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<SEC-DOCUMENT>0000950123-01-001192.txt : 20010214
<SEC-HEADER>0000950123-01-001192.hdr.sgml : 20010214
ACCESSION NUMBER:		0000950123-01-001192
CONFORMED SUBMISSION TYPE:	S-3/A
PUBLIC DOCUMENT COUNT:		11
FILED AS OF DATE:		20010213

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARROW ELECTRONICS INC
		CENTRAL INDEX KEY:			0000007536
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065]
		IRS NUMBER:				111806155
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3/A
		SEC ACT:		
		SEC FILE NUMBER:	333-50572
		FILM NUMBER:		1536543

	BUSINESS ADDRESS:	
		STREET 1:		25 HUB DR
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		5163911300
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>y42939a1s-3a.txt
<DESCRIPTION>AMENDMENT NO. 1 TO FORM S-3
<TEXT>

<PAGE>   1

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 13, 2001
                         REGISTRATION NO. 333-50572

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                AMENDMENT NO. 1
                                       TO

                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933




  ARROW ELECTRONICS, INC.             NEW YORK                 11-1806155
(EXACT NAME OF REGISTRANT  (STATE OR OTHER JURISDICTION     (I.R.S. EMPLOYER
 AS SPECIFIED IN CHARTER)          OF INCORPORATION       IDENTIFICATION NUMBER)
                                   OR ORGANIZATION)



                                      5065
            (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)


                                  25 HUB DRIVE
                            MELVILLE, NEW YORK 11747
                                 (516) 391-1300
    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)


                                ROBERT E. KLATELL
                            EXECUTIVE VICE PRESIDENT
                             ARROW ELECTRONICS, INC.
                                  25 HUB DRIVE
                            MELVILLE, NEW YORK 11747
                                 (516) 391-1300
            (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)


                                 WITH A COPY TO:

                                HOWARD S. KELBERG
                                 DONALD B. BRANT
                       MILBANK, TWEED, HADLEY & MCCLOY LLP
                            ONE CHASE MANHATTAN PLAZA
                            NEW YORK, NEW YORK 10005
                                 (212) 530-5000


     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement until all the
securities hereunder have been sold.

     If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]

     If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

     If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
                                                  ------------
     If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
                           ------------
     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]



<PAGE>   2

                               EXPLANATORY NOTE

     The securities registered hereby may be offered from time to time by means
of the basic prospectus included herein and, when a particular series of such
securities is being offered or sold, such series of securities may be offered or
sold by means of the basic prospectus included herein and an applicable
prospectus supplement. If any series of securities registered hereby are offered
or sold in reliance upon the procedures contemplated by Rule 430A under the
Securities Act of 1933, as amended, such series of securities will be offered
or sold by means of the basic prospectus included herein and a prospectus
supplement in the form included herein. Series of securities registered hereby
which are not offered or sold in reliance upon the procedures contemplated by
Rule 430A may be offered or sold by means of the basic prospectus included
herein and a prospectus supplement in a form other than the form of prospectus
supplement included herein.


<PAGE>   3

     The information in this prospectus supplement is not complete and may be
     changed. This prospectus supplement and the accompanying prospectus are not
     an offer to sell these securities and we are not soliciting offers to buy
     these securities in any state where the offer or sale is not permitted.


PROSPECTUS SUPPLEMENT (Subject to Completion)           Issued February 13, 2001


(To Prospectus dated February 13, 2001, Subject to Completion)



                              $




                                  [ARROW LOGO]

                            Arrow Electronics, Inc.

               ZERO COUPON CONVERTIBLE SENIOR DEBENTURES DUE 2021


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


HOLDERS MAY CONVERT THE DEBENTURES INTO SHARES OF OUR COMMON STOCK AT ANY TIME
PRIOR TO MATURITY AT A CONVERSION RATE OF           SHARES PER $1,000 PRINCIPAL
AMOUNT AT MATURITY. THE CONVERSION RATE WILL NOT BE ADJUSTED FOR ACCRUED
ORIGINAL ISSUE DISCOUNT, BUT WILL BE SUBJECT TO ADJUSTMENT IN CERTAIN EVENTS.


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


ON OR AFTER FEBRUARY   , 2006, WE MAY REDEEM ANY OF THE DEBENTURES AT THE
REDEMPTION PRICES SET FORTH IN THIS PROSPECTUS SUPPLEMENT. HOLDERS MAY REQUIRE
US TO REPURCHASE THE DEBENTURES AT THE REPURCHASE PRICES SET FORTH IN THIS
PROSPECTUS SUPPLEMENT ON FEBRUARY   , 2006, FEBRUARY   , 2011 AND FEBRUARY   ,
2016.


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


FOR A MORE DETAILED DESCRIPTION OF THE DEBENTURES, SEE "DESCRIPTION OF
DEBENTURES" BEGINNING ON PAGE S-22.


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


OUR COMMON STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"ARW." ON FEBRUARY 12, 2001, THE LAST REPORTED SALE PRICE OF OUR COMMON STOCK ON
THE NEW YORK STOCK EXCHANGE WAS $28.91 PER SHARE.


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


               PRICE      % AND ACCRUED ORIGINAL DISCOUNT, IF ANY


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


We have granted the underwriters the right to purchase up to an additional
$          aggregate principal amount at maturity of debentures to cover
over-allotments.


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

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

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


Morgan Stanley & Co. Incorporated expects to deliver the debentures to
purchasers on February   , 2001.

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

MORGAN STANLEY DEAN WITTER                            CREDIT SUISSE FIRST BOSTON


GOLDMAN, SACHS & CO.


                   BANC OF AMERICA SECURITIES LLC


                                    JP MORGAN


                                                 ROBERTSON STEPHENS



               , 2001

<PAGE>   4

                               TABLE OF CONTENTS


<TABLE>
<S>                                    <C>
PROSPECTUS SUPPLEMENT
- -------------------------------------     PAGE
                                       -------
Information Relating to
  Forward-Looking Statements.........      S-2
Prospectus Supplement Summary........      S-3
Use of Proceeds......................      S-7
Common Stock Price Range.............      S-7
Dividend Policy......................      S-7
Capitalization.......................      S-8
Selected Historical Financial Data...      S-9
Management's Discussion and Analysis
  of Financial Condition and Results
  of Operations......................     S-10
Business.............................     S-14
Management...........................     S-21
Description of Debentures............     S-22
Certain United States Federal Income
  Tax Considerations.................     S-33
Underwriters.........................     S-36
Legal Matters........................     S-37
Experts..............................     S-37
             PROSPECTUS
- -------------------------------------     PAGE
                                       -------
About This Prospectus................        2
Where You Can Find More Information..        2
Forward Looking Statements...........        3
Arrow Electronics, Inc...............        3
Use of Proceeds......................        4
Consolidated Ratios of Earnings To
  Fixed Charges......................        4
Description of Debt Securities.......        5
Description of Capital Stock.........       21
Description of Warrants..............       23
Plan of Distribution.................       24
Validity of Securities...............       25
Experts..............................       25
</TABLE>



This document is in two parts. The first part is this prospectus supplement,
which describes the terms of the offering of convertible senior debentures and
also adds to and updates information contained in the accompanying prospectus
and the documents incorporated by reference into the prospectus. The second part
is the accompanying prospectus, which gives more general information, some of
which may not apply to the convertible senior debentures.



You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with information that is different from
that contained or incorporated by reference in this prospectus supplement or the
accompanying prospectus. We are offering to sell the convertible senior
debentures only where offers and sales are permitted. The information contained
in or incorporated by reference in this prospectus supplement and the
accompanying prospectus is accurate only as of the date of this prospectus
supplement, regardless of the time of delivery of this prospectus supplement or
of any sale of the convertible senior debentures.


               INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

This prospectus supplement includes forward-looking statements that are subject
to certain risks and uncertainties which could cause actual results or facts to
differ materially from such statements for a variety of reasons, including, but
not limited to: industry conditions, changes in product supply, pricing, and
customer demand, competition, other vagaries in the electronic components and
commercial computer products markets, and changes in relationships with key
suppliers. Forward-looking statements are those statements which are not
statements of historical fact. You can identify these forward-looking statements
by forward-looking words such as "expects," "anticipates," "intends," "plans,"
"may," "will," "believes," "seeks," "estimates," and similar expressions. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they are made. We undertake no
obligation to update publicly or revise any of the forward-looking statements.

                                       S-2
<PAGE>   5

                         PROSPECTUS SUPPLEMENT SUMMARY

     The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, included or
incorporated by reference in this prospectus supplement. Unless otherwise
specified, all information herein assumes no exercise of the underwriters'
over-allotment option. References to "we," "us," "our," or "Arrow" refer to
Arrow Electronics, Inc. and its subsidiaries, unless the context requires
otherwise or the text indicates otherwise.

                            ARROW ELECTRONICS, INC.


     We are the world's largest distributor of electronic components and
computer products to industrial and commercial customers. We believe we are one
of the global electronics distribution industry's leaders in state-of-the-art
operating systems, employee productivity, value-added programs, and total
quality assurance. Through a network of more than 225 sales facilities and 19
distribution centers in 38 countries, we deliver inventory solutions, materials
management services, and design and technical support our customers need when,
where and how they need them.



     We are diversified across suppliers, geographic regions, and customers. We
are a leading distributor for over 600 suppliers. Our distribution network spans
the world's three dominant electronics markets: the Americas, Europe, and the
Asia/Pacific region. Through our business units in these vital industrialized
regions, we serve over 175,000 original equipment manufacturers, or OEMs, and
commercial customers worldwide. OEMs include manufacturers of computer and
office products, industrial equipment (including machine tools, factory
automation, and robotic equipment), telecommunications products, aircraft and
aerospace equipment, and scientific and medical devices. Commercial customers
are mainly value-added resellers of computer systems.



     Our strategy is to be the premier supply-chain partner for our customers
and suppliers, assisting them throughout the supply chain--from concept through
production. We believe we can achieve our strategy through:



     - Technology-based sales and marketing teams;



     - Broad array of value-added services;



     - State-of-the-art technology, systems and logistics networks;



     - Opportunistic acquisitions; and



     - Leadership in e-commerce.


                                       S-3
<PAGE>   6

                                     THE OFFERING


Securities Offered.........  $          aggregate principal amount at maturity
                             of zero coupon convertible senior debentures due
                             February   , 2021, plus an additional $
                             aggregate principal amount at maturity if the
                             underwriters' over-allotment option is exercised in
                             full. We will not pay periodic interest on the
                             debentures, except as described under "Description
                             of Debentures -- Optional Conversion to Semiannual
                             Coupon Debentures Upon a Tax Event."



Yield to Maturity of
  Debentures...............            % per year compounded semi-annually,
                             calculated from February   , 2001.



Conversion.................  You have the option to convert the debentures into
                             our common stock at any time prior to maturity or
                             their earlier redemption. You can convert the
                             debentures into common stock at a fixed conversion
                             rate of           shares per $1,000 principal
                             amount at maturity. The conversion rate will be
                             subject to adjustment if certain events occur. See
                             "Description of Debentures -- Conversion of
                             Debentures by Holders."


                             You may exercise the option to convert only before
                             the debentures reach maturity and before we redeem
                             or repurchase them.


Ranking....................  The debentures will be unsecured and unsubordinated
                             obligations of our company and are pari passu in
                             right of payment with all of our existing and
                             future unsubordinated and unsecured obligations.


Original Issue Discount....  The debentures are being offered at original issue
                             discount for United States federal income tax
                             purposes equal to the excess of their principal
                             amount at maturity over the amount of their issue
                             price. We will not make periodic cash payments of
                             interest on the debentures, except as described
                             under "Description of Debentures -- Optional
                             Conversion to Semiannual Coupon Debentures Upon a
                             Tax Event." Nonetheless, you should be aware that
                             accrued original issue discount will be included
                             periodically in your gross income for United States
                             federal income tax purposes. See "Certain United
                             States Federal Income Tax Considerations."

                             You should be aware that you will be responsible
                             for the payment of taxes that may be due even
                             though you may not receive any cash payment at the
                             time original issue discount is included in your
                             gross income.


Redemption at Our Option...  We cannot redeem the debentures before February   ,
                             2006. At any time on or after February   , 2006, we
                             can redeem all or part of the debentures for cash.
                             You can convert the debentures after they are
                             called for redemption at any time up to three
                             business days prior to the redemption date.


                                       S-4
<PAGE>   7

                             Redemption prices are equal to the issue price plus
                             accrued original issue discount through the date of
                             redemption. See "Description of
                             Debentures -- Redemption of Debentures at Our
                             Option."

Fundamental Change.........  You may require us to repurchase the debentures if
                             we experience a Fundamental Change. The Fundamental
                             Change purchase price is equal to the issue price
                             plus accrued original issue discount through the
                             date of repurchase. See "Description of
                             Debentures -- Repurchase at the Option of the
                             Holder Upon a Fundamental Change."


Repurchase at the
  Option of the Holder.....  You may require us to repurchase the debentures on
                             February   , 2006, February   , 2011 and February
                               , 2016 at a repurchase price equal to the issue
                             price plus accrued original issue discount through
                             the date of repurchase. We may elect to pay all or
                             a portion of the repurchase price in common stock
                             instead of cash, subject to certain conditions. See
                             "Description of Debentures -- Repurchase of
                             Debentures at the Option of the Holder."


Conversion to Semiannual
  Coupon Debenture.........  If a tax event prevents us from deducting original
                             issue discount payable on the debentures, we can
                             elect to pay you interest in cash and terminate the
                             further accrual of original issue discount. See
                             "Description of Debentures -- Optional Conversion
                             to Semiannual Coupon Debentures Upon a Tax Event."


Certain Covenants..........  The debentures are subject to a number of
                             covenants, including restrictions on liens, sale
                             and leaseback transactions, and mergers,
                             consolidations, and the sale of substantially all
                             of our assets, as more fully described in the
                             prospectus.


Use of Proceeds............  Arrow expects to use the net proceeds of this
                             offering to repay short-term debt.

NYSE Common Stock
  Symbol...................  ARW

                                       S-5
<PAGE>   8

                       SUMMARY HISTORICAL FINANCIAL DATA

     The following table contains our summary historical financial data as of
the dates and for the periods indicated. We have derived the historical
financial data as of and for each of the years in the five-year period ended
December 31, 1999 from our audited consolidated financial statements. We have
derived the historical financial data as of September 30, 2000 and for the
nine-month periods ended September 30, 2000 and September 30, 1999 from our
unaudited consolidated financial statements which, in the opinion of management,
include all adjustments necessary for a fair presentation. Nine-month results,
however, are not necessarily indicative of the results that may be expected for
any other interim period or for a full year.


     You should read the following data together with our other historical
financial information and statements (including related notes) of us
incorporated by reference in this prospectus supplement. Please also read
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Capitalization" included in this prospectus supplement.



<TABLE>
<CAPTION>
                                                       NINE MONTHS
                                                          ENDED
                                                      SEPTEMBER 30,                  YEAR ENDED DECEMBER 31,
                                                    -----------------    ------------------------------------------------
                                                     2000     1999(A)    1999(B)     1998     1997(C)     1996      1995
                                                    ------    -------    -------    ------    -------    ------    ------
                                                                     (IN MILLIONS EXCEPT PER SHARE DATA)
<S>                                                 <C>       <C>        <C>        <C>       <C>        <C>       <C>
INCOME STATEMENT DATA
Sales............................................   $9,268    $6,827     $9,313     $8,345    $7,764     $6,535    $5,919
Operating income.................................      537       230        339        353       375        401       423
EBITDA(d)........................................      598       308        433        405       440        438       459
Interest expense.................................      107        78        106         81        67         38        46
Net income.......................................      249        80        124        146       164        203       203
Diluted earnings per share(e)....................   $ 2.53    $ 0.83     $ 1.29     $ 1.50    $ 1.64     $ 1.98    $ 2.03
</TABLE>



<TABLE>
<CAPTION>
                                                            AT                         AT DECEMBER 31,
                                                       SEPTEMBER 30,    ----------------------------------------------
                                                           2000          1999      1998      1997      1996      1995
                                                       -------------    ------    ------    ------    ------    ------
                                                                                (IN MILLIONS)
<S>                                                    <C>              <C>       <C>       <C>       <C>       <C>
BALANCE SHEET DATA
Accounts receivable and inventory...................      $4,209        $3,084    $2,676    $2,475    $1,948    $1,979
Total assets........................................       5,707         4,483     3,840     3,538     2,710     2,701
Total long-term debt and capital lease
  obligations.......................................         859         1,533     1,047       830       353       461
Shareholders' equity................................       1,766         1,551     1,487     1,361     1,358     1,196
</TABLE>


- ------------
(a) Operating and net income include a special charge of $25 million and $16
    million after taxes, respectively, associated with the acquisition and
    integration of Richey Electronics, Inc. ("Richey") and the electronics
    distribution group of Bell Industries, Inc. ("EDG"). Excluding this charge,
    operating income, net income, and earnings per share on a diluted basis
    would have been $255 million, $97 million, and $1.01, respectively.

(b) Operating and net income include a special charge of $25 million and $16
    million after taxes, respectively, associated with the acquisition and
    integration of Richey and EDG. Excluding this charge, operating income, net
    income, and earnings per share on a diluted basis would have been $363
    million, $141 million, and $1.46, respectively.

(c) Operating and net income include special charges totaling $59 million and
    $40 million after taxes, respectively, associated with the realignment of
    our North American Components Operations and the acquisition and integration
    of the volume electronic component distribution businesses of Premier
    Farnell plc. Excluding these charges, operating income, net income, and
    earnings per share on a diluted basis were $434 million, $204 million, and
    $2.05, respectively.

(d) EBITDA consists of the sum of net income, interest expense, income taxes,
    minority interest, and depreciation and amortization, exclusive of the
    special charges related to acquisitions. We present EBITDA because investors
    use EBITDA to determine our ability to meet our debt service obligations,
    fund capital expenditures, and expand our business. You should not consider
    this information to be an alternative to net income, operating income, cash
    flow from operations or any other operating or liquidity performance measure
    prescribed by generally accepted accounting principles (GAAP). Our
    presentation of EBITDA may not be comparable to EBITDA defined and presented
    by other companies.

(e) Per share amounts in 1996 and 1995 have been restated to reflect a
    two-for-one stock split effective October 15, 1997.

                                       S-6
<PAGE>   9

                                USE OF PROCEEDS


     Arrow expects to use the net proceeds of this offering to repay short-term
debt.


                            COMMON STOCK PRICE RANGE

     Arrow's common stock is listed on the New York Stock Exchange under the
symbol "ARW." The following table lists the high and low per share sales prices
for the common stock as reported by the New York Stock Exchange for the periods
indicated:


<TABLE>
<CAPTION>
                                                                HIGH        LOW
                                                               -------    -------
<S>                                                            <C>        <C>
YEAR ENDED DECEMBER 31, 1999:
  First quarter.............................................   $26 9/16   $13 3/16
  Second quarter............................................    19 7/8     14 5/8
  Third quarter.............................................    23 1/8    16 15/16
  Fourth quarter............................................    26 1/2     14 3/4
YEAR ENDED DECEMBER 31, 2000:
  First quarter.............................................    37 1/2     20 1/2
  Second quarter............................................    46         28 1/4
  Third quarter.............................................    39 7/8     31 3/8
  Fourth quarter............................................   37 3/16    22 1/16
YEAR ENDED DECEMBER 31, 2001:
  First quarter (through February 12, 2001).................   33 7/16    26 3/16
</TABLE>



     On February 12, 2001, the reported last sale price of the common stock as
reported by the New York Stock Exchange was $28.91 per share.


                                DIVIDEND POLICY

     We have not paid cash dividends on our common stock during the past five
years. While the board of directors considers the payment of dividends on the
common stock from time to time, the declaration of future dividends will be
dependent upon our earnings, financial condition, and other relevant factors.


     The terms of our credit facilities, senior notes, and senior debentures
limit, among other things, the incurrence of additional borrowings and require
that working capital, net worth, and certain other financial ratios be
maintained at designated levels.


                                       S-7
<PAGE>   10


                                 CAPITALIZATION



     The following table sets forth our capitalization on an actual basis as of
September 30, 2000 and as adjusted on a pro forma basis to give effect to the
issuance of the floating rate notes due 2001, the 8.20% senior notes due 2003,
the 8.70% senior notes due 2005 and the 9.15% senior notes due 2010, issued on
October 6, 2000, the issuance of the debentures, and the application of the net
proceeds thereof in accordance with "Use of Proceeds."



     In December 2000, we entered into a $400 million short-term credit facility
scheduled to mature on March 19, 2001. If certain conditions are met, the
facility maturity date may be extended to June 19, 2001. We used the proceeds of
this facility to repay various short-term debt. We intend to repay the
outstanding indebtedness of $400 million under this facility with a portion of
the proceeds of this offering.



     In December 2000, Standard & Poor's announced that it had placed our
long-term ratings on CreditWatch with negative implications. It also affirmed
our A-2 commercial paper rating. Standard and Poor's stated that it would lower
our long-term credit rating from its current BBB+ to BBB with a stable outlook
on April 2, 2001, if we have not completed a significant equity offering by that
date. In connection with this offering we have agreed not to engage in an
offering of common stock or securities convertible into or exchangeable for
common stock for a period of 90 days following the closing of this offering. See
"Underwriters."



<TABLE>
<CAPTION>
                                                                        AT
                                                                SEPTEMBER 30, 2000
                                                               ---------------------
                                                               ACTUAL    AS ADJUSTED
                                                               ------    -----------
                                                                   (IN MILLIONS)
<S>                                                            <C>       <C>
Short-term debt:
  Various borrowings, including current maturities of
     long-term debt.........................................   $ 374       $  374
  Floating rate notes due 2001..............................      --          200
  Credit facilities.........................................     389          389
  Commercial paper program..................................     405          215
  Bid facilities............................................     297           --
                                                               ------      ------
                                                               $1,465      $1,178
                                                               ======      ======
Long-term debt:
  6.45% senior notes due 2003...............................     250          250
  7% senior notes due 2007..................................     198          198
  6 7/8% senior debentures due 2018.........................     196          196
  7 1/2% senior debentures due 2027.........................     196          196
  8.20% senior notes due 2003...............................      --          425
  8.70% senior notes due 2005...............................      --          250
  9.15% senior notes due 2010...............................      --          200
  Zero coupon convertible senior debentures due 2021........      --          487
  Other obligations with various interest rates and due
     dates..................................................      19           19
                                                               ------      ------
          Total long-term debt..............................     859        2,221
                                                               ------      ------
          Total debt........................................   $2,324      $3,399
                                                               ======      ======
Shareholders' equity:
  Common stock, par value $1: Authorized--160,000,000 shares
     Issued--103,741,595 shares.............................     104          104
  Capital in excess of par value............................     528          528
  Retained earnings.........................................   1,488        1,488
  Foreign currency translation adjustment...................    (196)        (196)
                                                               ------      ------
                                                               1,924        1,924
Less:
  Treasury shares (5,552,692), at cost......................     149          149
  Unamortized employee stock awards.........................       9            9
                                                               ------      ------
          Total shareholders' equity........................   1,766        1,766
                                                               ------      ------
          Total capitalization..............................   $4,090      $5,165
                                                               ======      ======
</TABLE>


                                       S-8
<PAGE>   11


                       SELECTED HISTORICAL FINANCIAL DATA


     The following table contains our selected historical financial data as of
the dates and for the periods indicated. We have derived the historical
financial data as of and for each of the years in the five-year period ended
December 31, 1999 from our audited consolidated financial statements. We have
derived the historical financial data as of September 30, 2000 and for the
nine-month periods ended September 30, 2000 and September 30, 1999 from our
unaudited consolidated financial statements which, in the opinion of management,
include all adjustments necessary for a fair presentation. Nine-month results,
however, are not necessarily indicative of the results that may be expected for
any other interim period or for a full year.


     You should read the following data together with our other historical
financial information and statements (including related notes) of us
incorporated by reference in this prospectus supplement. Please also read
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Capitalization" included in this prospectus supplement.


<TABLE>
<CAPTION>
                                                   NINE MONTHS
                                                      ENDED
                                                  SEPTEMBER 30,                  YEAR ENDED DECEMBER 31,
                                                -----------------    ------------------------------------------------
                                                 2000     1999(A)    1999(B)     1998     1997(C)     1996      1995
                                                ------    -------    -------    ------    -------    ------    ------
                                                                 (IN MILLIONS EXCEPT PER SHARE DATA)
<S>                                             <C>       <C>        <C>        <C>       <C>        <C>       <C>
INCOME STATEMENT DATA
Sales.........................................  $9,268    $6,827     $9,313     $8,345    $7,764     $6,535    $5,919
Operating income..............................     537       230        339        353       375        401       423
EBITDA(d).....................................     598       308        433        405       440        438       459
Interest expense..............................     107        78        106         81        67         38        46
Net income....................................     249        80        124        146       164        203       203
Diluted earnings per share(e).................  $ 2.53    $ 0.83     $ 1.29     $ 1.50    $ 1.64     $ 1.98    $ 2.03
</TABLE>

<TABLE>
<CAPTION>
                                                            AT                         AT DECEMBER 31,
                                                       SEPTEMBER 30,    ----------------------------------------------
                                                           2000          1999      1998      1997      1996      1995
                                                       -------------    ------    ------    ------    ------    ------
                                                                                (IN MILLIONS)
<S>                                                    <C>              <C>       <C>       <C>       <C>       <C>
BALANCE SHEET DATA
Accounts receivable and inventory....................     $4,209        $3,084    $2,676    $2,475    $1,948    $1,979
Total assets.........................................      5,707         4,483     3,840     3,538     2,710     2,701
Total long-term debt and capital lease obligations...        859         1,533     1,047       830       353       461
Shareholders' equity.................................      1,766         1,551     1,487     1,361     1,358     1,196
</TABLE>

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

(a) Operating and net income include a special charge of $25 million and $16
    million after taxes, respectively, associated with the acquisition and
    integration of Richey Electronics, Inc. ("Richey") and the electronics
    distribution group of Bell Industries, Inc. ("EDG"). Excluding this charge,
    operating income, net income, and earnings per share on a diluted basis
    would have been $255 million, $97 million, and $1.01, respectively.

(b) Operating and net income include a special charge of $25 million and $16
    million after taxes, respectively, associated with the acquisition and
    integration of Richey and EDG. Excluding this charge, operating income, net
    income, and earnings per share on a diluted basis would have been $363
    million, $141 million, and $1.46, respectively.

(c) Operating and net income include special charges totaling $59 million and
    $40 million after taxes, respectively, associated with the realignment of
    our North American Components Operations and the acquisition and integration
    of the volume electronic component distribution businesses of Premier
    Farnell plc. Excluding these charges, operating income, net income, and
    earnings per share on a diluted basis were $434 million, $204 million, and
    $2.05, respectively.

(d) EBITDA consists of the sum of net income, interest expense, income taxes,
    minority interest, and depreciation and amortization, exclusive of the
    special charges related to acquisitions. We present EBITDA because investors
    use EBITDA to determine our ability to meet our debt service obligations,
    fund capital expenditures, and expand our business. You should not consider
    this information to be an alternative to net income, operating income, cash
    flow from operations or any other operating or liquidity performance measure
    prescribed by generally accepted accounting principles (GAAP). Our
    presentation of EBITDA may not be comparable to EBITDA defined and presented
    by other companies.

(e) Per share amounts in 1996 and 1995 have been restated to reflect a
    two-for-one stock split effective October 15, 1997.

                                       S-9
<PAGE>   12

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

     For an understanding of the significant factors that influenced our
performance during the periods described below, the following discussion should
be read in conjunction with our consolidated financial statements and other
information included in or incorporated by reference in this prospectus
supplement.

NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999

     SALES


     Consolidated sales for the first nine months of 2000 increased 36 percent
compared with the comparable prior-year period. The sales growth was driven by a
59 percent increase in sales of core components (net of foreign exchange rate
differences) for the first nine months of 2000, from the comparable prior-year
period. Sales of computer products decreased by 7 percent for the first nine
months of 2000, when compared to the year-earlier period principally as a result
of market conditions for mid-range products and lower sales of low margin
microprocessors (a product segment not considered a part of the company's core
business).


     OPERATING INCOME


     We recorded operating income of $537.4 million in the first nine months of
2000, compared with $230.2 million in the comparable prior-year period.
Excluding the integration charge relating to EDG and Richey, operating income
was $254.8 million for the nine months ended September 30, 1999. The increase in
operating income is due to increased sales and improving gross profit margins in
the core components businesses around the world, as well as a change in mix
resulting in greater weighting of the core components business. In addition,
operating expenses as a percentage of sales decreased to 9.8 percent for the
nine months ended September 30, 2000, from 10.1 percent in the comparable
prior-year period.


     INTEREST EXPENSE


     Interest expense of $107.2 million in the first nine months of 2000
increased from $78.1 million in the comparable prior-year period. The increase
is the result of additional debt incurred to fund acquisitions, internet-related
joint ventures, and capital expenditures, and investments in working capital to
support accelerated sales growth.


     INCOME TAXES


     We recorded a provision for taxes at an effective rate of 41 percent for
the first nine months of 2000, compared with 44.4 percent in the comparable
prior-year period. Excluding the impact of the integration charge referred to
above, the effective rate was 42.8 percent for the nine months ended September
30, 1999. Our effective tax rate is principally impacted by, among other
factors, the statutory tax rates in the countries in which we operate, the
related level of earnings generated by these operations, and the
nondeductibility of goodwill amortization.


     NET INCOME


     We recorded net income of $249 million in the first nine months of 2000,
compared with $80.1 million in the comparable prior-year period. Excluding the
integration charge of $24.6 million ($16.5 million after taxes), net income was
$96.6 million for the first nine months of 1999. The increase in net income is
due to increased sales and improving gross profit margins, offset, in part, by
higher levels of interest.



YEARS ENDED DECEMBER 31, 1999 AND 1998



     SALES



     In 1999, consolidated sales increased to $9.3 billion. This 12 percent
sales growth over 1998 was principally due to growth in the worldwide core
components operations and acquisitions offset, in part, by


                                      S-10
<PAGE>   13


fewer sales of low margin microprocessors, a product segment not considered a
part of the company's core business, and foreign exchange rate differences.
Excluding the impact of the Richey and EDG acquisitions, foreign exchange rate
differences, and lower microprocessor sales, consolidated revenue increased by 8
percent over the prior year and sales of core components increased by 10
percent. Sales of commercial computer products increased marginally over 1998's
level due principally to softening demand and lower average selling prices,
offset by increasing unit shipments, as a result of market conditions.



     Consolidated sales of $8.3 billion in 1998 were 7 percent higher than 1997
sales of $7.8 billion. This sales growth was due to increased sales of
commercial computer products from $1.3 billion in 1997 to more than $2 billion
in 1998. Excluding the impact of acquisitions, 1998 sales of computer products
increased by 24 percent when compared to 1997. The worldwide market for
electronic components continued to be characterized by product availability well
in excess of demand and resultant pressure on average selling prices and gross
profit margins resulting in a decline in sales from $6.5 billion in 1997 to $6.3
billion in 1998.



     OPERATING INCOME



     In 1999, our consolidated operating income decreased to $338.7 million from
$352.5 million in 1998, principally as result of the special charge of $24.6
million associated with the acquisition and integration of Richey and EDG.
Excluding this integration charge, operating income was $363.2 million.
Operating income, excluding the integration charge, increased as a result of
higher sales, improving gross profit margins in the core components operations
in the latter part of 1999, and improved operating efficiencies resulting from
the integration of Richey and EDG into our North American Components Operations
("NACO") offset, in part, by lower gross profit margins in the computer products
operations, increased non-cash amortization expense associated with goodwill,
investments made in systems, including the Internet, and personnel to support
anticipated increases in business activities in 2000 and beyond.



     Our consolidated operating income decreased to $352.5 million in 1998,
compared with operating income of $374.7 million in 1997, including special
charges of $59.5 million. Excluding the special charges, operating income in
1997 was $434.2 million. The reduction in operating income reflected a decline
in the sales of our NACO, a further decline in gross margins due to
proportionately higher sales of lower margin commercial computer products, and
competitive pricing pressures throughout the world offset, in part, by the
impact of increased sales and the benefits of continuing economies of scale.
Operating expenses as a percent of sales remained consistent with 1997 at 9.7
percent, the lowest in our history.



     INTEREST EXPENSE



     In 1999, interest expense increased to $106.3 million from $81.1 million in
1998, reflecting both increases in borrowings to fund acquisitions and
investments in working capital.



     Interest expense of $81.1 million in 1998 increased by $14 million from the
1997 level, reflecting increases in borrowings associated with acquisitions and
investments in working capital.



     INCOME TAXES



     In 1999, we recorded a provision for taxes at an effective tax rate of 43
percent, excluding the integration charge, compared with 42.2 percent in 1998.
The increased rate of 1999 is due to the non-deductibility of goodwill
amortization.



     We recorded a provision for taxes at an effective tax rate of 42.2 percent
in 1998 compared with 41 percent, excluding the special charges, in 1997. The
higher effective rate in 1998 is due to the non-deductibility of goodwill
amortization.



     NET INCOME



     In 1999, our net income decreased to $124.2 million from $145.8 million in
1998. Excluding the integration charge, net income was $140.6 million. The
decrease in net income, excluding the integration


                                      S-11
<PAGE>   14


charge, was primarily attributable to an increase in operating income and a
decrease in minority interest offset by an increase in interest expense.



     Net income in 1998 was $145.8 million, a decrease from $204.1 million,
before the special charges of $59.5 million ($40.4 million after taxes), in
1997. The decrease in net income is attributable to lower operating income and
increases in interest expense.


LIQUIDITY AND CAPITAL RESOURCES

     We maintain a high level of current assets, primarily accounts receivable
and inventories. Consolidated current assets as a percentage of total assets
were approximately 75 percent at September 30, 2000, compared with 70 percent at
September 30, 1999.

     The net amount of cash used for our operating activities during the first
nine months of 2000 was $373 million, principally reflecting investments in
working capital, offset, in part, by earnings for the nine months. The net
amount of cash used for investing activities was $177.6 million, including $51
million for various capital expenditures, $92.7 million primarily for the
acquisitions of Rapac Electronics Ltd., Tekelec Europe, Jakob Hatteland AS, and
Dicopel S.A. de C.V., and $33.9 million for internet-related joint ventures. The
net amount of cash provided by financing was $554.6 million, primarily
reflecting borrowings under the company's commercial paper program, credit
facilities, and various short-term bank borrowings.

     The net amount of cash provided by our operating activities during the
first nine months of 1999 was $66.6 million, principally reflecting earnings,
offset, in part, by investments in working capital. The net amount of cash used
for investing activities was $523.6 million, including $62.7 million for various
capital expenditures and $460.9 million principally for the acquisitions of
Richey, EDG, the remaining 10% of Spoerle Electronic, the remaining interest in
Support Net, Inc., and the additional interest in Scientific and Business
Minicomputers, Inc., as well as certain internet-related investments. The net
amount of cash provided by financing activities was $356.8 million, reflecting
borrowings under the company's credit facilities, offset, in part, by the
repayment of Richey's 7.0% convertible subordinated notes and debentures and
distributions to partners.


     In December 2000, we entered into a $400 million short-term credit facility
scheduled to mature on March 19, 2001. If certain conditions are met, the
facility maturity date may be extended to June 19, 2001, at our option. We used
the proceeds of this facility to repay various short-term debt. We intend to
repay the outstanding indebtedness of $400 million under this facility with a
portion of the proceeds of this offering. See "Use of Proceeds."



     We are currently in negotiations with a number of financial institutions to
refinance our $550 million 364-day credit facility scheduled to mature in March
2001 and our $650 million global multi-currency credit facility scheduled to
mature in September 2001 with a new 364-day credit facility and a new multi-year
credit facility. We anticipate that these transactions will close during the
first quarter of 2001.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risk from changes in foreign currency exchange
rates and interest rates.

     As a large international organization, we are exposed to adverse movements
in foreign currency exchange rates. These exposures may change over time as
business practices evolve and could have a material impact on our financial
results in the future. Our primary exposure relates to transactions in which the
currency collected from customers is different from the currency utilized to
purchase the product sold in Europe, the Asia/Pacific region, and Latin America.
At the present time, we hedge only those currency exposures for which natural
hedges do not exist. Anticipated foreign currency cash flows and earnings and
investments in businesses in Europe, the Asia/Pacific region, and Latin America
are not hedged as in many instances there are natural offsetting positions. The
translation of the financial statements of the non-North American operations is
impacted by fluctuations in foreign currency exchange rates. Had the various
average foreign currency exchange rates remained the same during the first nine
months of 2000 as compared with December 31, 1999,

                                      S-12
<PAGE>   15

2000 sales and operating income would have been $284 million and $27 million
higher, respectively, than the reported results.


     Our interest expense, in part, is sensitive to the general level of
interest rates in the Americas, Europe, and the Asia/Pacific region. We manage
our exposure to interest rate risk through the proportion of fixed rate and
variable rate debt in its total debt portfolio. At September 30, 2000, we had
approximately 37 percent of our debt as fixed rate borrowings and 63 percent of
our debt subject to variable rates. Interest expense would fluctuate by
approximately $7 million if average interest rates had changed by one percentage
point during the first nine months of 2000. This amount was determined by
considering the impact of a hypothetical interest rate on our borrowing cost.
This analysis does not consider the effect of the level of overall economic
activity that could exist in such an environment. Further, in the event of a
change of such magnitude, management could likely take actions to further
mitigate any potential negative exposure to the change. However, due to the
uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analysis assumes no changes in our financial structure.




                                      S-13
<PAGE>   16


                                    BUSINESS


BUSINESS OVERVIEW

     We are the world's largest distributor of electronic components and
computer products to industrial and commercial customers. Spanning the world's
three major electronics markets--the Americas, Europe, and the Asia/Pacific
region--we offer an extensive global distribution network.


     We have one of the industry's broadest product offerings, or line cards,
providing real-time access to a $1.9 billion inventory as of September 30, 2000
from more than 600 leading manufacturers. Through a network of more than 225
sales facilities and 19 distribution centers in 38 countries we deliver to more
than 175,000 original equipment manufacturers and commercial customers the
products, inventory solutions, materials management services, design, and
technical support they need when, where and how they need them. We are the
largest distributor for many of the world's leading semiconductor suppliers and
one of the leading passive, electromechanical, and interconnect ("PEMCO")
distribution resources in the industry.



     In 1999, revenues exceeded $9.3 billion with EBITDA and net income of $433
million and $141 million, respectively, excluding the special charge of $24.6
million ($16.5 million after taxes) associated with the integration of
acquisitions. For the first nine months of 2000, revenues totaled approximately
$9.3 billion with EBITDA and net income of $598 million and $249 million,
respectively. In each of the first three quarters of 2000, sales, EBITDA, and
net income were at record levels.


     Because we have a diverse mix of products and customers and a broad
geographic reach, we do not rely upon any one supplier or type of product, and
have limited exposure to technological change in the products we offer as well
as limited risks related to our customers' business cycles and regional economic
cycles.

     We have transitioned our business from its historical role of simple order
fulfillment to an integral part of the supply chain. Suppliers rely on us to
possess significant "demand creation" skills, on a global basis, and to serve as
an integral resource to their own selling efforts.

     We also serve as a critical link in the management of our customers' own
supply chain. Through our wide range of value-added services, we help our
customers select the right technology and design and the most appropriate
components, reduce time-to-market, lower costs, and enhance overall
competitiveness. As manufacturing has moved to a just-in-time (JIT) basis, our
expertise in supply-chain management enables us to deliver parts to our
customers as needed. Contributing to this important role is our ability to
profile our customers' product requirements--taking into consideration changing
demand patterns and market fluctuations. Because of the breadth of our line card
we can offer customers one-stop shopping, helping them to minimize their own
costs. Over 64% of our North American revenues are derived from customers to
whom we provide value-added services, reflecting our key role in the supply
chain for suppliers and customers alike.


     The value-added services we offer include:


<TABLE>
<CAPTION>
MANUFACTURING SERVICES              MATERIALS MANAGEMENT                PRODUCT ENHANCEMENT SERVICES
- ----------------------              --------------------------------    --------------------------------
<S>                                 <C>                                 <C>
Box Building                        Bill of Materials (BOM) Grading     Bar Coding
Component Programming               Bonded Inventory Management         Packaging
Connector and Cable Assembly        CARES (Auto Replenishment)          Serialization
Flat Panel Assembly Hardware        E-compass (Forecast and Order       Special Handling Procedures
  Configuration                     Management)                         Special Marking Tape and
Kitting                             In-plant Stores                     Reel Testing
Systems Integration                 Inventory Management                Software Integration
                                    JIT Inventory
                                    Primary and Proximity
                                    Warehousing
                                    Product Life Cycle Management
                                    Product Traceability
                                    Schedule Sharing
</TABLE>

                                      S-14
<PAGE>   17

<TABLE>
<CAPTION>
TECHNICAL SUPPORT                   ELECTRONIC COMMERCE                 FINANCIAL SERVICES
- -----------------                   -------------------                 ------------------
<S>                                 <C>                                 <C>
Design-in Engineering Support       EDI                                 Consolidating
Field Application Engineers         Internet Ordering                   Invoicing
Marketing Support                   PRO-Series                          Specialized Financing
Product Education and               In-plant Terminals
  Certification
Technical Seminars
Technical Support
Technical Training
</TABLE>

INDUSTRY OVERVIEW

     Our industry has undergone a significant transformation. Leading
distributors must be more than stocking and marketing intermediaries. Their
ability to fill a range of roles is paramount. Technical proficiency and demand
creation, broad product offerings, innovative value-added programs, and a global
presence contribute to the success of our suppliers and customers alike.

     Our industry has had strong long-term growth, yet is still subject to
business cycles. Over the past 30 years our industry has grown at a 12% compound
annual growth rate. Despite this growth, there are, periodically, industry-wide
troughs driven principally by product supply and availability.


     Our financial performance through these cycles has changed significantly.
During the down cycle of the mid 1980s, we suffered losses, while during the
recessionary period of the early 1990s, we were marginally profitable. During
the period from mid 1996 through 1999, the industry's longest and most severe
recessionary cycle in the past three decades, our annual net income was never
below $140 million, excluding non-recurring charges. We believe that if we are
able to continue to successfully leverage our operating structure and cost
efficiencies, we can position ourselves to not only reap the benefits of growth
in our industry, but also better withstand the recessionary cycles.


     Our industry requires modest capital investments in "bricks and mortar."
Instead, our cash requirements are most often tied to highly-liquid assets like
receivables and inventory.

     Our industry's exposure to inventory risks is limited. It is the policy of
most manufacturers to protect authorized distributors, like ourselves, against
the potential write-down of semiconductor inventories due to technological
change or manufacturers' price reductions. Under the terms of the related
distributor agreements, and assuming the distributor complies with certain
conditions, those suppliers are required to credit the distributor for inventory
losses incurred through reductions in manufacturers' list prices. In addition,
under the terms of many distributor agreements, the distributor has the right to
return to the manufacturer for credit a defined portion of those inventory items
purchased within a designated period of time. Approximately 65 percent of the
dollar value of our inventory consists of semiconductors.

     A manufacturer who elects to terminate a distributor agreement is generally
required to purchase from the distributor the total amount of its products
carried in inventory. While these industry practices do not entirely protect us
from inventory losses, we believe that they currently provide substantial
protection from those losses.

STRATEGY


     Our strategy is to be the premier supply-chain partner for our customers
and suppliers, assisting them throughout the supply chain--from concept through
production. We believe we can achieve our strategy through:


     TECHNOLOGY-BASED SALES AND MARKETING TEAMS

     We seek to ensure that our sales force and engineers stay abreast of the
latest technological developments. Our field application engineers are trained
to understand the needs of our customers and to translate that information back
to our suppliers. By understanding the state-of-the-art products of our

                                      S-15
<PAGE>   18

suppliers, and the full potential of their application, our team will be able to
provide maximum benefit to both our customers and our suppliers.

     BROAD ARRAY OF VALUE-ADDED SERVICES

     We strive to provide our customers with the broadest array of the
value-added services they want in order to service their needs throughout the
supply chain. These value-added services, including both physical and materials
management, position us as a true partner to our customers. From kitting, to
programming of parts, to procurement and materials management programs, to
credit extension, we seek to strengthen the reliance our customers place in us.

     STATE-OF-THE-ART TECHNOLOGY, SYSTEMS AND LOGISTICS NETWORKS

     We continuously invest in the technology, the systems, and the logistics
network needed to make our distribution operations more efficient. Then, we rely
on this efficient network to generate economies of scale from increased business
activity, which results in decreased operating costs as a percentage of our
revenues.

     OPPORTUNISTIC ACQUISITIONS


     Our opportunistic acquisitions over the past 20 years have helped enable us
to become the largest electronic components distributor in the world and to
become a truly global distributor. They have also helped us to improve our
operating efficiencies by giving us the additional business activity from which
economies of scale are derived. We will continue to expand our reach, striving
for a presence that serves the needs of our customers and suppliers around the
globe.



     LEADERSHIP IN E-COMMERCE


     Our investments in the Internet, both directly through our internal efforts
and externally through the joint ventures in which we participate, will enable
our customers, suppliers, and shareholders to participate in the benefits to be
derived from this emerging technology.

OVERVIEW BY REGION

     Our business has a significant presence in each of the world's three major
markets. Our 1999 sales of $9.3 billion were generated as follows: 66% from the
Americas, 26% from Europe, and 8% from the Asia/ Pacific region.

     NORTH AMERICA

     In North America, we are a leader in electronics distribution. Our
operations are organized around two distinct operating groups, NACO and North
American Computer Products ("NACP") groups:


     NACO offers a wide range of electronic components--principally
semiconductors and PEMCO products (i.e., capacitors, resistors, potentiometers,
power supplies, relays, switches, and connectors)--representing the industry's
broadest line card. Sales totaled $3.6 billion and $3.9 billion in 1999 and for
the first nine months of 2000, respectively, for this group.



     NACO consists of eight segmented marketing groups specifically positioned
to provide business solutions tailored to match customer needs. These marketing
groups are:



     - Arrow Contract Manufacturing Services Distribution Group focuses
       exclusively on providing industry expertise, extensive technical
       resources, and value-added services to contract manufacturers.



     - Arrow/Richey Electronics is one of the world's largest distributors of
       PEMCO products, and provides customers with comprehensive, innovative
       value-added services.



     - Arrow/Bell Components specializes in servicing the needs of small,
       medium, and emerging industrial OEMs in North America offering a complete
       line of semiconductor, PEMCO, and industrial computer


                                      S-16
<PAGE>   19

       products, as well as cable, mechanical, and assembly value-added
       services. Arrow/Bell's field application engineers provide dedicated
       semiconductor engineering support, design tools, and a broad technology
       base to assist customers throughout the product development and design
       cycle.


     - Arrow Semiconductor Group specializes in serving the semiconductor needs
       of the larger OEMs, interfacing with customers' engineers and product
       development teams to help select the right components that will minimize
       a product's time-to-market.



     - Arrow/Wyle Communications Group specializes in serving the semiconductor
       needs of communications and networking original equipment manufacturers,
       regardless of size.



     - Arrow/Zeus Electronics maintains support from design through production
       to the military, aerospace and other electronics industries offering
       high-reliability semiconductors and space products, commercial
       semiconductors, and industrial computer products, with military and
       aerospace inventories geared to meet crucial deadlines.



     - Arrow Alliance Group provides a full line card and a wide range of
       value-added services to large customers with complex needs.



     - Arrow Supplier Services Group manages all semiconductor supplier
       relationships, including the line card strategy, marketing programs and
       purchasing.


     NACP is a full-line technical distributor of computer systems, peripherals,
and software to value-added resellers ("VARs") and industrial computer products,
with an emphasis on being a leading distributor of mid-range work stations.
Sales of this group totaled $2.6 billion and $1.8 billion in 1999 and for the
first nine months of 2000, respectively.

     NACP consists of six segmented marketing groups as follows:


     - SBM is a leading distributor of Hewlett-Packard mid-range work stations
       operating on UNIX and NT platforms, offering sales, marketing, and
       technical support to its VARs.



     - SupportNet is a leading distributor of IBM mid-range work stations
       offering sales, marketing, and technical support to its VARs.



     - MOCA is a leading distributor of Sun Microsystems products, selling
       enterprise software, storage area networks, and Solaris operating systems
       which run on Sun Microsystems hardware and related professional services.



     - Arrow/Wyle Computer Products Group is a distributor offering technical
       solutions to OEM's, Compaq resellers and large complex customers who
       require computer products. Extensive product offerings include computer
       systems and servers, networking, peripherals, and an array of mass
       storage products, from disk drives to RAID systems.



     - Arrow Microtronica provides component and board level computer products
       to PC, server and storage subsystem builders and integrators representing
       the world's preeminent suppliers of CPUs, mass storage, memory,
       motherboards, and all other components and peripherals required to build
       a computer system.



     - Gates/Arrow is a full-line technical distributor of computer systems,
       peripherals, and software to VARs, offering a full range of computing
       platforms, from desktop systems to enterprise computing environments and
       technical assistance for most operating systems including UNIX, Netware,
       DOS, Windows, Windows NT, as well as Intel and RISC-based platforms.


     Arrow also serves the rapidly-developing markets in Argentina, Brazil, and
Mexico through its recent majority investments in Elko, Panamericana, and
Dicopel, respectively, leading electronic components distributors in each of
these countries.

                                      S-17
<PAGE>   20

     EUROPE


     Our position in Europe has grown significantly since our initial entry into
this market in 1985 with revenues totaling $2.4 billion in 1999, representing
26% of our worldwide total, and $2.6 billion for the first nine months of 2000.



     We are a recognized leader of pan-European components distribution. We have
secured this position by recognizing that Europe is made up of unique sectors
requiring different products and services, in effect cultivating a base of local
knowledge supported by a global presence. Our product offering in Europe is more
heavily weighted toward semiconductors, PEMCO products, and industrial computer
products. We are organized into the following geographic regions to service the
unique needs of our customers:



     - Northern Europe serves the U.K., Denmark, Finland, Ireland, Norway, and
       Sweden. Our joint venture in South Africa, Arrow-Altech, is also a part
       of this group.



     - Central Europe serves Germany, Austria, Belgium, the Netherlands,
       Switzerland, Poland, and the Czech Republic.



     - Southern Europe services Italy, France, Spain, Portugal, Israel, Greece,
       Hungary, Turkey, and Slovenia.


     ASIA/PACIFIC

     We are one of the largest distributors in this rapidly-growing region.
Since our initial investment in this region in 1993, revenues have grown to more
than $750 million in 1999 and we expect to exceed $1.3 billion in revenues in
2000. Our product offerings in the Asia/Pacific region largely consist of
semiconductors, PEMCO, and industrial computer products. Headquartered in Hong
Kong, we have offices in Australia, China, India, Malaysia, New Zealand,
Singapore, South Korea, Taiwan, and Thailand. These areas are serviced by our
regional distribution centers in Hong Kong, Malaysia, Taiwan, and Singapore.

     Our presence in the region has been strengthened by our joint venture with
the Marubun Corporation, a leading independent components distributor in Japan.
The joint venture sells electronic components to Japanese-owned customers in the
Asia/Pacific region and the Americas.

INTERNET

     Because of our critical position in the supply chain and the increasing
demand for value-added services, we believe that the Internet provides us with a
valuable tool to better serve our suppliers' and customers' needs.

     We have utilized a two-prong approach to the Internet. Internally, we have
a formalized organization, the Internet Business Group, that focuses on our
corporate e-commerce activities and brings us to the Internet with a set of
tools and services that makes it as easy for customers to do business with us
over the Internet as by traditional means. In 1999, we launched an extensive
suite of on-line, supply-chain management tools, arrow.com PRO-Series. The
result of extensive research and testing, PRO-Series gives customers
Internet-based, 24-hour access to our inventory, plus the ability to place,
modify, monitor, and manage every order on-line. We believe PRO-Series is the
only on-line, supply-chain management tool that provides:

     - Real-time multi-line quotes;

     - Customer-specific pricing;

     - Spot and scheduled ordering on account;

     - Ability to change quantity, change data, cancel orders;

     - Return authorization; and

     - Real-time integration with our sales team.

                                      S-18
<PAGE>   21

     The second prong in our approach to the Internet has been to make strategic
investments in select Internet start-up companies to access certain market
segments that we do not currently reach. To date, we have made six such
investments, including investments in companies targeted at Internet buyers and
sellers of excess components, companies providing technical design resources for
engineers for utilization in prototype development, and companies providing
supply-chain management tools.

ACQUISITIONS

     The electronics distribution market has undergone a period of
consolidation. In 1970, we were ranked number eleven in our industry based upon
annual revenues. Today, to a large extent resulting from our acquisition
strategy, we are ranked number one. Since 1985, we have made more than 50
acquisitions and strategic investments. We believe we were the first distributor
to develop and execute a strategy to build a pan-European distribution network
and the first North American distributor to enter the Asia/Pacific region,
building one of the largest regional distribution networks. Our approach is to
acquire companies that are recognized leaders in their respective markets, share
our operating philosophies and values, and possess strong, accomplished
managers.

     Our acquisitions over the past 15 years have provided us with access to
experienced sales and marketing teams, new supplier relationships, strong
entrepreneurial managers, facilities and value-added centers, technical
expertise, new customer markets, geographic reach, and the ability to gain
greater operating leverage.


     Although one of the key challenges in any acquisition is the integration of
the acquired organization, we believe that one of the key attributes of our
organization is our ability to integrate all of our North American acquisitions,
and many of our international acquisitions, into our operating systems with a
minimal amount of disruption to either business. A successful integration
creates significant synergies, which lower our fixed costs as a percentage of
revenues. The synergies are principally from areas such as systems, facilities,
logistics centers, and related personnel, as well as personnel in finance, human
resources, and operations. For example, in January 1999, we acquired both Richey
Electronics, Inc. and the electronics distribution business of Bell Industries,
Inc. and by late 1999 we had identified and eliminated significant duplicative
annual costs. The sales and marketing forces, however, are generally not
rationalized. Instead, we utilize these larger teams to gain greater penetration
in the market.


THE WYLE ACQUISITION

     In early August 2000, a consortium consisting of ourselves, an affiliate of
Schroder Ventures, and another distributor, agreed to purchase the VEBA
Electronics Group from Germany-based E.ON AG (formerly VEBA AG) for
approximately $2.35 billion in cash, including the assumption of debt. The VEBA
Electronics Group reported 1999 sales of $5.5 billion. On October 16, 2000, we
completed the acquisition of E.ON's U.S.-based operations: Wyle Components, Wyle
Systems, and the U.S.-based portion of E.ON's logistics unit, ATLAS. Together,
these entities reported combined 1999 sales in North America of about $2
billion.

     The Wyle businesses complement our existing distribution businesses in
North America. Wyle brings a focused group of technical specialists to the
market who will now be better positioned to deliver to its customers our broader
and richer array of value-added services. We are fully committed to the
integration of the best practices and people of the Wyle operations.
Additionally, several new suppliers will be added to our line card. As has been
the case with prior acquisitions, we expect the acquisition of the Wyle
Companies to produce sizable synergies.

     Wyle Components is a franchised distributor for both broadline and
proprietary semiconductor suppliers in North America. Wyle Components serves
customers in various markets, including networking and communications,
computing, contract manufacturing, instrumentation, transportation, and
industrial controls. The merger of Wyle Components with our North American
Components Operations effectively combines our superior supply-chain management
tools and broad line card with Wyle's strong demand creation capabilities. Wyle
Components had revenues of almost $1.3 billion in 1999 and $1.4 billion for the
first nine months of 2000.
                                      S-19
<PAGE>   22

     Wyle Systems is a distributor of computer products with a strong market
presence in the western United States. Our merger with Wyle Systems nearly
doubles our OEM systems sales and systems configuration business, expands our
line card, and strengthens our relationships with suppliers. Wyle Systems had
revenues of $642 million in 1999 and $513 million for the first nine months of
2000.

     Wyle Systems has three business units: the OEM Systems Division, the
Technical Solutions Division, and the Commercial Systems Division.

     The OEM Systems Division (OSD) provides three types of outsourcing services
to OEMs: (1) manufacturing services, such as systems integration--integrating a
combination of off-the-shelf products, such as boards, memory and
microprocessors, and unique or custom products into end products for OEM
customers, (2) engineering support, and (3) logistic and supply chain
management, including drop-ship management, on- and off-site consignment
management, export control and compliance management, and traffic management.

     The Technical Solutions Division (TSD) provides services similar to those
of the OEM Systems Division. However, while the OSD serves OEMs, the TSD's
customers are application VARs, systems integrators, and end users, with greater
concentration on engineering support and less on manufacturing services.

     TSD also provides three types of outsourcing services to VARs and end
users: integration services, systems engineering support, and just-in-time
delivery.

     The Commercial Systems Division (CSD) services systems and PC integrators
by acting as a volume distributor of commodity products, such as Quantum low-end
storage products. The Commercial Systems Division targets the top 100 PC and
systems integrators in the United States with an outside sales force and also
concentrates on Intel product dealers with an internal group.

THE MOCA ACQUISITION

     On October 31, 2000, we acquired MOCA for an initial purchase price of $115
million in cash plus the assumption or repayment of approximately $57 million of
off-balance sheet financing. The acquisition agreement provides that the
purchase price may be increased by up to an additional $37.5 million based upon
future developments with respect to MOCA's business. MOCA is a distributor of
Sun Microsystems products, selling enterprise software, storage area networks,
and Solaris operating systems which run on Sun Microsystems hardware and related
professional services.

                                      S-20
<PAGE>   23

                                   MANAGEMENT




<TABLE>
<CAPTION>
NAME                                         AGE                         POSITION
- ----                                         ---                         --------
<S>                                          <C>      <C>
Stephen Kaufman...........................   59       Chairman
Francis M. Scricco........................   51       President and Chief Executive Officer
Robert E. Klatell.........................   55       Executive Vice President, General Counsel and
                                                      Secretary
Sam R. Leno...............................   55       Senior Vice President and Chief Financial
                                                      Officer
Betty Jane Scheihing......................   52       Senior Vice President
Steven W. Menefee.........................   55       Senior Vice President and President, Arrow
                                                      Asia
Arthur H. Baer............................   54       Vice President and President of Arrow Europe
Michael J. Long...........................   42       Vice President and President of the North
                                                      American Computer Products Group
Jan M. Salsgiver..........................   44       Vice President and President of the North
                                                      American Components Organization
</TABLE>



     Stephen P. Kaufman joined Arrow as president of our Electronics
Distribution Division in 1982. He was appointed President and Chief Operating
Officer of Arrow in 1985. He served as Chief Executive Officer from 1986 through
July 2000, and has served as Chairman since May 1994. Prior to this, he served
in executive capacities with Midland-Ross Corporation and ten years prior to
that, was associated with McKinsey and Company, management consultants, where he
was a partner from 1976 to 1980. He serves on the Board of Directors for Harris
Corporation and Polaroid Corporation.


     Francis M. Scricco has been President since June 1999 and was appointed
Chief Executive Officer in July 2000. From March 1994 through August 1997 he was
Group Vice President at Fischer Scientific International, Inc. Prior thereto, he
was President of Whirlpool Canada. He has also held positions with the General
Electric Company and The Boston Consulting Group.


     Robert E. Klatell has been Executive Vice President since July 1995 and has
served as our Senior Vice President, General Counsel and Secretary for more than
six years. He also served as Chief Financial Officer from January 1992 to April
1996 and Treasurer from 1990 to April 1996.



     Sam R. Leno was appointed Senior Vice President and Chief Financial Officer
effective March 1999. From July 1995 through February 1999, he served as
Executive Vice President and Chief Financial Officer of Corporate Express, Inc.
Prior thereto he was Chief Financial Officer of a mid-sized healthcare company
and for twenty-three years prior thereto he served in various financial
positions at Baxter International.



     Betty Jane Scheihing has been Senior Vice President since May 1996 and
served as a Vice President for more than five years prior thereto.



     Steven W. Menefee has been Senior Vice President of the company since July
1995 and served as a Vice President for more than five years prior thereto. In
addition, he was appointed President of Arrow Asia in September 1998.



     Arthur H. Baer was named President of Arrow Europe and a Vice President in
January 2000. Prior to joining Arrow, he was President of Hudson Valley
Publishing, Inc. from February 1998 through December 1999 and President of Xyan,
Inc. from 1996 through February 1998. Prior thereto, he served as Dean of the
College of Business Administration at Drexel University from May 1993 through
April 1996.



     Michael J. Long has been President and Chief Operating Officer of the North
American Computer Products Group since July 1999. In addition, he has been a
Vice President for more than five years and President of Gates/Arrow
Distributing since November 1995. Prior thereto he was President of Capstone
Electronics since 1994.



     Jan M. Salsgiver has been President of NACO since July 1999. Prior thereto,
she served as President of the Arrow Supplier Services Group since its inception
in January 1998. Prior thereto, she was President of the Arrow/Schweber
Electronics Group since November 1995 and President of Zeus Electronics from
July 1993 to November 1995. In addition, she has been a Vice President for more
than five years.


                                      S-21
<PAGE>   24

                           DESCRIPTION OF DEBENTURES

     The debentures will be issued under an indenture dated as of January 15,
1997 between us and The Bank of New York, as trustee. We have summarized the
material terms and provisions of the debentures in this section, which
supplement the terms of the senior debt securities contained in the prospectus.
In addition to the material terms of the debentures contained in this prospectus
supplement, you should read the description of the indenture contained in the
prospectus for additional information regarding your rights as a holder of the
debentures before you buy any of these debentures. References in this section to
"us," "we" and "our" are solely to Arrow and not to our subsidiaries. References
in this section to the "indenture" shall mean the indenture, as supplemented by
the supplemental indenture relating to the debentures. In the event of any
inconsistency between the terms of the debentures contained in this prospectus
supplement and the provisions of the indenture contained in the prospectus, the
terms contained in this prospectus supplement shall control with respect to the
debentures.


GENERAL; RANKING



     The debentures will be unsecured and unsubordinated obligations of our
company and are pari passu in right of payment with all of our existing and
future unsubordinated and unsecured obligations. The debentures are limited to
$          aggregate principal amount at maturity, plus an additional
$          aggregate principal amount at maturity if the underwriters'
over-allotment option is exercised in full. The debentures are scheduled to
mature on February    , 2021. The debentures are being offered at a substantial
discount from their principal amount at maturity and will therefore have
original issue discount for U.S. federal income tax purposes. See "Certain
United States Federal Income Tax Considerations."


     There will be no periodic cash payments of interest on the debentures,
except as described under "--Optional Conversion to Semiannual Coupon Debentures
Upon a Tax Event." In periods during which a debenture remains outstanding, the
accrual of original issue discount (the difference between the issue price of a
debenture and its principal amount at maturity) will be compounded semi-annually
using a year composed of twelve 30-day months. The accrual of original issue
discount will commence on the date the debentures are issued. Original issue
discount or, if the debentures are converted to semiannual coupon debentures
following the occurrence of a tax event, interest on the debentures, will cease
to accrue upon conversion, repurchase or redemption of the debentures under the
terms of the debentures. The principal amount at maturity of each debenture is
payable at the office or agency of the paying agent, in the Borough of
Manhattan, The City of New York, which shall initially be an office or agency of
the trustee, or any other office of the paying agent maintained for this
purpose. You may present debentures for conversion into common stock at the
office of the conversion agent. Debentures in definitive form may be presented
for exchange for other debentures or registration of transfer at the office of
the registrar. The trustee will initially serve as paying agent, conversion
agent and registrar. We will not impose a service charge for any registration,
transfer or exchange of debentures. However, we may require the holder to pay
for any tax, assessment or other governmental charge to be paid in connection
with any registration, transfer or exchange of debentures.

CONVERSION OF DEBENTURES BY HOLDERS

     You may convert your debentures into shares of our common stock at any time
prior to maturity. However, if we elect to redeem a debenture, you may convert
it only until the close of business on the last trading day prior to a
redemption date, unless we fail to pay the redemption price. If you have
delivered a repurchase notice exercising your option to require us to repurchase
your debenture, you may not convert the debenture unless you withdraw the notice
in accordance with the terms of the indenture. Similarly, if you exercise your
option to require us to repurchase your debenture upon a Fundamental Change (as
defined in the indenture), that debenture may be converted only if you withdraw
your election to exercise your option in accordance with the terms of the
indenture. You may convert your debentures in whole or in part provided

                                      S-22
<PAGE>   25

that you convert them in multiples of $1,000 principal amount at maturity. We
will deliver the shares issuable upon any conversion to the trustee no later
than the close of business on the seventh business day following the conversion
date.


     The initial conversion rate is           shares of common stock per $1,000
principal amount at maturity of debentures, subject to adjustment upon the
occurrence of the events described below. If, on conversion, you would be
entitled to a fractional share of common stock, you will instead receive cash in
an amount equal to the closing price of shares of our common stock on the
trading day immediately prior to the conversion date multiplied by such
fraction.


     You will not receive any cash payment on conversion of a debenture
representing accrued original issue discount. Instead, accrued original issue
discount will be deemed paid in full rather than canceled, extinguished or
forfeited. Consequently, our delivery to you of the fixed number of shares of
our common stock into which the debenture is convertible, together with the cash
payment, if any, in lieu of a fractional share of our common stock, will be
deemed to satisfy our obligation to pay the principal amount at maturity of the
debenture, including accrued original issue discount attributable to the period
from the issue date to the conversion date. We will not adjust the conversion
ratio to account for accrued original issue discount.

     The conversion date is the date on which all of the requirements for
delivery of the debenture for conversion have been satisfied.

     The conversion rate is subject to adjustment to prevent dilution upon the
occurrence of any one of the following events:

     (1) the issuance of our common stock as a dividend or distribution on our
         common stock;

     (2) the issuance to our stockholders of rights or warrants to purchase our
         common stock at below market price;

     (3) certain subdivisions, combinations and reclassifications of our
         outstanding common stock;

     (4) distributions to all our common stockholders of our capital stock, debt
         securities, or other assets, excluding distributions of:

        - common stock in the manner described in item (1) above;

        - rights or warrants in the manner described in item (2) above; or

        - cash in the manner described in item (5) below;

     (5) cash distributions, excluding any quarterly cash dividend on our common
         stock if the quarterly distribution does not exceed the greater of:

        - the cash dividend per share from the previous quarter not requiring an
          adjustment under this provision, as adjusted to reflect subdivisions
          or combinations of our common stock; or

        - 3.75% of the average of the last reported sales price of the common
          stock during the 10 trading days immediately prior to the dividend
          declaration date;

     (6) payment in respect of a tender offer or exchange offer by us or any of
         our subsidiaries for our common stock if the price per share exceeds
         the current market price of our common stock on the next trading day
         after the last date on which tenders or exchanges may be made; and

     (7) payment in respect of certain tender offers or exchange offers by a
         third party in which, as of the closing or expiration date of such
         offer, our board of directors does not recommend rejection of the
         offer, in which case an adjustment will be made only if:

        - the tender offer or exchange offer increases the ownership of the
          person making the offer to more than 25% of our common stock; and

        - the cash and other consideration paid exceeds the market price of our
          common stock on the next trading day after the last date on which
          tenders or exchanges may be made.
                                      S-23
<PAGE>   26

     If an adjustment were required to be made under item (5) above as a result
of a quarterly distribution, the adjustment would be based upon the amount by
which the cash distributed exceeded the maximum quarterly dividend permitted
under that item. If an adjustment were required to be made under item (5) as a
result of a distribution other than a quarterly dividend, the adjustment would
be based upon the full amount of cash distributed. The adjustment referred to in
item (7) above will not be made if, as of the closing of the tender offer or
exchange offer, the offering documents disclose a plan or an intention to cause
us to engage in a consolidation, merger or sale of all or substantially all our
assets.

     If our common stockholders become entitled to receive stock, other
securities, property, cash or other assets upon any reclassification of our
common stock, any consolidation or merger involving us, or any sale to another
entity of substantially all of our assets, then you will generally be able to
convert your debentures into the same type of consideration received by our
common stockholders as if you had done so immediately prior to the triggering
event.

     We may increase the conversion rate for a period of at least 20 days so
long as:

     - the increase remains irrevocable during that period; and

     - our board of directors determines that the increase is in our best
       interest, which determination shall be conclusive.

     We must give at least seven days' advance notice of any increase in the
conversion rate. In addition to increases in the conversion rate of the type
described above, we may increase the conversion rate as we deem advisable to
avoid or diminish any income tax to holders of our common stock resulting from
any dividend or distribution of our stock, or rights to acquire stock, or from
any event treated as a dividend, distribution or right to acquire our stock for
income tax purposes. See "Certain United States Federal Income Tax
Considerations."

     No adjustment in the conversion rate will be required unless the adjustment
would require a change of at least 1% in the conversion rate then in effect;
provided that any adjustment that would otherwise be required to be made will be
carried forward and taken into account in any subsequent adjustment.

     Except as stated above, the conversion rate will not be adjusted for the
issuance of our common stock, any securities convertible into or exchangeable
for our common stock or any rights to purchase any of the foregoing.

     If, following a tax event, we exercise our option to have interest accrue
on a debenture in lieu of original issue discount, you will be entitled to
receive on conversion the same number of shares of common stock that you would
have received had we not exercised our option. If we exercise our option,
debentures surrendered for conversion during the period from the close of
business on the record date next preceding the next interest payment date to the
opening of business on the next interest payment date (except debentures to be
redeemed on the next interest payment date) must also be accompanied by an
amount equal to the accrued and unpaid interest on the debenture that you are to
receive. Except where debentures surrendered for conversion must be accompanied
by the payment described in this paragraph, no interest on converted debentures
will be payable by us on any interest payment date subsequent to the date of
conversion. See "--Optional Conversion to Semiannual Coupon Debentures Upon a
Tax Event."

     In the event of a taxable distribution to our common stockholders or in
certain other circumstances requiring an adjustment to the conversion rate, the
debenture holders may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend. In certain other
circumstances, the absence of an adjustment may result in a taxable dividend to
the holders of common stock. See "Certain United States Federal Income Tax
Considerations."

REDEMPTION OF DEBENTURES AT OUR OPTION


     We may not redeem the debentures before February   , 2006. Beginning on
February   , 2006, we may redeem the debentures for cash in whole or in part at
any time, by mailing a redemption notice to the debenture holders not less than
30 days nor more than 60 days prior to the redemption date. You can convert

                                      S-24
<PAGE>   27

the debentures after they are called for redemption at any time up to three
business days prior to the redemption date.

     The redemption price will be an amount in cash equal to 100% of the sum of:


     - $          , the original issue price per $1,000 principal amount; and


     - accrued original issue discount up to and including the date of
       redemption.

     The debentures will be redeemable in multiples of $1,000 principal amount
at maturity. There is no sinking fund for the debentures.


     The table below shows redemption prices of debentures per $1,000 principal
amount at maturity at February   , 2006, and at each February   thereafter until
maturity on February   , 2021. These redemption prices reflect accrued original
issue discount up to and including each redemption date. The redemption price of
a debenture redeemed between any two of the dates listed below would include an
additional amount reflecting original issue discount accrued from the next
preceding redemption date through the actual date of redemption.



<TABLE>
<CAPTION>
                                                                    (2)
                                                                  ACCRUED
                                                    (1)        ORIGINAL ISSUE          (3)
                                                 DEBENTURE        DISCOUNT         REDEMPTION
                                                ISSUE PRICE         AT %         PRICE (1) + (2)
                                                -----------    --------------    ---------------
<S>                                             <C>            <C>               <C>
February   , 2006.............................
February   , 2007.............................
February   , 2008.............................
February   , 2009.............................
February   , 2010.............................
February   , 2011.............................
February   , 2012.............................
February   , 2013.............................
February   , 2014.............................
February   , 2015.............................
February   , 2016.............................
February   , 2017.............................
February   , 2018.............................
February   , 2019.............................
February   , 2020.............................
At Stated Maturity (February   , 2021)........
</TABLE>


     If we elect to convert the debentures to semiannual coupon debentures
following a tax event, the debentures will be redeemable at the Restated
Principal Amount (as described below) plus accrued and unpaid interest, if any,
to the applicable redemption date.

     If less than all of the outstanding debentures held in certificated form
are to be redeemed, the trustee will select the debentures held in certificated
form to be redeemed in principal amounts at maturity of $1,000 or integral
multiples thereof by lot, pro rata or by another method the trustee considers
fair and appropriate. If a portion of your certificated debentures is selected
for partial redemption and you convert a portion of your debentures, the
converted portion will be deemed to be the portion selected for redemption.
Debentures registered in the name of DTC or its nominee will be redeemed as
described under "Book Entry System".

REPURCHASE OF DEBENTURES AT THE OPTION OF THE HOLDER


     You have the right to require us to repurchase the debentures on February
  , 2006, February   , 2011 and February   , 2016. We will be required to
repurchase any outstanding debenture for which you

                                      S-25
<PAGE>   28

deliver a written repurchase notice to the paying agent. This notice must be
delivered during the period beginning at any time from the opening of business
on the date that is 20 business days prior to the repurchase date until the
close of business on the repurchase date. If a repurchase notice is given and
withdrawn during that period, we will not be obligated to repurchase the
debentures listed in the notice. Our repurchase obligation will be subject to
certain additional conditions.

     The repurchase price payable for a debenture will be equal to the issue
price plus accrued original issue discount through the repurchase date. If,
prior to the repurchase date, we have elected to convert the debentures to
semiannual coupon debentures following a tax event, the repurchase price will be
equal to the Restated Principal Amount plus accrued and unpaid interest to the
repurchase date. See "--Optional Conversion to Semiannual Coupon Debentures Upon
a Tax Event." The table below shows the repurchase prices of a debenture as of
the specified repurchase dates.


<TABLE>
<CAPTION>
REPURCHASE DATE                                               REPURCHASE PRICE
- ---------------                                               ----------------
<S>                                                           <C>
February   , 2006...........................................
February   , 2011...........................................
February   , 2016...........................................
</TABLE>


     We may, at our option, elect to pay the repurchase price in cash, in shares
of our common stock or in any combination of the two. For a discussion of the
tax treatment of debenture holders receiving cash, shares of our common stock or
both, see "Certain United States Federal Income Tax Considerations."

     If we elect to pay the repurchase price, in whole or in part, in shares of
our common stock, the number of shares to be delivered in exchange for the
portion of the repurchase price to be paid in our common stock will be equal to
that portion of the repurchase price divided by the market price (as defined
below) of our common stock. We will not, however, deliver fractional shares in
repurchases using shares of our common stock as consideration. Debenture holders
who would otherwise be entitled to receive fractional shares will instead
receive cash in an amount equal to the market price of a share of our common
stock multiplied by such fraction.

     Your right to require us to repurchase debentures is exercisable by
delivering a written repurchase notice to the paying agent within 20 business
days of the repurchase date. The paying agent initially will be the trustee.

     The repurchase notice must state:

     (1) if certificated debentures have been issued, the debenture certificate
         numbers (or, if your debentures are not certificated, your repurchase
         notice must comply with appropriate DTC procedures);

     (2) the portion of the principal amount at maturity of debentures to be
         repurchased, which must be in $1,000 multiples;

     (3) that the debentures are to be repurchased by us pursuant to the
         applicable provisions of the debentures and the indenture; and

     (4) your election, in the event that we decide to pay all or a portion of
         the repurchase price in shares of our common stock but prove unable to
         satisfy the conditions for common stock payment and ultimately have to
         pay cash, to:

        - withdraw your repurchase notice with respect to all or a portion of
          the debentures listed therein; or

        - receive cash for the entire repurchase price for all the debentures
          listed in your repurchase notice.

     If you fail to indicate your election under item (4) above, you will be
deemed to have elected to receive cash for the entire repurchase price for all
the debentures listed in your repurchase notice.

                                      S-26
<PAGE>   29

     You may withdraw any written repurchase notice by delivering a written
notice of withdrawal to the paying agent prior to the close of business of the
repurchase date. The withdrawal notice must state:

     - the principal amount at maturity of the withdrawn debentures;

     - if certificated debentures have been issued, the certificate numbers of
       the withdrawn debentures (or, if your debentures are not certificated,
       your withdrawal notice must comply with appropriate DTC procedures); and

     - the principal amount at maturity, if any, which remains subject to the
       repurchase notice.

     We must give notice of an upcoming repurchase date to all debenture holders
not less than 20 business days prior to the repurchase date at their addresses
shown in the register of the registrar. We will also give notice to beneficial
owners as required by applicable law. This notice will state, among other
things:

     - whether we will pay the repurchase price of the debentures in cash,
       shares of our common stock, or both (in which case the relative
       percentages will be specified);

     - if we elect to pay all or a portion of the repurchase price in shares of
       our common stock, the method by which we are required to calculate
       "market price" of the common stock; and

     - the procedures that holders must follow to require us to repurchase their
       debentures.

     The "market price" means the average sale price of our common stock for the
five trading days ending on the third business day prior to the applicable
repurchase date (assuming the third business day prior to the applicable
repurchase date is a trading day, or if not, the five trading days ending on the
last trading day prior to the third business day), appropriately adjusted to
take into account the occurrence of certain events that would result in an
adjustment of the conversion rate with respect to our common stock.

     The "sale price" of our common stock on any date means the closing sale
price per share of our common stock on that date (or if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) as reported on
the New York Stock Exchange.

     Because the market price of our common stock will be determined prior to
the applicable repurchase date, debenture holders bear the market risk that our
common stock will decline in value between the date the market price is
calculated and the repurchase date. We may pay the repurchase price or any
portion of the repurchase price in shares of our common stock only if our common
stock is listed on a United States national securities exchange or quoted in an
inter-dealer quotation system of any registered United States national
securities association.

     Upon determination of the actual number of shares of our common stock to be
issued in accordance with the foregoing provisions, if required, we will notify
the securities exchanges or quotation systems on which our common stock is then
listed or quoted and disseminate the number of shares to be issued on our
website or through another public medium.

     Our right to repurchase your debentures, in whole or in part, with shares
of our common stock is subject to various conditions, including:

     - registration of the shares of our common stock to be issued upon
       repurchase under the Securities Act and the Exchange Act, if required;
       and

     - qualification or registration of the shares of our common stock to be
       issued upon repurchase under applicable state securities laws, if
       necessary, or the availability of an exemption therefrom.

     If these conditions are not satisfied by a repurchase date, we will pay the
repurchase price of the debentures to be repurchased entirely in cash. We may
not change the form or components or percentages of components of consideration
to be paid for the debentures once we have given the debenture holders the
required notice, except as described in the preceding sentence.

                                      S-27
<PAGE>   30

     Payment of the repurchase price for a debenture for which a repurchase
notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of the debenture, together with necessary endorsements, to
the paying agent at its office in the Borough of Manhattan, The City of New
York, or any other office of the paying agent, at any time after delivery of the
repurchase notice. Payment of the repurchase price for the debenture will be
made promptly following the later of the repurchase date and the time of book-
entry transfer or delivery of the debenture. If the paying agent holds money or
securities sufficient to pay the repurchase price of the debenture on the
business day following the repurchase date, then, on and after the date:

     - the debenture will cease to be outstanding;

     - original issue discount (or, if the debentures have been converted to
       interest-bearing debentures following a tax event, interest) will cease
       to accrue; and

     - all other rights of the holder will terminate.

     This will be the case whether or not book-entry transfer of the debenture
has been made or the debenture has been delivered to the paying agent, and all
other rights of the debenture holder will terminate, other than the right to
receive the repurchase price upon delivery of the debenture.

     Our ability to repurchase debentures with cash may be limited by the terms
of our then-existing borrowing agreements. The indenture will prohibit us from
repurchasing debentures for cash from debenture holders if any event of default
under the indenture has occurred and is continuing, except a default in the
payment of the repurchase price with respect to the debentures.

     Even though we become obligated to repurchase any outstanding debenture on
a repurchase date, we may not have sufficient funds to pay the repurchase price
on that repurchase date. If this were to occur, we could be required to issue
shares of our common stock to pay the repurchase price at valuations based on
then prevailing market prices for all debentures tendered by their holders.

     We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Exchange Act that may be applicable at the time of the tender
offer. We will file a Schedule TO or any other schedule required in connection
with any offer by us to repurchase the debentures.

REPURCHASE AT THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE

     If we undergo a Fundamental Change (as defined below), you will have the
option to require us to purchase for cash any or all of your debentures on a
purchase date that is 30 days after the date we provide you with notice of such
Fundamental Change. We will pay a purchase price equal to the issue price plus
accrued original issue discount through the purchase date or, if applicable, the
Restated Principal Amount plus accrued and unpaid interest through the date of
purchase. You may require us to purchase all or any part of your debentures
provided that the principal amount at maturity of the debentures being purchased
is an integral multiple of $1,000.

     A "Fundamental Change" is the occurrence of any transaction or event in
connection with which all or substantially all of our common stock will be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or any
other method) any form of consideration which is not all or substantially all
common stock listed (or, upon consummation of or immediately following such
transaction or event, which will be listed) on a United States national
securities exchange or approved for quotation on the Nasdaq's National Market or
any similar United States system of automated dissemination of quotations of
securities prices.

     In order to exercise your right to require us to repurchase your debentures
upon a Fundamental Change, you must deliver a written notice to the paying agent
prior to the close of business on the business day prior to the date on which
the debentures are to be repurchased. You may withdraw the notice by delivering
a written withdrawal notice to the paying agent before the repurchase date. On
or before the 10th day following a

                                      S-28
<PAGE>   31

Fundamental Change, we are required to mail to the trustee and all debenture
holders of record a written notice:

     - stating that a Fundamental Change has occurred; and

     - explaining the repurchase rights that have arisen as a consequence of the
       Fundamental Change.

To exercise your repurchase right, you must deliver to us (or our designated
agent) within 30 days after the date of our Fundamental Change notice:

     - written notice of your election to exercise your repurchase right; and

     - the debentures to be repurchased duly endorsed for transfer.

Payment for debentures surrendered for repurchase (and not withdrawn) prior to
the expiration of the 30-day period will be made promptly following the
repurchase date.

     If, following a tax event, we have previously exercised our option to pay
interest on the debentures instead of accruing original issue discount, we will
purchase the debentures at a cash price equal to the Restated Principal Amount
plus accrued and unpaid interest from the date we exercised our option. See
"--Optional Conversion to Semiannual Coupon Debentures Upon a Tax Event."

     In the event of a Fundamental Change, we will comply with the provisions of
Rule 13e-4 and any other tender offer rules under the Exchange Act that may be
applicable at the time we repurchase the debentures. We will also file a
Schedule TO or any other schedule required in connection with any offer by us to
repurchase the debentures.

     The repurchase rights of the debenture holders could discourage a potential
acquirer from acquiring us, but the Fundamental Change repurchase feature does
not result from management's knowledge of any potential acquirer's attempt to
obtain control of us, nor is it part of an anti-takeover strategy on the part of
management.

     The term "Fundamental Change" is limited to specific types of transactions
and does not include other events that might adversely affect our financial
condition. Moreover, the Fundamental Change repurchase feature may not protect
you in the event of a highly leveraged transaction, reorganization, merger or
similar transaction involving or affecting us.

     No debentures may be repurchased at the option of holders upon a
Fundamental Change if there has occurred and is continuing an event of default
described under "--Events of Default; Notice and Waiver" below. However,
debentures may be repurchased if the event of default is in the payment of the
Fundamental Change purchase price with respect to the debentures.

OPTIONAL CONVERSION TO SEMIANNUAL COUPON DEBENTURES UPON A TAX EVENT


     We have the option to convert the debentures to interest-bearing debentures
following a tax event. From and after the date a tax event occurs, we may elect
to pay interest at      % per year on the debentures instead of accruing
original issue discount. The principal amount will be restated as the sum of (A)
the issue price and (B) the amount of original issue discount accrued up to the
date we exercise our conversion option. This "Restated Principal Amount" will
then be the amount due at maturity. If we elect this option, interest will be
based on a 360-day year comprised of twelve 30-day months. Interest will accrue
from the date we exercise our conversion option and will be payable semiannually
on February   to holders of record on the immediately preceding February   and
on August   to holders of record on the immediately preceding August   .


     A tax event occurs when we receive an opinion from tax counsel stating
that, for United States federal income tax purposes, there is more than an
insubstantial risk that all or a portion of the interest, including

                                      S-29
<PAGE>   32

original issue discount, payable on the debentures would not be deductible by us
either (A) on a current accrual basis or (B) under any other method, as a result
of either:

     - any amendment, change or announced prospective change in the laws or
       regulations of the United States or any of its political subdivisions or
       taxing authorities; or

     - any amendment, change, interpretation or application of the laws or
       regulations by any legislative body, court, government agency or
       regulatory authority.

EVENTS OF DEFAULT; NOTICE AND WAIVER

     If an event of default has occurred and is continuing, the indenture
provides that either the trustee or the holders of at least 25% in aggregate
principal amount at maturity of the debentures then outstanding, in the case of
an event of default described under paragraphs (1) and (2) below under the
definition of events of default, or the holders of 25% in aggregate principal
amount of the debt securities of all affected series then issued and outstanding
under the indenture, in the case of an event of default specified under
paragraphs (3) and (4) under the definition of events of default, may declare
due and payable:

     - the issue price of the debentures (or, if the debentures are converted to
       interest-bearing debentures following a tax event, the Restated Principal
       Amount); plus

     - original issue discount accrued and unpaid on the debentures to the date
       of the declaration (or, if the debentures are converted to
       interest-bearing debentures following a tax event, interest accrued and
       unpaid on the debentures to the date of the declaration).

     In the case of certain events of bankruptcy or insolvency, the issue price
plus original issue discount accrued and unpaid on the debentures to the date of
the event (or, if the debentures are converted to interest-bearing debentures
following a tax event, the Restated Principal Amount plus interest accrued and
unpaid on the debentures to the date of the event) will automatically become
immediately due and payable.

     Under circumstances specified in the indenture, the holders of a majority
in aggregate principal amount at maturity of the outstanding debentures may
rescind any acceleration of the debentures so that they will not become
immediately due and payable.


     Cash interest will accrue at the rate of      % per annum and be payable on
demand upon a default in the payment of any redemption price or purchase price
and, after acceleration, of the issue price plus accrued original issue discount
(or, if the debentures are converted to interest-bearing debentures following a
tax event, the Restated Principal Amount plus accrued and unpaid interest) to
the extent such payment of the interest is legally enforceable. Original issue
discount or, if the debentures are converted to semiannual coupon debentures
following the occurrence of a tax event, interest on the debentures (except as
provided in the first sentence of this paragraph), will cease to accrue after
declaration of acceleration.


     The following constitute events of default under the indenture with respect
to the debentures:

     (1) our failure to pay any of the following when each becomes due and
         payable:

        - the principal amount of the debentures (or, if the debentures have
          been converted to interest-bearing debentures following a tax event,
          the Restated Principal Amount) at stated maturity;

        - the issue price;

        - accrued and unpaid original issue discount (or, if the debentures have
          been converted to interest-bearing debentures following a tax event,
          accrued and unpaid interest);

        - redemption price;

        - repurchase price; or

        - Fundamental Change purchase price;

                                      S-30
<PAGE>   33

     (2) our failure for 30 days to pay any interest (assuming conversion of the
         debentures to interest-bearing debentures following a tax event) due on
         the debentures;

     (3) our failure to comply with any of our covenants or agreements set forth
         in the indenture or the debentures for 30 days after written notice by
         the trustee or by the holders of at least 25% in principal amount at
         maturity of the outstanding debentures;

     (4) certain events involving our bankruptcy, insolvency or reorganization
         or the bankruptcy, insolvency or reorganization of any of our
         Restricted Subsidiaries, as such term is defined in the prospectus
         under "Description of Debt Securities--Certain Definitions."


     The trustee will give notice to the debenture holders of any continuing
default known to the trustee within 90 days after the trustee becomes aware of
it. However, the trustee may withhold notice to the debenture holders of any
default or event of default, except for defaults in any payment on the
debentures, if the trustee considers it in the best interest of the debenture
holders to do so.


     The holders of a majority in aggregate principal amount at maturity of the
outstanding debentures may direct the time, place and method of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee. However, such direction may not conflict with
any law or the indenture and will be subject to certain other limitations.
Before exercising any right or power under the indenture at the direction of the
debenture holders, the trustee will be entitled to receive security or indemnity
satisfactory to the trustee against the costs, expenses and liabilities incurred
by the trustee in complying with the direction of the debenture holders. No
debenture holder will have any right to pursue any remedy with respect to the
indenture or the debentures unless:

     (1) the debenture holder has previously given us and the trustee written
         notice of a continuing event of default;

     (2) the holders of at least 25% in aggregate principal amount at maturity
         of the outstanding debentures have made a written request to the
         trustee to pursue the remedy;

     (3) the debenture holder or holders have offered the trustee indemnity
         satisfactory to the trustee;


     (4) the holders of a majority in aggregate principal amount at maturity of
         the outstanding debentures have not given the trustee a direction
         inconsistent with the request within 60 days of the trustee's receipt
         of the request; and



     (5) the trustee has failed to comply with the request within a 60-day
         period.


     However, none of the following rights of any debenture holder may be
impaired or adversely affected without the debenture holder's consent:

     (1) the right to receive payments of principal (including the issue price
         and accrued original issue discount) or interest in respect of any
         default in payment under a debenture on or after the due date;

     (2) the right to institute suit for the enforcement of any payments or
         conversion; or

     (3) the right to convert debentures.

     The holders of at least a majority in aggregate principal amount at
maturity of the outstanding debentures may waive an existing default and its
consequences, other than:

     - any default in any payment on the debentures;

     - any default with respect to the conversion rights of the debentures; or

     - any default in respect of certain covenants or provisions in the
       indenture which may not be modified without the consent of the holder of
       each debenture as described under the caption entitled "--Modification
       and Waiver" below.

     We will be required to furnish to the trustee annually a statement as to
any default by us in the performance and observance of our obligations under the
indenture.
                                      S-31
<PAGE>   34

MODIFICATION AND WAIVER

     In addition to the provisions contained under "Description of Debt
Securities--Modification of the Indenture" in the prospectus, we may not amend,
modify or supplement the indenture without the consent of each holder affected
if the effect of such amendment, modification or supplement would be to:

     (1) reduce the repurchase price or Fundamental Change purchase price;

     (2) alter the manner or rate of accrual of original issue discount or
         interest, if any;

     (3) make any debenture payable in money or securities of a type other than
         that stated in the debentures;

     (4) impair the right to institute suit for payment under, or conversion of,
         the debentures;

     (5) reduce the quorum or voting requirements under the indenture;

     (6) change any obligation of Arrow to maintain an office or agency in the
         places and for the purposes specified in the indenture; or

     (7) make any change that adversely affects the right to convert any
         debenture or the right to require us to repurchase a debenture or the
         right to require us to repurchase a debenture upon a Fundamental
         Change.

PAYMENT AND PAYING AGENTS

     Payments on the debentures not made in shares of our common stock will be
made in U.S. dollars at the office of the trustee. At our option, however, we
may make payments by check mailed to the holder's registered address or, with
respect to global debentures, by wire transfer. We will make interest payments
to the person in whose name the debenture is registered at the close of business
on the record date for the interest payment.

     The trustee initially will be designated as our paying agent for payments
on debentures. We may at any time designate additional paying agents or rescind
the designation of any paying agent or approve a change in the office through
which any paying agent acts.

     Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent shall pay to us upon written request any money held by
them for payments on the debentures that remain unclaimed for two years after
the date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the trustee or paying agent with respect to that money will cease.

INFORMATION CONCERNING THE TRUSTEE

     We have appointed The Bank of New York as trustee under the indenture, and
as paying agent, conversion agent, registrar and custodian with regard to the
debentures.

                                      S-32
<PAGE>   35

            CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

     This section summarizes some of the U.S. federal income tax considerations
relating to the purchase, ownership, and disposition of the debentures and of
common stock into which the debentures may be converted. This summary does not
provide a complete analysis of all potential tax considerations. The information
provided below is based on existing authorities. These authorities may change,
or the Internal Revenue Service (the "IRS") might interpret the existing
authorities differently. In either case, the tax consequences of purchasing,
owning or disposing of debentures or common stock could differ from those
described below. The summary generally applies only to holders that are U.S.
holders that purchase debentures in the initial offering at their issue price
and hold the debentures or common stock as "capital assets" (generally, for
investment). The summary generally does not address tax considerations that may
be relevant to particular investors because of their specific circumstances, or
because they are subject to special rules. Finally, the summary does not
describe the effect of the federal estate and gift tax laws or the effects of
any applicable foreign, state, or local laws.

     INVESTORS CONSIDERING THE PURCHASE OF DEBENTURES SHOULD CONSULT THEIR OWN
TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO
THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES OF FEDERAL ESTATE OR GIFT TAX
LAWS, FOREIGN, STATE, OR LOCAL LAWS, AND TAX TREATIES.

     As used herein, the term "U.S. holder" means a holder of a debenture or
common stock that is, for U.S. federal income tax purposes:

     - a citizen or resident of the United States;

     - a corporation or partnership created or organized in or under the laws of
       the United States or any state therein;

     - an estate the income of which is subject to U.S. federal income taxation
       regardless of its source; or

     - a trust if a U.S. court is able to exercise primary supervision over its
       administration and one or more U.S. persons have the authority to control
       all of its substantial decisions.

ORIGINAL ISSUE DISCOUNT

     Because the debentures do not provide for payments of fixed periodic
interest, they will be sold at a discount from their principal amount at
maturity. Investors will in effect receive interest at maturity, unless the
debentures are converted or redeemed before then, by receiving a principal
amount greater than the issue price of the debentures. Because this excess of
principal over issue price is economically equivalent to interest, the U.S. tax
rules require that this amount (referred to as "original issue discount") be
recognized as interest income over the term of the debentures. The amount of
accrued interest for each period is determined under a constant yield method, so
that the accrued interest for any period equals a constant percentage of the
holder's investment (including the original purchase price of the debenture plus
any previously accrued interest). Because the holder's investment increases each
period, the amount of interest income for each period will increase as the
debentures get closer to maturity.

     We will be required to furnish annually to the IRS and to certain
noncorporate holders information regarding the amount of original issue discount
allocable to the year. For this purpose, we will use six-month accrual periods
that begin or end on the maturity date of the debentures.

SALE, EXCHANGE OR REDEMPTION OF THE DEBENTURES

     Except as described below, a holder will recognize capital gain or loss if
the holder disposes of a debenture in a sale, redemption or exchange other than
a conversion of the debenture into common stock. The holder's gain or loss will
equal the difference between the proceeds received by the holder and the
holder's adjusted tax basis in the debenture. The proceeds received by the
holder will include the amount of any cash and the fair market value of any
other property received for the debenture. The holder's tax basis in the
                                      S-33
<PAGE>   36

debenture will generally equal the amount the holder paid for the debenture,
increased by previously accrued original issue discount. The gain or loss
recognized by a holder on a disposition of the debenture will be long-term
capital gain or loss if the holder held the debenture for more than one year.
Long-term capital gains of individual taxpayers are generally taxed at a maximum
rate of 20 percent. The deductibility of capital losses is subject to
limitation.


     If a holder elects to exercise his option to tender debentures to us on a
February      , 2006, February      , 2011 or February      , 2016 purchase date
and we issue common stock in satisfaction of all or part of the purchase price,
the exchange of the debentures for common stock should qualify as a
reorganization for federal income tax purposes. If we pay the purchase price
solely in common stock, the holder generally should not recognize any gain or
loss. If we pay the purchase price with a combination of common stock and cash,
the holder would be required to recognize any gain realized, but only to the
extent of the cash received. The holder would not be allowed to recognize any
loss. Because the price we will pay will equal the issue price plus accrued
original issue discount, however, the amount received by an initial holder
should equal the holder's tax basis and the holder should not realize any gain
or loss. If we pay all or part of the purchase price with common stock and the
holder receives cash in lieu of a fractional share of stock, the holder would be
treated as if he received the fractional share and then had the fractional share
redeemed for the cash. The holder would recognize capital gain or loss equal to
the difference between the cash received and that portion of his basis in the
stock attributable to the fractional share. A holder's initial tax basis in his
common stock (including any fractional share) should equal the holder's adjusted
basis in the debentures tendered, increased by the amount of gain recognized and
decreased by the amount of cash received. The holder's holding period for his
common stock should include the period during which the holder held his
debentures. The holding period for common stock attributable to original issue
discount, however, might begin on the day following the exchange date.


CONVERSION OF THE DEBENTURES

     A holder generally will not recognize any income, gain or loss on
converting a debenture into common stock. If the holder receives cash in lieu of
a fractional share of stock, however, the holder would be treated as described
in the preceding paragraph. The holder's holding period for the stock will
include the period during which he or she held the debenture. The holding period
for common stock attributable to original issue discount, however, might begin
on the day following conversion.

DIVIDENDS

     If, after a holder converts a debenture into common stock, we make a
distribution in respect of that stock, the distribution will be treated as a
dividend, taxable to the holder as ordinary income, to the extent it is paid
from our current or accumulated earnings and profits. If the distribution
exceeds our current and accumulated profits, the excess will be treated first as
a tax-free return of the holder's investment, up to the holder's basis in its
common stock. Any remaining excess will be treated as capital gain. If the
holder is a U.S. corporation, it would generally be able to claim a deduction
equal to a portion of any dividends received.

     The terms of the debentures allow for changes in the conversion rate of the
debentures in certain circumstances. A change in conversion price that allows
debentureholders to receive more shares of common stock on conversion may
increase the debentureholders' proportionate interests in our earnings and
profits or assets. In that case, the debentureholders would be treated as though
they received a dividend in the form of our stock. Such a constructive stock
dividend could be taxable to the debentureholders, although they would not
actually receive any cash or other property. A taxable constructive stock
dividend would result, for example, if the conversion rate is adjusted to
compensate debentureholders for distributions of cash or property to our
shareholders. Not all changes in conversion rate that allow debentureholders to
receive more stock on conversion, however, increase the debenture-holders'
proportionate interests in the company. For instance, a change in conversion
rate could simply prevent the dilution of the debentureholders' interests upon a
stock split or other change in capital structure. Changes of this type, if made
by a bona fide, reasonable adjustment formula, are not treated as constructive
stock dividends. Conversely, if an event occurs that dilutes the
debentureholders' interests and the conversion rate is not adjusted, the
resulting increase in the
                                      S-34
<PAGE>   37

proportionate interests of our shareholders could be treated as a taxable stock
dividend to them. Any taxable constructive stock dividends resulting from a
change to, or failure to change, the conversion rate would be treated like
dividends paid in cash or other property. They would result in ordinary income
to the recipient, to the extent of our current or accumulated earnings and
profits, with any excess treated as a tax-free return of capital or as capital
gain.

SALE OF COMMON STOCK

     A holder will generally recognize capital gain or loss on a sale or
exchange of common stock. The holder's gain or loss will equal the difference
between the proceeds received by the holder and the holder's adjusted tax basis
in the stock. The proceeds received by the holder will include the amount of any
cash and the fair market value of any other property received for the stock. The
gain or loss recognized by a holder on a sale or exchange of stock will be
long-term capital gain or loss if the holder held the stock for more than one
year. In the case of individuals, long-term capital gains are generally taxed at
a maximum rate of 20 percent, while the deductibility of capital losses is
subject to limitation.

BACKUP WITHHOLDING AND INFORMATION REPORTING

     The Internal Revenue Code and the Treasury regulations require those who
make specified payments to report the payments to the IRS. Among the specified
payments are interest (including original issue discount), dividends, and
proceeds paid by brokers to their customers. The required information returns
enable the IRS to determine whether the recipient properly included the payments
in income. This reporting regime is reinforced by "backup withholding" rules.
These rules require the payors to withhold tax at a 31 percent rate from
payments subject to information reporting if the recipient fails to cooperate
with the reporting regime by failing to provide his taxpayer identification
number to the payor, furnishing an incorrect identification number, or
repeatedly failing to report interest or dividends on his returns. The
information reporting and backup withholding rules do not apply to payments to
corporations, whether domestic or foreign.

     Payments of dividends to individual holders of common stock will generally
be subject to information reporting, and will be subject to backup withholding
unless the holder provides us or our paying agent with a correct taxpayer
identification number.

     Payments made to holders by a broker upon a sale of debentures or common
stock will generally be subject to information reporting and backup withholding.
If, however, the sale is made through a foreign office of a U.S. broker, the
sale will be subject to information reporting but not backup withholding. If the
sale is made through a foreign office of a foreign broker, the sale will
generally not be subject to either information reporting or backup withholding.
This exception may not apply, however, if the foreign broker is owned or
controlled by U.S. persons, or is engaged in a U.S. trade or business. Any
amounts withheld from a payment to a holder of debentures or common stock under
the backup withholding rules can be credited against any U.S. federal income tax
liability of the holder.

TAX EVENT

     The modification of the terms of the debentures by us upon a tax event as
described in "Description of Debentures--Optional Conversion to Semiannual
Coupon Debentures Upon a Tax Event," could alter the timing of income
recognition by the holders regarding the semiannual payments of interest due
after the option exercise date.


     THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE, EACH PROSPECTIVE INVESTOR
SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE,
LOCAL, AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING, AND DISPOSING OF OUR
DEBENTURES OR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN
APPLICABLE LAWS.


                                      S-35
<PAGE>   38

                                  UNDERWRITERS

     Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus supplement, the underwriters named
below have severally agreed to purchase, and we have agreed to sell to them, the
following principal amounts of debentures:


<TABLE>
<CAPTION>
NAME                                                            PRINCIPAL AMOUNT
- ----                                                            ----------------
<S>                                                             <C>
Morgan Stanley & Co. Incorporated...........................
Credit Suisse First Boston Corporation......................
Goldman, Sachs & Co. .......................................
Banc of America Securities LLC..............................
J.P. Morgan Securities Inc. ................................
Robertson Stephens, Inc. ...................................
                                                                  -----------
Total.......................................................      $
                                                                  ===========
</TABLE>


     The underwriting agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the debentures offered by this
prospectus supplement are subject to the approval of certain legal matters by
their counsel and to certain other conditions. The underwriters are obligated to
take and pay for all of the debentures offered by this prospectus supplement if
any such debentures are taken. However, the underwriters are not required to
take or pay for the debentures covered by the underwriters over-allotment option
described below.


     The underwriters initially propose to offer part of the debentures directly
to the public at the public offering price listed on the cover page of this
prospectus supplement and part to certain dealers at a price that represents a
concession not in excess of $          per debenture. Any underwriter may allow,
and such dealers may reallow, a concession not in excess of $          per
debenture to other underwriters or to certain dealers. After the debentures are
released to the public, the offering price and other selling terms may from time
to time be varied by the underwriters named on the cover page of this prospectus
supplement.



     We have granted to the underwriters an option, exercisable within 30 days
of the date of this prospectus supplement, to purchase up to an additional
$          aggregate principal amount at maturity of the debentures at the
public offering price set forth on the cover page of this prospectus supplement,
less underwriting discounts and commissions. The underwriters may exercise the
option solely for the purpose of covering over-allotments if any, made in
connection with the offering of debentures offered by this prospectus
supplement. To the extent the option is exercised, each underwriter will become
obligated to purchase approximately the same percentage of the additional
debentures as the underwriter purchased in the original offering. If the
underwriters' option is exercised in full, the total price to the public would
be $          , the total underwriters' discounts and commissions would be
$          and total proceeds to us would be $          .


     The debentures are a new issue of securities with no established trading
market. The underwriters have advised us that they presently intend to make a
market in the debentures as permitted by applicable laws and regulations. The
underwriters are not obligated, however, to make a market in the debentures and
any such market-making activity may be discontinued at any time at the sole
discretion of the underwriters. Accordingly, we cannot assure you as to the
liquidity of, or trading markets for, the debentures.


     We, our directors and our executive officers are agreeing that, without the
prior written consent of Morgan Stanley & Co. Incorporated on behalf of the
underwriters, each of us will not, during the period ending 90 days after the
date of this prospectus supplement:


     - offer, pledge, sell, contract to sell, sell any option or contract to
       purchase, purchase any option or contract to sell, grant any option,
       right or warrant to purchase, lend or otherwise transfer or dispose of
       directly or indirectly, any shares of common stock or any securities
       convertible into or exercisable or exchangeable for common stock; or

                                      S-36
<PAGE>   39

     - enter into any swap or other arrangement that transfers to another, in
       whole or in part, any of the economic consequences of ownership of the
       common stock

whether any transaction described above is to be settled by delivery of common
stock or such other securities, in cash or otherwise.

     We may, without such consent, however:

     - issue and sell the debentures offered hereby;

     - issue the common stock issuable upon conversion of the debentures; and


     - grant options or issue and sell stock upon the exercise of outstanding
       stock options or otherwise pursuant to our stock option or employee stock
       purchase plans;



and, with respect to Messrs. Kaufman and Klatell, they may, without such
consent, contract to sell and sell up to 1,000,000 shares and 120,000 shares of
common stock, respectively, after five trading days from the date of pricing of
this offering.


     In order to facilitate the offering of the debentures and the common stock,
the underwriters may engage in transactions that stabilize, maintain or
otherwise affect the price of the debentures or the common stock. Specifically,
the underwriters may over-allot in connection with the offering, creating a
short position in the debentures for their own account. In addition, to cover
over-allotments or to stabilize the price of the debentures, the underwriters
may bid for, and purchase, the debentures or shares of the common stock in the
open market. Finally, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or a dealer for distributing the debentures in the
offering, if the syndicate repurchases previously distributed debentures in
transactions to cover syndicate short positions, in stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market price
of the debentures or the common stock above independent market levels. The
underwriters are not required to engage in these activities, and may end any of
these activities at any time.


     From time to time, the underwriters or their affiliates may provide
investment banking services to us, for which they have received customary
compensation. We will apply $400 million of the net proceeds of this offering to
repay our short-term indebtedness to an affiliate of Morgan Stanley Dean Witter.



     We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act.


                                 LEGAL MATTERS


     The validity of the debentures will be passed upon for us by Milbank,
Tweed, Hadley & McCloy LLP. Certain legal matters will be passed on for the
underwriters by Davis Polk & Wardwell.


                                    EXPERTS


     The consolidated financial statements of Arrow Electronics, Inc. at
December 31, 1999 and 1998, and for each of the three years in the period ended
December 31, 1999, appearing in our Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 and incorporated by reference in the prospectus,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report dated February 16, 2000 incorporated in the prospectus by reference
and are included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.



     The audited historical financial statements of the Wyle Electronics Group
incorporated in this Supplement by reference to Arrow Electronics, Inc's Form
8-K dated September 1, 2000 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.


                                      S-37
<PAGE>   40
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.



                SUBJECT TO COMPLETION, DATED FEBRUARY 13, 2001.
PROSPECTUS


                                 $2,000,000,000
                                  -------------
                             ARROW ELECTRONICS, INC.

                                 DEBT SECURITIES
                                 PREFERRED STOCK
                                  COMMON STOCK
                                    WARRANTS


         We may offer and sell the securities from time to time in one or more
offerings. This prospectus provides you with a general description of the
securities we may offer.

         Each time we sell securities, we will provide a supplement to this
prospectus that contains specific information about the offering and the terms
of the securities. The supplement may also add, update or change information
contained in this prospectus. You should carefully read this prospectus and any
supplement before you invest in any of our securities.

         We may offer and sell the following securities:

- -        debt securities, in one or more series, consisting of notes, debentures
         or other evidences of indebtedness;

- -        preferred stock;

- -        common stock; and

- -        warrants.


         Our common stock is traded on the New York Stock Exchange under the
symbol "ARW." Any common stock sold pursuant to this prospectus or any
prospectus supplement will be listed on that exchange, subject to official
notice of issuance. The prospectus supplement will state whether any other
securities offered thereby will be listed on a securities exchange.


         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.


            The date of this prospectus is                , 2001.

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

<PAGE>   41
                                TABLE OF CONTENTS


<TABLE>
<S>                                                                                                           <C>
About This Prospectus....................................................................................      2
Where You Can Find More Information......................................................................      2
Forward Looking Statements...............................................................................      3
Arrow Electronics, Inc...................................................................................      4
Use Of Proceeds..........................................................................................      4
Consolidated Ratios Of Earnings To Fixed Charges.........................................................      4
Description Of Debt Securities...........................................................................      5
Description Of Capital Stock.............................................................................     24
Description Of Warrants..................................................................................     26
Plan Of Distribution.....................................................................................     27
Validity Of Securities...................................................................................     28
Experts..................................................................................................     28
</TABLE>

<PAGE>   42
                              ABOUT THIS PROSPECTUS

         This prospectus is part of a "shelf" registration statement that we
filed with the United States Securities and Exchange Commission, or the "SEC."
By using a shelf registration statement, we may sell up to $2,000,000,000 in
aggregate offering price of any combination of the securities described in this
prospectus (or in the other prospectus included in the shelf registration
statement) from time to time and in one or more offerings. This prospectus only
provides you with a general description of the securities that we may offer.
Each time we sell securities, we will provide a supplement to this prospectus
that contains specific information about the terms of the securities. The
supplement may also add, update or change information contained in this
prospectus. Before purchasing any securities, you should carefully read both
this prospectus and any supplement, together with the additional information
described under the heading "Where You Can Find More Information." Unless
otherwise indicated or unless the context requires otherwise, all references in
this prospectus to "Arrow", "we", "our", "us" or similar references mean Arrow
Electronics, Inc.

         You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The information contained in this prospectus
and the supplement to this prospectus is accurate only as of the dates of their
respective covers, regardless of the time of delivery of this prospectus or any
supplement to this prospectus or of any sale of our securities.

         No action is being taken in any jurisdiction outside the United States
to permit a public offering of the securities or possession or distribution of
this prospectus or any supplement to this prospectus in that jurisdiction.
Persons who come into possession of this prospectus or any supplement to this
prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe any restrictions as to this offering and the
distribution of this prospectus or any supplement to this prospectus applicable
to that jurisdiction.


                       WHERE YOU CAN FIND MORE INFORMATION

         We file annual, quarterly and current reports, proxy statements and
other documents with the Securities and Exchange Commission under the Securities
Exchange Act of 1934.

         You may read and copy any document we file at the SEC's public
reference room, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference room. Our
SEC filings are also available to the public on the SEC's Web site at
http://www.sec.gov and through the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, on which our common stock is listed.

         You may obtain a copy of any of our filings with the SEC, or any of the
agreements or other documents that constitute exhibits to those filings, without
charge, by request directed to us at the following address and telephone number:

                             Arrow Electronics, Inc.
                                  25 Hub Drive
                            Melville, New York 11747
                                 (516) 391-1300
                              Attention: Secretary

                                       2
<PAGE>   43
         The SEC allows us to "incorporate by reference" in this prospectus
reports that we file with them, which means that we can disclose important
information to you by referring you to those reports. Accordingly, we are
incorporating by reference in this prospectus the documents listed below and any
future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934:

         (1)      Our Annual Report on Form 10-K for the year ended December 31,
                  1999;

         (2)      Our Quarterly Reports on Form 10-Q for the quarters ended
                  March 31, 2000, June 30, 2000 and September 30, 2000;


         (3)      Our Current Reports on Form 8-K dated September 1, 2000,
                  September 19, 2000 and December 22, 2000; and


         (4)      The description of our common stock set forth on our
                  registration statement filed with the Securities and Exchange
                  Commission pursuant to Section 12 of the Exchange Act,
                  including any amendments or reports filed for the purpose of
                  updating such description.

         The information incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information contained
directly in this prospectus. Any information that we file later with the SEC
will automatically update and supersede this information.

         This prospectus constitutes a part of a registration statement on Form
S-3 filed by us with the SEC under the Securities Act of 1933. This prospectus
does not contain all the information that is contained in the registration
statement, some of which we are allowed to omit in accordance with the rules and
regulations of the SEC. We refer you to the registration statement and to the
exhibits filed with the registration statement for further information with
respect to Arrow. Copies of the registration statement and the exhibits to the
registration statement are on file at the offices of the SEC and may be obtained
upon payment of the prescribed fee or may be examined without charge at the
public reference facilities of the SEC described above. Statements contained in
this prospectus concerning the provisions of documents are summaries of the
material provisions of those documents, and each of those statements is
qualified in its entirety by reference to the copy of the applicable document
filed with the SEC. Since this prospectus may not contain all of the information
that you may find important, you should review the full text of these documents.

                           FORWARD LOOKING STATEMENTS

         This prospectus includes forward-looking statements that are subject to
certain risks and uncertainties which could cause actual results or facts to
differ materially from the statements in this prospectus for a variety of
reasons, including, but not limited to: industry conditions, changes in product
supply, pricing, and customer demand, competition, other vagaries in the
electronic components and commercial computer products markets, and changes in
relationships with key suppliers. Forward-looking statements are those
statements which are not statements of historical fact. You can identify these
forward-looking statements by forward-looking words such as "expects,"
"anticipates," "intends," "plans," "may," "will," "believes," "seeks,"
"estimates," and similar expressions. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date on
which they are made. We undertake no obligation to update publicly or revise any
of the forward-looking statements.

                                       3
<PAGE>   44
                             ARROW ELECTRONICS, INC.

         We are the world's largest distributor of electronic components and
computer products to industrial and commercial customers. We believe we are one
of the global electronics distribution industry's leaders in state-of-the-art
operating systems, employee productivity, value-added programs, and total
quality assurance. We are a leading distributor for over 600 suppliers.

         Our distribution network spans the world's three dominant electronics
markets: North America, Europe, and the Asia/Pacific region. Through our
business units in these vital industrialized regions, we serve a diversified
base of original equipment manufacturers and commercial customers worldwide.
Original equipment manufacturers, or OEMs, include manufacturers of computer and
office products, industrial equipment (including machine tools, factory
automation, and robotic equipment), telecommunications products, aircraft and
aerospace equipment, and scientific and medical devices. Commercial customers
are mainly value-added resellers of computer systems. Through a network of more
than 225 sales facilities and 19 distribution centers in 38 countries, we
deliver to more than 175,000 OEMs and commercial customers the products,
inventory solutions, materials management services, and design and technical
support they need when, where and how they need them.

                                 USE OF PROCEEDS

         Except as otherwise described in the prospectus supplement relating to
an offering of securities, the net proceeds from the sale of securities offered
pursuant to this prospectus and any prospectus supplement will be used for
general corporate purposes.


                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

         The following table sets forth our historical ratios of earnings to
fixed charges and our consolidated subsidiaries for the periods indicated:

<TABLE>
<CAPTION>
                                        NINE MONTHS ENDED
                                        SEPTEMBER 30, 2000                  YEAR ENDED DECEMBER 31,
                                        ------------------     -----------------------------------------------
                                                               1999        1998      1997      1996       1995
                                                               ----        ----      ----      ----       ----
<S>                                     <C>                   <C>          <C>       <C>       <C>        <C>
Ratio of Earnings
to Fixed Charges...............                4.6             2.9(a)       4.0      5.0(b)     8.6        7.7
</TABLE>

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

(a)      Excluding the special pre-tax charge of $25 million associated with the
         acquisition and integration of Richey Electronics, Inc. and the
         electronics distribution group of Bell Industries, Inc., the ratio of
         earnings to fixed charges would have been 3.1.

(b)      Excluding special pre-tax charges totaling $59 million associated with
         the realignment of our North American components operations and the
         acquisition and integration of the volume electronic component
         distribution businesses of Premier Farnell plc, the ratio of earnings
         to fixed charges would have been 5.7.

                                       4
<PAGE>   45
                         DESCRIPTION OF DEBT SECURITIES

    We have described below the general terms and provisions of the debt
securities to which a prospectus supplement may relate. We will describe the
particular terms of the debt securities offered by any prospectus supplement in
the prospectus supplement relating to the offered debt securities.

    We may from time to time offer and sell debt securities, consisting of
debentures, notes and/or other unsecured evidences of indebtedness. The debt
securities will be either our unsecured senior debt securities or our unsecured
subordinated debt securities.


         We will issue senior debt securities under an indenture, called the
"senior indenture", between us and The Bank of New York (as successor to Bank of
Montreal Trust Company), as trustee, in such capacity, called the "senior
trustee". We may also issue subordinated debt securities under a proposed
indenture, called the "subordinated indenture", between us and a trustee to be
named in any prospectus supplement relating to the subordinated debt securities,
called the "subordinated trustee". In this prospectus, we refer to the senior
indenture and the subordinated indenture together as the "indentures", to the
senior debt securities and the subordinated debt securities together as the
"debt securities" and to the senior trustee and the subordinated trustee
together as the "trustees". Unless otherwise indicated, section references in
this prospectus or in an accompanying prospectus supplement are to the relevant
provisions of both the senior indenture and the subordinated indenture. The
following summary of important provisions of the debt securities and the
indentures does not purport to be complete. This summary is subject to the
detailed provisions of the indentures, including the definition of certain
terms used in this prospectus and those terms made a part of the indentures by
reference to the Trust Indenture Act and the debt securities. Wherever
particular sections or defined terms of the indentures are referred to, those
sections or defined terms are incorporated by reference in this prospectus as
part of the statement made, and the statement is qualified in its entirety by
such reference. Numerical references in parentheses below are to sections in
the indentures. Capitalized terms that are used and not otherwise defined in
this prospectus will have the meanings assigned to them in the indentures.


GENERAL


         The indentures provide for the issuance from time to time of
debentures, notes or other evidences of indebtedness by us in an unlimited
amount pursuant to a supplemental indenture, a board resolution, or an officer's
certificate pursuant to a supplemental indenture or board resolution. (Section
2.3)



         Under each indenture, we may issue debt securities in one or more
series with the same or various maturities, at par, at a premium or with an
original issue discount. The applicable prospectus supplement relating to a
particular series of debt securities will describe the specific terms of the
debt securities we may offer, including:


         (a)      the designation of the debt securities of a particular series,
                  which will distinguish the debt securities of that series from
                  the debt securities of all other series;

         (b)      any limit upon the aggregate principal amount of the debt
                  securities of that series that may be authenticated and
                  delivered under the indentures and any limitation on our
                  ability to increase the aggregate principal amount after the
                  initial issuance of the debt securities of that series;

                                       5



<PAGE>   46
         (c)      the date or dates on which the principal of the debt
                  securities of that series is payable (which date or dates may
                  be fixed or extendible);

         (d)      the rate or rates (which may be fixed or variable) per year at
                  which the debt securities of that series will bear interest,
                  if any;

         (e)      the date or dates from which interest will accrue, on which
                  interest will be payable and (in the case of registered
                  securities (which is defined as any debt security registered
                  on the security register)) on which a record will be taken for
                  the determination of holders to whom interest is payable
                  and/or the method by which such rate or rates or date or dates
                  will be determined;

         (f)      if other than as provided in the indentures, the place or
                  places where (1) the principal of and any interest on debt
                  securities will be payable, (2) any registered securities may
                  be surrendered for exchange, (3) notices, demands to or upon
                  us in respect of the debt securities of that series or the
                  indentures may be served and (4) notice to holders may be
                  published;

         (g)      our right, if any, to redeem debt securities of that series,
                  in whole or in part, at our option and the period or periods
                  within which, the price or prices at which and any terms and
                  conditions upon which debt securities of that series may be
                  redeemed pursuant to any sinking fund or otherwise;

         (h)      our obligation, if any, to redeem, purchase or repay debt
                  securities of that series pursuant to any mandatory
                  redemption, sinking fund or analogous provisions or at the
                  option of a holder and the price or prices at which and the
                  period or periods within which and any of the terms and
                  conditions upon which debt securities of that series will be
                  redeemed, purchased or repaid, in whole or in part, pursuant
                  to our redemption obligation;

         (i)      if other than denominations of $1,000 and any integral
                  multiple of $1,000, the denominations in which debt securities
                  of that series will be issuable;

         (j)      if other than the principal amount of the debt securities, the
                  portion of the principal amount of debt securities of that
                  series which will be payable upon acceleration of the maturity
                  of those securities;

         (k)      if other than the coin or currency in which the debt
                  securities of that series are denominated, the coin or
                  currency in which payment of the principal of or interest on
                  the debt securities of that series will be payable or if the
                  amount of payments of principal of and/or interest on the debt
                  securities of that series may be determined with reference to
                  an index based on a coin or currency other than that in which
                  the debt securities of that series are denominated, the manner
                  in which those amounts will be determined;

         (l)      if other than the currency of the United States of America,
                  the currency or currencies, including composite currencies, in
                  which payment of the principal of and interest on the debt
                  securities of that series will be payable, and the manner in
                  which any currencies will be valued against other currencies
                  in which any other debt securities will be payable;

                                       6

<PAGE>   47
         (m)      whether the debt securities of that series or any portion
                  thereof will be issuable, with or without coupons, as
                  registered securities (and if so, whether those debt
                  securities will be issuable as registered global securities)
                  or unregistered securities (which is defined as any debt
                  security other than a registered security), or any combination
                  of the foregoing, any restrictions applicable to the offer,
                  sale or delivery of unregistered securities or the payment of
                  interest on those securities and, if other than as provided in
                  the indenture, the terms upon which unregistered securities of
                  any series may be exchanged for registered securities of that
                  series and vice versa;

         (n)      whether and under what circumstances we will pay additional
                  amounts on debt securities held by a person who is not a U.S.
                  person in respect of any tax, assessment or governmental
                  charge withheld or deducted and, if so, whether we will have
                  the option to redeem the securities rather than pay any
                  additional amounts;

         (o)      if the debt securities of that series are to be issuable in
                  definitive form (whether upon original issue or upon exchange
                  of a temporary debt security of that series) only upon receipt
                  of certain certificates or other documents or satisfaction of
                  other conditions, the form and terms of those certificates,
                  documents or conditions;

         (p)      any trustees, depositaries, authenticating or paying agents,
                  transfer agents or the registrar or any other agents with
                  respect to the debt securities of that series;

         (q)      provisions, if any, for the defeasance of the debt securities
                  of that series, including provisions permitting defeasance of
                  less than all the debt securities of that series, which
                  provisions may be in addition to, in substitution for, or in
                  modification of (or any combination of the foregoing) the
                  provisions of the indentures;

         (r)      if the debt securities of that series are issuable in whole or
                  in part as one or more registered global securities, the
                  identity of the depositary (if other than The Depository Trust
                  Company, or DTC) for that registered global security or
                  securities (which depositary will, at the time of its
                  designation as depositary and at all times while it serves as
                  depositary, be a clearing agency registered under the Exchange
                  Act and any other applicable statute or regulation);

         (s)      any other events of default or covenants with respect to the
                  debt securities of that series in addition to the events of
                  default or covenants set forth in the indentures;

         (t)      any other terms of the debt securities of that series, which
                  terms will not be inconsistent with the provisions of the
                  indentures.


     Neither indenture contains any restriction on the payment of dividends or
any financial covenants. Neither indenture contains provisions which would
afford you protection in the event of a transfer of assets to a subsidiary and
incurrence of unsecured debt by such subsidiary, or in the event of a decline in
our credit quality resulting from highly leveraged or other similar transactions
involving us.



                                       7



<PAGE>   48
         The debt securities will be unsubordinated obligations of ours and the
senior debt securities will rank equal in right of payment with all of our
existing and future unsecured and unsubordinated obligations. The indebtedness
represented by the subordinated debt securities will be subordinated in right of
payment to the prior payment in full of our senior debt, as described below
under "Subordination". Claims of holders of the debt securities will be
effectively subordinated to the claims of holders of the debt of our
subsidiaries with respect to the assets of our subsidiaries. In addition, claims
of holders of the debt securities will be effectively subordinated to the claims
of holders of our secured debt and the secured debt of our subsidiaries with
respect to the collateral securing those claims. Our claims as the holder of
general unsecured intercompany debt will be similarly effectively subordinated
to claims of holders of secured debt of our subsidiaries.

SUBORDINATION


         If we issue subordinated debt securities, our obligations to make any
payment of the principal of and premium, if any, and interest on, any
subordinated debt securities to be issued will be subordinate and junior in
right of payment to the prior payment in full of all of our senior indebtedness,
whether outstanding on the date of the subordinated indenture or thereafter
incurred. (article 10 of subordinated indenture)


         We may not pay the principal of or interest or premium on the
subordinated debt securities if (i) we fail to make any of such payments on any
senior indebtedness (other than trade accounts payable) which has matured by
lapse of time, acceleration or otherwise, or (ii) a default occurs on the senior
indebtedness (other than trade accounts payable) that allows the holders of the
senior indebtedness to accelerate its maturity after lapse of time, the giving
of notice or both and that default continues.

         If any payment or distribution of our assets occurs upon our
dissolution, winding-up, liquidation or reorganization, we may not pay the
principal of or interest or premium on the subordinated debt securities until we
have made such payments in full to the holders of all senior indebtedness. If
such dissolution, winding-up, liquidation or reorganization occurs and the
holders of the subordinated debt securities receive a payment or distribution,
then they must turn that payment or distribution over to the holders of the
senior indebtedness or a trustee for the benefit of the senior indebtedness
holders. Because of this subordination, if an insolvency occurs, holders of the
subordinated debt securities may recover less, proportionately, than holders of
senior debt and our general unsecured creditors.

CONVERSION

         The terms, if any, on which debt securities are convertible into our
common stock will be set forth in the prospectus supplement for that series of
debt securities. These terms will include:

         -        the conversion price,

         -        the conversion period,

         -        provision as to whether conversion will be at our option or at
                  the option of the holder,


                                       8

<PAGE>   49
         -        the events requiring an adjustment of the conversion price,
                  and

         -        provisions affecting conversion in the event of the redemption
                  of such series of debt securities.

REGISTERED GLOBAL SECURITIES

         Unless otherwise specified in the applicable prospectus supplement, DTC
will act as securities depositary for the debt securities. The debt securities
will be issued only as registered global securities registered in the name of
DTC's nominee, which we expect will be Cede & Co. We will issue one or more
registered global securities for the debt securities representing the aggregate
principal amount of that series of debt securities and will deposit the
registered global securities with DTC.

         The description of book-entry procedures in this prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the registered global securities issued in connection with sales
of debt securities made pursuant to this prospectus. The descriptions of the
operations and procedures of DTC that follow are provided solely as a matter of
convenience. These operations and procedures are solely within the control of
the DTC settlement system and are subject to change from time to time.

         We understand that DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act.

         DTC holds securities that its participants (the "direct participants")
deposit with DTC. DTC also facilitates the settlement among direct participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in direct
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly (the "indirect participants," and together with the direct
participants, the "participants").

         Purchases of securities within DTC's system must be made by or through
direct participants. The direct participants receive a credit for the securities
on DTC's records. The ownership interest of the actual purchaser of each
security (a "beneficial owner") is in turn recorded on the direct and indirect
participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchase. However, beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the direct or indirect participant through
which the beneficial owner entered into the transaction. Transfers of ownership
interest in the securities are to be accomplished by entries made on the books
of participants acting on behalf of beneficial owners. Beneficial owners will
not receive certificates representing their ownership interest in debt
securities except in the event that use of the book-entry system for the debt
securities is discontinued.

         To facilitate subsequent transfers of the debt securities, all
securities deposited by direct participants with DTC are registered in the name
of a nominee of DTC. The deposit of debt securities with DTC and their
registration in the name of the nominee do not change the


                                       9

<PAGE>   50
beneficial ownership of the securities. DTC has no knowledge of the actual
beneficial owners of the debt securities. DTC's records reflect only the
identity of the direct participants to whose accounts the debt securities are
credited. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.

         As long as DTC or its nominee is the registered holder of the
registered global security, DTC or its nominee will be considered the sole owner
and holder of the debt securities represented by the registered global security
for all purposes under the indenture and the debt securities. Except in limited
circumstances, beneficial owners will not be entitled to have any portions of
the registered global security registered in their names, will not receive or be
entitled to receive physical delivery of debt securities in definitive form and
will not be considered the owners or holders of the registered global security
(or any debt securities represented thereby) under the indenture or the debt
securities.

         The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a registered global security to
those persons may be limited. Because DTC can act only on behalf of its
participants, which in turn act on behalf of indirect participants and certain
banks, the ability of a beneficial owner to pledge their interest to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of their interests, may be affected by the lack of a physical
certificate evidencing their interests.

         DTC will send notices and other communications to its direct
participants; direct participants will send these communications to indirect
participants. The direct participants and indirect participants will send
notices and other communications to beneficial owners pursuant to arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.

         We will send any redemption notices to the nominee of DTC. If less than
all of the debt securities of a particular series are being redeemed, DTC will
determine in accordance with its procedures the amount of the interest of each
direct participant in the particular series to be redeemed.

         Neither DTC nor its nominee will consent or vote with respect to any
debt securities. Under its usual procedures, DTC mails an omnibus proxy to its
direct participants as soon as possible after the applicable record date. The
omnibus proxy assigns the nominee's consenting or voting rights to those direct
participants to whose accounts the applicable securities are credited on the
record date (identified in a listing attached to the omnibus proxy).

         Principal, premium, if any, and interest payments on the debt
securities will be made to DTC or its nominee. We expect that DTC will credit
direct participants' accounts on the relevant payment date upon DTC's receipt of
funds in accordance with the respective holdings shown on DTC's records. We
expect that payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
for the accounts of customers in bearer form or registered in "street-name".
These payments will be the responsibility of the participant and not of DTC, any
underwriters, or us, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of distributions and other amounts to
DTC is the responsibility of the trustee. DTC is responsible for disbursing
those payments to the direct participants. The direct and indirect participants
are responsible for disbursing payments to the beneficial owners. We will not
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership


                                       10
<PAGE>   51
interests in the registered global security or for maintaining, supervising or
reviewing any records relating to those beneficial ownership interests.

         Interests in the registered global security will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.

         DTC may discontinue providing its services as securities depositary
with respect to the debt securities at any time by giving reasonable notice to
us and the trustee. In the event that a successor securities depositary is not
obtained, definitive debt securities certificates representing the debt
securities will be required to be printed and delivered.

         We will not have any responsibility or obligation to participants or
the persons for whom they act as nominees with respect to the accuracy of the
records of DTC, its nominee or any participant with respect to any ownership
interest in the debt securities, or with respect to payments to or providing of
notice for the participants or the beneficial owners.

         So long as DTC's nominee is the registered owner of the debt
securities, references herein to a holder of the debt securities means DTC or
its nominee and not the beneficial owners of the debt securities.

         The information in this section concerning DTC and DTC's book-entry
system has been obtained from DTC. Neither we, the trustees nor the
underwriters, dealers or agents, if any, take responsibility for the accuracy or
completeness of this description.

CERTAIN COVENANTS


         Except as specified below or in the applicable prospectus supplement,
the following covenants apply to all series of senior debt securities.


        RESTRICTIONS ON LIENS. The senior indenture provides that we will not,
and will not permit any Restricted Subsidiary to, create or incur any Lien on
any shares of stock, indebtedness or other obligations of a Restricted
Subsidiary or any Principal Property of ours or of a Restricted Subsidiary,
whether those shares of stock, indebtedness or other obligations of a Restricted
Subsidiary or Principal Property are owned at the date of such indenture or
acquired afterwards, unless we secure or cause the applicable Restricted
Subsidiary to secure the outstanding debt securities equally and ratably with
(or, at our option, prior to) all indebtedness secured by the particular Lien,
so long as the indebtedness is so secured. This covenant does not apply in the
case of:

         (a)      the creation of any Lien on any shares of stock, indebtedness
                  or other obligations of a Subsidiary or any Principal Property
                  acquired after the date of such indenture (including
                  acquisitions by way of merger or consolidation) by us or a
                  Restricted Subsidiary, contemporaneously with that
                  acquisition, or within 180 days thereafter, to secure or
                  provide for the payment or financing of any part of the
                  purchase price, or the assumption of any Lien upon any shares
                  of stock, indebtedness or other obligations of a Subsidiary or
                  any Principal Property acquired after the date of such
                  indenture existing at the time of the acquisition, or the
                  acquisition of any shares of stock, indebtedness or other
                  obligations of a Subsidiary or any Principal Property subject
                  to any Lien without the assumption


                                       11

<PAGE>   52
                  of that Lien, provided that every Lien referred to in this
                  clause will attach only to the shares of stock, indebtedness
                  or other obligations of a Subsidiary or any Principal Property
                  so acquired and fixed improvements on that Principal Property;

         (b)      any Lien on any shares of stock, indebtedness or other
                  obligations of a Subsidiary or any Principal Property existing
                  on the date of such indenture;

         (c)      any Lien on any shares of stock, indebtedness or other
                  obligations of a Subsidiary or any Principal Property in favor
                  of us or any Restricted Subsidiary;

         (d)      any Lien on any Principal Property being constructed or
                  improved securing loans to finance the construction or
                  improvements of that property;

         (e)      any Lien on shares of stock, indebtedness or other obligations
                  of a Subsidiary or any Principal Property incurred in
                  connection with the issuance of tax-exempt governmental
                  obligations, including, without limitation, industrial revenue
                  bonds and similar financings;

         (f)      any mechanics', materialmen's, carriers' or other similar
                  Liens arising in the ordinary course of business with respect
                  to obligations that are not yet due or that are being
                  contested in good faith;

         (g)      any Lien on any shares of stock, indebtedness or other
                  obligations of a Subsidiary or any Principal Property for
                  taxes, assessments or governmental charges or levies not yet
                  delinquent, or already delinquent but the validity of which is
                  being contested in good faith;

         (h)      any Lien on any shares of stock, indebtedness or other
                  obligations of a Subsidiary or any Principal Property arising
                  in connection with legal proceedings being contested in good
                  faith, including any judgment Lien so long as execution on the
                  Lien is stayed;

         (i)      any landlord's Lien on fixtures located on premises leased by
                  us or a Restricted Subsidiary in the ordinary course of
                  business, and tenants' rights under leases, easements and
                  similar Liens not materially impairing the use or value of the
                  property involved;

         (j)      any Lien arising by reason of deposits necessary to qualify us
                  or any Restricted Subsidiary to conduct business, maintain
                  self-insurance, or obtain the benefit of, or comply with, any
                  law;

         (k)      Liens on our current assets to secure loans to us that mature
                  within twelve months from their creation and that are made in
                  the ordinary course of business; and


         (l)      any renewal of or substitution for any Lien permitted by any
                  of the preceding clauses, provided, in the case of a Lien
                  permitted under clauses (a), (b) or (d), the indebtedness
                  secured is not increased nor the Lien extended to any
                  additional assets. (Section 4.3(a) of senior indenture)


                                       12
<PAGE>   53

         Notwithstanding the foregoing, we or any Restricted Subsidiary may
create or assume Liens in addition to those permitted by the preceding sentence
of this paragraph, and renew, extend or replace those Liens, provided that at
the time of and after giving effect to the creation, assumption, renewal,
extension or replacement, Exempted Debt does not exceed 15 percent of
Consolidated Net Tangible Assets. (Section 4.3(b) of senior indenture)


         RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS. The senior indenture
provides that we will not, and will not permit any Restricted Subsidiary to,
sell or transfer, directly or indirectly, except to us or to a Restricted
Subsidiary, any Principal Property as an entirety, or any substantial portion of
that Principal Property, with the intention of taking back a lease of such
property, except a lease for a period of three years or less at the end of which
it is intended that the use of that property by the lessee will be discontinued.
Notwithstanding the foregoing, we or any Restricted Subsidiary may sell any
Principal Property and lease it back for a longer period:

         (a) if we or such applicable Restricted Subsidiary would be entitled,
    pursuant to the provisions of Section 4.3(a) of the senior indenture, to
    create a Lien on the property to be leased securing Funded Debt in an amount
    equal to the Attributable Debt with respect to the sale and lease-back
    transaction without equally and ratably securing the outstanding debt
    securities; or


         (b) if we promptly inform the trustee of the transaction, and we cause
    an amount equal to the fair value (as determined by resolution of our board
    of directors) of the property to be applied (1) to the purchase of other
    property that will constitute Principal Property having a fair value at
    least equal to the fair value of the property sold, or (2) to the retirement
    within 120 days after receipt of the proceeds of Funded Debt incurred or
    assumed by us or a Restricted Subsidiary, including the senior debt
    securities;



provided, further that, in lieu of applying all of or any part of such net
proceeds to such retirement, we may, within 75 days after the sale, deliver or
cause to be delivered to the applicable trustee for cancellation either
debentures or debt securities evidencing Funded Debt of ours (which may include
the senior debt securities) or of a Restricted Subsidiary previously
authenticated and delivered by the applicable trustee, and not yet tendered for
sinking fund purposes or called for a sinking fund or otherwise applied as a
credit against an obligation to redeem or retire such debt securities or
debentures, and an officer's certificate (which will be delivered to the
trustee) stating that we elect to deliver or cause to be delivered the
debentures or debt securities in lieu of retiring Funded Debt as provided in
such indenture.



         If we deliver debentures or debt securities to the trustee and we duly
deliver the officer's certificate, the amount of cash that we will be required
to apply to the retirement of Funded Debt under this provision of the senior
indenture will be reduced by an amount equal to the aggregate of the then
applicable optional redemption prices (not including any optional sinking fund
redemption prices) of the applicable debentures or debt securities, or, if there
are no such redemption prices, the principal amount of those debentures or debt
securities. If the applicable debentures or debt securities provide for an
amount less than the principal amount to be due and payable upon a declaration
of the maturity, then the amount of cash will be reduced by the amount of
principal of those debentures or debt securities that would be due and payable
as of the date of the application upon a declaration of acceleration of the
maturity pursuant to the terms of the indenture pursuant to which those
debentures or debt securities were issued. (Section 4.4(a) of senior
indenture)


         Notwithstanding the foregoing, we or any Restricted Subsidiary may
enter into sale and lease-back transactions in addition to those permitted by
this paragraph, without any obligation


                                       13

<PAGE>   54

to retire any outstanding debt securities or other Funded Debt, provided that at
the time of entering into and giving effect to such sale and lease-back
transactions, Exempted Debt does not exceed 15 percent of Consolidated Net
Tangible Assets. (Section 4.4(b) of senior indenture)


CERTAIN DEFINITIONS


         The term "Attributable Debt" as defined in the senior indenture means
when used in connection with a sale and leaseback transaction referred to above
under " - Certain Covenants - Restrictions on Sale and Lease-Back Transactions,"
on any date as of which the amount of Attributable Debt is to be determined, the
product of (a) the net proceeds from the sale and lease-back transaction
multiplied by (b) a fraction, the numerator of which is the number of full years
of the term of the lease relating to the property involved in the sale and
lease-back transaction (without regard to any options to renew or extend such
term) remaining on the date of the making of the computation, and the
denominator of which is the number of full years of the term of the lease
measured from the first day of the term.



         The term "Consolidated Net Tangible Assets" as defined in the
senior indenture means total assets after deducting all current liabilities
and intangible assets as set forth in our most recent balance sheet and our
consolidated Subsidiaries and computed in accordance with GAAP.


        The term "Exempted Debt" as defined in the senior indenture means
the sum, without duplication, of the following items outstanding as of the date
Exempted Debt is being determined:

         (a) indebtedness of ours and our Restricted Subsidiaries incurred after
    the date of such indenture and secured by liens created or assumed or
    permitted to exist pursuant to Section 4.3(b) of such indenture described
    above under " - Certain Covenants - Restrictions on Liens"; and

         (b) Attributable Debt of ours and our Restricted Subsidiaries in
    respect of all sale and lease-back transactions with regard to any Principal
    Property entered into pursuant to Section 4.4(b) of such indenture described
    above under " - Certain Covenants - Restrictions on Sales and Lease-Back
    Transactions".


         The term "Funded Debt" as defined in the senior indenture means all
indebtedness for money borrowed, including purchase money indebtedness, having a
maturity of more than one year from the date of its creation or having a
maturity of less than one year but by its terms being renewable or extendible at
the option of the obligor, beyond one year from the date of its creation.



         The terms "Holder" or "Securityholder" as defined in the applicable
indenture mean the registered holder of any debt security with respect to
registered securities and the bearer of any unregistered security or any coupon
appertaining to it, as the case may be.



         The term "Lien" as defined in the senior indenture means, with respect
to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest in respect of such asset.
For the purposes of such indenture, we or any Subsidiary will be deemed to own,
subject to a Lien, any asset that we have acquired or hold subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.



                                       14

<PAGE>   55
         The term "Original Issue Discount Security" as defined in the
applicable indenture means any debt security that provides for an amount less
than the principal amount of a particular security to be due and payable upon a
declaration of acceleration of the maturity of that security pursuant to Section
6.2 of such indenture.


         The term "Principal Property" as defined in the senior indenture means
any manufacturing or processing plant or warehouse owned at the date of such
indenture or acquired after that date by us or any of our Restricted
Subsidiaries which is located within the United States and the gross book value
of which (including related land and improvements and all machinery and
equipment without deduction of any depreciation reserves) on the date as of
which the determination is being made exceeds 2 percent of Consolidated Net
Tangible Assets, other than:


         (a) any manufacturing or processing plant or warehouse or any portion
    of the same (together with the land on which it is erected and fixtures that
    are a part of that land) which is financed by industrial development bonds
    which are tax exempt pursuant to Section 103 of the Internal Revenue Code
    (or which receive similar tax treatment under any subsequent amendments or
    any successor laws or under any other similar statute of the United States);

         (b) any property which in the opinion of our board of directors is not
    of material importance to the total business conducted by us as an entirety;
    or

         (c) any portion of a particular property which is similarly found not
    to be of material importance to the use or operation of such property.

         The term "Restricted Subsidiary" as defined in the applicable indenture
means a Subsidiary of ours (a) of which substantially all the property is
located, or substantially all the business is carried on, within the United
States, and (b) which owns Principal Property; provided, however, that any
Subsidiary may be declared a Restricted Subsidiary by board resolution,
effective as of the date such board resolution is adopted; provided further,
that any such declaration may be rescinded by further board resolution,
effective as of the date that further board resolution is adopted.


         The term "Senior Indebtedness" as defined in the subordinated indenture
shall mean (a) the principal of, premium, if any, and interest on all
indebtedness, whether outstanding on the date of the subordinated indenture as
originally executed or thereafter created or incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such indebtedness is not superior in right of payment to the
subordinated debt securities; and (b) any amendments, modifications, deferrals,
renewals or extensions of any such Senior Indebtedness, or debentures, notes or
other evidences of indebtedness issued in exchange for any such Senior
Indebtedness; provided, however, that Senior Indebtedness shall not be deemed to
include (i) indebtedness which constitutes subordinated indebtedness and (ii)
any other debt securities issued pursuant to the subordinated indenture.


         The term "Subsidiary" as defined in the applicable indenture means,
with respect to any person, any corporation, association or other business
entity of which more than 50% of the outstanding Voting Stock is owned, directly
or indirectly, by that person and one or more other Subsidiaries of that person.

RESTRICTIONS ON MERGERS AND SALES OF ASSETS


         Under each indenture, we may not consolidate with, merge with or into,
or sell, convey, transfer, lease or otherwise dispose of all or substantially
all of our property and assets (in one transaction or a series of related
transactions) to, any person (other than a consolidation with or merger with or
into a Subsidiary or a sale, conveyance, transfer, lease or other disposition to
a



                                       15

<PAGE>   56

Subsidiary) or permit any person to merge with or into us unless (a) either (1)
we will be the continuing person or (2) the person (if other than ourselves)
formed by the consolidation or into which we are merged or that acquired or
leased such property and assets of ours will be a corporation organized and
validly existing under the laws of the United States of America or any of its
jurisdictions and will expressly assume, by a supplemental indenture, executed
and delivered to the trustee, all of our obligations on all of the debt
securities under such indenture, and we will have delivered to the trustee an
opinion of counsel stating that the consolidation, merger or transfer and the
supplemental indenture complies with such indenture and that all conditions
precedent provided for in such indenture relating to the transaction have been
complied with and that the supplemental indenture constitutes a legal, valid and
binding obligation of ours or the successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and (b) an officer's
certificate to the effect that immediately after giving effect to such
transaction, no default will have occurred and be continuing and an opinion of
counsel as to the matters set forth in clause (a) will have been delivered to
the trustee. (Section 5.1)


EVENTS OF DEFAULT


        Events of default defined in the indentures with respect to the debt
securities of any series are:


         (a)      we default in the payment of the principal of any debt
                  securities of a series when the same becomes due and payable
                  at maturity, upon acceleration, redemption or mandatory
                  repurchase, including as a sinking fund installment, or
                  otherwise;

         (b)      we default in the payment of interest on any debt securities
                  of a series when the same becomes due and payable, and that
                  default continues for a period of 30 days;


         (c)      we default in the performance of or breach any other covenant
                  or agreement of ours in the applicable indenture with respect
                  to the debt securities of a series and that default or breach
                  continues for a period of 30 consecutive days (or, in the case
                  of the subordinated indenture, 60 consecutive days) after
                  written notice to us by the trustee or to us and the trustee
                  by the Holders of 25 percent or more in aggregate principal
                  amount of the debt securities of all series affected thereby;


         (d)      an involuntary case or other proceeding is commenced against
                  us or any Restricted Subsidiary with respect to our debts or
                  our Restricted Subsidiary's debts under any bankruptcy,
                  insolvency or other similar law now or in the future in effect
                  seeking the appointment of a trustee, receiver, liquidator,
                  custodian or other similar official relating to us or a
                  substantial part of our property, and the involuntary case or
                  other proceeding remains undismissed and unstayed for a period
                  of 60 days; or an order for relief is entered against us or
                  any Restricted Subsidiary under the federal bankruptcy laws as
                  now or in the future in effect;

         (e)      we or any Restricted Subsidiary (1) commence a voluntary case
                  under any applicable bankruptcy, insolvency or other similar
                  law now or in the future in effect, or consents to the entry
                  of an order for relief in an involuntary case under any such
                  law, (2) consent to the appointment of or taking possession by
                  a receiver, liquidator, assignee, custodian, trustee,
                  sequestrator or similar official of us or any Restricted
                  Subsidiary or for all or substantially all of our property and


                                       16

<PAGE>   57
                  assets or any Restricted Subsidiary's property and assets or
                  (3) effect any general assignment for the benefit of
                  creditors; and


         (f)      any other event of default established with respect to any
                  series of debt securities issued pursuant to the applicable
                  indenture occurs. (Section 6.1)



    The indentures provide that if an event of default described in clauses (a)
or (b) above, with respect to the debt securities of any series then
outstanding, occurs and is continuing, then, and in each and every such case,
except for any series of debt securities the principal of which has already
become due and payable, either the trustee or the Holders of not less than 25
percent in aggregate principal amount of the debt securities of any such
affected series then outstanding under the applicable indenture (each series
being treated as a separate class) by notice in writing to us (and to the
trustee if given by Securityholders), may declare the entire principal (or, if
the debt securities of any such series are Original Issue Discount Securities,
the applicable portion of the principal amount as may be specified in the terms
of the particular series established pursuant to that indenture) of all debt
securities of the affected series, and the interest accrued on that series, if
any, to be due and payable immediately, and upon any such declaration the same
will become immediately due and payable.


         If an event of default described clauses (c) or (d) above, with respect
to the debt securities of one or more but not all series then outstanding, or
with respect to the debt securities of all series then outstanding, occurs and
is continuing, then, and in each and every such case, except for any series of
debt securities the principal of which has already become due and payable,
either the trustee or the Holders of not less than 25 percent in aggregate
principal amount (or, if the debt securities of any such series are Original
Issue Discount Securities, the amount of which is accelerable as described in
this paragraph) of the debt securities of all the affected series then
outstanding under the applicable indenture (treated as a single class) by notice
in writing to us (and to the trustee if given by Securityholders) may declare
the entire principal (or, if the debt securities of any such series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all debt securities of all the
affected series, and the interest accrued on those series, if any, to be due and
payable immediately, and upon any such declaration the same will become
immediately due and payable.


         If an event of default described in clauses (e) or (f) above occurs and
is continuing, then the principal amount (or, if any debt securities are
Original Issue Discount Securities, the portion of the principal as may be
specified in the terms of that series) of all the debt securities then
outstanding and interest accrued on those debt securities, if any, will be and
become immediately due and payable without any notice or other action by any
Holder or the trustee to the full extent permitted by applicable law. Upon
certain conditions such declarations may be rescinded and annulled and past
defaults may be waived by the Holders of a majority in principal of the then
outstanding debt securities of all series that have been accelerated, voting as
a single class. (Section 6.2)


TRUSTEE'S RIGHTS


    The indentures contain a provision under which, subject to the duty of the
trustee during a default to act with the required standard of care:


         (a)      the trustee may rely and will be protected in acting or
                  refraining from acting upon any resolution, certificate,
                  officer's certificate, opinion of counsel, statement,
                  instrument, opinion, report, notice, request, direction,
                  consent, order, bond,


                                       17



<PAGE>   58
                  debenture, note, other evidence or indebtedness or other paper
                  or document believed by it to be genuine and to have been
                  signed or presented by the proper person or persons, and the
                  trustee need not investigate any fact or matter stated in the
                  document, but the trustee, in its discretion, may make any
                  further inquiry or investigation into any facts or matters as
                  it may see fit;

         (b)      before the trustee acts or refrains from acting, it may
                  require an officer's certificate and/or an opinion of counsel,
                  which will conform to the requirements of the applicable
                  indenture, and the trustee will not be liable for any action
                  it takes or omits to take in good faith in reliance on that
                  certificate or opinion; subject to the terms of such
                  indenture, whenever in the administration of the trusts of
                  such indenture the trustee deems it necessary or desirable
                  that a matter be proved or established prior to taking or
                  suffering or omitting any action under the indenture, that
                  matter (unless other evidence in respect thereof be
                  specifically prescribed in such indenture) may, in the
                  absence of negligence or bad faith on the part of the
                  trustee, be deemed to be conclusively proved and established
                  by an officer's certificate delivered to the trustee, and
                  that certificate, in the absence of negligence or bad faith
                  on the part of the trustee, will be full warrant to the
                  trustee for any action taken, suffered or omitted by it under
                  the provisions of such indenture upon the faith of the
                  officer's certificate;

         (c)      the trustee may act through its attorneys and agents not
                  regularly in its employ and will not be responsible for the
                  misconduct or negligence of any agent or attorney appointed
                  with due care by it under the applicable indenture;

         (d)      any request, direction, order or demand of us mentioned in the
                  applicable indenture will be sufficiently evidenced by an
                  officer's certificate (unless other evidence is specifically
                  prescribed in such indenture); and any board resolution may
                  be evidenced to the trustee by a copy of the resolution
                  certified by our Secretary or an Assistant Secretary;

         (e)      the trustee will be under no obligation to exercise any of the
                  rights or powers vested in it by the applicable indenture at
                  the request, order or direction of any of the Holders, unless
                  the Holders have offered the trustee reasonable security or
                  indemnity against the costs, expenses and liabilities that
                  might be incurred by it in compliance with the request or
                  direction;

         (f)      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
                  in accordance with the applicable indenture relating to the
                  time, method and place of conducting any proceeding for any
                  remedy available to the trustee, or exercising any trust or
                  power conferred upon the trustee, under such indenture;

         (g)      the trustee may consult with counsel, and the written advice
                  of its 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 under the applicable
                  indenture in good faith and in reliance on that opinion of
                  counsel; and

         (h)      prior to the occurrence of an event of default under each
                  indenture and after the curing or waiving of all events of
                  default, the trustee will not be bound to make


                                       18

<PAGE>   59

                  any investigation into the facts or matters stated in any
                  resolution, certificate, officer's certificate, opinion of
                  counsel, board resolution, statement, instrument, opinion,
                  report, notice, request, consent, order, approval, appraisal,
                  bond, debenture, note, coupon, security, or other paper or
                  document, but the trustee, in its discretion, may make any
                  further inquiry or investigation into any facts or matters as
                  it may see fit and, if the trustee decides to make such
                  further inquiry or investigation, it will be entitled to
                  examine, during normal business hours and upon prior written
                  notice, our books, records and premises, personally or by
                  agent or attorney. (Section 7.2)



         Subject to various provisions in the indentures, the Holders of at
least a majority in principal amount (or, if the debt securities are Original
Issue Discount Securities, such portion of the principal as is then accelerable
under the applicable indenture) of the applicable outstanding debt securities
of all series affected (voting as a single class) by notice to the trustee, may
waive, on behalf of the Holders of all the debt securities of that series, an
existing default or event of default with respect to such debt securities of
that series and its consequences, except a default in the payment of principal
of or interest on any debt security as specified in clauses of the "Events of
Default" section above or in respect of a covenant or provision of such
indenture which cannot be modified or amended without the consent of the Holder
of each outstanding debt security affected by the default. Upon any waiver, the
default will cease to exist, and any event of default with respect to the debt
securities of that series will be deemed to have been cured, for every purpose
of such indenture. However, no waiver will extend to any subsequent or other
default or event of default or impair any right in relation to any subsequent
or other default or event of default. (Section 6.4)



         Subject to provisions in the indentures for the indemnification of the
trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount (or, if any debt securities are Original Issue
Discount Securities, the portion of the principal as is then accelerable under
the applicable indenture) of the applicable outstanding debt securities of all
series affected (voting as a single 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 with respect to the debt
securities of such series by such indenture, provided that the trustee may
refuse to follow any direction that conflicts with law or such indenture
that may involve the trustee in personal liability, or that the trustee
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction; and provided, further that the trustee
may take any other action it deems proper that is not inconsistent with any
directions received from such Holders of debt securities pursuant to such
indenture. (Section 6.5)



         The indentures provide that no Holder of any applicable debt securities
of any series may institute any proceeding, judicial or otherwise, with respect
to the applicable indenture or the debt securities of that series, or for the
appointment of a receiver or trustee, or for any other remedy under the
indentures, unless:


         (a)      such Holder has previously given to the trustee written notice
                  of a continuing event of default with respect to the debt
                  securities of that series;


         (b)      such Holders of at least 25 percent in aggregate principal
                  amount of applicable outstanding debt securities of the
                  affected series have made written request to the trustee to
                  institute proceedings in respect of the event of default in
                  its own name as trustee under such indenture;



                                       19



<PAGE>   60
         (c)      the Holder or Holders have offered to the trustee indemnity
                  reasonably satisfactory to the trustee against any costs,
                  liabilities or expenses to be incurred in compliance with the
                  request;

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


         (e)      during the 60-day period, the Holders of a majority in
                  aggregate principal amount of the applicable outstanding debt
                  securities of the affected series have not given the trustee a
                  direction that is inconsistent with such written request. A
                  Holder may not use such indenture to prejudice the rights of
                  another Holder or to obtain a preference or priority
                  over any other Holder. (Section 6.6)



         The indentures contain a covenant that we will file with the trustee,
within 15 days after we are required to file the same with the SEC, copies of
the annual reports and of the information, documents and other reports that we
may be required to file with the SEC pursuant to Section 13 or Section 15(d) of
the Exchange Act. (Section 4.6)


DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE


         Each indenture provides with respect to each series of applicable
debt securities that, except as otherwise provided in this paragraph, we may
terminate our obligations under such debt securities of a series and the
applicable indenture with respect to debt securities of that series if:


         (a) all debt securities of that series previously authenticated and
    delivered, with certain exceptions, have been delivered to the trustee for
    cancellation, and we have paid all sums payable by us under such
    indenture with respect to that series; or

         (b) (1) the debt securities of that 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;


              (2) we irrevocably deposit in trust with the trustee, as trust
funds solely for the benefit of the Holders of those debt securities, for that
purpose, money or U.S. Government obligations or a combination of money or U.S.
Government obligations sufficient (unless such funds consist solely of money, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification delivered to the trustee), without
consideration of any reinvestment, to pay principal of and interest on the debt
securities of that series to maturity or redemption, as the case may be, and to
pay all other sums payable by us under such indenture; and


              (3) we deliver to the trustee an officer's certificate and an
opinion of counsel, in each case stating that all conditions precedent provided
for in such indenture relating to the satisfaction and discharge of such
indenture with respect to the debt securities of that series have been
complied with.

         With respect to the foregoing clause (a), only our obligations to
compensate and indemnify the trustee will survive. With respect to the foregoing
clause (b), only our obligations to execute and deliver debt securities of that
series for authentication, to set the terms of the debt securities of that
series, to maintain an office or agency in respect of the debt securities of
that series, to have moneys held for payment in trust, to register the transfer
or exchange of debt securities of that series, to deliver debt securities of
that series for replacement or to be


                                       20

<PAGE>   61

canceled, to compensate and indemnify the trustee and to appoint a successor
trustee, and our right to recover excess money held by the trustee will survive
until those debt securities are no longer outstanding. Thereafter, only our
obligations to compensate and indemnify the trustee and its right to recover
excess money held by the trustee will survive. (Section 8.1)



         Each indenture provides that, except as otherwise provided in
this paragraph, we:



         (a) will be deemed to have paid and will be discharged from any and all
    obligation, in respect of the debt securities of any series, and the
    provisions of such indenture will no longer be in effect with
    respect to the debt securities of that series (a "legal defeasance"); and



         (b) may omit to comply with any specific covenant relating to such
    series provided for in a board resolution or supplemental indenture or
    officer's certificate that may by its terms be defeased pursuant to the
    indenture (or any term, provision or condition of the senior indenture
    described under "-- Certain Covenants", in the case of the senior indenture)
    and our omission will be deemed not to be an event of default under
    clauses (c) and (d) under "Events of Default" above with respect to the
    outstanding debt securities of a series (a "covenant defeasance");


provided that the following conditions will have been satisfied:

         (a) we have irrevocably deposited in trust with the trustee as trust
    funds solely for the benefit of the Holders of the debt securities of that
    series, for payment of the principal of and interest on those debt
    securities, money or U.S. Government obligations or a combination of the
    foregoing sufficient (unless such funds consist solely of money, in the
    opinion of a nationally recognized firm of independent public accountants
    expressed in a written certification thereof delivered to the trustee)
    without consideration of any reinvestment and after payment of all federal,
    state and local taxes or other charges and assessments in respect of those
    payments payable by the trustee, to pay and discharge the principal of and
    accrued interest on the outstanding debt securities of such series to
    maturity or earlier redemption (irrevocably provided for under arrangements
    satisfactory to the trustee), as the case may be;

         (b) our deposit will not result in a breach or violation of, or
    constitute a default under, such indenture or any other material
    agreement or instrument to which we are a party or by which we are bound;

         (c) no default with respect to those debt securities will have occurred
    and be continuing on the date of the deposit;

         (d) we will have delivered to the trustee an opinion of counsel that
    the Holders of the debt securities of that series have a valid security
    interest in the trust funds subject to no prior liens under such Uniform
    Commercial Code; and

         (e) we will have delivered to the trustee an officer's certificate and
    an opinion of counsel, in each case stating that all conditions precedent
    provided for in such indenture relating to the defeasance contemplated
    have been complied with.

         In the case of a legal defeasance, we will have delivered to the
trustee an opinion of counsel (based on a change in law) or a ruling directed to
the trustee from the United States Internal Revenue Service that the Holders of
the debt securities of that series will not recognize income, gain or loss for
federal income tax purposes as a result of our exercise of our option


                                       21

<PAGE>   62
under this provision of the applicable indenture and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
could have been the case if the deposit and defeasance had not occurred, or an
instrument, in form reasonably satisfactory to the trustee, where we,
notwithstanding a legal defeasance of our indebtedness in respect of debt
securities of any series, or any portion of the principal amount thereof, will
assume the obligation which will be absolute and unconditional) to irrevocably
deposit with the trustee any additional sums of money or additional U.S.
Government obligations or any combination of money or U.S. Government
obligations, at such time or times as necessary, together with the money and/or
U.S. Government obligations so deposited, to pay when due the principal of and
premium, if any, and interest due and to become due on the applicable debt
securities; provided, however, that the instrument may state that our obligation
to make additional deposits as aforesaid will be subject to the delivery to us
by the trustee of a notice asserting the deficiency accompanied by an opinion of
an independent public accountant of nationally recognized standing selected by
the trustee, showing the applicable calculation.


         Subsequent to a legal defeasance, our obligations to execute and
deliver debt securities of that series for authentication, to set the terms of
the debt securities of that series, to maintain an office or agency in respect
of the debt securities of that series, to have moneys held for payment in trust,
to register the transfer or exchange of debt securities of that series, to
deliver debt securities of that series for replacement or to be canceled, to
compensate and indemnify the trustee and to appoint a successor trustee, and our
right to recover excess money held by the trustee will survive until those debt
securities are no longer outstanding. After those debt securities are no longer
outstanding, in the case of a legal defeasance, only our obligations to
compensate and indemnify the trustee and our right to recover excess money held
by the trustee will survive. (Sections 8.2 and 8.3)


MODIFICATION OF THE INDENTURE


         Each indenture provides that we and the trustee may amend or supplement
such indenture or the applicable debt securities of any series without notice to
or the consent of any Holder:


         (a)      to cure any ambiguity, defect or inconsistency in such
                  indenture, provided that such amendments or supplements
                  do not materially and adversely affect the interests of the
                  Holders;


         (b)      to comply with Article 5 (which relates to the covenant
                  discussed under " - Restrictions on Mergers and Sales of
                  Assets") of such indenture;


         (c)      to comply with any requirements of the SEC in connection with
                  the qualification of such indenture under the Trust
                  Indenture Act;

         (d)      to evidence and provide for the acceptance of appointment
                  under such indenture with respect to the debt securities
                  of any or all series by a successor trustee;

         (e)      to establish the form or forms or terms of debt securities of
                  any series or of the coupons appertaining to such debt
                  securities as permitted under such indenture;

         (f)      to provide for uncertificated or unregistered debt securities
                  and to make all appropriate changes for such purpose;


         (g)      to change or eliminate any provisions of such indenture
                  with respect to all or any series of the debt securities not
                  then outstanding (and, if the change is applicable



                                       22

<PAGE>   63

                  to fewer than all those series of the applicable debt
                  securities, specifying the series to which the change is
                  applicable), and to specify the rights and remedies of the
                  trustee and the Holders of those debt securities; and



         (h)      to make any change that does not materially and adversely
                  affect the rights of any Holder. (Section 9.1)



         Each indenture also contains provisions that allow us and the trustee,
subject to certain conditions, without prior notice to any Holders, to amend
such indenture and the outstanding debt securities of any series with the
written consent of the Holders of a majority in aggregate principal amount of
the applicable debt securities then outstanding of all series affected by such
supplemental indenture (all such series voting as one class). The Holders of a
majority in aggregate principal amount of the applicable outstanding debt
securities of all series affected (all such series voting as one class) by
written notice to the trustee may waive future compliance by us with any
provision of such indenture or the debt securities of that series.
Notwithstanding the foregoing provisions, without the consent of each applicable
Holder affected, an amendment or waiver, including a waiver pursuant to Section
6.4 of such indenture, may not:


         (a)      extend the stated maturity of the principal of, or any sinking
                  fund obligation or any installment of interest on, the
                  Holder's debt security or reduce the principal amount or the
                  rate of interest of that debt security (including any amount
                  in respect of original issue discount), or any premium payable
                  with respect to that debt security, or adversely affect the
                  rights of that Holder under any mandatory redemption or
                  repurchase provision or any right of redemption or repurchase
                  at the option of that Holder, or reduce the amount of the
                  principal of an Original Issue Discount Security that would be
                  due and payable upon the acceleration of the maturity of that
                  debt security or any amount provable in bankruptcy, or change
                  any place of payment where, or the currency in which, any debt
                  security or any premium or the interest on that debt security
                  is payable, or impair the right to institute suit for the
                  enforcement of any payment on or after the due date of that
                  payment;


         (b)      reduce the percentage in principal amount of outstanding debt
                  securities of the relevant series the consent of whose Holders
                  is required for any supplemental indenture or for any waiver
                  of compliance with certain provisions of such indenture or
                  certain defaults and their consequences provided for therein;



         (c)      waive a default in the payment of principal of or interest on
                  any applicable debt security of a Holder; or



         (d)      modify any of the provisions of such indenture governing
                  supplemental indentures with the consent of Securityholders,
                  except to increase the percentage or to provide that certain
                  other provisions of such indenture cannot be modified or
                  waived without the consent of the Holder of each outstanding
                  debt security affected by the modification.



         A supplemental indenture which changes or eliminates any covenant or
other provision of the applicable indenture which has expressly been included
solely for the benefit of one or more particular series of debt securities, or
which modifies the rights of Holders of applicable debt securities of that
series with respect to that covenant or provision, will be deemed not to affect
the rights under such indenture of the Holders of debt securities of any
other series or of the coupons



                                       23

<PAGE>   64

appertaining to those debt securities. It will not be necessary for the consent
of any Holder under such indenture to approve the particular form of any
proposed amendment, supplement or waiver, but it will be sufficient if the
consent approves the substance of the amendment, supplement or waiver. After an
amendment, supplement or waiver under such indenture becomes effective, we or,
at our request, the trustee will give to the affected Holders a notice briefly
describing the amendment, supplement or waiver. We or, at our request, the
trustee will mail supplemental indentures to Holders upon request. Any failure
of us to mail such notice, or any defect in the notice, will not, however, in
any way impair or affect the validity of any supplemental indenture or waiver.
(Section 9.2)


INFORMATION CONCERNING THE TRUSTEE

         An affiliate of The Bank of New York participates as a lender under
certain of our credit agreements.

                          DESCRIPTION OF CAPITAL STOCK

         We have authority to issue 160,000,000 shares of common stock, par
value $1.00 per share and 2,000,000 shares of preferred stock, par value $1.00
per share. As of September 30, 2000, we had outstanding 103,741,595 shares of
common stock and no shares of preferred stock.  Our board of directors has
authority, without action by our shareholders, to issue authorized and unissued
shares of preferred stock in one or more series and, within certain
limitations, to determine the voting rights (including the right to vote as a
series on particular matters), preference as to dividends and in liquidation,
conversion, redemption and other rights of each series.

         The following is a brief summary of the voting, dividend, liquidation
and certain other rights of the holders of the capital stock as set forth in our
by-laws and Restated Certificate of Incorporation, copies of which are filed
with the Commission.

COMMON STOCK

         Voting Rights-Noncumulative Voting. The holders of common stock are
entitled to one vote per share on all matters to be voted on by shareholders,
including the election of directors. Shareholders are not entitled to cumulative
voting rights, and, accordingly, the holders of a majority of the shares voting
for the election of directors can elect the entire board of directors if they
choose to do so and, in that event, the holders of the remaining shares will not
be able to elect any person to the board of directors.

         Our Restated Certificate of Incorporation requires the affirmative vote
of 90% of our outstanding shares of common stock to authorize certain mergers,
sales of assets, corporate reorganizations and other transactions in the event
that any person or entity acquires 30% or more of our outstanding common stock.

         Dividends; Restriction on Payment of Dividends. The holders of common
stock are entitled to receive such dividends, if any, as may be declared from
time to time by our board of directors, in its discretion, from funds legally
available for the purpose and subject to prior dividend rights of holders of any
shares of preferred stock which may be outstanding. Upon liquidation or
dissolution of Arrow, subject to prior liquidation rights of the holders of
preferred stock, the holders of common stock are entitled to receive on a pro
rata basis the remaining assets of Arrow available for distribution. Holders of
common stock have no preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions


                                       24

<PAGE>   65
with respect to our common stock.

         In addition, the terms of our second amended and restated credit
agreement, as amended, and our amended and restated 364-day credit agreement
require that consolidated total debt, consolidated net worth, and the ratio of
earnings to cash interest expense be maintained at certain designated levels.

         All outstanding shares of common stock are fully paid and not liable to
further calls or assessment by us.

PREFERRED STOCK

         Our board of directors is authorized, without further vote or action by
the holders of our common stock, to issue by resolution an aggregate of
2,000,000 shares of preferred stock. These shares of preferred stock may be
issued in one or more series as established from time to time by our board of
directors. Our board also is authorized to fix the number of shares and the
designation or title of each series of preferred stock prior to the issuance of
any shares of that series. Regarding each class or series of preferred stock,
our board will fix the voting powers which may be full or limited, or there may
be no voting powers. Our board will also determine the preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions, of each series of preferred stock. Our board is further
authorized to increase or decrease the number of shares of any series subsequent
to the issuance of shares of that series, but not below the number of shares of
the class or series then outstanding.

         No shares of preferred stock are presently outstanding and we have no
plans to issue a new series of preferred stock. It is not possible to state the
effect of the authorization and issuance of any series of preferred stock upon
the rights of the holders of common stock until our board of directors
determines the specific terms, rights and preferences of a series of preferred
stock. However, possible effects might include restricting dividends on the
common stock, diluting the voting power of the common stock or impairing the
liquidation rights of the common stock without further action by holders of
common stock. In addition, under some circumstances, the issuance of preferred
stock may render more difficult or tend to discourage a merger, tender offer or
proxy contest, the assumption of control by a holder of a large block of our
securities or the removal of incumbent management, which could thereby depress
the market price of our common stock.

RIGHTS AGREEMENT

         In March 1988, we paid a dividend of one preferred share purchase right
on each outstanding share of common stock pursuant to a rights agreement. Each
right entitles the holder to purchase from us one one-hundredth of a share of
participating stock, $1.00 par value, for a price of $50, subject to adjustment.
Although the rights are not intended to prevent a takeover of Arrow at a full
and fair price, they may have certain anti-takeover effects. They may deter an
attempt to acquire Arrow in a manner which seeks to deprive our shareholders of
the full and fair value of their investment and may deter attempts by
significant shareholders to take advantage of Arrow and its shareholders through
certain self-dealing transactions. The rights may cause substantial dilution to
a person or group that acquires or attempts to acquire Arrow without the rights
being redeemed by the board of directors. Accordingly, the rights should
encourage any potential acquirer to negotiate with our board of directors.
Unless approval is first obtained from our board of directors, the rights may
deter transactions, including tender offers, which the majority of shareholders
may believe are beneficial to them.



                                       25

<PAGE>   66
                             DESCRIPTION OF WARRANTS

         We have described below the general terms and provisions of the debt
warrants and equity warrants to which a prospectus supplement may relate. We
will describe the particular terms of any debt warrants and equity warrants
offered by any prospectus supplement in the prospectus supplement relating to
such debt warrants or equity warrants.

GENERAL

         We may issue debt warrants and equity warrants, evidenced by warrant
certificates under a warrant agreement, independently or together with any debt
securities, preferred stock or common stock. The warrants may be transferable
with or separate from such securities. If we offer debt warrants, the applicable
prospectus supplement will describe the terms of the debt warrants, including
the following: (i) the offering price, if any, including the currency, or
currency unit in which such price will be payable; (ii) the designation,
aggregate principal amount and terms of the offered debt securities with which
the debt warrants are issued and the number of debt warrants issued with each
such offered debt security; (iii) if applicable, the date on or after which the
debt warrants and the related offered debt securities will be separately
transferable; (iv) the designation, aggregate principal amount and terms of debt
securities purchasable upon exercise of one debt warrant and the price or prices
at which, and the currency, or currency unit in which such principal amount of
debt securities may be purchased upon exercise; (v) the date on which the right
to exercise the debt warrants commences and the date on which such right
expires; (vi) any U.S. Federal income tax consequences; (vii) whether the debt
warrants represented by the warrant certificates will be issued in registered or
bearer form or both; and (viii) any other material terms of the debt warrants.
If we offer equity warrants, the applicable prospectus supplement will describe
the terms of the equity warrants, including the following: (i) the offering
price, if any, including the currency or currency unit in which such price will
be payable; (ii) the designation of any series of preferred stock purchasable
upon exercise of the equity warrants; (iii) the number of shares of preferred
stock or common stock purchasable upon exercise of one equity warrant, and the
price or prices at which, and the currency, or currency unit in which such
shares may be purchased upon exercise; (iv) the date on which the right to
exercise the equity warrants and the date on which such right expires; (v) any
U.S. Federal income tax consequences; (vi) whether the equity warrants
represented by the warrant certificate will be issued in registered or bearer
form or both; (vii) whether the equity warrants or the underlying preferred
stock or common stock will be listed on any national securities exchange; and
(viii) any other material terms of the equity warrants. In addition, if we sell
any debt warrants or equity warrants for any foreign currency or currency units,
the restrictions, elections, tax consequences, specific terms and other
information with respect to such issue will be specified in the applicable
prospectus supplement.

         Warrant certificates, if any, may be exchanged for new warrant
certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the
warrant agent, which will be listed in the applicable prospectus supplement, or
at such other office as may be set forth therein. Warrantholders do not have any
of the rights of holders of debt securities (except to the extent that the
consent of warrantholders may be required for certain modifications of the terms
of the indenture under which the series of offered debt securities issuable upon
exercise of the warrants to be issued) or preferred or common stockholders and
are not entitled to payments of principal and interest, if any, on debt
securities or to dividends or other distributions made with respect to preferred
stock or common stock.

                                       26

<PAGE>   67
         Warrants may be exercised by surrendering the warrant certificate, if
any, at the corporate trust office or other designated office of the warrant
agent, with (i) the form of election to purchase on the reverse side of the
warrant certificate, if any, properly completed and executed, and (ii) payment
in full of the exercise price, as set forth in the applicable prospectus
supplement. Upon exercise of warrants, the warrant agent will, as soon as
practicable, deliver the debt securities, preferred stock or common stock
issuable upon the exercise of the warrants in authorized denominations in
accordance with the instructions of the exercise warrantholder and at the sole
cost and risk of such holder. If less than all of the warrants evidenced by the
warrant certificate are exercised, a new warrant certificate will be issued for
the remaining amount of unexercised warrants, if sufficient time exists prior to
the expiration date.

                              PLAN OF DISTRIBUTION

GENERAL

         Any of the securities offered hereby may be sold in any one or more of
the following ways from time to time:

         -        to or through underwriters;
         -        through dealers;
         -        directly to other purchasers; or
         -        through agents.

         The distribution of the securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.

         In connection with the sale of securities, underwriters may receive
compensation from us or purchasers of securities for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters,
dealers and agents that participate in the distribution of securities may be
deemed to be underwriters, and any discounts or commissions received by them
from us and any profit on the resale of securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any person who
may be deemed to be an underwriter will be identified, and the compensation
received from us will be described, in the prospectus supplement.

         During and after an offering through underwriters, the underwriters may
purchase and sell the securities in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the securities sold for their
account may be reclaimed by the syndicate if those securities are repurchased by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the securities,
which may be higher than the price that might otherwise prevail in the open
market, and, if commenced, may be discontinued at any time.


         Except for our common stock, all securities, when first issued, will
have no established trading market. Any underwriters or agents to or through
whom securities are sold by us for public offering and sale may make a market in
those securities, but the underwriters or agents


                                       27

<PAGE>   68
will not be obligated to do so and may discontinue any market making at any time
without notice. We cannot assure you as to the liquidity of the trading market
for any of our securities.

         Under agreements which we may enter into, underwriters, dealers and
agents who participate in the distribution of securities may be entitled to
indemnification by us against or contribution toward certain liabilities,
including liabilities under the Securities Act.

DELAYED DELIVERY ARRANGEMENT

         If so indicated in the prospectus supplement, we will authorize
underwriters or other persons acting as our agents to solicit offers by certain
institutions to purchase debt securities from us pursuant to contracts providing
for payment and delivery on a future date. Institutions with which those types
of contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to our approval. The
obligations of any purchaser under any of those types of contracts will be
subject to the condition that the purchase of the securities will not at the
time of delivery be prohibited under the laws of any jurisdiction to which the
purchaser is subject. The underwriters and agents will not have any
responsibility in respect of the validity or performance of those contracts.

                             VALIDITY OF SECURITIES

         The validity of the securities offered by this prospectus will be
passed upon for us by Milbank, Tweed, Hadley & McCloy LLP, New York, New York.

                                     EXPERTS

         The consolidated financial statements at December 31, 1999 and 1998,
and for each of the three years in the period ended December 31, 1999, appearing
in our Annual Report on Form 10-K for the fiscal year ended December 31, 1999
and incorporated by reference herein, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report dated February 16, 2000
incorporated in this prospectus by reference and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.



         The audited historical financial statements of the Wyle Electronics
Group incorporated in this Prospectus by reference to Arrow Electronics, Inc's
Form 8-K dated September 1, 2000 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.


                                       28
<PAGE>   69
                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

         The following table sets forth the estimated costs and expenses, other
than the underwriting discounts and commissions, payable by Arrow Electronics,
Inc. (the "Company") in connection with the sale of the securities.


<TABLE>
<CAPTION>
                                                                                 AMOUNT TO
                                                                                  BE PAID
                                                                                  -------
<S>                                                                              <C>
SEC registration fee...................................................          $528,000
Printing expenses......................................................            75,000
Legal fees and expenses................................................           200,000
Accounting fees and expenses...........................................            20,000
Rating agency fees.....................................................             5,000
Blue Sky fees and expenses (including counsel).........................            10,000
Miscellaneous expenses.................................................            62,000
                                                                                 --------
         Total.........................................................          $900,000
                                                                                 ========
</TABLE>






ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Article 9 of the Company's Certificate of Incorporation permits the
indemnification of officers and directors under certain circumstances to the
full extent that such indemnification may be permitted by law.

         Such rights of indemnification are in addition to, and not in
limitation of, any rights to indemnification to which any officer or director of
the Registrant is entitled under the Business Corporation Law of the State of
New York (Sections 721 through 726), which provides for indemnification by a
corporation of its officers and directors under certain circumstances as stated
in the Business Corporation Law and subject to specified limitations set forth
in the Business Corporation Law.

         The Company also maintains directors' and officers' liability insurance
coverage which insures directors and officers of the Company against certain
losses arising from claims made, and for which the Company has not provided
reimbursement, by reason of their being directors and officers of the Company or
its subsidiaries.

ITEM 16. EXHIBITS

         The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated by reference to a prior filing
of the Company under the Securities Act or the Exchange Act as indicated in
parentheses:


<TABLE>
<CAPTION>
EXHIBIT
NUMBER         EXHIBIT DESCRIPTION
- ------        -------------------
<S>        <C>
1.1        Underwriting Agreement (Common Stock).*

1.2        Underwriting Agreement (Preferred Stock).*
1.3        Underwriting Agreement (Debt Securities).*
1.4        Underwriting Agreement, dated as of February [ ], 2001, between Arrow
           Electronics, Inc. and Morgan Stanley & Co. Incorporated and the
           other underwriters named therein.***
3.1        Restated Certificate of Incorporation of Arrow
           Electronics, Inc, as amended (filed as
</TABLE>


                                      II-1
<PAGE>   70

<TABLE>
<S>        <C>
           Exhibits 3(a)(i) and 3(a)(ii) to the Annual Report of Arrow
           Electronics, Inc. on Form 10-K for the year ended December 31, 1999
           (File No. 1-4482), and incorporated herein by this reference
           thereto).

           By-Laws of Arrow Electronics, Inc., as amended (filed as Exhibit
           3(b) to the Annual Report of Arrow Electronics, Inc. on Form 10-K
           for the year ended December 31, 1999 (File No. 1-4482), and
           incorporated herein by this reference thereto).

 3.2       Certificate of Designations for Preferred Stock.***

 3.3       Rights Agreement dated as of March 2, 1988, as amended (filed as
           Exhibits 4(a)(i) through 4(a)(vi) to the Annual Report of Arrow
           Electronics, Inc. on Form 10-K for the year ended December 31, 1999
           (File No. 1-4482), and incorporated herein by this reference
           thereto).

 4.1       Indenture between Arrow Electronics, Inc. and The Bank of New York
           (formerly, Bank of Montreal Trust Company), as trustee, dated as of
           January 15, 1997 (filed as Exhibit 4(b)(i) to the Annual Report of
           Arrow Electronics, Inc. on Form 10-K for the year ended December
           31, 1999 (File No. 1-4482), and incorporated herein by this
           reference thereto).

 4.2       Supplemental Indenture relating to the Zero Coupon Convertible
           Senior Debentures due 2021.***

 4.3       Form of Subordinated Indenture between Arrow Electronics, Inc. and
           [________________] as trustee, dated as of [_____________], 200[ ].*

 4.4       Form of Warrant Agreement for Debt Securities (including form of
           Warrant Certificate).*

 4.5       Form of Warrant Agreement for Preferred Stock (including form of
           Warrant Certificate).*

 4.6       Form of Warrant Agreement for Common Stock (including form of Warrant
           Certificate).*

 5.1       Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to the
           validity of securities being offered by Arrow Electronics, Inc.*

12.1       Statement regarding computation of consolidated ratios of earnings
           to fixed charges.**

23.1       Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit
           5.1).*

23.2       Consent of Ernst & Young LLP, independent auditors.*

23.3       Consent of PricewaterhouseCoopers LLP, independent auditors.*

24         Power of Attorney.**

25.1       Statement of Eligibility on Form T-1 under the Trust Indenture Act
           of 1939, as amended, of The Bank of New York, as trustee, under
           indenture between Arrow Electronics, Inc. and the trustee dated as
           of January 15, 1997.**

25.2       Statement of Eligibility on Form T-1 under the Trust Indenture Act
           of 1939, as amended, of [_______________], as trustee, under the
           indenture between Arrow Electronics, Inc. and the trustee dated as
           of [_____________], 200[ ].***

</TABLE>


________________________


*  Filed herewith

** Previously filed

*** To be filed by amendment or by Form 8-K




                                     II-2
<PAGE>   71
ITEM 17. UNDERTAKINGS

         The registrants hereby undertake:

         (1)    To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

                  (a) To include any prospectus required by Section 10(a)(3) of
         the Securities Act of 1933;

                  (b)   To reflect in the prospectus any facts or events arising
         after the effective date of the registration statement (or the most
         recent post-effective amendment thereof) which, individually or in the
         aggregate, represent a fundamental change in the information set forth
         in the registration statement. Notwithstanding the foregoing, any
         increase or decrease in volume of securities offered (if the total
         dollar value of securities offered would not exceed that which was
         registered) and any deviation from the low or high end of the estimated
         maximum offering range may be reflected in the form of prospectus filed
         with the Securities and Exchange Commission pursuant to Rule 424(b) if,
         in the aggregate, the changes in volume and price represent no more
         than a 20 percent change in the maximum aggregate offering price set
         forth in the "Calculation of Registration Fee" table in the effective
         registration statement;

                  (c)   To include any material information with respect to the
         plan of distribution not previously disclosed in the registration
         statement or any material change to such information in the
         registration statement;

provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

         (2)    That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3)    To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offering.

         (4)    That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared effective.

         (5)    That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

         (6)    That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the

                                      II-3
<PAGE>   72
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefits plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                  Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

         (7)    To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the Act.

                                      II-4
<PAGE>   73
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused Amendment No. 1 to this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Melville, New York, on February 13, 2001.

                                        ARROW ELECTRONICS, INC.


                                        By: /s/ Robert E. Klatell
                                            ______________________________
                                            Robert E. Klatell
                                            Executive Vice President





        Pursuant to the requirements of the Securities Act of 1933, Amendment
No. 1 to this registration statement has been signed by the following persons
in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
SIGNATURE                                                   TITLE                                   DATE
- ---------                                                   -----                                   ----
<S>                                            <C>                                           <C>
/s/ Stephen P. Kaufman*
___________________________                    Chairman of the Board                         February 13, 2001
Stephen P. Kaufman

/s/ Francis M. Scricco*
___________________________                    President and Chief Executive Officer         February 13, 2001
Francis M. Scricco                             (Principal Executive Officer)

/s/ Robert E. Klatell
___________________________                    Executive Vice President, Secretary, and      February 13, 2001
Robert E. Klatell                              Director

/s/ Sam R. Leno*
___________________________                    Senior Vice President                         February 13, 2001
Sam R. Leno                                    (Principal Financial Officer)

/s/ Paul J. Reilly*
___________________________                    Vice President - Finance                      February 13, 2001
Paul J. Reilly                                 (Principal Accounting Officer)

/s/ Daniel W. Duval*
___________________________                    Director                                      February 13, 2001
Daniel W. Duval
</TABLE>


                                      II-5
<PAGE>   74

<TABLE>
<S>                                            <C>                                 <C>

___________________________                    Director
Carlo Giersch

/s/ John N. Hanson *
___________________________                    Director                              February 13, 2001
John N. Hanson

___________________________                    Director
Roger King

/s/ Karen Gordon Mills *
___________________________                    Director                              February 13, 2001
Karen Gordon Mills

/s/ Barry W. Perry *
___________________________                    Director                              February 13, 2001
Barry W. Perry

/s/ Richard S. Rosenbloom *
___________________________                    Director                              February 13, 2001
Richard S. Rosenbloom

/s/ John C. Waddell *
___________________________                    Director                              February 13, 2001
John C. Waddell

* By Robert E. Klatell, as attorney-in-fact

/s/ Robert E. Klatell
- ---------------------
Robert E. Klatell
attorney-in-fact for the individuals as indicated
</TABLE>

                                      II-6
<PAGE>   75
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER          EXHIBIT DESCRIPTION
- ------          -------------------
<S>         <C>

 1.1        Underwriting Agreement (Common Stock).*

 1.2        Underwriting Agreement (Preferred Stock).*

 1.3        Underwriting Agreement (Debt Securities).*

 1.4        Underwriting Agreement, dated as of February [ ], 2001, between
            Arrow Electronics, Inc. and Morgan Stanley & Co. Incorporated and
            the other underwriters named therein.***

 3.1        Restated Certificate of Incorporation of Arrow Electronics, Inc, as
            amended (filed as Exhibits 3(a)(i) and 3(a)(ii) to the Annual Report
            of Arrow Electronics, Inc. on Form 10-K for the year ended December
            31, 1999 (File No. 1-4482), and incorporated herein by this
            reference thereto).

            By-Laws of Arrow Electronics, Inc., as amended (filed as Exhibit
            3(b) to the Annual Report of Arrow Electronics, Inc. on Form 10-K
            for the year ended December 31, 1999 (File No. 1-4482), and
            incorporated herein by this reference thereto).

 3.2        Certificate of Designations for Preferred Stock.***

 3.3        Rights Agreement dated as of March 2, 1988, as amended (filed as
            Exhibits 4(a)(i) through 4(a)(vi) to the Annual Report of Arrow
            Electronics, Inc. on Form 10-K for the year ended December 31, 1999
            (File No. 1-4482), and incorporated herein by this reference
            thereto).

 4.1        Indenture between Arrow Electronics, Inc. and the Bank of New York
            (formerly, Bank of Montreal Trust Company), as trustee, dated as of
            January 15, 1997 (filed as Exhibit 4(b)(i) to the Annual Report of
            Arrow Electronics, Inc. on Form 10-K for the year ended December 31,
            1999 (File No. 1-4482), and incorporated herein by this reference
            thereto).

 4.2        Supplemental Indenture relating to the Zero Coupon Convertible Senior
            Debentures due 2021.***

 4.3        Form of Subordinated Indenture between Arrow Electronics, Inc. and
            [________________] as trustee, dated as of [_____________], 200[ ].*

 4.4        Form of Warrant Agreement for Debt Securities (including form of
            Warrant Certificate).*

 4.5        Form of Warrant Agreement for Preferred Stock (including form of
            Warrant Certificate).*

 4.6        Form of Warrant Agreement for Common Stock (including form of
            Warrant Certificate).*

 5.1        Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to the
            validity of securities being offered by Arrow Electronics, Inc.*

12.1        Statement regarding computation of consolidated ratios of earnings
            to fixed charges.**

23.1        Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit
            5.1).*

23.2        Consent of Ernst & Young LLP, independent auditors.*

23.3        Consent of PricewaterhouseCoopers LLP, independent auditors.*

24          Power of Attorney.**

25.1        Statement of Eligibility on Form T-1 under the Trust Indenture Act
            of 1939, as amended, of the Bank of New York, as trustee, under
            indenture between Arrow Electronics, Inc. and the trustee dated as
            of January 15, 1997.**

25.2        Statement of Eligibility on Form T-1 under the Trust Indenture Act
            of 1939, as amended, of [_______________], as trustee, under the
            indenture between Arrow Electronics, Inc. and the trustee dated as
            of [_____________], 200[ ].***
</TABLE>

_____________________________

*   Filed herewith

**  Previously filed

*** To be filed by amendment or by Form 8-K



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>y42939a1ex1-1.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 1.1


                             ARROW ELECTRONICS, INC.

                             UNDERWRITING AGREEMENT

                               STANDARD PROVISIONS
                                 (COMMON STOCK)

                                                       ___________________, 200_



         From time to time, Arrow Electronics, Inc., a New York corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of a specified number of shares (the "Offered Securities") of the
Company's common stock, par value $0.01 (the "Common Stock"), to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "Underwriting
Agreement"). The Underwriting Agreement, including the provisions incorporated
therein by reference, is herein sometimes referred to as this Agreement. Terms
defined in the Underwriting Agreement are used herein as therein defined.


         The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to
Common Stock and has filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the Offered
Securities pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"). The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").


         The term "Contract Securities" means the Offered Securities, if any,
to be purchased pursuant to the delayed delivery contracts substantially in the
form of Schedule I hereto, with such changes therein as the Company may approve
(the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means
the Offered Securities other than Contract Securities.


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

         (a)      The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge,
threatened by the Commission.

<PAGE>   2


         (b)      (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Registration Statement and
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein.


         (c)      The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

         (d)      Each subsidiary of the Company which constitutes a
"significant subsidiary" within the meaning of Rule 1-02 of Regulation S-X (the
"Material Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

         (e)      This Agreement has been duly authorized, executed and
delivered by the Company.


         (f)      The Offered Securities, upon issuance and delivery and payment
therefor in the manner described herein, will be duly authorized, validly
issued, fully paid and nonassessable. The Offered Securities conform to the
description thereof in the preliminary prospectus and the Prospectus.



                                       2
<PAGE>   3



         (g)      All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable.


         (h)      The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding agreements of
the Company, enforceable in accordance with their respective terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability.

         (i)      The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the Offered
Securities and the Delayed Delivery Contracts will not contravene any provision
of applicable law or the certificate of incorporation or by-laws of the Company
or any agreement or other instrument binding upon the Company or any of its
Material Subsidiaries or to which any of its or their properties are subject
that is material to the Company and its subsidiaries, taken as a whole, or any
material judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Material Subsidiary or any of their
properties, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the Offered
Securities or the Delayed Delivery Contracts, except such as may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Offered Securities.


         (j)      There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).


         (k)      There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
Material Subsidiaries is a party or to which any of the properties of the
Company or any of its Material Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed or incorporated by reference as exhibits to the Registration Statement
that are not described, filed or incorporated as required.

         (l)      Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.

         (m)      The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.


                                       3
<PAGE>   4


         (n)      The Company and its Material Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.

         2.       Delayed Delivery Contracts. If the Prospectus provides for
sales of Offered Securities pursuant to Delayed Delivery Contracts, the Company
hereby authorizes the Underwriters to solicit offers to purchase Contract
Securities on the terms and subject to the conditions set forth in the
Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery Contracts
may be entered into only with institutional investors approved by the Company of
the types set forth in the Prospectus. On the Closing Date, the Company will pay
to the Manager as compensation for the accounts of the Underwriters the
commission set forth in the Underwriting Agreement in respect of the Contract
Securities. The Underwriters will not have any responsibility in respect of the
validity or the performance of any Delayed Delivery Contracts.

         If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.

         3.       Terms of Public Offering. The Company is advised by the
Manager that the Underwriters propose to make a public offering of their
respective portions of the Underwriters' Securities as soon after this Agreement
has been entered into as in the Manager's judgment is advisable. The terms of
the public offering of the Underwriters' Securities are set forth in the
Prospectus.


         4.       Payment and Delivery. Payment for the Underwriters' Securities
shall be made by wire transfer to an account designated by the Company in same
day funds at the time and place set forth in the Underwriting Agreement, upon
delivery to the Manager for the respective accounts of the several Underwriters
of the Underwriters' Securities registered in such names and in such
denominations as the Manager shall request in writing not less than two full
business days prior to the date of delivery, with any transfer taxes payable in
connection with the transfer of the Underwriters' Securities to the Underwriters
duly paid.



                                       4
<PAGE>   5


         5.       Conditions to the Underwriters' Obligations. The several
obligations of the Underwriters to purchase any Offered Securities are subject
to the following conditions:

         (a)      Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:


                  (i)      there shall not have occurred any downgrading in, nor
         shall any notice have been given of any intended or potential
         downgrading in or of any negative review of, the rating accorded any of
         the Company's securities by any "nationally recognized statistical
         rating organization," as such term is defined for purposes of Rule
         436(g)(2) under the Securities Act; and


                  (ii)     there shall not have occurred any change, or any
         development involving a prospective change, in the condition, financial
         or otherwise, or in the earnings, business or operations of the Company
         and its subsidiaries, taken as a whole, from that set forth in the
         Prospectus (exclusive of any amendments or supplements thereto
         subsequent to the date of this Agreement) that, in the judgment of the
         Manager, is material and adverse and that makes it, in the judgment of
         the Manager, impracticable to market the Offered Securities on the
         terms and in the manner contemplated in the Prospectus.


         (b)      The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, not in his individual capacity but solely in his capacity as an
executive officer of the Company, to the effect set forth in clause (a) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date. The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.



         (c)      The Underwriters shall have received on the Closing Date
opinions of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Company, and
Robert E. Klatell, Executive Vice President and Secretary of the Company, dated
the Closing Date, in form and substance satisfactory to the Underwriters.



                                       5
<PAGE>   6



         (d)      The Underwriters shall have received on the Closing Date an
opinion of [            ], special counsel for the Underwriters, dated the
Closing Date, in form and substance satisfactory to the Underwriters.

         6.       Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

         (a)      To furnish the Manager, without charge, one signed copy of the
Registration Statement (including exhibits thereto and documents incorporated
therein by reference) and for delivery to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto and documents
incorporated therein by reference) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents


                                       8
<PAGE>   7


incorporated by reference therein and any supplements and amendments thereto or
to the Registration Statement as the Manager may reasonably request.

         (b)      Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Offered Securities, to furnish to the Manager
a copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects.

         (c)      If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters, after consultation with the Company, the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, after
consultation with the Company, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Manager will furnish to the Company) to
which Offered Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with applicable law.

         (d)      To endeavor to qualify the Offered Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as the
Manager shall reasonably request.

         (e)      To make generally available to the Company's security holders
and to the Manager as soon as practicable an earning statement covering a twelve
month period, which earning statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.


         (f)      To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto; (ii) the preparation, issuance and delivery of the Offered Securities;
(iii) the fees and disbursements of the Company's counsel and accountants; (iv)
the qualification of the Offered Securities under state securities or Blue Sky
laws in accordance with the provisions of Section 6(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda; (v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of any preliminary prospectus and the Prospectus and any
amendments or supplements thereto; (vi) the printing and delivery to the
Underwriters of copies of any Blue Sky or Legal Investment Memoranda; (vii)



                                       9
<PAGE>   8



the filing fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc. made in connection
with the Offered Securities; (viii) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors and (ix) all
document production charges and expenses of counsel to the Underwriters (but not
including their fees for professional services) incurred in connection with the
preparation of this Agreement.


         7.       Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Manager expressly for use therein.

         (b)      Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.

         (c)      In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this Section
7, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any


                                       10
<PAGE>   9
\


indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Manager, in the case
of parties indemnified pursuant to paragraph (a) above, and by the Company, in
the case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.


         (d)      To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Offered Securities they have purchased hereunder, and not joint.


         (e)      The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this


                                       11
<PAGE>   10


Section 7. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

         (f)      The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Securities.


         8.       Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv), such event, singly or together with any other such event, makes it, in the
judgment of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.


         9.       Defaulting Underwriters. If, on the Closing Date, any one or
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate amount of the Underwriters' Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the amount of Underwriters' Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
amount of Underwriters Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or


                                       12
<PAGE>   11


Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the amount of Underwriters' Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such amount of
Underwriters' Securities without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Underwriters' Securities and the aggregate amount of Underwriters'
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of Underwriters' Securities to be purchased on such date,
and arrangements satisfactory to the Manager and the Company for the purchase of
such Underwriters' Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the Manager
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

         If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

         10.      Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         11.      Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.

         12.      Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.




                                       13
<PAGE>   12





                             UNDERWRITING AGREEMENT

                                                            _____________ , 200_

Arrow Electronics, Inc.
25 Hub Drive
Melville, NY 11747

Dear Sirs and Mesdames:


         We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that Arrow
Electronics, Inc., a New York corporation (the "Company"), proposes to issue and
sell [________] shares of the Company's Common Stock, par value $0.01, for an
aggregate offering price of $[_________] (the "Securities") (The Securities are
also referred to herein as the "Offered Securities.")



         Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Securities set forth below opposite their names at a
purchase price of $[   ] per share of Securities.



<TABLE>
<CAPTION>
                                        Number of
         Name                           Securities
         ----                       -------------------
<S>                                  <C>
[Name of Underwriter]
[Insert syndicate list]
                                      Total. . . . . .
</TABLE>



         The number of Securities to be purchased by the several Underwriters
shall be reduced by the aggregate number of Securities sold pursuant to delayed
delivery contracts.


         The Underwriters will pay for the Offered Securities (less any Offered
Securities sold pursuant to delayed delivery contracts) upon delivery thereof at
[office] at ______ a.m. (New York time) on ___________, 200_, or at such other
time, not later than 5:00 p.m. (New York time) on _________, 200_, as shall be
designated by the Manager. The time and date of such payment and delivery are
hereinafter referred to as the Closing Date.

         The Offered Securities shall have the terms set forth in the Prospectus
dated ____________, 200_, and the Prospectus Supplement dated _____________,
200_.


         The Commission to be paid to the Underwriters in respect of the Offered
Securities purchased pursuant to delayed delivery contracts arranged by the
Underwriters shall be $[    ] per share of the Securities so purchased.



                                       14
<PAGE>   13


         All provisions contained in the document entitled Arrow Electronics,
Inc. Underwriting Agreement Standard Provisions (Common Stock ) dated _______
200_, (the "Standard Provisions") a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control, (ii) all
references in such document to a type of security that is not an Offered
Security shall not be deemed to be a part of this Agreement and (iii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.

         All references to the Manager in the Standard Provisions shall be taken
to mean [name of Underwriter] and [names of other co-lead Managers] whose
authority hereunder and thereunder may be exercised by them jointly or by [name
of Underwriter] alone.




                                       15
<PAGE>   14



         Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.

                                   Very truly yours,

                                   [NAME OF LEAD MANAGER]
                                   [Name of Other Lead Managers]

                                   Acting severally on behalf of themselves
                                   [and the several Underwriters named herein]


                                   By:      [NAME OF LEAD MANAGER]

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

Accepted:

ARROW ELECTRONICS, INC.

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




                                       16
<PAGE>   15




                                                                      Schedule I


                            DELAYED DELIVERY CONTRACT

                                                                 _________, 200_


Ladies and Gentlemen:

         The undersigned hereby agrees to purchase from Arrow Electronics, Inc.,
a New York corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated ________________, 200_
and Prospectus Supplement dated _________________ 200_, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.


         The undersigned will purchase from the Company Securities at the price
per share and in the numbers on the delivery dates set forth in Schedule A. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."


         Payment for the Securities which the undersigned has agreed to purchase
on each Delivery Date shall be made to the Company by wire transfer in same day
funds on the Delivery Date to the account specified by the Company, upon
delivery to the undersigned of the Securities to be purchased by the undersigned
on the Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.

         The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned as its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.

         Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.

         This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.




                                       17
<PAGE>   16



         If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This will
become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.

         This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.

                                       Yours very truly,

                                       ----------------------------
                                                (Purchaser)

                                       By
                                          -------------------------

                                       ----------------------------
                                                (Title)

                                       ----------------------------
                                                (Address)

Accepted:

ARROW ELECTRONICS, INC.

By
   --------------------------



                                       18
<PAGE>   17



                 PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING

         The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)

<TABLE>
<CAPTION>
                                                        Telephone No.
                Name                                (Including Area Code)                   Department
                ----                                ---------------------                   ----------
<S>                                                   <C>                               <C>

- ----------------------------------                    -----------------                 ------------------
</TABLE>




                                       19
<PAGE>   18



                                   SCHEDULE A

Securities:



Numbers to be Purchased:





Price per Share:




Delivery:



                                       20






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.2
<SEQUENCE>3
<FILENAME>y42939a1ex1-2.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 1.2


                             ARROW ELECTRONICS, INC.

                             UNDERWRITING AGREEMENT

                               STANDARD PROVISIONS
                                (PREFERRED STOCK)

                                                       ___________________, 200_


         From time to time, Arrow Electronics, Inc., a New York corporation (the
"Company"), may enter into one or more underwriting agreements that provide for
the sale of a specified number of shares (the "Offered Securities") of the
Company's preferred stock, par value $0.01 (the "Preferred Stock"), to the
several underwriters named therein. The standard provisions set forth herein may
be incorporated by reference in any such underwriting agreement (an
"Underwriting Agreement"). The Underwriting Agreement, including the provisions
incorporated therein by reference, is herein sometimes referred to as this
Agreement. Terms defined in the Underwriting Agreement are used herein as
therein defined.

         The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to
Preferred Stock and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

         The term "Contract Securities" means the Offered Securities, if any, to
be purchased pursuant to the delayed delivery contracts substantially in the
form of Schedule I hereto, with such changes therein as the Company may approve
(the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means
the Offered Securities other than Contract Securities.

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

         (a)      The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge,
threatened by the Commission.


<PAGE>   2



         (b)      (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Registration Statement and
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein.


         (c)      The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

         (d)      Each subsidiary of the Company which constitutes a
"significant subsidiary" within the meaning of Rule 1-02 of Regulation S-X (the
"Material Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

         (e)      This Agreement has been duly authorized, executed and
delivered by the Company.

         (f)      The Offered Securities, upon issuance and delivery and payment
therefor in the manner described herein, will be duly authorized, validly
issued, fully paid and nonassessable. The Offered Securities conform to the
description thereof in the preliminary prospectus and the Prospectus;


                                       2
<PAGE>   3



         (g)      All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable.


         (h)      The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding agreements of
the Company, enforceable in accordance with their respective terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability.

         (i)      The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the Offered
Securities and the Delayed Delivery Contracts will not contravene any provision
of applicable law or the certificate of incorporation or by-laws of the Company
or any agreement or other instrument binding upon the Company or any of its
Material Subsidiaries or to which any of its or their properties are subject
that is material to the Company and its subsidiaries, taken as a whole, or any
material judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Material Subsidiary or any of their
properties, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the Offered
Securities or the Delayed Delivery Contracts, except such as may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Offered Securities.


         (j)      There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).


         (k)      There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
Material Subsidiaries is a party or to which any of the properties of the
Company or any of its Material Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed or incorporated by reference as exhibits to the Registration Statement
that are not described, filed or incorporated as required.

         (l)      Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.

         (m)      The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.



                                       3
<PAGE>   4

         (n)      The Company and its Material Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.

         2.       Delayed Delivery Contracts. If the Prospectus provides for
sales of Offered Securities pursuant to Delayed Delivery Contracts, the Company
hereby authorizes the Underwriters to solicit offers to purchase Contract
Securities on the terms and subject to the conditions set forth in the
Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery Contracts
may be entered into only with institutional investors approved by the Company of
the types set forth in the Prospectus. On the Closing Date, the Company will pay
to the Manager as compensation for the accounts of the Underwriters the
commission set forth in the Underwriting Agreement in respect of the Contract
Securities. The Underwriters will not have any responsibility in respect of the
validity or the performance of any Delayed Delivery Contracts.

         If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.

         3.       Terms of Public Offering. The Company is advised by the
Manager that the Underwriters propose to make a public offering of their
respective portions of the Underwriters' Securities as soon after this Agreement
has been entered into as in the Manager's judgment is advisable. The terms of
the public offering of the Underwriters' Securities are set forth in the
Prospectus.


         4.       Payment and Delivery. Payment for the Underwriters' Securities
shall be made by wire transfer to an account designated by the Company in same
day funds at the time and place set forth in the Underwriting Agreement, upon
delivery to the Manager for the respective accounts of the several Underwriters
of the Underwriters' Securities registered in such names and in such
denominations as the Manager shall request in writing not less than two full
business days prior to the date of delivery, with any transfer taxes payable in
connection with the transfer of the Underwriters' Securities to the Underwriters
duly paid.




                                       4
<PAGE>   5

         5.       Conditions to the Underwriters' Obligations. The several
obligations of the Underwriters to purchase any Offered Securities are subject
to the following conditions:

         (a)      Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:


                  (i)      there shall not have occurred any downgrading in, nor
         shall any notice have been given of any intended or potential
         downgrading in or of any negative review of, the rating accorded any of
         the Company's securities by any "nationally recognized statistical
         rating organization," as such term is defined for purposes of Rule
         436(g)(2) under the Securities Act; and


                  (ii)     there shall not have occurred any change, or any
         development involving a prospective change, in the condition, financial
         or otherwise, or in the earnings, business or operations of the Company
         and its subsidiaries, taken as a whole, from that set forth in the
         Prospectus (exclusive of any amendments or supplements thereto
         subsequent to the date of this Agreement) that, in the judgment of the
         Manager, is material and adverse and that makes it, in the judgment of
         the Manager, impracticable to market the Offered Securities on the
         terms and in the manner contemplated in the Prospectus.


         (b)      The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, not in his individual capacity but solely in his capacity as an
executive officer of the Company, to the effect set forth in clause (a) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date. The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.


         (c)      The Underwriters shall have received on the Closing Date
opinions of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Company, and
Robert E. Klatell, Executive Vice President and Secretary of the Company, dated
the Closing Date, in form and substance satisfactory to the Underwriters.


                                       5
<PAGE>   6




         (d)      The Underwriters shall have received on the Closing Date an
opinion of [                     ], special counsel for the Underwriters, dated
the Closing Date in form and substance satisfactory to the Underwriters.


         6.       Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

         (a)      To furnish the Manager, without charge, one signed copy of the
Registration Statement (including exhibits thereto and documents incorporated
therein by reference) and for delivery to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto and documents
incorporated therein by reference) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents



                                       8
<PAGE>   7


incorporated by reference therein and any supplements and amendments thereto or
to the Registration Statement as the Manager may reasonably request.

         (b)      Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Offered Securities, to furnish to the Manager
a copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects.

         (c)      If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters, after consultation with the Company, the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, after
consultation with the Company, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Manager will furnish to the Company) to
which Offered Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with applicable law.

         (d)      To endeavor to qualify the Offered Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as the
Manager shall reasonably request.

         (e)      To make generally available to the Company's security holders
and to the Manager as soon as practicable an earning statement covering a twelve
month period, which earning statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.


         (f)      To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto; (ii) the preparation, issuance and delivery of the Offered Securities;
(iii) the fees and disbursements of the Company's counsel and accountants; (iv)
the qualification of the Offered Securities under state securities or Blue Sky
laws in accordance with the provisions of Section 6(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda; (v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of any preliminary prospectus and the Prospectus and any
amendments or supplements thereto; (vi) the printing and delivery to the
Underwriters of copies of any Blue Sky or Legal Investment Memoranda; (vii)



                                       9
<PAGE>   8



the filing fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc. made in connection with the
Offered Securities; (viii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors and (ix) all document
production charges and expenses of counsel to the Underwriters (but not
including their fees for professional services) incurred in connection with the
preparation of this Agreement.


         7.       Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Manager expressly for use therein.

         (b)      Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.

         (c)      In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this Section
7, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any



                                       10
<PAGE>   9


indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Manager, in the case
of parties indemnified pursuant to paragraph (a) above, and by the Company, in
the case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.


         (d)      To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Offered Securities they have purchased hereunder, and not joint.


         (e)      The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this


                                       11
<PAGE>   10


Section 7. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

         (f)      The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Securities.


         8.       Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv), such event, singly or together with any other such event, makes it, in the
judgment of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.


         9.       Defaulting Underwriters. If, on the Closing Date, any one or
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate amount of the Underwriters' Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the amount of Underwriters' Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
amount of Underwriters Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or


                                       12
<PAGE>   11



Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the amount of Underwriters' Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such amount of
Underwriters' Securities without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Underwriters' Securities and the aggregate amount of Underwriters'
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of Underwriters' Securities to be purchased on such date,
and arrangements satisfactory to the Manager and the Company for the purchase of
such Underwriters' Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the Manager
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

         If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

         10.      Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         11.      Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.

         12.      Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.




                                       13
<PAGE>   12



                             UNDERWRITING AGREEMENT

                                                             _____________, 200_

Arrow Electronics, Inc.
25 Hub Drive
Melville, NY 11747

Dear Sirs and Mesdames:


         We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that Arrow
Electronics, Inc., a New York corporation (the "Company"), proposes to issue and
sell [________] shares of the Company's Preferred Stock, par value $0.01, for an
aggregate offering price of $[_________] (the "Securities") (The Securities are
also referred to herein as the "Offered Securities.")



         Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Securities set forth below opposite their names at a
purchase price of $[____] per share of Securities.



<TABLE>
<CAPTION>
                                         Number of
         Name                            Securities
         ----                        -------------------
<S>                                  <C>
[Name of Underwriter]
[Insert syndicate list]
                                      Total. . . . . .
</TABLE>



         The number of Securities to be purchased by the several Underwriters
shall be reduced by the number of Securities sold pursuant to delayed delivery
contracts.


         The Underwriters will pay for the Offered Securities (less any Offered
Securities sold pursuant to delayed delivery contracts) upon delivery thereof at
[office] at ______ a.m. (New York time) on ___________, 200_, or at such other
time, not later than 5:00 p.m. (New York time) on _________, 200_, as shall be
designated by the Manager. The time and date of such payment and delivery are
hereinafter referred to as the Closing Date.

         The Offered Securities shall have the terms set forth in the Prospectus
dated ____________, 200_, and the Prospectus Supplement dated _____________,
200_.


         The Commission to be paid to the Underwriters in respect of the Offered
Securities purchased pursuant to delayed delivery contracts arranged by the
Underwriters shall be $[____] per share of the Securities so purchased.




                                       14
<PAGE>   13

         All provisions contained in the document entitled Arrow Electronics,
Inc. Underwriting Agreement Standard Provisions (Preferred Stock ) dated _______
200_, (the "Standard Provisions") a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control, (ii) all
references in such document to a type of security that is not an Offered
Security shall not be deemed to be a part of this Agreement and (iii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.

         All references to the Manager in the Standard Provisions shall be taken
to mean [name of Underwriter] and [names of other co-lead Managers] whose
authority hereunder and thereunder may be exercised by them jointly or by [name
of Underwriter] alone.




                                       15
<PAGE>   14



         Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.

                                  Very truly yours,

                                  [NAME OF LEAD MANAGER]
                                  [Name of Other Lead Managers]

                                  Acting severally on behalf of themselves
                                  [and the several Underwriters named herein]


                                  By:      [NAME OF LEAD MANAGER]

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

Accepted:

ARROW ELECTRONICS, INC.

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




                                       16
<PAGE>   15



                                                                      Schedule I

                            DELAYED DELIVERY CONTRACT

                                                                 _________, 200_

Ladies and Gentlemen:

         The undersigned hereby agrees to purchase from Arrow Electronics, Inc.,
a New York corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated ________________, 200_
and Prospectus Supplement dated _________________ 200_, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.


         The undersigned will purchase from the Company Securities at the price
per share and in the numbers on the delivery dates set forth in Schedule A. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."


         Payment for the Securities which the undersigned has agreed to purchase
on each Delivery Date shall be made to the Company by wire transfer in same day
funds on the Delivery Date to the account specified by the Company, upon
delivery to the undersigned of the Securities to be purchased by the undersigned
on the Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.

         The obligation of the undersigned to take delivery of and make payment
for the Securities on the Delivery Date shall be subject to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned as its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.

         Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.

         This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.




                                       17
<PAGE>   16



         If this Agreement is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below. This will
become a binding agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.

         This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.

                                                 Yours very truly,

                                                 ----------------------------
                                                          (Purchaser)

                                                 By
                                                    -------------------------

                                                 ----------------------------
                                                          (Title)

                                                 ----------------------------
                                                          (Address)

Accepted:

ARROW ELECTRONICS, INC.

By
   --------------------------



                                       18
<PAGE>   17



                 PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING

         The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)

<TABLE>
<CAPTION>
                                                        Telephone No.
                Name                                (Including Area Code)                   Department
                ----                                ---------------------                   ----------
<S>                                                  <C>                                <C>

- ----------------------------------                    -----------------                 ------------------
</TABLE>



                                       19
<PAGE>   18



                                   SCHEDULE A

Securities:



Numbers to be Purchased:


Price per Share:



Delivery:



                                       20










</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.3
<SEQUENCE>4
<FILENAME>y42939a1ex1-3.txt
<DESCRIPTION>UNDERWRITING AGREEMENT (DEBT SECURITIES)
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 1.3

                             ARROW ELECTRONICS, INC.

                             UNDERWRITING AGREEMENT

                               STANDARD PROVISIONS
                                (DEBT SECURITIES)

                                                      ____________________, 200_

      From time to time, Arrow Electronics, Inc., a New York corporation (the
"Company") may enter into one or more underwriting agreements that provide for
the sale of designated debt securities to the several underwriters named
therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "Underwriting Agreement"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.

      The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

      The term "Contract Securities" means the Offered Securities, if any, to be
purchased pursuant to the delayed delivery contracts substantially in the form
of Schedule I hereto, with such changes therein as the Company may approve (the
"Delayed Delivery Contracts"). The term "Underwriters' Securities" means the
Offered Securities other than Contract Securities.

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

      (a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge,
threatened by the Commission.
<PAGE>   2

      (b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Registration Statement and
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein or (B) to that part of
the Registration Statement that constitutes the Statement of Eligibility (Form
T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), of the Trustee.

      (c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.

      (d) Each subsidiary of the Company which constitutes a "significant
subsidiary" within the meaning of Rule 1-02 of Regulation S-X and each
subsidiary of the Company which constitutes a "restricted subsidiary" within the
meaning of the Indenture (together, the "Material Subsidiaries") has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.

      (e) This Agreement has been duly authorized, executed and delivered by the
Company.

      (f) The Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and


                                       2
<PAGE>   3

(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.

      (g) The Offered Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms of
the Underwriting Agreement, in the case of the Underwriters' Securities, or by
institutional investors in accordance with the terms of the Delayed Delivery
Contracts in the case of Contract Securities, will be entitled to the benefits
of the Indenture and will be valid and binding obligations of the Company, in
each case enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration, if any,
and the availability of equitable remedies may be limited by equitable
principles of general applicability.

      (h) The Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company and are valid and binding agreements of the Company,
enforceable in accordance with their respective terms except as (i)
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability.

      (i) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Indenture, the Offered
Securities and the Delayed Delivery Contracts will not contravene any provision
of applicable law or the certificate of incorporation or by-laws of the Company
or any agreement or other instrument binding upon the Company or any of its
Material Subsidiaries or to which any of its or their properties are subject
that is material to the Company and its subsidiaries, taken as a whole, or any
material judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Material Subsidiary or any of their
properties, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Offered Securities or the Delayed Delivery Contracts, except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Offered Securities.

      (j) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).

      (k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its Material
Subsidiaries is a party or to which any of the properties of the Company or any
of its Material Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by


                                       3
<PAGE>   4

reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.

      (l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.

      (m) The Company is not an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended.

      (n) The Company and its Material Subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.

      2. Delayed Delivery Contracts. if the Prospectus provides for sales of
Offered Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.

      If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.

      3. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Underwriters Securities as soon after this Agreement has been entered
into as in the Manager's judgment is


                                       4
<PAGE>   5

advisable, The terms of the public offering of the Underwriters' Securities are
set forth in the Prospectus.

      4. Payment and Delivery. Payment for the Underwriters' Securities shall be
made by wire transfer to an account designated by the Company in same day funds
at the time and place set forth in the Underwriting Agreement, upon delivery to
the Manager for the respective accounts of the several Underwriters of the
Underwriters' Securities registered in such names and in such denominations as
the Manager shall request in writing not less than two full business days prior
to the date of delivery, with any transfer taxes payable in connection with the
transfer of the Underwriters' Securities to the Underwriters duly paid.

      5. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters to purchase any Offered Securities are subject to the following
conditions:

      (a) Subsequent to the execution and delivery of the Underwriting Agreement
and prior to the Closing Date:

            (i) there shall not have occurred any downgrading in, nor shall any
      notice have been given of any intended or potential downgrading in or of
      any negative review of, the rating accorded any of the Company's
      securities by any "nationally recognized statistical rating organization,"
      as such term is defined for purposes of Rule 436(g)(2) under the
      Securities Act; and

            (ii) there shall not have occurred any change, or any development
      involving a prospective change, in the condition, financial or otherwise,
      or in the earnings, business or operations of the Company and its
      subsidiaries, taken as a whole, from that set forth in the Prospectus
      (exclusive of any amendments or supplements thereto subsequent to the date
      of this Agreement) that, in the judgment of the Manager, is material and
      adverse and that makes it, in the judgment of the Manager, impracticable
      to market the Offered Securities on the terms and in the manner
      contemplated in the Prospectus.

      (b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, not in his individual capacity but solely in his capacity as an
executive officer of the Company, to the effect set forth in clause (a) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date. The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.

      (c) The Underwriters shall have received on the Closing Date opinions of
Milbank, Tweed, Hadley & McCloy LLP, counsel for the Company, and Robert E.
Klatell, Executive Vice President and Secretary of the Company, dated the
Closing Date, in form and substance satisfactory to the Underwriters.


                                       5
<PAGE>   6

      (d) The Underwriters shall have received on the Closing Date an opinion of
[     ], special counsel for the Underwriters, dated the Closing Date, in form
and substance satisfactory to the Underwriters.

      6. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:

      (a) To furnish the Manager, without charge, one signed copy of the
Registration Statement (including exhibits thereto and documents incorporated
therein by reference) and for delivery to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto and documents
incorporated therein by reference) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.

      (b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Offered Securities, to furnish to the Manager a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects.

      (c) If, during such period after the first date of the public offering of
the Offered Securities as in the opinion of counsel for the Underwriters, after
consultation with the Company, the Prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, after consultation with
the Company, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses the Manager will furnish to the Company) to which Offered Securities
may have been sold by the Manager on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with applicable law.

      (d) To endeavor to qualify the Offered Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request and to maintain such qualification for as long as the Manager
shall reasonably request.

      (e) To make generally available to the Company's security holders and to
the Manager as soon as practicable an earning statement covering a twelve month
period, which earning statement shall satisfy the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder.

      (f) During the period beginning on the date of the Underwriting Agreement
and continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise


                                       6
<PAGE>   7

dispose of any debt securities of the Company substantially similar to the
Offered Securities (other than (i) the Offered Securities and (ii) commercial
paper issued in the ordinary course of business), without the prior written
consent of the Manager.

      (g) To pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and supplements
thereto; (ii) the preparation, issuance and delivery of the Offered Securities;
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel; (iv) the qualification of the Offered Securities
under state securities or Blue Sky laws in accordance with the provisions of
Section 6(d), including filing fees and the fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky or Legal Investment Memoranda; (v) the printing and
delivery to the Underwriters in quantities as hereinabove stated of copies of
the Registration Statement and all amendments thereto and of any preliminary
prospectus and the Prospectus and any amendments or supplements thereto; (vi)
the printing and delivery to the Underwriters of copies of any Blue Sky or Legal
Investment Memoranda; (vii) any fees charged by rating agencies for the rating
of the Offered Securities; (viii) the filing fees and expenses, if any, incurred
with respect to any filing with the National Association of Securities Dealers,
Inc. made in connection with the Offered Securities; (ix) any expenses incurred
by the Company in connection with a "road show" presentation to potential
investors and (x) all document production charges and expenses of counsel to the
Underwriters (but not including their fees for professional services) incurred
in connection with the preparation of this Agreement.

      7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Manager expressly for use therein.

      (b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through the Manager


                                       7
<PAGE>   8

expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.

      (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) of this Section 7, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.

      (d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection


                                       8
<PAGE>   9

with the offering of the Offered Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of such Offered
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate public offering price of the Offered Securities. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Offered
Securities they have purchased hereunder, and not joint.

      (e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 1 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

      (f) The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Securities.

      8. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (1) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have beers suspended on any exchange or in


                                       9
<PAGE>   10

any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Manager, is material and adverse and (b)in the case
of any of the events specified in clauses (a) (i) through (iv), such event,
singly or together with any other such event, makes it, in the judgment of the
Manager, impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.

      9. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase Underwriters' Securities that
it has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Underwriters' Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate amount of the Underwriters' Securities to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the amount of Underwriters' Securities set forth opposite their respective
names in the Underwriting Agreement bears to the aggregate amount of
Underwriters Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Manager may specify, to
purchase the Underwriters' Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the amount of Underwriters' Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such amount of
Underwriters' Securities without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Underwriters' Securities and the aggregate amount of Underwriters'
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of Underwriters' Securities to be purchased on such date,
and arrangements satisfactory to the Manager and the Company for the purchase
of such Underwriters' Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the Manager
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

      If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.


                                       10
<PAGE>   11

      10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

      11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

      12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.


                                       11
<PAGE>   12

                             UNDERWRITING AGREEMENT
                                                          ________________, 200_

Arrow Electronics, Inc.
25 Hub Drive
Melville, NY 11747

Dear Sirs and Mesdames:

      We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Arrow Electronics, Inc., a
New York corporation (the "Company"), proposes to issue and sell [Currency and
Principal Amount] aggregate initial offering price of [Full title of Debt
Securities] (the "Debt Securities"). (The Debt Securities are also referred to
herein as the "Offered Securities.") The Debt Securities will be issued pursuant
to the provisions of an Indenture dated as of _______________, 200_, as amended
or supplemented from time to time (the "Indenture"), between the Company and
[               ], as Trustee (the "Trustee").

      Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
respective principal amounts of Debt Securities set forth below opposite their
names at a purchase price of ____ % of the principal amount of Debt Securities[,
plus accrued interest, if any, from [Date of Offered Securities] to the date of
payment and delivery]:

<TABLE>
<CAPTION>
                                        Principal Amount of
          Name                          Debt Securities
          ----                          ---------------
<S>                                <C>
[Name of Underwriter]
[insert syndicate list]
                                   Total.....
</TABLE>

      The principal amount of Debt Securities to be purchased by the several
Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.

      The Underwriters will pay for the Offered Securities (less any Offered
Securities sold pursuant to delayed delivery contracts) upon delivery thereof at
[office] at _______ a.m. (New York time) on ______________, 200_, or at such
other time, not later than 5:00 p.m. (New York time) on __________, 200_, as
shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.

      The Offered Securities shall have the terms set forth in the Prospectus
dated ________, 200_, and the Prospectus Supplement dated _____________, 200_,
including the following:


                                       12
<PAGE>   13

Terms of Debt Securities

      Maturity Date:

      Interest Rate:

      Redemption Provisions:

      Interest Payment Dates:    _________________ and
                                 ________________ commencing
                                 ___________________, ____
                                 [(Interest accrues from
                                 ___________________, ____)]

      Form and Denomination:

      [Other Terms:]

      The Commission to be paid to the Underwriters in respect of the Offered
Securities purchased pursuant to delayed delivery contracts arranged by the
Underwriters shall be ___% of the principal amount of the Debt Securities so
purchased.

      All provisions contained in the document entitled Arrow Electronics, Inc.
Underwriting Agreement Standard Provisions (Debt Securities) dated _________
200_, (the "Standard Provisions") a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control, (ii) all
references in such document to a type of security that is not an Offered
Security shall not be deemed to be a part of this Agreement and (iii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.

      All references to the Manager in the Standard Provisions shall be taken to
mean [name of Underwriter] and [names of other co-lead Managers] whose authority
hereunder and thereunder may be exercised by them jointly or by [name of
Underwriter] alone.


                                       13
<PAGE>   14

      Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.

                                     Very truly yours,

                                     [NAME OF LEAD MANAGER]
                                     [Name of Other Lead Managers]

                                     Acting severally on behalf of themselves
                                     [and the several Underwriters named herein]


                                     By:   [NAME OF LEAD MANAGER]


                                     By:   ______________________________
                                           Name:
                                           Title:

Accepted:

ARROW ELECTRONICS, INC.

By:    ______________________
       Name:
       Title:


                                       14
<PAGE>   15

                                                                      Schedule 1

                            DELAYED DELIVERY CONTRACT

                                                                   _______, 200_

Dear Ladies and Gentlemen:

      The undersigned hereby agrees to purchase from Arrow Electronics, Inc., a
New York corporation (the "Company"), and the Company agrees to sell to the
undersigned the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated __________________,
200_ and Prospectus Supplement dated _______________, 200_, receipt of copies of
which are hereby acknowledged, at a purchase price stated in Schedule A and on
the further terms and conditions set forth in this Agreement. The undersigned
does not contemplate selling Securities prior to making payment therefor.

      The undersigned will purchase from the Company Securities in the principal
amount and numbers on the delivery dates set forth in Schedule A. Each such date
on which Securities are to be purchased hereunder is hereinafter referred to as
a "Delivery Date."

      Payment for the Securities which the undersigned has agreed to purchase on
each Delivery Date shall be made to the Company by wire transfer in same day
funds on the Delivery Date to the account specified by the Company, upon
delivery to the undersigned of the Securities to be purchased by the undersigned
on the Delivery Date, in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.

      The obligation of the undersigned to take delivery of and make payment for
the Securities on the Delivery Date shall be subject to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery to the
Underwriters, the Company will mail or deliver to the undersigned as its address
set forth below notice to such effect, accompanied by a copy of the opinion of
counsel for the Company delivered to the Underwriters in connection therewith.

      Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.

      This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.

      If this Agreement is acceptable to the Company, it is requested that the
Company sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned


                                       15
<PAGE>   16

at its address set forth below. This will become a binding agreement, as of the
date first above written, between the Company and the undersigned when such
counterpart is so mailed or delivered.

      This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.

                                         Yours very truly,

                                         ______________________________
                                                 (Purchaser)

                                         By____________________________

                                         ______________________________
                                                 (Title)

                                         ______________________________
                                                 (Address)

Accepted:

ARROW ELECTRONICS, INC.

By________________________


                                       16
<PAGE>   17

                 PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING

      The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)

<TABLE>
<CAPTION>
                                   Telephone No.
          Name                 (Including Area Code)          Department
          ----                 ---------------------          ----------
<S>                            <C>                         <C>

______________________         _____________________       _________________
</TABLE>


                                       17
<PAGE>   18

                                   SCHEDULE A

Securities:

Principal Amounts or Numbers to be Purchased:

Purchase Price:

Delivery:


                                       18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>5
<FILENAME>y42939a1ex4-3.txt
<DESCRIPTION>FORM OF SUBORDINATED INDENTURE
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 4.3

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

                             ARROW ELECTRONICS, INC.

                                       and

                           [                        ],

                                     Trustee

                                   ----------
                                    Indenture

                          Dated as of [         ], 20[  ]

                          Subordinated Debt Securities

                                   ----------

================================================================================
<PAGE>   2

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.........................1

       Section 1.1. Definitions .............................................1
       Section 1.02. Other Definitions ......................................6
       Section 1.03. Incorporation By Reference Of Trust Indenture Act ......6
       Section 1.04. Rules of Construction ..................................7

ARTICLE 2 THE SECURITIES ....................................................7

       Section 2.1. Form ....................................................7
       Section 2.2. Execution and Authentication ............................7
       Section 2.3. Amount Unlimited; Issuable in Series ....................9
       Section 2.4. Denomination And Date Of Securities; Payments Of
                      Interest .............................................11
       Section 2.5. Registrar And Paying Agent; Agents Generally ...........12
       Section 2.6. Paying Agent To Hold Money In Trust ....................12
       Section 2.7. Transfer And Exchange ..................................13
       Section 2.8. Replacement Securities .................................15
       Section 2.9. Outstanding Securities .................................16
       Section 2.10. Temporary Securities ..................................17
       Section 2.11. Cancellation ..........................................17
       Section 2.12. CUSIP Numbers .........................................17
       Section 2.13. Defaulted Interest ....................................17
       Section 2.14. Series May Include Tranches ...........................17

ARTICLE 3 REDEMPTION .......................................................18

       Section 3.1. Applicability Of Article ...............................18
       Section 3.2. Notice Of Redemption; Partial Redemptions ..............18
       Section 3.3. Payment of Securities Called For Redemption ............20
       Section 3.4. Exclusion Of Certain Securities From Eligibility For
                      Selection For Redemption .............................20
       Section 3.5. Mandatory And Optional Sinking Funds ...................21

ARTICLE 4 COVENANTS ........................................................23

       Section 4.1. Payment Of Securities ..................................23
       Section 4.2. Maintenance Of Office Or Agency ........................23
       Section 4.3. Certificate To Trustee .................................24
       Section 4.4. Reports By The Company .................................24


                                       i
<PAGE>   3

ARTICLE 5 SUCCESSOR CORPORATION ............................................25

       Section 5.1. When Companies May Merge, Etc ..........................25
       Section 5.2. Successor Substituted ..................................25

ARTICLE 6 DEFAULT AND REMEDIES .............................................26

       Section 6 1. Events Of Default ......................................26
       Section 6.2. Acceleration ...........................................26
       Section 6.3. Other Remedies .........................................28
       Section 6.4. Waiver Of Past Defaults ................................28
       Section 6.5. Control By Majority ....................................28
       Section 6.6. Limitation On Suits ....................................29
       Section 6.7. Rights Of Holders To Receive Payment ...................29
       Section 6 8. Collection Suit By Trustee .............................29
       Section 6.9. Trustee May File Proofs Of Claim .......................30
       Section 6.10. Application Of Proceeds ...............................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 ..........................31

ARTICLE 7 TRUSTEE ..........................................................32

       Section 7.1. General ................................................32
       Section 7.2. Certain Rights Of Trustee ..............................32
       Section 7.3. Individual Rights Of Trustee ...........................33
       Section 7 4. Trustee's Disclaimer ...................................34
       Section 7.5. Notice Of Default ......................................34
       Section 7.6. Reports By Trustee To Holders ..........................34
       Section 7.7. Compensation And Indemnity .............................34
       Section 7.8. Replacement Of Trustee .................................35
       Section 7.9. Successor Trustee By Merger, Etc .......................36
       Section 7.10. Eligibility ...........................................36
       Section 7.11. Money Held In Trust ...................................37

ARTICLE 8 DISCHARGE OF INDENTURE ...........................................37

       Section 8.1. Defeasance Within One Year Of Payment ..................37
       Section 8.2. Defeasance .............................................38
       Section 8.3. Covenant Defeasance ....................................39
       Section 8.4. Application Of Trust Money .............................40
       Section 8.5. Repayment To Company ...................................40

ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS ..............................40

       Section 9.1. Without Consent Of Holders .............................40
       Section 9.2. With Consent Of Holders ................................41
       Section 9.3. Revocation And Effect Of Consent .......................42
       Section 9.4. Notation On Or Exchange Of Securities ..................43


                                       ii
<PAGE>   4

      Section 9.5. Trustee To Sign Amendments, Etc .........................43
      Section 9.6. Conformity With Trust Indenture Act .....................43

ARTICLE 10 SUBORDINATION ...................................................44

      Section 10.1. Agreement To Subordinate ...............................44
      Section 10.2. Distribution On Dissolution Or Reorganization;
                      Subrogation Of Securities ............................44
      Section 10.3. No Payment On Securities If Senior Indebtedness Is
                      In Default ...........................................46
      Section 10.4. Payments On Securities Permitted .......................47
      Section 10.5. Authorization Of Securityholders To Trustee To Effect
                      Subordination ........................................47
      Section 10.6. Knowledge Of Trustee ...................................48
      Section 10.7. Trustee May Hold Senior Indebtedness ...................48
      Section 10.8. Rights Of Holders Of Senior Indebtedness Not Impaired ..48
      Section 10.9. Modification Of Terms Of Senior Indebtedness ...........48

ARTICLE 11 MISCELLANEOUS ...................................................49

      Section 11.1. Trust Indenture Act Of 1939 ............................49
      Section 11.2. Notices ................................................49
      Section 11.3. Certificate And Opinion As To Conditions Precedent .....50
      Section 11.4. Statements Required In Certificate Or Opinion ..........50
      Section 11.5. Evidence Of Ownership ..................................51
      Section 11.6. Rules By Trustee, Paying Agent Or Registrar ............52
      Section 11.7. Payment Date Other Than A Business Day .................52
      Section 11.8. Governing Law ..........................................52
      Section 11.9. No Adverse Interpretation Of Other Agreements ..........52
      Section 11.10. Successors ............................................52
      Section 11.11. Duplicate Originals ...................................52
      Section 11.12. Separability ..........................................52
      Section 11.13. Table Of Contents, Headings, Etc ......................53
      Section 11.14. Incorporators, Shareholders, Officers and Directors
                       Of Company Exempt From Individual Liability .........53
      Section 11.15. Judgment Currency .....................................53


                                      iii
<PAGE>   5

                                  [Tie Sheet]


                                       iv
<PAGE>   6

      INDENTURE, dated as of [             ], 20[  ], between Arrow Electronics,
Inc, a New York corporation (the "Company"), and [            ] (the "Trustee").

                             RECITALS OF THE COMPANY

            WHEREAS, the Company has duly authorized the issue from time to time
of its subordinated debentures, notes or other evidences of indebtedness, which
may or may not be convertible into or exchangeable for any securities of any
Person (including the Company), to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from time to time be
authorized in accordance with the terms of this Indenture and to provide, among
other things, for the authentication, delivery and administration thereof, the
Company has duly authorized the execution and delivery of this Indenture; and

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

            NOW, THEREFORE:

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

                                    ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

            Section 1.1 Definitions.

            "Agent" means any Registrar, Paying Agent, transfer agent or
Authenticating Agent.

            "Authorized Newspaper" means a newspaper (which, in the case of The
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition) and in the case of London, will, if practicable, be the Financial Times
(London Edition) and published in an official language of the country of
publication customarily published at least once a day for at least five days in
each calendar week and of general circulation in The City of New York or London,
as applicable. If it shall be impractical in the opinion of the Trustee to make
any publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
<PAGE>   7

            "Board Resolution" means one or more resolutions of the board of
directors of the Company or any authorized committee thereof, certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted and
to be in full force and effect on the date of certification, and delivered to
the Trustee.

            "Business Day" means any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in The City of New York or
in the city in which the Corporate Trust Office is located, with respect to any
Security the interest on which is based on the offered quotations in the
interbank Eurodollar market for dollar deposits in London, or with respect to
Securities denominated in a specified currency other than United States dollars,
in the principal financial center of the country of the specified currency.

            "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's capital stock or equity,
including, without limitation, all Common Stock and Preferred Stock.

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

            "Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all series and classes of such common stock.

            "Company" means the party named as such in the first paragraph of
this Indenture until a successor replaces it pursuant to Article 5 of this
Indenture and thereafter means the successor.


            "Consolidated Net Tangible Assets" means total assets after
deducting therefrom all current liabilities and intangible assets as set forth
in the most recent balance sheet of the Company and its consolidated
Subsidiaries and computed in accordance with GAAP.


            "Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at [__________], Attention: [__________].

            "Default" means any Event of Default as defined in Section 6.1 and
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 Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Company pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Registered Global
Securities of that series. The initial Depositary shall be The Depository Trust
Company, New York, New York.


                                       2
<PAGE>   8

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

            "Holder" or "Securityholder" means the registered holder of any
Security with respect to Registered Securities and the bearer of any
Unregistered Security or any coupon appertaining thereto, as the case may be.

            "Indebtedness" of the Company means any liability or obligation of
the Company (whether incurred directly by the Company, by assumption or
otherwise) (i) for money borrowed, or (ii) for indebtedness (whether or not
secured by lien, pledge or deposit), including trade accounts payable, created
in favor of a vendor or seller for, or to finance all or part of, the purchase
price of property, equipment or other assets, or (iii) arising under a lease of
property, equipment or other assets which, pursuant to generally accepted
accounting principles then in effect, is classified upon the balance sheet of
the Company as a liability of the Company, or (iv) arising under an express
written guaranty by the Company of the liability or obligation of another
(including any subsidiary of the Company) which is outstanding on the date of
this Indenture as originally executed, or any such guaranty thereafter executed
by the Company where the liability or obligation of the Company arising
thereunder is, under the express provisions of such guaranty, superior in right
of payment to the Securities.

            "Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture and shall include the forms and terms of the
Securities of each series established as contemplated pursuant to Sections 2.1
and 2.3.

            "Officer" means, with respect to the Company, the Chairman of the
Board of Directors, the President or Chief Executive Officer, any Vice
President, the Chief Financial Officer, the Treasurer or any Assistant
Treasurer, or the Secretary or any Assistant Secretary.

            "Officers' Certificate" means a certificate signed in the name of
the Company (i) by the Chairman of the Board of Directors, the President or
Chief Executive Officer or a Vice President and (ii) by the Chief Financial
Officer, the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary, complying with Section 11.4 and delivered to the Trustee.
Each such certificate shall comply with Section 314 of the Trust Indenture Act
and include (except as otherwise expressly provided in this Indenture) the
statements provided in Section 11.4, if and to the extent required thereby.

            "Opinion of Counsel" means a written opinion signed by legal
counsel, who may be an employee of or counsel to the Company, satisfactory to
the Trustee and complying with Section 11.4. Each such opinion shall comply with
Section 314 of the Trust Indenture Act and include the statements provided in
Section 11.4, if and to the extent required thereby.

            "Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of authentication of such Security or (b) the date of
any Security (or portion thereof) for which such Security was issued (directly
or indirectly) on registration of transfer, exchange or substitution.


                                       3
<PAGE>   9

            "Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 6.2.

            "Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents upon the issuance of
such Securities.

            "Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

            "Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date of this Indenture, including,
without limitation, all series and classes of such preferred or preference
stock.

            "Principal" of a Security means the principal amount of, and, unless
the context indicates otherwise, includes any premium payable on, the Security.


            "Principal Property" means any manufacturing or processing plant or
warehouse owned at the date hereof or hereafter acquired by the Company or any
Restricted Subsidiary of the Company which is located within the United States
and the gross book value of which (including related land and improvements
thereon and all machinery and equipment included therein without deduction of
any depreciation reserves) on the date as of which the determination is being
made exceeds 2% of Consolidated Net Tangible Assets, other than (i) any such
manufacturing or processing plant or warehouse or any portion thereof (together
with the land on which it is erected and fixtures comprising a part thereof)
which is financed by industrial development bonds which are tax exempt pursuant
to Section 103 of the Internal Revenue Code (or which receive similar tax
treatment under any subsequent amendments thereto or any successor laws thereof
or under any other similar statute of the United States), (ii) any property
which in the opinion of the Company's Board of Directors is not of material
importance to the total business conducted by the Company as an entirety , or
(iii) any protion of a particular property which is similarly found not to be
of material importance to the use or operation of such property.


            "Registered Global Security" means a Security evidencing all or a
part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.2, and bearing the legend prescribed in
Section 2.2.

            "Registered Security" means any Security registered on the Security
Register (as defined in Section 2.5).

            "Responsible Officer" means, when used with respect to the Trustee,
any senior trust officer, any vice president, any trust officer, any assistant
trust officer, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.


            "Restricted Subsidiary" means a Subsidiary of the Company (i)
substantially all the property of which is located, or substantially all the
business of which is carried on, within the United States, and (ii) which owns
Principal Property; provided, however, that any Subsidiary may be declared a
Restricted Subsidiary by Board Resolution, effective as of the date such Board
Resolution is adopted; provided further, that any such declaration may be
rescinded by further Board Resolution, effective as of the date such further
Board Resolution is adopted.


            "Securities" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture and, unless the context indicates otherwise, shall include any
coupon appertaining thereto.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Senior Indebtedness" of the Company means (a) the principal of,
premium, if any, and interest on all Indebtedness, whether outstanding on the
date of this Indenture as originally executed or thereafter created or incurred,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such Indebtedness is not superior
in right of payment to the Securities; and (b) any amendments, modifications,
deferrals, renewals or extensions of any such Senior Indebtedness, or
debentures,


                                       4
<PAGE>   10

notes or other evidences of indebtedness issued in exchange for any such Senior
Indebtedness; provided, however, that Senior Indebtedness shall not be deemed to
include (i) Indebtedness which constitutes Subordinated Indebtedness and (ii)
any other debt securities issued pursuant to this Indenture.


            "Subordinated Indebtedness" of the Company means the principal of,
premium, if any, and interest, on Indebtedness, whether outstanding on the date
of execution of this Indenture or thereafter created, assumed or incurred, which
Indebtedness is by its terms expressly stated to be junior and subordinate in
right of payment to other Indebtedness of the Company (other than the
Securities).


            "Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the outstanding
Voting Stock is owned, directly or indirectly, by such Person and one or more
other Subsidiaries of such Person.

            "Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of Article 7 and thereafter means such successor.

            "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it may be amended from time to time.

            "UCC" means the Uniform Commercial Code, as in effect in each
applicable jurisdiction.

            "United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.

            "Unregistered Security" means any Security other than a Registered
Security.

            "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.

            "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.


                                       5
<PAGE>   11

            "Yield to Maturity" means, as the context may require, the yield to
maturity (i) on a series of Securities or (ii) if the Securities of a series are
issuable from time to time, on a Security of such series, calculated at the time
of issuance of such series in the case of clause (i), or at the time of issuance
of such Security of such series in the case of clause (ii), or, if applicable,
at the most recent redetermination of interest on such series or on such
Security, and calculated in accordance with the constant interest method or such
other accepted financial practice as is specified in the terms of such Security.

            Section 1.02. Other Definitions. Each of the following terms is
defined in the section set forth opposite such term:

<TABLE>
<CAPTION>
                 Term                    Section
                 ----                    -------
      <S>                                 <C>
      Authenticating Agent                 2.2
      Cash Transaction                     7.3
      Dollars                              4.2
      Event of Default                     6.1
      Judgment Currency                   11.15
      mandatory sinking fund payment       3.5
      optional sinking fund payment        3 5
      Paying Agent                         2.5
      Record Date                          2.4
      Registrar                            2.5
      Required Currency                   11.15
      Security Register                    2.5
      Self-Liquidating Paper               7.3
      sinking fund payment date            3.5
      tranche                              2.14
</TABLE>

            Section 1.03. Incorporation By Reference Of 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 terms used in this Indenture that are defined by the Trust Indenture
Act have the following meanings:

            "indenture securities" means the Securities;

            "indenture security holder" means a Holder or a Securityholder;

            "indenture to be qualified" means this Indenture;

            "indenture trustee" or "institutional trustee" means the Trustee;
      and

            "obligor" on the indenture securities means the Company or any other
      obligor on the Securities.


                                       6
<PAGE>   12

            All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by reference in the Trust Indenture Act to another
statute or defined by a rule of the Commission and not otherwise defined herein
have the meanings assigned to them therein.

            Section 1.04. Rules of Construction. Unless the context otherwise
requires:

            (i) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with GAAP;

            (ii) words in the singular include the plural, and words in the
      plural include the singular;

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

            (iv) all references to Sections or Articles refer to Sections or
      Articles of this Indenture unless otherwise indicated; and

            (v) use of masculine, feminine or neuter pronouns should not be
      deemed a limitation, and the use of any such pronouns should be construed
      to include, where appropriate, the other pronouns.

                                    ARTICLE 2

                                 THE SECURITIES

            Section 2.1. Form. The Securities of each series shall be
substantially in such form or forms (not inconsistent with this Indenture) as
shall be established by or pursuant to one or more Board Resolutions or in one
or more indentures supplemental hereto, or in one or more Officer's Certificates
pursuant to such Board Resolutions or supplemental indentures, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law, or
with any rules of any securities exchange or usage, all as may be determined by
the officers executing such Securities as evidenced by their execution of the
Securities. Unless otherwise so established, Unregistered Securities shall have
coupons attached.

            Section 2.2. Execution and Authentication. Two officers shall
execute the Securities (other than coupons) for the Company by facsimile or
manual signature in the name and on behalf of the Company. The seal of the
Company, if any, shall be reproduced on the Securities. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.

            The Trustee, at the expense of the Company, may appoint an
authenticating agent (the "Authenticating Agent") to authenticate Securities
other than coupons. The Authenticating


                                       7
<PAGE>   13

Agent may authenticate Securities whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such Authenticating Agent.

            A Security (other than coupons) shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

            At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series having
attached thereto appropriate coupons, if any. executed by the Company to the
Trustee for authentication together with the applicable documents referred to
below in this Section, and the Trustee shall thereupon authenticate and deliver
such Securities to or upon the written order of the Company. In authenticating
any Securities of a series, the Trustee shall be entitled to receive prior to
the first authentication of any Securities of such series, and (subject to
Article 7) shall be fully protected in relying upon, unless and until such
documents have been superseded or revoked:

            (1) any Board Resolution and/or executed supplemental indenture
      referred to in Sections 2.1 and 2.3 by or pursuant to which the forms and
      terms of the Securities of that series were established;

            (2) any Officers' Certificate referred to in Sections 2.1 and 2.3
      setting forth the form or forms and terms of the Securities, stating that
      the form or forms and terms of the Securities of such series have been, or
      will be when established in accordance with such procedures as shall be
      referred to therein, established in compliance with this Indenture; and

            (3) at the option of the Company, either an Opinion of Counsel, or a
      letter addressed to the Trustee permitting it to rely on an Opinion of
      Counsel, substantially to the effect that the Securities have been duly
      authorized and, if executed and authenticated in accordance with the
      provisions of the Indenture and delivered to and duly paid for by the
      purchasers thereof on the date of such opinion, would be entitled to the
      benefits of the Indenture and would be valid and binding obligations of
      the Company, enforceable against the Company in accordance with their
      respective terms, subject to bankruptcy, insolvency, reorganization,
      receivership, moratorium and other similar laws affecting creditors'
      rights generally, general principles of equity, and such other matters as
      shall be specified therein.

            If the Company shall establish pursuant to Section 2.3 that the
Securities of a series or a portion thereof are to be issued in the form of one
or more Registered Global Securities, then the Company shall execute and the
Trustee shall authenticate and deliver one or more Registered Global Securities
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of all of the Securities of such series issued in
such form and not yet canceled, (ii) shall be registered in the name of the
Depositary for such Registered Global Security or Securities or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such Depositary or
its custodian or pursuant to such Depositary's instructions and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in


                                       8
<PAGE>   14

part for Securities in definitive registered form, this Security may not be
transferred except as a whole by the Depositary to the 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."

            Section 2 3. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.

            The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with all other unsecured and
unsubordinated debt of the Company. There shall be established in or pursuant to
Board Resolution or one or more indentures supplemental hereto, or in an
Officer's Certificate pursuant to such Board Resolution or such supplemental
indenture, prior to the initial issuance of Securities of any series, subject to
the last sentence of this Section 2.3,

            (1) the designation of the Securities of the series, which shall
      distinguish the Securities of the Series from the Securities of all other
      series;

            (2) any limit upon the aggregate principal amount of the Securities
      of the series that may be authenticated and delivered under this Indenture
      and any limitation on the ability of the Company to increase such
      aggregate principal amount after the initial issuance of the Securities of
      that series (except for securities authenticated and delivered upon
      registration of transfer of, or in exchange for, or in lieu of, or upon
      redemption of, other Securities of the series pursuant hereto);

            (3) the date or dates on which the principal of the Securities of
      the series is payable (which date or dates may be fixed or extendible);

            (4) the rate or rates (which may be fixed or variable) per annum at
      which the Securities of the series shall bear interest, if any, the date
      or dates from which such interest shall accrue, on which such interest
      shall be payable and (in the case of Registered Securities) on which a
      record shall be taken for the determination of Holders to whom interest is
      payable and/or the method by which such rate or rates or date or dates
      shall be determined;

            (5) if other than as provided in Section 4.2, the place or places
      where the principal of and any interest on Securities of the series shall
      be payable, any Registered Securities of the series may be surrendered for
      conversion, exchange, notices, demands to or upon the Company in respect
      of the Securities of the series and this Indenture may be served and
      notice to Holders may be published;

            (6) the right, if any, of the Company to redeem Securities of the
      series, in whole or in part, at its option and the period or periods
      within which, the price or prices at which and any terms and conditions
      upon which Securities of the series may be so redeemed, pursuant to any
      sinking fund or otherwise;

            (7) the obligation, if any, of the Company to redeem, purchase or
      repay Securities of the series pursuant to any mandatory redemption,
      sinking fluid or analogous


                                       9
<PAGE>   15

      provisions or at the option of a Holder thereof and the price or prices at
      which and the period or periods within which and any of the terms and
      conditions upon which Securities of the series shall be redeemed,
      purchased or repaid, in whole or in part, pursuant to such obligation;

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

            (9) if other than the principal amount thereof, the portion of the
      principal amount of Securities of the series which shall be payable upon
      acceleration of the maturity thereof;

            (10) if other than the coin or currency in which the Securities of
      the series are denominated, the coin or currency in which payment of the
      principal of or interest on the Securities of the series shall be payable
      or if the amount of payments of principal of and/or interest on the
      Securities of the series may be determined with reference to an index
      based on a coin or currency other than that in which the Securities of the
      series are denominated, the manner in which such amounts shall be
      determined;

            (11) if other than the currency of the United States of America, the
      currency or currencies, including composite currencies, in which payment
      of the Principal of and interest on the Securities of the series shall be
      payable, and the manner in which any such currencies shall be valued
      against other currencies in which any other Securities shall be payable;

            (12) whether the Securities of the series or any portion thereof
      will be issuable as Registered Securities (and if so, whether such
      Securities will be issuable as Registered Global Securities) or
      Unregistered Securities (with or without coupons), or any combination of
      the foregoing, any restrictions applicable to the offer, sale or delivery
      of Unregistered Securities or the payment of interest thereon and, if
      other than as provided herein, the terms upon which Unregistered
      Securities of any series may be exchanged for Registered Securities of
      such series and vice versa;

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

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

            (15) unless otherwise provided herein, any trustees, depositaries,
      authenticating or paying agents, transfer agents or the registrar or any
      other agents with respect to the Securities of the series;


                                       10
<PAGE>   16

            (16) provisions, if any, for the defeasance of the Securities of the
      series (including provisions permitting defeasance of less than all
      Securities of the series), which provisions may be in addition to, in
      substitution for, or in modification of (or any combination of the
      foregoing) the provisions of Article 8;

            (17) if the Securities of the series are issuable in whole or in
      part as one or more Registered Global Securities, the identity of the
      Depositary for such Registered Global Security or Securities (which
      Depositary shall, at the time of its designation as Depositary and at all
      times while it serves as Depositary, be a clearing agency registered under
      the Exchange Act and any other applicable statute or regulation) if other
      than The Depository Trust Company, New York, New York;

            (18) if the Securities of the series are to be convertible into or
      exchangeable for any securities of any Person (including the Company), the
      terms and conditions upon which such Securities will be so convertible or
      exchangeable;

            (19) any other events of default or covenants with respect to the
      Securities of the series in addition to the Events of Default or covenants
      set forth herein; and

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

            All Securities of any one series and coupons, if any, appertaining
thereto shall be substantially identical, except in the case of Registered
Securities as to date and denomination, except in the case of any Periodic
Offering and except as may otherwise be provided by or pursuant to the Board
Resolution referred to above or as set forth in any such indenture supplemental
hereto, or Officer's Certificate pursuant to such Board Resolution or such
supplemental indenture. All Securities of any one series need not be issued at
the same time and may be issued from time to time, consistent with the terms of
this Indenture, if so provided by or pursuant to such Board Resolution or in any
such indenture supplemental hereto, or Officer's Certificate pursuant to such
Board Resolution or such supplemental indenture, and any forms and terms of
Securities to be issued from time to time may be completed and established from
time to time prior to the issuance thereof by procedures described in such Board
Resolution or supplemental indenture, or Officer's Certificate pursuant to such
Board Resolution or such supplemental indenture.

            Section 2.4. Denomination And Date Of Securities; Payments Of
Interest. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, if not so established with respect to Securities
of any series, in denominations of $1,000 and any integral multiple thereof. The
Securities of each series shall be numbered, lettered or otherwise distinguished
in such manner or in accordance with such plan as the Officers of the Company
executing the same may determine, as evidenced by their execution thereof.

            Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest and shall be payable on the dates, established as contemplated by
Section 2.3.


                                       11
<PAGE>   17

            The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Company shall default in the payment of the
interest due on such interest payment date for such series, in which case the
provisions of Section 2.13 shall apply. The term "Record Date" as used with
respect to an interest payment date (except a date for payment of defaulted
interest) for the Securities of any series shall mean the date specified as such
in the terms of the Registered Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, the
fifteenth day next preceding such interest payment date, whether or not such
record date is a Business Day.

            Section 2.5. Registrar And Paying Agent; Agents Generally. The
Company shall maintain an office or agency where Securities may be presented for
registration, registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"), which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Registered
Securities and of their registration, transfer and exchange (the "Security
Register"). The Company may have one or more additional Paying Agents or
transfer agents with respect to any series.

            The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture and the Trust Indenture Act that relate to such
Agent. The Company shall give prompt written notice to the Trustee of the name
and address of any Agent and any change in the name or address of an Agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such.

            The Company may remove any Agent upon written notice to such Agent
and the Trustee; provided that no such removal shall become effective until (i)
the acceptance of an appointment by a successor Agent to such Agent as evidenced
by an appropriate agency agreement entered into by the Company and such
successor Agent and delivered to the Trustee or (ii) notification to the Trustee
that the Trustee shall serve as such Agent until the appointment of a successor
Agent in accordance with clause (i) of this proviso. The Company or any
affiliate of the Company may act as Paying Agent or Registrar; provided that
neither the Company nor an affiliate of the Company shall act as Paying Agent in
connection with the defeasance of the Securities or the discharge of this
Indenture under Article 8.

            The Company initially appoints the Trustee as Registrar and Paying
Agent. If, at any time, the Trustee is not the Registrar, the Registrar shall
make available to the Trustee ten days prior to each interest payment date and
at such other times as the Trustee may reasonably request the names and
addresses of the Holders as they appear in the Security Register.

            Section 2.6 Paying Agent To Hold Money In Trust. Not later than
10:00 a.m. New York City time on each due date of any Principal or interest on
any Securities, the Company shall deposit with the Paying Agent money in
immediately available funds sufficient


                                       12
<PAGE>   18

to pay such Principal or interest. The Company shall require each Paying Agent
other than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders of such Securities or the Trustee all money
held by the Paying Agent for the payment of Principal of and interest on such
Securities and shall 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 such 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 shall have no further liability for the money so paid
over to the Trustee. If the Company or any affiliate of the Company acts as
Paying Agent, it will, on or before each due date of any Principal of or
interest on any Securities, segregate and hold in a separate trust fund for the
benefit of the Holders thereof a sum of money sufficient to pay such Principal
or interest so becoming due until such sum of money shall be paid to such
Holders or otherwise disposed of as provided in this Indenture, and will
promptly notify the Trustee in writing of its action or failure to act as
required by this Section.

            Section 2.7. Transfer And Exchange. Unregistered Securities (except
for any temporary global Unregistered Securities) and coupons (except for
coupons attached to an temporary global Unregistered Securities) shall be
transferable by delivery.

            At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
and tenor having authorized denominations and an equal aggregate principal
amount, upon surrender of such Registered Securities to be exchanged at the
agency of the Company that shall be maintained for such purpose in accordance
with Section 2.5 and upon payment, if the Company shall so require, of the
charges hereinafter provided. If the Securities of any series are issued in both
registered and unregistered form, except as otherwise established pursuant to
Section 2.3, at the option of the Holder thereof, Unregistered Securities of any
series may be exchanged for Registered Securities of such series and tenor
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Unregistered Securities to be exchanged at the agency of the
Company that shall be maintained for such purpose in accordance with Section
4.2, with, in the case of Unregistered Securities that have coupons attached,
all unmatured coupons and all matured coupons in default thereto appertaining,
and upon payment, if the Company shall so require, of the charges hereinafter
provided. At the option of the Holder thereof, if Unregistered Securities of any
series, maturity date, interest rate and original issue date are issued in more
than one authorized denomination, except as otherwise established pursuant to
Section 2.3, such Unregistered Securities may be exchanged for Unregistered
Securities of such series and tenor having authorized denominations and an equal
aggregate principal amount, upon surrender of such Unregistered Securities to be
exchanged at the agency of the Company that shall be maintained for such purpose
in accordance with Section 4.2, with, in the case of Unregistered Securities
that have coupons attached, all unmatured coupons and all matured coupons in
default thereto appertaining, and upon payment, if the Company shall so require,
of the charges hereinafter provided. Registered Securities of any series may not
be exchanged for Unregistered Securities of such series. Whenever any securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.


                                       13
<PAGE>   19

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

            The Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities. No service charge shall be made for
any such transaction.

            Notwithstanding any other provision of this Section 2.7, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.

            If at any time the Depositary for any Registered Global Securities
of any series notifies the Company that it is unwilling or unable to continue as
Depositary for such Registered Global Securities or if at any time the
Depositary for such Registered Global Securities shall no longer be eligible
under applicable law, the Company shall appoint a successor Depositary eligible
under applicable law with respect to such Registered Global Securities. If a
successor Depositary eligible under applicable law for such Registered Global
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of the Company's order for the
authentication and delivery of definitive Registered Securities of such series
and tenor, will authenticate and deliver Registered Securities of such series
and tenor, in any authorized denominations, in an aggregate principal amount
equal to the principal amount of such Registered Global Securities, in exchange
for such Registered Global Securities.

            The Company may at any time and in its sole discretion determine
that any Registered Global Securities of any series shall no longer be
maintained in global form. In such event the Company will execute, and the
Trustee, upon receipt of the Company's order for the authentication and delivery
of definitive Registered Securities of such series and tenor, will authenticate
and deliver, Registered Securities of such series and tenor in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
such Registered Global Securities, in exchange for such Registered Global
Securities.

            Any time the Registered Securities of any series are not in the form
of Registered Global Securities pursuant to the preceding two paragraphs, the
Company agrees to supply the Trustee with a reasonable supply of certificated
Registered Securities without the legend required by Section 2.2 and the Trustee
agrees to hold such Registered Securities in safekeeping until authenticated and
delivered pursuant to the terms of this Indenture.

            If established by the Company pursuant to Section 2.3 with respect
to any Registered Global Security, the Depositary for such Registered Global
Security may surrender such Registered Global Security in exchange in whole or
in part for Registered Securities of the


                                       14
<PAGE>   20

same series and tenor in definitive registered form on such terms as are
acceptable to the Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service charge,

            (i) to the Person specified by such Depositary new Registered
      Securities of the same series and tenor, of any authorized denominations
      as requested by such Person, in an aggregate principal amount equal to and
      in exchange for such Person's beneficial interest in the Registered Global
      Security; and

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


            Registered Securities issued in exchange for a Registered Global
Security pursuant to this Section 2.7 shall be registered in such names and in
such authorized denominations as the Depositary for such Registered Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or an agent of the Company or the Trustee.
The Trustee or such agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered.


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

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

            Neither the Registrar nor the Company shall be required (i) to
issue, authenticate, register the transfer of or exchange Securities of any
series for a period of 15 days before a selection of such Securities to be
redeemed or (ii) to register the transfer of or exchange any Security selected
for redemption in whole or in part.

            Section 2.8. Replacement Securities. If a defaced or mutilated
Security of any series is surrendered to the Trustee or if a Holder claims that
its Security of any series has been lost, destroyed or wrongfully taken, the
Company shall, subject to the further provisions of this Section 2.8, issue and
the Trustee shall authenticate a replacement Security of such series and tenor
and principal amount bearing a number not contemporaneously outstanding. The
Company may charge such Holder for any tax or other governmental charge that may
be imposed as a result of or in connection with replacing a Security and for its
expenses and the expenses of the Trustee (including without limitation
attorneys' fees and expenses) in replacing a Security. In


                                       15
<PAGE>   21

case any such mutilated, defaced, lost, destroyed or wrongfully taken Security
has become or is about to become due and payable, the Company in its discretion
may pay such Security instead of issuing a new Security in replacement thereof.
If required by the Trustee or the Company, (i) an indemnity bond must be
furnished that is sufficient in the judgment of both the Trustee and the Company
to protect the Company, the Trustee and any Agent from any loss that any of them
may suffer if a Security is replaced or paid as provided in this Section 2.8 and
(ii) in the case of a lost, destroyed or wrongfully taken Security, evidence
must be furnished to the satisfaction of both the Trustee and the Company of the
loss, destruction or wrongful taking of such Security. Notwithstanding the
foregoing, the Company and the Trustee shall have no obligation to replace or
pay a Security pursuant to this Section 2.8 if either the Company or the Trustee
has notice that such Security has been acquired by a bona fide purchaser.

            Every replacement Security is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.

            To the extent permitted by law, the foregoing provisions of this
Section are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities.

            Section 2.9. Outstanding Securities. Securities outstanding at any
time are all Securities that have been authenticated and delivered by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding.

            If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a holder in due
course.

            If the Paying Agent (other than the Company or an affiliate of the
Company) holds on the maturity date or any redemption date or date for
repurchase of the Securities money sufficient to pay Securities payable or to be
redeemed or repurchased on that date, then on and after that date such
Securities cease to be outstanding and interest on them shall cease to accrue.

            A Security does not cease to be outstanding because the Company or
one of its affiliates holds such Security, provided, however, that, in
determining whether the Holders of the requisite principal amount of the
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
affiliate of the Company shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities as to which a Responsible Officer of the Trustee has
received written notice to be so owned shall be so disregarded. Any Securities
so owned that are pledged by the Company, or by any affiliate of the Company, as
security for loans or other obligations, otherwise than to another such
affiliate of the Company, shall be deemed to be outstanding, if the pledgee is
entitled pursuant to the terms of its pledge agreement and is free to exercise
in its or his discretion the right to vote such securities, uncontrolled by the
Company or by any such affiliate.


                                       16
<PAGE>   22

            Section 2.10. Temporary Securities. Until definitive Securities of
any series are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities of such series. Temporary Securities of any
series shall be substantially in the form of definitive Securities of such
series but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Securities,
as evidenced by their execution of such temporary Securities. If temporary
Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Securities of any series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series and
tenor upon surrender of such temporary Securities at the office or agency of the
Company designated for such purpose pursuant to Section 4.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of such series and tenor and authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled to
the same benefits under this Indenture as definitive Securities of such series.

            Section 2.11 Cancellation. The Company at any time may deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold.
The Registrar, any transfer agent and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee shall cancel and destroy all Securities surrendered for transfer,
exchange, payment or cancellation and shall deliver a certificate of destruction
to the Company. The Company may not issue new Securities to replace Securities
it has paid in full or delivered to the Trustee for cancellation.

            Section 2.12. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee
shall use CUSIP numbers or CINS numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders and no representation shall
be made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of redemption or exchange.

            Section 2.13. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay, the
defaulted interest plus (to the extent lawful) any interest payable on the
defaulted interest (as may be specified in the terms thereof, established
pursuant to Section 2.3) to the Persons who are Holders on a subsequent special
record date, which shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before such special record date, the Company
shall mail to each Holder and to the Trustee a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.

            Section 2.14. Series May Include Tranches. A series of Securities
may include one or more tranches (each, a "tranche") of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including


                                       17
<PAGE>   23

authentication dates and public offering prices, but all the Securities within
each such tranche shall have identical terms, including authentication date and
public offering price. Notwithstanding any other provision of this Indenture,
with respect to Sections 2.2 (other than the fourth paragraph thereof) through
2.4, 2.7, 2.8, 2.10, 3.1 through 3.5, 4.2, 6.1 through 6.14, 8.1 through 8.5 and
9.2, if any series of Securities includes more than one tranche, all provisions
of such sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to Section 2.3. In particular, and without
limiting the scope of the next preceding sentence, any of the provisions of such
sections which provide for or permit action to be taken with respect to a series
of Securities shall also be deemed to provide for and permit such action to be
taken instead only with respect to Securities of one or more tranches within
that series (and such provisions shall be deemed satisfied thereby), even if no
comparable action is taken with respect to Securities in the remaining tranches
of that series.


                                    ARTICLE 3

                                   REDEMPTION

            Section 3.1. Applicability Of Article. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.

            Section 3.2. Notice Of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Company shall be given by mailing
notice of such redemption by first class mail postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Registered Securities of such series at their last addresses as they shall
appear upon the Securities Register. Notice of redemption to the Holders of
Unregistered Securities of any series to be redeemed as a whole or in part who
have filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act, shall be given by mailing notice of such
redemption, by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption, to such Holders at such
addresses as were so furnished to the Trustee (and, in the case of any such
notice given by the Company, the Trustee shall make such information available
to the Company for such purpose). Notice of redemption to all other Holders of
Unregistered Securities of any series to be redeemed as a whole or in part shall
be published in an Authorized Newspaper in The City of New York or with respect
to any Security the interest on which is based on the offered quotations in the
interbank Eurodollar market for dollar deposits in an Authorized Newspaper in
London, in each case, once in each of three successive calendar weeks, the first
publication to be not less than 30 days nor more than 60 days prior to the date
fixed for redemption. Any notice which is mailed or published in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.


                                       18
<PAGE>   24

            The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the CUSIP numbers of the Securities to be redeemed, (iii) the
date fixed for redemption, (iv) the redemption price, (v) the place or places of
payment, (vi) that payment will be made upon presentation and surrender of such
Securities and, in the case of Securities with coupons attached thereto, of all
coupons appertaining thereto maturing after the date fixed for redemption, (vii)
that such redemption is pursuant to the mandatory or optional sinking fund, or
both, if such be the case, (viii) that interest accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. In case any Security of a series is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities of such series and
tenor in principal amount equal to the unredeemed portion thereof will be
issued.

            The notice of redemption of Securities of any series to be redeemed
at the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

            Not later than 10:00 a.m. New York City time on the redemption date
specified in the notice of redemption given as provided in this Section, the
Company will deposit with the Trustee or with one or more Paying Agents (or, if
the Company is acting as its own Paying Agent, set aside, segregate and hold in
trust as provided in Section 2.6) an amount of money in immediately available
funds sufficient to redeem on the redemption date all the Securities of such
series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If less than all the
outstanding Securities of a series are to be redeemed, the Company will deliver
to the Trustee at least 15 days prior to the last date on which notice of
redemption may be given to Holders pursuant to the first paragraph of this
Section 3.2 (or such shorter period as shall be acceptable to the Trustee) an
Officers' Certificate (which need not contain the statements required by Section
11.4) stating the aggregate principal amount of such Securities to be redeemed.
In case of a redemption at the election of the Company prior to the expiration
of any restriction on such redemption, the Company shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such redemption is not prohibited
by such restriction.

            If less than all the Securities of a series are to be redeemed, the
Trustee shall select, pro rata, by lot or in such manner as it shall deem
appropriate and fair, Securities of such series to be redeemed in whole or in
part. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Company in writing of the Securities of
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.


                                       19
<PAGE>   25

            Section 3.3. Payment of Securities Called For Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after such
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to such date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured coupons, if any, appertaining thereto shall be void
and, except as provided in Sections 7.11 and 8.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of such
Securities at a place of payment specified in said notice, together with all
coupons, if any, appertaining thereto maturing after the date fixed for
redemption, said Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; provided that payment
of interest becoming due on or prior to the date fixed for redemption shall be
payable in the case of Securities with coupons attached thereto, to the Holders
of the coupons for such interest upon surrender thereof, and in the case of
Registered Securities, to the Holders of such Registered Securities registered
as such on the relevant record date subject to the terms and provisions of
Sections 2.4 and 2.13 hereof.

            If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.

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

            Upon presentation of any Security of any series redeemed in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to or on the order of the Holder thereof, at the expense of the Company, a new
Security or Securities of such series and tenor (with any unmatured coupons
attached), of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.

            Section 3.4. Exclusion Of Certain Securities From Eligibility For
Selection For Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, not
pledged or hypothecated by either (a) the Company 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.


                                       20
<PAGE>   26

            Section 3.5 Mandatory And Optional Sinking Funds. The minimum amount
of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."

            In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Company may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except through a mandatory sinking fund
payment) by the Company or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Company and delivered to the Trustee for cancellation pursuant
to Section 2.11, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c) receive credit for
Securities of such series (not previously so credited) redeemed by the Company
through any optional sinking fund payment. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.

            On or before the sixtieth day next preceding each sinking fund
payment date for any series, or such shorter period as shall be acceptable to
the Trustee, the Company will deliver to the Trustee an Officers' Certificate
(a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be satisfied by credit of specified
Securities of such series and the basis for such credit, (b) stating that none
of the specified Securities of such series has theretofore been so credited, (c)
stating that no defaults in the payment of interest or Events of Default with
respect to such series have occurred (which have not been waived or cured) and
are continuing and (d) stating whether or not the Company intends to exercise
its right to make an optional sinking fund payment with respect to such series
and, if so, specifying the amount of such optional sinking fund payment that the
Company intends to pay on or before the next succeeding sinking fund payment
date. Any Securities of such series to be credited and required to be delivered
to the Trustee in order for the Company to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.11 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and upon its receipt
by the Trustee the Company shall become unconditionally obligated to make all
the cash payments or delivery of securities therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the Company, on
or before any such sixtieth day, to deliver such Officer's Certificate and
Securities specified in this paragraph, if any, shall not constitute a Default
but shall constitute, on and as of such date, the irrevocable election of the
Company (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof and
(ii) that the Company will make no optional sinking fund payment with respect to
such series as provided in this Section.

            If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the


                                       21
<PAGE>   27

Company shall so request with respect to the Securities of any series), such
cash shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
thereof together with accrued interest thereon to the date fixed for redemption.
If such amount shall be $50,000 (or such lesser sum) or less and the Company
makes no such request then it shall be carried over until a sum in excess of
$50,000 (or such lesser sum) is available. The Trustee shall select, in the
manner provided in Section 3.2, for redemption on such sinking fund payment date
a sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall inform the Company of the serial numbers of the
Securities of such series (or portions thereof) so selected. Securities shall be
excluded from eligibility for redemption under this Section if they are
identified by registration and certificate number in an Officers' Certificate
delivered to the Trustee at least 60 days prior to the sinking fund payment date
as being owned of record and beneficially by, and not pledged or hypothecated by
either (a) the Company or (b) an entity specifically identified in such
Officers' Certificate as directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company. The Trustee, in the
name and at the expense of the Company (or the Company, if it shall so request
the Trustee in writing) shall cause notice of redemption of the Securities of
such series to be given in substantially the manner provided in Section 3.2 (and
with the effect provided in Section 3.3) for the redemption of Securities of
such series in part at the option of the Company. The amount of any sinking fund
payments not so applied or allocated to the redemption of Securities of such
series shall be added to the next cash sinking fund payment for such series and,
together with such payment, shall be applied in accordance with the provisions
of this Section. Any and all sinking fund moneys held on the stated maturity
date of the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the Principal of, and
interest on, the Securities of such series at maturity.

            Not later than 10:00 a.m. New York City time on each sinking fund
payment date, the Company shall pay to the Trustee in cash or shall otherwise
provide for the payment of all interest accrued to the date fixed for redemption
on Securities to be redeemed on the next following sinking fund payment date.

            The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or mail any notice of redemption of
Securities of such series by operation of the sinking fund during the
continuance of a Default in payment of interest on such Securities or of any
Event of Default except that, where the mailing of notice of redemption of any
Securities shall theretofore have been made, the Trustee shall redeem or cause
to be redeemed such Securities, provided that it shall have received from the
Company a sum sufficient for such redemption. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such Default or Event of
Default shall occur, and any moneys thereafter paid into the sinking fund,
shall, during the continuance of such Default or Event of Default, be deemed to
have been collected under Article 6 and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided in
Section 6.4 or the Default cured on or before the sixtieth day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance with this Section
to the redemption of such Securities.


                                       22
<PAGE>   28

                                    ARTICLE 4

                                    COVENANTS

            Section 4.1. Payment Of Securities. The Company shall pay the
Principal of and interest on the Securities on the dates and in the manner
provided in the Securities and this Indenture. The interest on Securities with
coupons attached (together with any additional amounts payable pursuant to the
terms of such Securities) shall be payable only upon presentation and surrender
of the several coupons for such interest installments as are evidenced thereby
as they severally mature. The interest on any temporary Unregistered Securities
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be paid, as to the installments of interest evidenced by
coupons attached thereto, if any, only upon presentation and surrender thereof,
and, as to the other installments of interest, if any, only upon presentation of
such Unregistered Securities for notation thereon of the payment of such
interest. The interest on Registered Securities (together with any additional
amounts payable pursuant to the terms of such Securities) shall be payable only
to the Holders thereof and at the option of the Company may be paid by mailing
checks for such interest payable to or upon the written order of such Holders at
their last addresses as they appear on the Security Register of the Company.

            Notwithstanding any provisions of this Indenture and the Securities
of any series to the contrary, if the Company and a Holder of any Registered
Security so agree, payments of interest on, and any portion of the Principal of,
such Holder's Registered Security (other than interest payable at maturity or on
any redemption or repayment date or the final payment of Principal on such
Security) shall be made by the Paying Agent, upon receipt from the Company of
immediately available funds by 11:00 A.M., New York City time (or such other
time as may be agreed to between the Company and the Paying Agent), directly to
the Holder of such Security (by Federal funds wire transfer or otherwise) if the
Holder has delivered written instructions to the Trustee 15 days prior to such
payment date requesting that such payment will be so made and designating the
bank account to which such payments shall be so made and in the case of payments
of Principal surrenders the same to the Trustee in exchange for a Security or
Securities aggregating the same principal amount as the unredeemed principal
amount of the Securities surrendered. The Trustee shall be entitled to rely on
the last instruction delivered by the Holder pursuant to this Section 4.1 unless
a new instruction is delivered 15 days prior to a payment date. The Company will
indemnify and hold each of the Trustee and any Paying Agent harmless against any
loss, liability or expense (including attorneys' fees) resulting from any act or
omission to act on the part of the Company or any such Holder in connection with
any such agreement or from making any payment in accordance with any such
agreement.

            The Company shall pay interest on overdue Principal, and interest on
overdue installments of interest, to the extent lawful, at the rate per annum
specified in the Securities.

            Section 4.2. Maintenance Of Office Or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may


                                       23
<PAGE>   29

be served. The Company hereby initially designates the Corporate Trust Office of
the Trustee, located in the Borough of Manhattan, The City of New York, as such
office or agency of the Company. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 11.2.

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

            The Company may also from time to time designate one or more other
offices or agencies where the Securities of any series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

            Section 4.3. Certificate To Trustee. The Company will furnish to the
Trustee annually, on or before a date not more than four months after the end of
its fiscal year (which, on the date hereof, is a calendar year), a brief
certificate (which need not contain the statements required by Section 11.4)
from its principal executive, financial or accounting officer as to his or her
knowledge of the compliance of the Company with all conditions and covenants
under this Indenture (such compliance to be determined without regard to any
period of grace or requirement of notice provided under this Indenture) which
certificate shall comply with the requirements of the Trust Indenture Act.

            Section 4.4. Reports By The Company. The Company covenants to file
with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents, and other reports which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.


                                       24
<PAGE>   30

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

            Section 5.1. When Companies May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (in one
transaction or a series of related transactions) to, any Person (other than a
consolidation with or merger with or into a Subsidiary or a sale, conveyance,
transfer, lease or other disposition to a Subsidiary) or permit any Person to
merge with or into the Company unless:

            (a) either (i) the Company shall be the continuing Person or (ii)
      the Person (if other than the Company) formed by such consolidation or
      into which the Company is merged or that acquired or leased such property
      and assets of the Company shall be a corporation organized and validly
      existing under the laws of the United States of America or any
      jurisdiction thereof and shall expressly assume, by a supplemental
      indenture, executed and delivered to the Trustee, all of the obligations
      of the Company on all of the Securities and under this Indenture and the
      Company shall have delivered to the Trustee an Opinion of Counsel stating
      that such consolidation, merger or transfer and such supplemental
      indenture complies with this provision and that all conditions precedent
      provided for herein relating to such transaction have been complied with
      and that such supplemental indenture constitutes the legal, valid and
      binding obligation of the Company or such successor enforceable against
      such entity in accordance with its terms, subject to customary exceptions;
      and

            (b) an Officers' Certificate to the effect that immediately after
      giving effect to such transaction, no Default shall have occurred and be
      continuing and an Opinion of Counsel as to the matters set forth in
      Section 5.1(a) shall have been delivered to the Trustee

            Section 5.2. Successor Substituted. Upon any consolidation or
merger, or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such sale, conveyance, transfer, lease or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein. In the event
of any such sale, conveyance, transfer or other disposition (other than by way
of lease) the Company or any successor Person that shall heretofore have become
such in the manner described in this Article shall be discharged from all
obligations and covenants under this Indenture and the Securities and may be
liquidated and dissolved.


                                       25
<PAGE>   31

                                    ARTICLE 6

                              DEFAULT AND REMEDIES

            Section 6.1. Events Of Default. An "Event of Default" shall occur
with respect to the Securities of any series if:


            (a) the Company defaults in the payment of the Principal of any
      Security of such series when the same becomes due and payable at maturity,
      upon acceleration, redemption or mandatory repurchase, including as a
      sinking fund installment, or otherwise, whether or not payment thereof
      shall be prevented by Article 10;



            (b) the Company defaults in the payment of interest on any Security
      of such series when the same becomes due and payable, and such default
      continues for a period of 30 days, whether or not payment thereof shall be
      prevented by Article 10;



            (c) the Company defaults in the performance of or breaches any other
      covenant or agreement of the Company in this Indenture with respect to any
      Security of such series or in the Securities of such series and such
      default or breach continues for a period of 60 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
      Securities of all series affected thereby;


            (d) an involuntary case or other proceeding shall be commenced
      against the Company or any Restricted Subsidiary 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 shall
      remain undismissed and unstayed for a period of 60 days; or an order for
      relief shall be entered against the Company or any Restricted Subsidiary
      under the federal bankruptcy laws as now or hereafter in effect;

            (e) the Company or any Restricted Subsidiary (A) 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, (B) consents
      to the appointment of or taking possession by a receiver, liquidator,
      assignee, custodian, trustee, sequestrator or similar official of the
      Company or any Restricted Subsidiary or for all or substantially all of
      the property and assets of the Company or any Restricted Subsidiary or (C)
      effects any general assignment for the benefit of creditors; or

            (f) any other Event of Default established pursuant to Section 2.3
      with respect to the Securities of such series occurs.

            Section 6.2. Acceleration. If an Event of Default described in
clauses (a) or (b) of Section 6.1 with respect to the Securities of any series
then outstanding occurs and is continuing,


                                       26
<PAGE>   32

then, and in each and every such case, except for any series of Securities the
principal of which shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Securities of any such affected series then outstanding hereunder (each such
series treated as a separate class) by notice in writing to the Company (and to
the Trustee if given by Securityholders), may declare the entire principal (or,
if the Securities of any such series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of such
series established pursuant to Section 2.3) of all Securities of such affected
series, and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.

            (b) If an Event of Default described in clauses (c) or (f) of
Section 6.1 with respect to the Securities of one or more but not all series
then outstanding, or with respect to the Securities of all series then
outstanding, occurs and is continuing, then, and in each and every such case,
except for any series of Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount (or, if the Securities of any such series are
Original Issue Discount Securities, the amount thereof accelerable under this
Section) of the Securities of all such affected series then outstanding
hereunder (treated as a single class) by notice in writing to the Company (and
to the Trustee if given by Securityholders), may declare the entire principal
(or, if the Securities of any such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series established pursuant to Section 2.3) of all Securities of
all such affected series, and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable.

            (c) If an Event of Default described in clause (d) or (e) of Section
6.1 occurs and is continuing, then the principal amount (or, if any Securities
are Original issue Discount Securities, such portion of the principal as may be
specified in the terms thereof established pursuant to Section 2.3) of all the
Securities then outstanding and interest accrued thereon, if any, shall be and
become immediately due and payable, without any notice or other action by any
Holder or the Trustee, to the full extent permitted by applicable law.

            The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to Section 2.3) of the Securities of any
series (or of all the Securities, as the case may be) shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Securities of each such series (or
of all the Securities, as the case may be) and the principal of any and all
Securities of each such series (or of all the Securities, as the case may be)
which shall have become due otherwise than by acceleration (with interest upon
such principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of each such series to the date
of such payment or deposit) and such amount as shall be sufficient to cover all
amounts owing the Trustee under Section 7.7, and if any and all Events of
Default under the Indenture, other than


                                       27
<PAGE>   33

the non-payment of the principal of Securities that shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then, and in each and every such case, the Holders of a majority in
aggregate principal amount of all the then outstanding Securities of all such
series that have been accelerated (voting as a single class), by written notice
to the Company and to the Trustee, may waive all defaults with respect to all
such series (or with respect to all the Securities, as the case may be) and
rescind and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.

            For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities 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 Securities 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 Securities.

            Section 6.3. Other Remedies. If a payment default or an Event of
Default with respect to the Securities of any series occurs and is continuing,
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 and interest on the Securities of such series or to enforce the
performance of any provision of the Securities of such series or this Indenture.

            The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding.

            Section 6.4. Waiver Of Past Defaults. Subject to Sections 6.2, 6.7
and 9.2, the Holders of at least a majority in principal amount (or, if the
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable under Section 6.2) of the outstanding Securities of all
series affected (voting as a single class), by notice to the Trustee, may waive,
on behalf of the Holders of all the Securities of such series, an existing
Default or Event of Default with respect to the Securities of such series and
its consequences, except a Default in the payment of Principal of or interest on
any Security as specified in clause (a) or (b) of Section 6.1 or in respect of a
covenant or provision of this Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
with respect to the Securities of such series arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.

            Section 6.5. Control By Majority. Subject to Sections 7.1 and
7.2(v), the Holders of at least a majority in aggregate principal amount (or, if
any Securities are Original Issue Discount Securities, such portion of the
principal as is then accelerable under Section 6.2) of the outstanding
Securities of all series affected (voting as a single class) may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising


                                       28
<PAGE>   34

any trust or power conferred on the Trustee with respect to the Securities of
such series by this Indenture; provided that the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Securities pursuant to this Section 6.5.

            Section 6.6. Limitation On Suits. No Holder of any Security of any
series may institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities of such series, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:

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

            (b) the Holders of at least 25% in aggregate principal amount of
      outstanding Securities of all such series affected shall have made written
      request to the Trustee to institute proceedings in respect of such Event
      of Default in its own name as Trustee hereunder;

            (c) such Holder or 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;

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

            (e) during such 60 day period, the Holders of a majority in
      aggregate principal amount of the outstanding Securities of all such
      affected series have nor given the Trustee a direction that is
      inconsistent with such written request.

            A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.

            Section 6.7. Rights Of Holders To Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of Principal of or interest, if any, on such Holder's Security
on or after the respective due dates expressed on such Security, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.

            Section 6.8. Collection Suit By Trustee. If an Event of Default with
respect to the Securities of any series in payment of Principal or interest
specified in clause (a) or (b) of Section 6.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount (or such portion thereof as specified
in the terms established pursuant to Section 2.3 of Original Issue Discount
Securities) of Principal of, and accrued interest remaining unpaid on, together
with interest on overdue Principal of, and, to the extent that payment of such
interest is lawful, interest on overdue


                                       29
<PAGE>   35

installments of interest on, the Securities of such series, in each case at the
rate or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, and such further amount as shall be sufficient to
cover all amounts owing the Trustee under Section 7.7.

            Section 6.9 Trustee May File Proofs Of Claim. In the case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for amounts due the Trustee under Section 7.7) and the Holders allowed in
any judicial proceedings relative to the Company (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any moneys, securities or other property payable or
deliverable upon conversion or exchange of the Securities or upon any such
claims and to distribute the same, and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
under Section 7.7. Nothing herein contained shall 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
Securities 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. Application Of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of the Securities of any series
shall be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of Principal
or interest, upon presentation of the several Securities and coupons
appertaining to such Securities in respect of which moneys have been collected
and noting thereon the payment, or issuing Securities of such series and tenor
in reduced principal amounts in exchange for the presented Securities of such
series and tenor if only partially paid, or upon surrender thereof if fully
paid:

            FIRST: To the payment of all amounts due the Trustee under Section
      7.7 applicable to the Securities of such series in respect of which moneys
      have been collected;

            SECOND: In case the principal of the Securities of such series in
      respect of which moneys have been collected shall not have become and be
      then due and payable, to the payment of interest on the Securities 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 Securities) specified in such Securities, such
      payments to be made ratably to the persons entitled thereto, without
      discrimination or preference;

            THIRD: In case the principal of the Securities of such series in
      respect of which moneys have been collected shall have become and shall be
      then due and payable, to the


                                       30
<PAGE>   36

      payment of the whole amount then owing and unpaid upon all the Securities
      of such series for Principal and interest, with interest upon the overdue
      Principal, and (to the extent that 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 Securities) specified in the Securities of such series; and in
      case such moneys shall be insufficient to pay in full the whole amount so
      due and unpaid upon the Securities of such series, then to the payment of
      such Principal and interest or Yield to Maturity, 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 Security of such series
      over any other Security of such series, ratably to the aggregate of such
      Principal and accrued and unpaid interest or Yield to Maturity; and

            FOURTH: To the payment of the remainder, if any, to the Company or
      any other person lawfully entitled thereto.

            Section 6.11. Restoration Of Rights And Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then,
and in each and every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored to their
former positions hereunder and thereafter all rights and remedies of the
Company, Trustee and the Holders shall 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 this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, in either case in respect to
the Securities of any series, 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 6.12 does not apply to a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in aggregate principal amount
of the outstanding Securities of such series.

            Section 6.13. Rights And Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Securities in Section 2.8, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

            Section 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 shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article 6 or by law to the Trustee or


                                       31
<PAGE>   37

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.

                                   ARTICLE 7

                                    TRUSTEE

            Section 7.1. General. The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act and as set forth herein.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, unless it receives indemnity satisfactory to it
against any loss, liability or expense. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Article 7.

            Section 7.2. Certain Rights Of Trustee. Subject to Trust Indenture
Act Sections 315(a) through (d):

            (a) the Trustee may rely and shall be protected in acting or
      refraining from acting upon any resolution, certificate, Officers'
      Certificate, Opinion of Counsel (or both), statement, instrument, opinion,
      report, notice, request, direction, consent, order, bond, debenture, note,
      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 or
      persons. The Trustee need not investigate any fact or matter stated in the
      document, but the Trustee, in its discretion, may make such further
      inquiry or investigation into such facts or matters as it may see fit;

            (b) before the Trustee acts or refrains from acting, it may require
      an Officers, Certificate and/or an Opinion of Counsel, which shall conform
      to Section 10.4. The Trustee shall not be liable for any action it takes
      or omits to take in good faith in reliance on such certificate or opinion.
      Subject to Sections 7.1 and 7.2, whenever in the administration of the
      trusts of this Indenture the Trustee shall deem it necessary or desirable
      that a matter be proved or established prior to taking or suffering or
      omitting any action hereunder, such matter (unless other evidence in
      respect thereof be herein specifically prescribed) may, in the absence of
      negligence or bad faith on the part of the Trustee, be deemed to be
      conclusively proved and established by an Officers' Certificate delivered
      to the Trustee, and such certificate, in the absence of negligence or bad
      faith on the part of the Trustee, shall be full warrant to the Trustee for
      any action taken, suffered or omitted by it under the provisions of this
      Indenture upon the faith thereof;

            (c) the Trustee may act through its attorneys and agents not
      regularly in its employ and shall not be responsible for the misconduct or
      negligence of any agent or attorney appointed with due care by it
      hereunder;


                                       32
<PAGE>   38

            (d) any request, direction, order or demand of the Company mentioned
      herein shall be sufficiently evidenced by an Officers' Certificate (unless
      other evidence in respect thereof be herein specifically prescribed); and
      any Board Resolution may be evidenced to the Trustee by a copy thereof
      certified by the Secretary or an Assistant Secretary of the Company;

            (e) the Trustee shall be under no obligation to exercise any of the
      rights or powers vested in it by this Indenture at the request, order or
      direction of any of the Holders, unless such Holders shall 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;

            (f) the Trustee shall 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 in accordance with Section 6.5 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;

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

            (h) prior to the occurrence of an Event of Default hereunder and
      after the curing or waiving of all Events of Default, the Trustee shall
      not be bound to make any investigation into the facts or matters stated in
      any resolution, certificate, Officers' Certificate, Opinion of Counsel,
      Board Resolution, statement, instrument, opinion, report, notice, request,
      consent, order, approval, appraisal, bond, debenture, note, coupon,
      security, or other paper or document, but the Trustee, in its discretion,
      may make such further inquiry or investigation into such facts or matters
      as it may see fit, and, if the Trustee shall determine to make such
      further inquiry or investigation, it shall be entitled to examine, during
      normal business hours and upon prior written notice, books, records and
      premises of the Company, personally or by agent or attorney.

            Section 7.3. Individual Rights Of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company or 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 Sections 310(b)
and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6), the
following terms shall mean:

            (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


                                       33
<PAGE>   39

            (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 that 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 with
      the Company arising from the making, drawing, negotiating or incurring of
      the draft, bill of exchange, acceptance or obligation.

            Section 7.4. Trustee's Disclaimer. The recitals contained herein and
in the Securities (except the Trustee's certificate of authentication) shall be
taken as statements of the Company and not of the Trustee and the Trustee
assumes no responsibility for the correctness of the same. Neither the Trustee
nor any of its agents (i) makes any representation as to the validity or
adequacy of this Indenture or the Securities and (ii) shall be accountable for
the Company's use or application of the proceeds from the Securities.

            Section 7.5. Notice Of Default. If any Default with respect to the
Securities of any series occurs and is continuing and if such Default is known
to the actual knowledge of a Responsible Officer with the Corporate Trust
Department of the Trustee, the Trustee shall give to each Holder of Securities
of such series notice of such Default within 90 days after it occurs (i) if any
Unregistered Securities of such series are then outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London and (ii) to all Holders of Securities of such series in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act, unless such
Default shall have been cured or waived before the mailing or publication of
such notice; provided, however, that, except in the case of a Default in the
payment of the Principal of or interest on any Security, the Trustee shall be
protected in withholding such notice if the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.

            Section 7.6. Reports By Trustee To Holders. Within 60 days after
each May 15, beginning with May 15, 20[ ], the Trustee shall mail to each Holder
as and to the extent provided in Trust Indenture Act Section 313(c) a brief
report dated as of such May 15, if required by Trust Indenture Act Section
313(a).

            Section 7.7. Compensation And Indemnity. The Company shall pay to
the Trustee such compensation as shall be agreed upon in writing from time to
time for its services. The compensation of the Trustee shall not be limited by
any law on compensation of a Trustee of an express trust. The Company agrees to
pay or reimburse the Trustee and each predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture and the
Securities or the issuance of the Securities or any series thereof (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ) except to the
extent any such expense, disbursement or advance may arise from its negligence
or bad faith. The Company shall indemnify the Trustee and each predecessor
Trustee for, and to hold it harmless against, any loss, liability or expense
arising out of or in connection


                                       34
<PAGE>   40

with the acceptance or administration of this Indenture and the Securities or
the issuance of the Securities or any series thereof or the trusts hereunder and
the performance of its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises, except to the extent such loss, liability or expense is due to the
negligence or bad faith of the Trustee or such predecessor Trustee. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel; provided
that the Company will not be required to pay such fees and expenses if it
assumes the Trustee's defense and there is no conflict of interest between the
Company and the Trustee in connection with such defense. The Company need not
pay for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.

            To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities 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, and interest on particular
Securities.

            The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the rejection or termination of
this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities or coupons, and the Securities are hereby
subordinated to such senior claim. If the Trustee renders services and incurs
expenses following an Event of Default under Section 6.1(d) or Section 6.1(e),
the parties hereto and the Holders by their acceptance of the Securities hereby
agree that such expenses are intended to constitute expenses of administration
under any bankruptcy law.

            Section 7.8. Replacement Of Trustee. A resignation or removal of the
Trustee as Trustee with respect to the Securities of any series and appointment
of a successor Trustee as Trustee with respect to the Securities of any series
shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.

            The Trustee may resign as Trustee with respect to the Securities of
any series at any time by so notifying the Company in writing. The Holders of a
majority in aggregate principal amount of the outstanding Securities of any
series may remove the Trustee as Trustee with respect to the Securities of such
series by so notifying the Trustee and the Company in writing and may appoint a
successor Trustee with respect thereto with the consent of the Company. The
Company may remove the Trustee as Trustee with respect to the Securities of any
series if: (a) the Trustee is no longer eligible under Section 7.10 of this
Indenture; (b) the Trustee is adjudged a bankrupt or insolvent; (c) a receiver
or other public officer takes charge of the Trustee or its property; or (d) the
Trustee becomes incapable of acting.


                                       35
<PAGE>   41

            If the Trustee resigns or is removed as Trustee with respect to the
Securities of any series, or if a vacancy exists in the office of Trustee with
respect to the Securities of any series for any reason, the Company shall
promptly appoint a successor Trustee with respect thereto. Within one year after
the successor Trustee takes office, the Holders of a majority in aggregate
principal amount of the outstanding Securities of such series may appoint a
successor Trustee in respect of such Securities to replace the successor Trustee
appointed by the Company. If the successor Trustee with respect to the
Securities of any series does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.8 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 Securities of
such series may petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect thereto.

            A successor Trustee with respect to the Securities of any series
shall deliver a written acceptance of its appointment to the retiring Trustee
and to the Company. Immediately after the delivery of such written acceptance,
subject to the lien provided for in Section 7.7, (a) the retiring Trustee shall
transfer all property held by it as Trustee in respect of the Securities of such
series to the successor Trustee, (b) the resignation or removal of the retiring
Trustee in respect of the Securities of such series shall become effective and
(c) the successor Trustee shall have all the rights, powers and duties of the
Trustee in respect of the Securities of such series under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder of
Securities of such series.

            Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the preceding paragraph.

            The Company shall give notice of any resignation and any removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee in respect of the Securities of such series to all Holders
of Securities of such series. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

            Notwithstanding replacement of the Trustee with respect to the
Securities of any series pursuant to this Section 7.8, the Company's obligations
under Section 7.7 shall continue for the benefit of the retiring Trustee.

            Section 7.9. Successor Trustee By Merger, Etc. 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 shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.

            Section 7.10. Eligibility. This Indenture shall always have a
Trustee who satisfies the requirements of Trust Indenture Act Section 310(a).
The Trustee shall have a combined capital and surplus of at least $10,000,000 as
set forth in its most recent published annual report of condition, if any. The
Trustee shall comply with Trust Indenture Act Section 310(b). If at any time the
Trustee with respect to the Securities of any series shall cease to be eligible
in


                                       36
<PAGE>   42

accordance with the provisions of this Section, it shall resign immediately
within the manner and with the effect hereinafter specified in this Article.

      Section 7.11. Money Held In Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
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 8 of this Indenture.

                                   ARTICLE 8

                             DISCHARGE OF INDENTURE

            Section 8.1. Defeasance Within One Year Of Payment. Except as
otherwise provided in this Section 8.1, the Company may terminate its
obligations under the Securities of any series and this Indenture with respect
to Securities of such series if:

            (a) all Securities of such series previously authenticated and
      delivered (other than destroyed, lost or wrongfully taken Securities of
      such series that have been replaced or Securities of such series that are
      paid pursuant to Section 4.1 or Securities of such series for whose
      payment money or securities have theretofore been held in trust and
      thereafter repaid to the Company, as provided in Section 8.5) have been
      delivered to the Trustee for cancellation and the Company has paid all
      sums payable by it hereunder; or

            (b) (i) the Securities 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, (ii) the
      Company irrevocably deposits in trust with the Trustee, as trust funds
      solely for the benefit of the Holders of such Securities for that purpose,
      money or U.S. Government Obligations or a combination thereof sufficient
      (unless such funds consist solely of money, in the opinion of a nationally
      recognized firm of independent public accountants expressed in a written
      certification thereof delivered to the Trustee), without consideration of
      any reinvestment, to pay Principal of and interest on the Securities of
      such series to maturity or redemption, as the case may be, and to pay all
      other sums payable by it hereunder, and (iii) 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 this Indenture with respect to the
      Securities of such series have been complied with.

            With respect to the foregoing clause (a), only the Company's
obligations under Sections 7.7 and 8.5 in respect of the Securities of such
series shall survive. With respect to the foregoing clause (b), only the
Company's obligations in Sections 2.2 through 2.12, 4.2, 7.7, 7.8 and 8.5 in
respect of the Securities of such series shall survive until such Securities of
such series are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.7 and 8.5 in respect of the Securities of such series
shall survive. After any such irrevocable deposit, the Trustee shall acknowledge
in writing the discharge of the Company's obligations under the


                                       37
<PAGE>   43

Securities of such series and this Indenture with respect to the Securities of
such series except for those surviving obligations specified above.

            Section 8.2. Defeasance. Except as provided below, the Company will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Securities of any series and the provisions of this Indenture
will no longer be in effect with respect to the Securities of such series (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same); provided that the following conditions shall have been
satisfied:

            (a) the Company has irrevocably deposited in trust with the Trustee
      as trust funds solely for the benefit of the Holders of the Securities of
      such series, for payment of the Principal of and interest on the
      Securities of such series, money or U.S. Government Obligations or a
      combination thereof sufficient (unless such funds consist solely of money,
      in the opinion of a nationally recognized firm of independent public
      accountants expressed in a written certification thereof delivered to the
      Trustee) without consideration of any reinvestment and after payment of
      all federal, state and local taxes or other charges and assessments in
      respect thereof payable by the Trustee, to pay and discharge the Principal
      of and accrued interest on the outstanding Securities of such series to
      maturity or earlier redemption (irrevocable provided for under
      arrangements satisfactory to the Trustee), as the case may be;

            (b) such deposit will not result in a breach or violation of, or
      constitute a default under, this Indenture or any other material agreement
      or instrument to which the Company is a party or by which it is bound;

            (c) no Default with respect to the Securities of such series shall
      have occurred and be continuing on the date of such deposit;

            (d) the Company shall have delivered to the Trustee (1) either (x) a
      ruling directed to the Trustee received from the United States Internal
      Revenue Service to the effect that the Holders of the Securities of such
      series will not recognize income, gain or loss for federal income tax
      purposes as a result of the Company's exercise of its option under this
      Section 8.2 and will be subject to federal income tax on the same amount
      and in the same manner and at the same times as would have been the case
      if such deposit and defeasance had not occurred, (y) an Opinion of Counsel
      to the same effect as the ruling described in clause (x) above and based
      upon a change in law, or (z) an instrument, in form reasonably
      satisfactory to the Trustee, wherein the Company, notwithstanding the
      payment and discharge, pursuant to this Section 8.2, of its indebtedness
      in respect of Securities of any series, or any portion of the principal
      amount thereof, shall assume the obligation (which shall be absolute and
      unconditional) to irrevocably deposit with the Trustee such additional
      sums of money, if any, or additional U.S. Government Obligations (meeting
      the requirements of this Article 8), if any, or any combination thereof,
      at such time or times, as shall be necessary, together with the money
      and/or U.S. Government Obligations theretofore so deposited, to pay when
      due the Principal of and premium, if any, and interest due and to become
      due on such Securities or portions thereof; provided, however, that such
      instrument may state that the obligation of the


                                       38
<PAGE>   44

      Company to make additional deposits as aforesaid shall be subject to the
      delivery to the Company by the Trustee of a notice asserting the
      deficiency accompanied by an opinion of an independent public accountant
      of nationally recognized standing, selected by the Trustee, showing the
      calculation thereof, and (2) an Opinion of Counsel to the effect that the
      Holders of the Securities of such series have a valid security interest in
      the trust finds subject to no prior liens under the UCC; and

            (e) 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
      contemplated by this Section 8.2 of the Securities of such series have
      been complied with.

            The Company's obligations in Sections 2.2 through 2.12, 4.2, 7.7,
7.8 and 8.5 with respect to the Securities of such series shall survive until
such Securities are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.7 and 8.5 shall survive.

            Section 8.3. Covenant Defeasance. The Company may omit to comply
with any specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture, or Officer's Certificate pursuant to such
Board Resolution or such supplemental indenture, pursuant to Section 2.3 that
may by its terms be defeased pursuant to this Section 8.3), and such omission
shall be deemed not to be an Event of Default under clauses (c) or (f) of
Section 6.1, with respect to the outstanding Securities of a series if:

            (a) the Company has irrevocably deposited in trust with the Trustee
      as trust funds solely for the benefit of the Holders of the Securities of
      such series, for payment of the Principal of and interest, if any, on the
      Securities of such series, money or U.S. Government Obligations or a
      combination thereof in an amount sufficient (unless such funds consist
      solely of money, in the opinion of a nationally recognized firm of
      independent public accountants expressed in a written certification
      thereof delivered to the Trustee) without consideration of any
      reinvestment and after payment of all federal, state and local taxes or
      other charges and assessments in respect thereof payable by the Trustee,
      to pay and discharge the Principal of and accrued interest on the
      outstanding Securities of such series to maturity or earlier redemption
      (irrevocably provided for under arrangements satisfactory to the Trustee),
      as the case may be;

            (b) such deposit will not result in a breach or violation of, or
      constitute a default under, this Indenture or any other material agreement
      or instrument to which the Company is a party or by which it is bound;

            (c) no Default with respect to the Securities of such series shall
      have occurred and be continuing on the date of such deposit;

            (d) the Company has delivered to the Trustee an Opinion of Counsel
      to the effect that the Holders of the Securities of such series have a
      valid security interest in the trust funds subject to no prior liens under
      the UCC; and


                                       39
<PAGE>   45

            (e) 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 covenant
      defeasance contemplated by this Section 8.3 of the Securities of such
      series have been complied with.

            Section 8.4. Application Of Trust Money. Subject to Section 8.5, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1, 8.2 or 8.3, as the case may be, in
respect of the Securities of any series end shall apply the deposited money and
the proceeds from deposited U.S. Government Obligations in accordance with the
Securities of such series and this Indenture to the payment of Principal of and
interest on the Securities of such series; but such money need not be segregated
from other funds except to the extent required by law. The Company shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
8.1, 8.2 or 8.3, as the case may be, or the Principal and interest received in
respect thereof, other than any such tax, fee or other charge that by law is for
the account of the Holders.

            Section 8.5. Repayment To Company. Subject to Sections 7.7, 8.1, 8.2
and 8.3, the Trustee and the Paying Agent shall promptly pay to the Company upon
request set forth in an Officers' Certificate any money held by them at any time
and not required to make payments hereunder and thereupon shall be relieved from
all liability with respect to such money. The Trustee and the Paying Agent shall
pay to the Company upon written request any money held by them and required to
make payments hereunder under this Indenture that remains unclaimed for two
years; provided that the Trustee or such Paying Agent before being required to
make any payment may cause to be published at the expense of the Company once in
an Authorized Newspaper in The City of New York or with respect to any Security
the interest on which is based on the offered quotations in the interbank
Eurodollar market for dollar deposits in an Authorized Newspaper in London or
mail to each Holder entitled to such money at such Holder's address (as set
forth in the Security Register) notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of such publication or mailing) any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.

                                   ARTICLE 9

                      AMENDMENTS, SUPPLEMENTS AND WAIVERS

            Section 9.1. Without Consent Of Holders. Without Consent Of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to or the consent of any Holder:


                                       40
<PAGE>   46

            (a) to cure any ambiguity, defect or inconsistency in this
      Indenture; provided that such amendments or supplements shall not
      materially and adversely affect the interests of the Holders;

            (b) to comply with Article 5;

            (c) to comply with any requirements of the Commission in connection
      with the qualification of this Indenture under the Trust Indenture Act;

            (d) to evidence and provide for the acceptance of appointment
      hereunder with respect to the Securities of any or all series by a
      successor Trustee;

            (e) to establish the form or forms or terms of Securities of any
      series or of the coupons appertaining to such Securities as permitted by
      Section 2.3, including the provisions and procedures relating to
      Securities convertible into or exchangeable for any securities of any
      Person (including the Company);

            (f) to provide for uncertificated or Unregistered Securities and to
      make all appropriate changes for such purpose;

            (g) to change or eliminate any provisions of this Indenture with
      respect to all or any series of the Securities not then outstanding (and,
      if such change is applicable to fewer than all such series of the
      Securities, specifying the series to which such change is applicable), and
      to specify the rights and remedies of the Trustee and the holders of such
      Securities in connection therewith; and

            (h) to make any change that does not materially and adversely affect
      the rights of any Holder.

            Section 9.2. With Consent Of Holders. Subject to Sections 6.4 and
6.7, without prior notice to any Holders, the Company and the Trustee may amend
this Indenture and the Securities of any series with the written consent of the
Holders of a majority in aggregate principal amount of the outstanding
Securities of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in aggregate
principal amount of the outstanding Securities of all series affected thereby
(all such series voting as one class) by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Securities of such series.

            Notwithstanding the provisions of this Section 9.2, without the
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 6.4, may not;

            (a) extend the stated maturity of the Principal of, or any sinking
      fund obligation or any installment of interest on, such Holder's Security,
      or reduce the Principal amount thereof or the rate of interest thereon
      (including any amount in respect of original issue discount), or any
      premium payable with respect thereto, or adversely affect the rights of
      such Holder under any mandatory redemption or repurchase provision or any
      right of redemption or repurchase at the option of such Holder, or
      adversely affect


                                       41
<PAGE>   47

      any right to convert or exchange any Security as may be provided pursuant
      to Section 2.3 herein, or reduce the amount of the Principal of an
      Original Issue Discount Security that would be due and payable upon an
      acceleration of the maturity thereof pursuant to Section 6.2 or the amount
      thereof provable in bankruptcy, or change any place of payment where, or
      the currency in which, any Security or any premium or the interest thereon
      is payable, or impair the right to institute suit for the enforcement of
      any such payment on or after the due date therefor;

            (b) reduce the percentage in principal amount of outstanding
      Securities of the relevant series the consent of whose Holders is required
      for any such supplemental indenture, for any waiver of compliance with
      certain provisions of this Indenture or certain Defaults and their
      consequences provided for in this Indenture;

            (c) waive a Default in the payment of Principal of or interest on
      any Security of such Holder; or

            (d) modify any of the provisions of this Section 9.2, 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 Security affected thereby.

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

            It shall not be necessary for the consent of any Holder under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

            After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company or, at the Company's request, the Trustee shall
give to the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver. The Company or, at the Company's request, the Trustee will
mail supplemental indentures to Holders upon request. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.

            Section 9.3. Revocation And Effect Of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.


                                       42
<PAGE>   48

            The Company may, but shall not be obligated to, fix a record date
(which may be not less than 10 nor more than 60 days prior to the solicitation
of consents) for the purpose of determining the Holders of the Securities of any
series affected entitled to consent to any amendment, supplement or waiver. If a
record date is fixed, then, notwithstanding the immediately preceding paragraph,
those Persons who were such Holders at such record date (or their duly
designated proxies) and only those Persons shall be entitled to consent to such
amendment, supplement or waiver or to revoke any  consent previously given,
whether or not such Persons continue to be such Holders after such record date.
No such consent shall be valid or effective for more than 90 days after such
record date.

            After an amendment, supplement or waiver becomes effective with
respect to the Securities of any series affected thereby, it shall bind every
Holder of such Securities theretofore or thereafter authenticated and delivered
hereunder unless it is of the type described in any of clauses (a) through (d)
of Section 9.2. In case of an amendment or waiver of the type described in
clauses (a) through (d) of Section 9.2, the amendment or waiver shall bind each
such Holder who has consented to it and every subsequent Holder of a Security
that evidences the same indebtedness as the Security of the consenting Holder.

            Section 9.4. Notation On Or Exchange Of Securities. If an amendment,
supplement or waiver changes the terms of any Security, the Trustee may require
the Holder thereof to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and return it to
the Holder and the Trustee may place an appropriate notation on any Security of
such series thereafter authenticated. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security of the same series and tenor that
reflects the changed terms.

            Section 9.5. Trustee To Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of an amendment, supplement or waiver
authorized pursuant to this Article 9 is authorized or permitted by this
Indenture, stating that all requisite consents have been obtained or that no
consents are required and stating that such supplemental indenture constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to customary exceptions. Subject
to the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights of the Trustee. The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver that affects the Trustee`s own rights, duties or immunities
under this Indenture or otherwise.

            Section 9.6. Conformity With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article 9 shall conform to the requirements
of the Trust Indenture Act as then in effect.


                                       43
<PAGE>   49

                                   ARTICLE 10

                                 SUBORDINATION

            Section 10.1. Agreement To Subordinate. The Company, for itself its
successors and assigns, covenants and agrees, and each holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that the payment of the
principal of premium, if any, and interest on each and all of the Securities is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all Senior
Indebtedness.

            Section 10.2. Distribution On Dissolution Or Reorganization;
Subrogation Of Securities. Upon any distribution of assets of the Company upon
dissolution, winding up, liquidation or reorganization of the Company in any
bankruptcy, insolvency, or receivership proceeding or upon an assignment for the
benefit of creditors or any other marshalling of the assets and liabilities of
the Company,

                  (a) the holders of all Senior Indebtedness shall first be
      entitled to receive payment in full of the principal thereof, premium, if
      any, and interest thereon before the holders of the Securities are
      entitled to receive any payment upon the principal of or premium, if any,
      or interest on the Securities;

                  (b) any payment or distribution of assets of the Company of
      any kind or character, whether in cash, property or securities (other than
      shares 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 10 with respect to the Securities, to the
      payment of all Senior Indebtedness which may at the time be outstanding,
      provided that the rights of the holders of Senior Indebtedness are not
      altered by such reorganization or readjustment), to which the holders of
      the Securities or the Trustee would be entitled except for the provisions
      of this Article 10 shall be paid or delivered by the person making such
      payment distribution, whether a trustee in bankruptcy, a receiver or
      liquidating trustee or other person, directly to the holders of 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, to the extent necessary to make payment in
      full of all Senior Indebtedness remaining unpaid, after giving effect to
      any concurrent payment or distribution to the holders of such Senior
      Indebtedness; and

                  (c) in the event that, notwithstanding the foregoing, any
      payment or distribution of assets of the Company of any kind or character,
      whether in cash, property or securities (other than shares 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 10 with respect to the Securities, to the payment of Senior
      Indebtedness, provided that the rights of the holders of Senior
      Indebtedness are not altered by such reorganization or readjustment),
      shall be received by the trustee or the holders of the Securities before
      all


                                       44
<PAGE>   50

      Senior Indebtedness is paid in full, 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 as aforesaid, for application
      to the payment of all Senior Indebtedness remaining unpaid until all such
      Senior Indebtedness shall have been paid in full, after giving effect to
      any concurrent payment or distribution to the holders of such Senior
      Indebtedness.

            The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the sale or conveyance of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Section 5.1 shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Article 10 if such
other corporation shall, as a part of such consolidation, merger, sale or
conveyance, comply with the conditions stated in Section 5.1.

            Subject to the payment in full of all Senior Indebtedness, the
holders of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior indebtedness until all
amounts owing on the Securities shall be paid in full, and, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Securities, no payment or distribution of cash, property or
securities made to the holders of Senior Indebtedness by virtue of this Article
10 which otherwise would have been made to the holders of the Securities shall
be deemed to be a payment by the Company on account of the Senior Indebtedness,
and no payment or distribution of cash, property or securities made to holders
of Securities by virtue of the subrogation provided for in this Article 10 which
otherwise would have been made to the holders of Senior Indebtedness shall be
deemed to be a payment on account of the Securities; it being understood that
the provisions of this Article 10 are and are intended solely for the purpose of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand. Nothing contained
in this Article 10 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Securities the principal of and premium, if any, and interest on
the Securities 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 the
Securities and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article 10 of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy. The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company within the
meaning of this Article 10, and the Trustee shall be entitled to assume that no
such event has occurred unless the Company has given such notice. Upon any
distribution of assets of the Company referred to in this Article 10, the
Trustee, subject to the provisions of Section 7.2, and the holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization


                                       45
<PAGE>   51

proceedings are pending or upon a certificate of the liquidating trustee or
agent or other person making any distribution to the Trustee or to the holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. 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 holder if it shall in good faith pay over or distribute to the
holders of the Securities or the Company or any other person, money or assets to
which the holders of Senior Indebtedness shall be entitled by virtue of this
Article 10 or otherwise. With respect to the holders of Senior Indebtedness, the
Company and the Trustee undertake to perform or observe only such of their
covenants and obligations as are specifically set forth in this Article 10, and
no implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Company or the
Trustee.

            In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 10, 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 persons under this Article 10, 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.

            If, 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, a proper
claim or proof of debt in the form required in such proceeding is not filed by
all of the Securityholders prior to 30 days before the expiration of the time to
file such claim or claims, and is not filed by the Trustee pursuant to the
authority granted to the Trustee pursuant to this Indenture prior to 15 days
before such expiration, then the holder or holders of Senior Indebtedness of the
Company are hereby authorized to, and have the right to, file an appropriate
claim for and on behalf of the Holders of the Securities.

            Section 10.3. No Payment On Securities If Senior Indebtedness Is In
Default. (a) Upon the maturity of any Senior Indebtedness (other than trade
accounts payable) by lapse of time, acceleration or otherwise, all principal
thereof and premium, if any, and interest due thereon shall first be paid in
full, or such payment duly provided for in cash, in cash equivalents or in
accordance with the terms of such Senior Indebtedness and the agreements, if
any, under which such Senior Indebtedness was issued or created, before any
payment is made on account of the principal of or premium, if any, or interest
on the Securities or to acquire any of the Securities.

            (b) Upon the occurrence of any default with respect to any Senior
Indebtedness (other than trade accounts payable), as defined therein or in the
instrument under which it is outstanding, which, after notice or lapse of time,
or both, would constitute an event of default which would permit the holders to
accelerate the maturity thereof, other than default in payment of the principal
of or premium, if any, or interest on such Senior Indebtedness, and after


                                       46
<PAGE>   52

written notice thereof has been given to the Company and the Trustee by the
holder or holders of such Senior indebtedness or their representative or
representatives, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, or provision shall have been made for the
payment of all principal, premium, if any, and interest which would be due upon
such Senior Indebtedness in the event of the acceleration of the maturity
thereof in cash, in cash equivalents or in accordance with the terms of such
Senior Indebtedness and the agreements, if any, under which such Senior
Indebtedness was issued or created, no payment shall be made by the Company with
respect to the principal of or premium, if any, or interest on the Securities or
to acquire any of the Securities.

            (c) Nothing in this Section 10.3 shall prevent the application by
the Trustee or any paying agent (other than the Company) of any moneys deposited
with it under this Indenture to the payment of or on account of the principal of
or premium, if any, or interest on any Security if the Trustee or such paying
agent shall not have received, at least five days prior to the date on which
such moneys become due and payable, notice by or on behalf of any holder of
Senior Indebtedness of the happening and continuance of any default on Senior
Indebtedness; provided, however, that nothing in this Section 10.3 or the next
preceding sentence shall prevent any payment in connection with a redemption of
Securities if the first mailing of notice of such redemption has been made
pursuant to Article 3 prior to the receipt by the Trustee of notice of such
default as provided in clause (b) of this Section 10.3.

            (d) Any deposit of moneys by the Company with the Trustee or any
paying agent (whether or not stated to be in trust) for the payment of interest
on any Securities or for the payment of the principal of or premium, if any, on
any Securities at maturity or upon call for redemption shall be subject to the
provisions of this Article 10, and the Trustee will not receive or accept any
deposit from the Company for any such payment upon the happening of any of the
events specified in clause (a) of this Section 10.3 or during the continuance of
any default specified in clause (b) of this Section 10.3, and in the event that
the Trustee shall receive any such deposit which the Company is not entitled to
make, the Trustee will hold such amount subject to the provisions of this
Article 10.

            Section 10.4. Payments On Securities Permitted. Nothing contained in
this Article 10 or elsewhere in this Indenture, or in any of the Securities,
shall (a) prevent the application by the Trustee or any paying agent (other than
the Company) of any moneys deposited with it hereunder to the payment of or on
account of the principal of or premium, if any, or interest on the Securities,
or (b) affect the obligation of the Company to make, or prevent the Company from
making, payment of the principal of or premium, if any, or interest on the
Securities, except in either case, as otherwise provided in Section 10.3 or
during the pendency of any dissolution, winding up, liquidation or
reorganization of the Company.

            Section 10.5. Authorization Of Securityholders To Trustee To Effect
Subordination. Each holder of Securities by his acceptance thereof authorizes
and directs the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination thereof as provided in this Article
10 and irrevocably appoints the Trustee his attorney-in-fact for any and all
such purposes.


                                       47
<PAGE>   53

            Section 10.6. Knowledge Of Trustee. Notwithstanding the provisions
of this Article 10 or any other provisions of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment of moneys to or by the Trustee, or the taking of any
other action by the Trustee, unless and until the Trustee shall have received
written notice thereof from the Company, any Securityholder, any paying agent or
the holder or representative of any class of Senior Indebtedness who shall have
been certified by the Company or otherwise established to the reasonable
satisfaction of the Trustee to be such a Securityholder, paying agent or holder
or representative; and, prior to the receipt of any such written notice, the
Trustee shall be entitled to assume that no such facts exist; provided, however,
that if at least two Business Days prior to the date upon which by the terms
hereof any such moneys may become payable for any purpose (including, without
limitation, the payment of either the principal (or premium, if any) or
interest, if any, on any Security) the Trustee shall not have received with
respect to such moneys the notice provided for in this Section 10.6, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys 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 within two Business Days
prior to such date; provided, however, no such application shall affect the
obligations under this Article 10 of the Persons receiving such moneys from the
Trustee. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such a
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder.

            Section 10.7. Trustee May Hold Senior Indebtedness. The Trustee
shall be entitled to all the rights set forth in this Article 10 with respect to
any Senior Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness.

            Section 10.8. Rights Of Holders Of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

            Section 10.9. Modification Of Terms Of Senior Indebtedness. Any
renewal or extension of the time of payment of any Senior Indebtedness or the
exercise by the holders of Senior Indebtedness of any of their rights under any
instrument creating or evidencing Senior Indebtedness, including, without
limitation, the waiver of default thereunder, may be made or done all without
notice to or assent from the Holders of the Securities or the Trustee.

      No compromise, alteration, amendment, modification, extension, renewal or
other change of, or waiver, consent or other action in respect of, any liability
or obligation under or in respect of or of, any of the terms, covenants or
conditions of any indenture or other instrument under which any Senior
Indebtedness is outstanding or of such Senior Indebtedness, whether or not such
release is in accordance with the provisions of any applicable document, shall
in any way alter or affect any of the provisions of this Article 10 or of the
Securities relating to the subordination thereof.


                                       48
<PAGE>   54

                                   ARTICLE 11

                                 MISCELLANEOUS

            Section 11.1. Trust Indenture Act Of 1939. This 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. If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by operation of Section 318(c) of the Trust Indenture
Act, the imposed duties shall control.

            Section 11.2. Notices. Any notice or communication shall be
sufficiently given if written and (a) if delivered in person when received or
(b) if mailed by first class mail 5 days after mailing, or (c) as between the
Company and the Trustee if sent by facsimile transmission, when transmission is
confirmed, in each case addressed as follows:

            If to the Company:

                  Arrow Electronics, Inc.
                  25 Hub Drive
                  Melville, New York 11747
                  Telecopy: (516) 391-1683
                  Attention: Robert E. Klatell

            If to the Trustee

                  [                    ]
                  [                    ]
                  [                    ]
                  Telecopy:  [                ]
                  Attention: [                ]

            The Company or the Trustee by written notice to the other may
designate additional or different addresses for subsequent notices or
communications.

            Any notice or communication shall be sufficiently given to Holders
of any Unregistered Securities, by publication at least once in an Authorized
Newspaper in The City of New York, or with respect to any Security the interest
on which is based on the offered quotations in the interbank Eurodollar market
for dollar deposits at least once in an Authorized Newspaper in London, and by
mailing to the Holders thereof who have filed their names and addresses with the
Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act at such
addresses as were so furnished to the Trustee (and in the case of an notice
given by the Company, the Trustee shall make such information available to the
Company for such purpose) and to Holders of Registered Securities by mailing to
such Holders at their addresses as they shall appear on the Security Register.
Notice mailed shall be sufficiently given if so mailed within the time
prescribed. Copies of any such communication or notice to a Holder shall also be
mailed to the Trustee and each Agent at the same time.


                                       49
<PAGE>   55

            Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.2, it is duly given, whether or not the
addressee receives it.

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

            In case it shall be impracticable to give notice as herein
contemplated, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.

            Section 11.3. Certificate And Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

            (a) an Officers' Certificate stating that, in the opinion of the
      signers, all conditions precedent, if any, provided for in this Indenture
      relating to the proposed action have been complied with; and

            (b) an Opinion of Counsel stating that, in the opinion of such
      counsel, all such conditions precedent, if any, have been complied with.

            Section 11.4. Statements Required In Certificate Or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this indenture shall include:

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

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

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

            (d) a statement as to whether or not, in the opinion of each such
      person, such condition or covenant has been complied with; provided,
      however, that, with respect to matters of fact, an Opinion of Counsel may
      rely on an Officers' Certificate or certificates of public officials.

            In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or


                                       50
<PAGE>   56

covered by the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.

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


            Any certificate, statement or opinion of an officer of the Company
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.


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

            Section 11.5. Evidence Of Ownership. The Company, the Trustee and
any agent of the Company or the Trustee may deem and treat the Holder of any
Unregistered Security and the Holder of any coupon as the absolute owner of such
Unregistered Security or coupon (whether or not such Unregistered Security or
coupon shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes, and neither the Company, the
Trustee, nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. The fact of the holding by any Holder of an Unregistered
Security, and the identifying number of such Security and the date of his
holding the same, may be proved by the production of such Security or by a
certificate executed by any trust company, bank, banker or recognized securities
dealer wherever situated satisfactory to the Trustee, if such certificate shall
be deemed by the Trustee to be satisfactory. Each such certificate shall be
dated and shall state that on the date thereof a Security bearing a specified
identifying number was deposited with or exhibited to such trust company, bank,
banker or recognized securities dealer by the person named in such certificate.
Any such certificate may be issued in respect of one or more Unregistered
Securities specified therein. The holding by the person named in any such
certificate of any Unregistered Securities specified therein shall be presumed
to continue for a period of one year from the date of such certificate unless at
the time of any determination of


                                       51
<PAGE>   57

such holding (1) another certificate bearing a later date issued in respect of
the same Securities shall be produced or (2) the Security specified in such
certificate shall be produced by some other Person, or (3) the Security
specified in such certificate shall have ceased to be outstanding. Subject to
Article 7, the fact and date of the execution of any such instrument and the
amount and numbers of Securities held by the Person so executing such instrument
may also be proven in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in any other manner which the Trustee may
deem sufficient.

            The Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the person in whose name any Registered Security shall be
registered upon the Security Register for such series as the absolute owner of
such Registered Security (whether or not such Registered Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the Principal of and,
subject to the provisions of this Indenture, interest on such Registered
Security and for all other purposes; and neither the Company nor the Trustee nor
any agent of the Company or the Trustee shall be affected by any notice to the
contrary.

            Section 11.6. Rules By Trustee, Paying Agent Or Registrar. The
Trustee may make reasonable rules for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.

            Section 11.7. Payment Date Other Than A Business Day. If any date
for payment of Principal or interest on any Security shall not be a Business Day
at any place of payment, then payment of Principal of or interest on such
Security, as the case may be, need not be made on such date, but may be made on
the next succeeding Business Day at any place of payment with the same force and
effect as if made on such date and no interest shall accrue in respect of such
payment for the period from and after such date.

            Section 11.8. Governing Law. The rights and duties of the parties
under this Indenture shall, pursuant to New York General Obligations Law Section
5-1401, be governed by the law of the State of New York.

            Section 11.9. No Adverse Interpretation Of Other Agreements. This
Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture or
agreement may not be used to interpret this Indenture.

            Section 11.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.

            Section 11.11. Duplicate Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

            Section 11.12. Separability. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


                                       52
<PAGE>   58

            Section 11.13. Table Of Contents, Headings, Etc. The Table of
Contents and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms and provisions
hereof.

            Section 11.14. Incorporators. Shareholders, Officers and Directors
Of Company Exempt From Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or any indenture
supplemental hereto, or in any Security or any coupons appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such, or against any past, present or future shareholder,
officer, director or employee, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities and the
coupons appertaining thereto by the Holders thereof and as part of the
consideration for the issue of the Securities and the coupons appertaining
thereto.

            Section 11.15. Judgment Currency The Company agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the Principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a Business
Day, then, to the extent permitted by applicable law, the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Business Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any Judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture.


                                       53
<PAGE>   59

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

(SEAL)                                  ARROW ELECTRONICS, INC.,
ATTEST:                                   as the Company

_____________________                   By: ____________________________________
Name:                                    Name:
Title:                                   Title:


(SEAL)                                  [                                     ],
ATTEST:                                   as the Trustee

_____________________                   By: ____________________________________
Name:                                    Name:
Title:                                   Title:


                                       54
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>6
<FILENAME>y42939a1ex4-4.txt
<DESCRIPTION>FORM OF WARRANT AGREEMENT
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 4.4











                             ARROW ELECTRONICS, INC.

                                       and

                            [NAME OF WARRANT AGENT],
                                  Warrant Agent


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



                       WARRANT AGREEMENT [DEBT SECURITIES]

                        Dated as of [___________], 20[__]







<PAGE>   2




        WARRANT AGREEMENT dated as of [_________], 20[__], between ARROW
ELECTRONICS, INC., a New York corporation (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), and
[_____________], as warrant agent (the "Warrant Agent", which term includes any
successor warrant agent hereunder).

        WHEREAS the Company has entered into an Indenture dated as of
[_______________], [____] (the "Indenture"), with [________________], a
[________] corporation, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), providing for the issuance [from time to
time] of the Company's [[title of debt Securities]] [debt securities, to be
issued in one or more series as provided in the Indenture] (the "Debt
Securities");

        [WHEREAS the Company proposes to sell [title of Securities being
offered] (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase up to an aggregate
principal amount of $[_____________] of Debt Securities, which are to be issued
under the Indenture (the "Warrant Securities"), such warrant certificates and
other warrant certificates issued pursuant to this Agreement being called the
"Warrant Certificates"; and

        WHEREAS the Company desires that the Warrant Agent act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced.

        NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

                                   ARTICLE I.

                       ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY
                             OF WARRANT CERTIFICATES

        SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially issued
in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after [___________], 20[__] (the "Detachable
Date")] [and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase up to $[____________] aggregate
principal amount of Warrant Securities.

        SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Warrant
Certificates, whenever issued, shall be in [bearer] [or] [registered] form [or
both]


                                        2


<PAGE>   3


substantially in the form set forth in Annex A hereto, shall be dated and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or engraved thereon as
the officers of the Company executing the same may approve (execution thereof to
be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange on which the Warrants may be listed, or to conform to
common usage. The Warrant Certificates shall be signed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President, its
Chief Operating Officer, its Chief Financial Officer, one of its Vice Presidents
(whether or not designated by a number or word or words added before or after
the title Vice President), its Treasurer or an Assistant Treasurer under its
corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.

        No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby has
been countersigned by the manual signature of the Warrant Agent. Such signature
by the Warrant Agent upon any Warrant Certificate executed by the Company shall
be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

        In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution of
such Warrant Certificate, shall be the proper officers of the Company, although
at the date of the execution of this Agreement any such person was not such
officer.

        [IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED SECURITIES WITH WARRANTS
WHICH ARE NOT IMMEDIATELY DETACHABLE--prior to the Detachable Date, the
registered owner of the Offered Security to which such Warrant Certificate was
initially attached (or the bearer if the Offered Securities are in bearer form)
and after such Detachable Date] the bearer of such Warrant Certificate.]

        [IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities]. The Company will, or will cause the registrar of the
Offered Securities to,


                                        3


<PAGE>   4


make available at all times to the Warrant Agent such information as to holders
of the Offered Securities with Warrants as may be necessary to keep the Warrant
Agent's records up-to-date.]

        SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant Certificates
evidencing the right to purchase up to $[____________] principal amount of
Warrant Securities (except as provided in Section 2.03(c), 3.02 and 4.01) may be
executed by the Company and delivered to the Warrant Agent upon the execution of
this Agreement or from time to time thereafter. The Warrant Agent shall, upon
receipt of Warrant Certificates duly executed on behalf of the Company and upon
order of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to $[_______] aggregate principal amount
of Warrant Securities and shall deliver such Warrant Certificates to or upon the
order of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Warrant Certificates [IF REGISTERED WARRANTS--or in
connection with their transfer] as hereinafter provided, or as provided in
Section 2.03(c).

                                   ARTICLE II.

                WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS

        SECTION 2.01. WARRANT PRICE. During the period from and including
[___________], 20[__], to and including [___________], 20[__], the exercise
price of each Warrant will be [[___]% of the principal amount of the Warrant
Securities] [$[_____] plus [accrued amortization of the original issue discount]
[accrued interest] from the most recently preceding [________]]. [During the
period from [___________], 20[__], to and including [___________], 20[__], the
exercise price of each Warrant will be [[___]% of the principal amount of the
Warrant Securities] [$[_____] plus [accrued amortization of the original issue
discount] [accrued interest] from the most recently preceding [___________]].]
[In each case, the original issue discount will be amortized at a [___]% annual
rate, computed on an annual basis using a 360-day year consisting of twelve
30-day months.] Such purchase price of Warrant Securities is referred to in this
Agreement as the "Warrant Price". [The original issue discount for each $[____]
principal amount of Warrant Securities is
$[---------].]

        SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[[___________], 20[__]] and at or before 5:00 p.m. New York City time on
[___________], 20[__] or such later date as may be selected by the Company, in a
written statement to the Warrant Agent and with notice to the holders of
Warrants (such date of expiration being called the "Expiration Date"). Each
Warrant not exercised at or before 5:00 p.m. New York City time on the
Expiration Date shall become void and all rights of the holder of the Warrant
Certificate evidencing such Warrant under this Agreement shall cease.

        SECTION 2.03. EXERCISE OF WARRANTS. (a) During the period specified in
Section 2.02, any whole number of Warrants may be exercised [, subject to
Section 2.03(c),] by delivery to the Warrant Agent of the Warrant Certificate
evidencing such Warrant, with the form


                                        4


<PAGE>   5


of election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed, and by paying in full
[in lawful money of the United States of America] [in the foreign currency or
currency unit in which the Warrant Securities are denominated] by bank wire
transfer in immediately available funds the Warrant Price for each Warrant
exercised to the principal corporate trust office of the Warrant Agent [or at
[________]]. The date on which the duly completed and executed Warrant
Certificate and payment in full of the Warrant Price is received by the Warrant
Agent shall be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the Warrant
Price in an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a wire transfer for the
exercise of Warrants is received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephone advice to the Company in
writing.

               (b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant Certificates
evidencing such Warrants with respect to delivery of the Warrant Securities to
which such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise and (iv) such other information as the Company or the Trustee
shall reasonably require.

               (c) As soon as practicable after the exercise of any Warrant, the
Company shall issue, pursuant to the Indenture, in authorized denomination to or
upon the order of the holder of the Warrant Certificate evidencing such Warrant,
the Warrant Securities to which such holder is entitled, [in fully registered
form, registered in such name or names] [in bearer form,] as may be directed by
such holder [; provided, however, that the Company shall deliver Warrant
Securities in bearer form only outside the United States of America (including
the states and District of Columbia) and its possessions (including Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island, and Northern Mariana
Islands) and only upon delivery from the person entitled to physical delivery of
such Warrant Securities of an executed certification substantially in the form
of Annex B hereto]. If fewer than all of the Warrants evidenced by such Warrant
Certificate are exercised, the Company shall execute (attested and under seal as
aforesaid), and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing the number of such
Warrants remaining unexercised, unless sufficient time does not exist before the
Expiration Date to exercise such Warrants in accordance with the provisions of
this Agreement.

               (d) The Company shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.


                                        5


<PAGE>   6



                                  ARTICLE III.

                 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
                             OF WARRANT CERTIFICATES

        SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including without limitation the right to receive the
payment of principal of or premium, if any, or interest, if any, on Warrant
Securities or to enforce any of the covenants in the Indenture except to the
extent that in connection with any modification of the Indenture pursuant to the
provisions of Section [___] thereof a holder of any unexpired Warrant shall be
deemed to be the holder of the principal amount of Warrant Securities issuable
upon exercise of such Warrant.

        SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser or
holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and evidencing a like number of Warrants. Upon the issuance of
any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Section are exclusive and shall preclude (to
the extent lawful) any and all other rights or remedies notwithstanding any law
or statute existing or hereinafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

        SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the Trustee, the holder
of any Warrant Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce
or otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.


                                        6


<PAGE>   7


        [IF WARRANT SECURITIES ARE EXCHANGEABLE OR CONVERTIBLE--

        SECTION 3.04. CONVERSION OR EXCHANGE. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
[title of security], the full number of shares of such [title of security] then
issuable upon exchange or conversion of all Warrant Securities.]

                                   ARTICLE IV.

                  EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

        SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED
INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or [__________]], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so surrendered.
[IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS IMPOSED WITH
RESPECT TO SUCH EXCHANGES)--After the Detachable Date, upon] [Upon] surrender at
the principal corporate trust office of the Warrant Agent [or [__________]],
Warrant Certificates in bearer form may be exchanged for Warrant Certificates in
registered form evidencing a like number of Warrants.] [IF REGISTERED
WARRANTS--The Warrant Agent shall keep, at its corporate trust office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates upon surrender of the Warrant Certificates to the Warrant Agent at
its principal corporate trust office [or [___________]] for exchange [or
registration of transfer], properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent.] The Company may
require payment of a service charge for any exchange [or registration of
transfer] of Warrant Certificates, and may require payment of a sum sufficient
to cover any stamp or other tax or other governmental charge that may be imposed
in connection with any such exchange [or registration of transfer]. Whenever any
Warrant Certificates are so surrendered for exchange [or registration of
transfer] an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange [or
registration of transfer] which will result in the issuance of a Warrant
Certificate


                                        7


<PAGE>   8


evidencing a fraction of a Warrant or a number of full Warrants and a fraction
of a Warrant. All Warrant Certificates issued upon any exchange [or registration
of transfer] of Warrant Certificates shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such exchange
[or registration of transfer].

        SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Subject to
Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding. [IF REGISTERED WARRANTS--Every
holder of a Warrant Certificate, by accepting the same, consents and agrees with
the Company, the Warrant Agent and with every subsequent holder of such Warrant
Certificate that until the transfer of the Warrant Certificate is registered on
the books of the Warrant Agent [or the register of the Offered Securities prior
to the Detachable Date], the Company and the Warrant Agent [or the registrar of
the Offered Securities prior to the Detachable Date] may treat such registered
holder as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any notice
to contrary notwithstanding.]

        SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise of
the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.

                                   ARTICLE V.

                          CONCERNING THE WARRANT AGENT

        SECTION 5.01. WARRANT AGENT. The Company hereby appoints the Warrant
Agent as warrant agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth and
the Warrant Agent hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it in
writing. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.


                                        8


<PAGE>   9


        SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:

                (a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent hereunder, as well as the
costs and expenses of defending against any claim of such liability.

                (b) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any fiduciary obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.

                (c) DOCUMENTS. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.

                (d) CERTAIN TRANSACTIONS. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants and/or Warrant Securities and/or Offered Securities, with the same
rights that it or they would have if it were not the Warrant Agent hereunder,
and, to the extent permitted by applicable law, it or they may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depositary, trustee or agent for, any committee or body of holders of
Warrant Securities, Offered Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder. Nothing in this Agreement
shall be deemed to prevent the Warrant Agent from acting as Trustee under the
Indenture or as trustee under any other indenture with the Company.

                (e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the Warrant
Certificates.

                (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall transfer
to the Company interest on any monies at any time received by it pursuant to any
of the provisions of this Agreement or of the Warrant Certificates.

                (g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or in
the Warrant


                                        9


<PAGE>   10


Certificates (except as to the Warrant Agent's countersignature thereon), all of
which are made solely by the Company.

                (h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated
to perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which might involve it in any expense or liability, the payment of which within
a reasonable time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use
by the Company of any of the Warrant Certificates countersigned and delivered by
it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent shall
have no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to initiate
or attempt to initiate any proceedings at law or otherwise, or, except as
provided in Section 6.02 hereof, to make any demand upon the Company.

        SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all the Warrant Certificates are no longer exercisable.

                (b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which it desires its resignation to become effective; provided that
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent hereunder
may be removed at any time by the filing with it of an instrument in writing
signed by or on behalf of the Company and specifying such removal and the date
upon which such removal shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligations of the Company under Section 5.02(a) shall continue to
the extent set forth therein notwithstanding the resignation or removal of the
Warrant Agent.

                (c) In case at any time the Warrant Agent shall resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or shall file a petition seeking relief under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any other
applicable Federal or state bankruptcy law or similar law or make an assignment
for the benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended,


                                       10


<PAGE>   11


or under any other applicable Federal or state bankruptcy or similar law, or if
any public officer shall have taken charge or control of the Warrant Agent or of
its property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent
and acceptance by the successor Warrant Agent of such appointment, the Warrant
Agent shall cease to be Warrant Agent hereunder.

                (d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.

                (e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.

                                   ARTICLE VI.

                                  MISCELLANEOUS

        SECTION 6.01. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.

        SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.

        SECTION 6.03. ADDRESSES. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to the Warrant
Agent at its principal corporate trust office at [______________________],
[_________________________], Attention: [_______________________], and any
communication from the Warrant Agent to the


                                       11


<PAGE>   12


Company with respect to this Agreement shall be addressed to Arrow Electronics,
Inc., 25 Hub Drive, Melville, New York 11747 Attention: [____________] or such
other address as shall be specified in writing by the Warrant Agent or the
Company.

        SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to holders of
Warrants which by any provisions of this Agreement is required or permitted to
be given shall be given [IF REGISTERED WARRANTS--by first class mail, postage
prepaid, at such holder's address as appears on the books of the Warrant Agent
[or on the register of the Offered Securities prior to the Detachable Date]] [IF
BEARER WARRANTS--by publication at least once in a daily morning newspaper in
New York City [, in London] [and in [________]].

        SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.

        SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus with an accompanying prospectus
supplement relating to the Warrant Securities, and the Warrant Agent agrees that
upon the exercise of any Warrant, the Warrant Agent will deliver to the holder
of the Warrant Certificate evidencing such Warrant prior to or concurrently with
the delivery of the Warrant Securities issued upon such exercise, a copy of such
prospectus and prospectus supplement.

        SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and state
laws and any applicable laws of other jurisdictions (including without
limitation a registration statement in respect of the Warrants and Warrant
Securities under the Securities Act of 1933) which may be or become required in
connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrant Securities issued upon exercise of the Warrants or upon
the expiration of the period during which the Warrants are exercisable.

        SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.

        SECTION 6.09. HEADINGS. The descriptive headings of the several Articles
or Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

        SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.


                                       12


<PAGE>   13


        SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent and the Company for inspection by the holder of any Warrant
Certificate. The Warrant Agent or the Company may require such holder to submit
his Warrant Certificate for inspection by it.

        SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will pay
all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.


                                       13


<PAGE>   14


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

                                    ARROW ELECTRONICS, INC.


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




                                    [NAME OF WARRANT AGENT]


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


                                       14


<PAGE>   15


                                     ANNEX A
                              TO WARRANT AGREEMENT


                          [FORM OF WARRANT CERTIFICATE]

                          [FACE OF WARRANT CERTIFICATE]


[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: PRIOR TO [___________], 20[___] THIS WARRANT CERTIFICATE CANNOT BE
TRANSFERRED OR EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITIES].]

                EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
                            AGENT AS PROVIDED HEREIN

                              WARRANTS TO PURCHASE
                                [DEBT SECURITIES]

                                    Issued by

                             ARROW ELECTRONICS, INC.


VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON [___________], 20[___]

[No.]___________________________________________________________ Warrants

        This certifies that [the bearer is the] [[__________] or registered
assigns is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any time
[after 5:00 p.m. New York City time on [___________], 20[__] and] at or before
5:00 p.m. New York City time on [___________], 20[__] (or such later date as may
be selected by Arrow Electronics, Inc., a New York corporation (the "Company")
with notice to the holder hereof as provided in the Warrant Agreement (as
hereinafter defined)), $[____] principal amount of [Title of Warrant Securities]
(the "Warrant Securities") of the Company, to be issued under the Indenture (as
hereinafter defined), on the following basis: during the period from and
including [___________], 20[___], the exercise price of each Warrant will be
[[___]% of the principal amount of the Warrant Securities] [$[______] plus
[accrued amortization of the original issue discount] [accrued interest] from
the most recently preceding [__________]] [; and during the period from
[___________], 20[__], to and including [___________], 20[__], the exercise
price of each Warrant will be [[___]% of the principal amount of the Warrant
Securities] [$[_____] plus [accrued amortization of the original issue discount]
[accrued interest] from the most recently preceding [__________]] [; provided


                                       15


<PAGE>   16


that in each case, the original issue discount will be amortized at a [___]%
annual rate, computed on an annual basis, using a 360-day year consisting of
twelve 30-day months)] (the "Warrant Price"). [The original issue discount for
each $[1,000] principal amount of Warrant Securities is $[__________].] The
holder may exercise the Warrants evidenced hereby by delivery to the Warrant
Agent (as hereinafter defined) of this Warrant Certificate, with the form of
election to purchase on the reverse hereof properly completed and duly executed
and by paying in full [in lawful money of the United States of America] [in the
foreign currency or currency unit in which the Warrant Securities are
denominated] by bank wire transfer in immediately available funds the Warrant
Price for each Warrant exercised to the warrant agent, such delivery and payment
to be made at the principal corporate trust office of [name of Warrant Agent] or
its successor as warrant agent (the "Warrant Agent") [,or [________]], currently
at the address specified on the reverse hereof, and upon compliance with and
subject to the conditions set forth herein and the Warrant Agreement.

        Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities [in registered form in denominations
of $[_____] and any integral multiples thereof] [in bearer form in the
denomination of $[_____]] [or both]. Upon any exercise of fewer than all of the
Warrants evidenced by this Warrant Certificate, there shall be issued to the
holder hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised, unless sufficient time does not exist to exercise such
Warrants in accordance with the provisions of the Warrant Agreement before the
Warrants become void.

        This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of [___________], 20[__] (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the principal corporate trust
office of the Warrant Agent specified on the reverse hereof [and at
[____________]].

        The Warrant Securities to be issued and delivered upon the exercise of
the Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of [___________], [____] (the
"Indenture"), between the Company and [___________], as Trustee (such Trustee
and any successor to such Trustee being hereinafter referred to as the
"Trustee"), and will be subject to the terms and provisions contained in the
Indenture. Copies of the Indenture and the form of the Warrant Securities are on
file at the principal corporate trust office of the Trustee in New York City
[and at
- ------------------].

        [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to [___________], 20[__], this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
(the "Offered Securities") to which this Warrant Certificate was initially
attached, and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Offered Securities. After such date, this] [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate
may be registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or


                                       16


<PAGE>   17


[__________]] by the registered owner or his assigns, in person or by his
attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.

        [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
office of the Warrant Agent [or [_________]] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].

        This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive payments of principal, of premium, if any, or interest, if
any, on the Warrant Securities or to enforce any of the covenants of the
Indenture, except to the extent that in connection with any modification of the
Indenture pursuant to the provisions of Section [__] thereof a holder of any
unexpired Warrant shall be deemed to be the holder of the principal amount of
Warrant Securities issuable upon exercise of such Warrant.

        This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any conflict
of laws provisions.

        The Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.

        Dated as of [___________], 20[__].


                                            ARROW ELECTRONICS, INC.

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


                                            [SEAL]


                                            Attest:

                                            -----------------------------------
                                            [Assistant] Secretary


                                       17


<PAGE>   18


                                            [NAME OF WARRANT AGENT],
                                               As Warrant Agent


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


                                       18


<PAGE>   19




                        (REVERSE OF WARRANT CERTIFICATE)

                      INSTRUCTIONS FOR EXERCISE OF WARRANT

        To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal corporate
trust office at [insert address of Warrant Agent], Attention: [______________],
[or [______________________________]] which wire transfer must specify the name
of the holder and the number of Warrants exercised by such holder. In addition,
the holder must complete the information required below and present this Warrant
Certificate in person or by mail (registered mail is recommended) to the Warrant
Agent at the addresses set forth below. This Warrant Certificate, completed and
duly executed, must be received by the Warrant Agent together with such wire
transfer. [If the undersigned is requesting delivery of Warrant Securities in
bearer form, the person entitled to physical delivery of such Warrant Securities
will be required to deliver a certificate (copies of which may be obtained from
the Warrant Agent [or [_____________]]) certifying that such Warrant Securities
are not being acquired by or on behalf of a U.S. person or for resale to a U.S.
person unless such U.S. person is qualified under United States tax laws and
regulations.]

                     TO BE EXECUTED UPON EXERCISE OF WARRANT

        The undersigned hereby irrevocably elects to exercise ________ Warrants,
evidenced by this Warrant Certificate, to purchase $______ principal amount of
the [Title of Warrant Securities] (the "Warrant Securities") of Arrow
Electronics, Inc. and represents that he has tendered payment for such Warrant
Securities by bank wire transfer in immediately available funds to the order of
Arrow Electronics, Inc., in care of [insert name and address of Warrant Agent],
in the amount of $______ in accordance with the terms hereof. The undersigned
requests that said principal amount of Warrant Securities be in [bearer form in
the authorized denominations] [fully registered form in the authorized
denominations, registered in such names and delivered], all as specified in
accordance with the instructions set forth below.
        If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.


                                       19


<PAGE>   20


Dated:


                                            Name
- -----------------------------------              ------------------------------
                                                         (Please Print)
                                            Address
- -----------------------------------                ----------------------------
(Insert Social Security or Other
Identifying Number of Holder)
                                            -----------------------------------

                                            Signature
                                                     --------------------------


                                       20


<PAGE>   21


The Warrants evidenced hereby may be exercised at the following addresses:

By hand at
               ----------------------------------------------------------------

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

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

By mail at
               ----------------------------------------------------------------

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

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


                                       21


<PAGE>   22


                             [IF REGISTERED WARRANT]

                                   ASSIGNMENT

              (FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES
                     TO TRANSFER WARRANTS EVIDENCED HEREBY)

      FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto

                                            Please insert social security
                                            or other identifying number.


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

- ----------------------------------          ---------------------------------
Please print name and address
  including zip code)

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

The Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________________________, Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.

Dated:



                                    --------------------------------------
                                                  Signature
                                    (Signature must conform in all respects to
                                    the name of the holder as specified on the
                                    face of this Warrant Certificate and must
                                    bear a signature guarantee by a bank, trust
                                    company or member broker of the New York,
                                    Chicago or Pacific Stock Exchange.)

Signature Guaranteed:

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


                                       22


<PAGE>   23


                                     ANNEX B
                              TO WARRANT AGREEMENT


          FORM OF CERTIFICATE FOR DELIVERY OF BEARER WARRANT SECURITIES

                                [DEBT SECURITIES]

                                    Issued by


                             ARROW ELECTRONICS, INC.


To:  Arrow Electronics, Inc.


        This certificate is submitted in connection with the request of the
undersigned that you deliver $_____ principal amount of [Title of Warrant
Securities] (the "Warrant Securities") in bearer form upon exercise of Warrants.

        The undersigned hereby certifies that as of the date hereof (the date of
delivery to the undersigned of the Warrant Securities), the Warrant Securities
which are to be delivered to the undersigned in bearer form are not being
acquired by or for the account or benefit of a United States person, or for
offer to resell or for resale to a United States person or any person who is
within the United States or, if any beneficial interest in the Warrant
Securities is being acquired by a United States person, such United States
person (i) is a foreign branch of a United States financial institution (as
defined in U.S. Treas. Reg. section 1.165-12(c)(1)(v)) which has provided to the
person from which it purchased the obligation a certificate stating that it
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986 and the regulations thereunder (a "qualifying
foreign branch"), (ii) acquired such securities through a qualifying foreign
branch and is holding the obligation through such financial institution or (iii)
is a financial institution holding for purposes of resale during the restricted
period (as defined in U.S. Treas. Reg. section 1.163-5(c)(2)(i)(D)(7)), which
financial institution has not acquired the obligation for the purposes of resale
directly or indirectly to a United States person or to a person within the
United States. In addition, the undersigned hereby certifies that the above-
referenced Warrant Securities are not being acquired by or for the account or
benefit of a "U.S. person", as the term is defined in Regulation S under the
United States Securities Act of 1933, as amended. If the undersigned is a
clearing organization, the undersigned represents that this certificate is based
on statements provided to it by its member organizations. If the undersigned is
a dealer, the undersigned agrees to obtain a similar certificate from each
person entitled to delivery of any of the Warrant Securities in bearer form
purchased from it. Notwithstanding the foregoing, if the undersigned has actual
knowledge that the information contained in such certificate is false, the
undersigned will not deliver a Warrant


                                       23


<PAGE>   24


Security in bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the undersigned. The
undersigned will be deemed to have actual knowledge that the beneficial owner is
a United States person for this purpose if the undersigned has a United States
address for the beneficial owner of the Security.
        As used herein, "United States" means the United States of America
(including the states and the District of Columbia) and its possessions,
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Islands, and Northern Mariana Islands; "United States person" means an
individual who is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source; and a "clearing organization" means an entity which is in the
business of holding obligations for member organizations and transferring
obligations among such members by credit or debit to the account of a member
without the necessity of physical delivery of the obligation.
        The undersigned understands that this certificate may be required in
connection with United States tax laws and regulations. The undersigned
irrevocably authorizes you to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings with respect to the
matters covered by this certificate.




                                        ---------------------------------------
                                             (Signature)


Dated:



                                        ---------------------------------------
                                             (Please print name)
Address:


                                       24




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>7
<FILENAME>y42939a1ex4-5.txt
<DESCRIPTION>FORM OF WARRANT AGREEMENT
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 4.5












                             ARROW ELECTRONICS, INC.

                                       and

                            [NAME OF WARRANT AGENT],
                                  Warrant Agent


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



                       WARRANT AGREEMENT [PREFERRED STOCK]

                        Dated as of [___________], 20[__]



<PAGE>   2




        WARRANT AGREEMENT dated as of [___________], 20[__] , between ARROW
ELECTRONICS, INC., a New York corporation (the "Company"), and [_____________],
as warrant agent (the "Warrant Agent", which term includes any successor warrant
agent hereunder).

        [WHEREAS the Company proposes to sell [title of Securities being
offered] (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase up to [____] shares
of the [title] Preferred Stock of the Company (the "Warrant Securities"), having
the terms which shall be set forth in the Certificate of Designation relating
thereto, such warrant certificates and other warrant certificates issued
pursuant to this Agreement being called the "Warrant Certificates"; and

        WHEREAS the Company desires that the Warrant Agent act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced.

        NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

                                   ARTICLE I.

                 ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY
                             OF WARRANT CERTIFICATES

        SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially issued
in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after [___________], 20[__] (the "Detachable
Date")] [and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase up to [_________] shares of the
Warrant Securities.

        SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Warrant
Certificates, whenever issued, shall be in [bearer] [or] [registered] form [or
both] substantially in the form set forth in Annex A hereto, shall be dated and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or engraved thereon as
the officers of the Company executing the same may approve (execution thereof to
be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange on which the Warrants may be listed, or to conform to
common usage. The Warrant Certificates shall be signed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President, its
Chief Operating Officer, its Chief Financial Officer,


                                        2


<PAGE>   3


one of its Vice Presidents (whether or not designated by a number or word or
words added before or after the title Vice President), its Treasurer or an
Assistant Treasurer under its corporate seal and attested by its Secretary or
one of its Assistant Secretaries. Such signatures may be manual or facsimile
signatures of such authorized officers and may be imprinted or otherwise
reproduced on the Warrant Certificates. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.

        No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby has
been countersigned by the manual signature of the Warrant Agent. Such signature
by the Warrant Agent upon any Warrant Certificate executed by the Company shall
be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

        In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution of
such Warrant Certificate, shall be the proper officers of the Company, although
at the date of the execution of this Agreement any such person was not such
officer.

        [IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED SECURITIES WITH WARRANTS
WHICH ARE NOT IMMEDIATELY DETACHABLE--prior to the Detachable Date, the
registered owner of the Offered Security to which such Warrant Certificate was
initially attached (or the bearer if the Offered Securities are in bearer form)
and after such Detachable Date] the bearer of such Warrant Certificate.]

        [IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities]. The Company will, or will cause the registrar of the
Offered Securities to, make available at all times to the Warrant Agent such
information as to holders of the Offered Securities with Warrants as may be
necessary to keep the Warrant Agent's records up-to-date.

        SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant Certificates
evidencing the right to purchase up to [__________] shares of Warrant Securities
(except as provided in Section 2.03(c), 3.02 and 4.01) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Agreement
or from time to time thereafter. The Warrant Agent shall, upon receipt of
Warrant Certificates duly executed on behalf of the Company and upon order of
the Company, countersign Warrant Certificates evidencing Warrants representing
the right to purchase up to [__________] shares of Warrant Securities and shall


                                        3


<PAGE>   4


deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate is
issued in exchange or substitution for one or more previously countersigned
Warrant Certificates [IF REGISTERED WARRANTS--or in connection with their
transfer] as hereinafter provided, or as provided in Section 2.03(c).

                                   ARTICLE II.

                WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS

        SECTION 2.01. WARRANT PRICE. During the period from and including
[___________], 20[__], to and including [___________], 20[__], the exercise
price of each Warrant will be $[_____] per share of the Warrant Securities.
[During the period from [___________], 20[__], to and including [___________],
20[__], the exercise price of each Warrant will be $[______] per share.] Such
purchase price of Warrant Securities is subject to Section 2.4 and is referred
to in this Agreement as the "Warrant Price".


        SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[[___________], 20[__]] and at or before 5:00 p.m. New York City time on
[___________], 20[__] or such later date as may be selected by the Company, in a
written statement to the Warrant Agent and with notice to the holders of
Warrants (such date of expiration being called the "Expiration Date"). Each
Warrant not exercised at or before 5:00 p.m. New York City time on the
Expiration Date [(an "Expired Unexercised Warrant")] shall become void and all
rights of the holder of the Warrant Certificate evidencing such Warrant under
this Agreement shall cease.


        SECTION 2.03. EXERCISE OF WARRANTS. (a) During the period specified in
Section 2.02, any whole number of Warrants may be exercised by delivery to the
Warrant Agent of the Warrant Certificate evidencing such Warrant, with the form
of election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed, and by paying in full
[in lawful money of the United States of America] [in the foreign currency or
currency unit in which the Warrant Securities are denominated] by bank wire
transfer in immediately available funds the Warrant Price for each Warrant
exercised to the principal corporate trust office of the Warrant Agent [or at
[________]]. The date on which the duly completed and executed Warrant
Certificate and payment in full of the Warrant Price is received by the Warrant
Agent shall be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the Warrant
Price in an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a wire transfer for the
exercise of Warrants is received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephone advice to the Company in
writing.

               (b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder


                                        4


<PAGE>   5


of the Warrant Certificates evidencing such Warrants with respect to delivery of
the Warrant Securities to which such holder is entitled upon such exercise,
(iii) delivery of Warrant Certificates evidencing the balance, if any, of the
Warrants remaining after such exercise and (iv) such other information as the
Company shall reasonably require.

               (c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which such holder
is entitled, in fully registered form, registered in such name or names as may
be directed by such holder. If fewer than all of the Warrants evidenced by such
Warrant Certificate are exercised, the Company shall execute (attested and under
seal as aforesaid), and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised, unless sufficient time does not
exist before the Expiration Date to exercise such Warrants in accordance with
the provisions of this Agreement.

               (d) The Company shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.

        SECTION 2.4. WARRANT PRICE ADJUSTMENT. [Here insert warrant price
adjustment provisions to protect against dilution.]


                                  ARTICLE III.

                 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
                             OF WARRANT CERTIFICATES

        SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive any
dividend or payment on Warrant Securities.

        SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser or
holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and evidencing a like number of Warrants. Upon the issuance of
any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered


                                        5


<PAGE>   6


pursuant to this Section in lieu of any lost, stolen or destroyed Warrant
Certificate shall represent an additional contractual obligation of the Company,
whether or not the lost, stolen or destroyed Warrant Certificate shall be at any
time enforceable by anyone, and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any law or statute existing or
hereinafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.

        SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce or otherwise
in respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.

        SECTION 3.04. RESERVATION OF SHARES. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
[title] Preferred Stock, for the purpose of effecting the exercise of the
Warrants, the full number of shares of [title] Preferred Stock then issuable
upon the exercise of all outstanding Warrants, and the Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized [title of security], for the purpose of effecting any exchange or
conversion of the Warrant Securities, the full number of shares of such [title
of security] issuable upon exchange or conversion of all Warrant Securities.

                                   ARTICLE IV.

                  EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

        SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED
INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or [__________]], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so surrendered.
[IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS IMPOSED WITH
RESPECT TO SUCH


                                        6


<PAGE>   7


EXCHANGES)--After the Detachable Date, upon] [Upon] surrender at the principal
corporate trust office of the Warrant Agent [or [__________]], Warrant
Certificates in bearer form may be exchanged for Warrant Certificates in
registered form evidencing a like number of Warrants.] [IF REGISTERED
WARRANTS--The Warrant Agent shall keep, at its corporate trust office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates upon surrender of the Warrant Certificates to the Warrant Agent at
its principal corporate trust office [or [________]] for exchange [or
registration of transfer], properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent.] The Company may
require payment of a service charge for any exchange [or registration of
transfer] of Warrant Certificates, and may require payment of a sum sufficient
to cover any stamp or other tax or other governmental charge that may be imposed
in connection with any such exchange [or registration of transfer]. Whenever any
Warrant Certificates are so surrendered for exchange [or registration of
transfer] an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange [or
registration of transfer] which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or
registration of transfer] of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificates surrendered for such
exchange [or registration of transfer].

        SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Subject to
Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding. [IF REGISTERED WARRANTS--Every
holder of a Warrant Certificate, by accepting the same, consents and agrees with
the Company, the Warrant Agent and with every subsequent holder of such Warrant
Certificate that until the transfer of the Warrant Certificate is registered on
the books of the Warrant Agent [or the register of the Offered Securities prior
to the Detachable Date], the Company and the Warrant Agent [or the registrar of
the Offered Securities prior to the Detachable Date] may treat such registered
holder as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any notice
to contrary notwithstanding.]

        SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise of
the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly


                                        7


<PAGE>   8


cancelled by the Warrant Agent and shall not be reissued and, except as
expressly permitted by this Agreement, no Warrant Certificate shall be issued
hereunder in exchange or in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of cancelled Warrant Certificates
in a manner satisfactory to the Company.

                                   ARTICLE V.

                          CONCERNING THE WARRANT AGENT

        SECTION 5.01. WARRANT AGENT. The Company hereby appoints the Warrant
Agent as warrant agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth and
the Warrant Agent hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it in
writing. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.

        SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:

                (a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent hereunder, as well as the
costs and expenses of defending against any claim of such liability.

                (b) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any fiduciary obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.

                (c) DOCUMENTS. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.

                (d) CERTAIN TRANSACTIONS. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants and/or Warrant Securities and/or Offered Securities, with the same
rights that it or they would have if it


                                        8


<PAGE>   9


were not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee or agent
for, any committee or body of holders of Warrant Securities, Offered Securities
or other obligations of the Company as freely as if it were not the Warrant
Agent hereunder.

                (e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the Warrant
Certificates.

                (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall transfer
to the Company interest on any monies at any time received by it pursuant to any
of the provisions of this Agreement or of the Warrant Certificates.

                (g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or in
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.

                (h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated
to perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which might involve it in any expense or liability, the payment of which within
a reasonable time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use
by the Company of any of the Warrant Certificates countersigned and delivered by
it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent shall
have no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to initiate
or attempt to initiate any proceedings at law or otherwise, or, except as
provided in Section 6.02 hereof, to make any demand upon the Company.

        SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all the Warrant Certificates are no longer exercisable.

                (b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which it desires its resignation to become effective; provided that
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent hereunder
may be removed at any time by the filing with it of an instrument in writing
signed by or on behalf of the Company and specifying such removal and the date
upon which such removal shall become effective. Such resignation or removal
shall take effect upon


                                        9


<PAGE>   10


the appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The obligations
of the Company under Section 5.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.

                (c) In case at any time the Warrant Agent shall resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or shall file a petition seeking relief under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any other
applicable Federal or state bankruptcy law or similar law or make an assignment
for the benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or state bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.

                (d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.

                (e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.


                                       10


<PAGE>   11


                                   ARTICLE VI.

                                  MISCELLANEOUS

        SECTION 6.01. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.

        SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.

        SECTION 6.03. ADDRESSES. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to the Warrant
Agent at its principal corporate trust office at [______________________],
[_________________________], Attention: [_________________________], and any
communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Arrow Electronics, Inc., 25 Hub Drive, Melville,
New York 11747 Attention: [____________] or such other address as shall be
specified in writing by the Warrant Agent or the Company.

        SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to holders of
Warrants which by any provisions of this Agreement is required or permitted to
be given shall be given [IF REGISTERED WARRANTS--by first class mail, postage
prepaid, at such holder's address as appears on the books of the Warrant Agent
[or on the register of the Offered Securities prior to the Detachable Date]] [IF
BEARER WARRANTS--by publication at least once in a daily morning newspaper in
New York City [, in London] [and in [________]].

        SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.

        SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus with an accompanying prospectus
supplement relating to the Warrant Securities, and the Warrant Agent agrees that
upon the exercise of any Warrant, the Warrant Agent will deliver to the holder
of the Warrant Certificate evidencing such Warrant prior to or concurrently with
the delivery of the Warrant Securities issued upon such exercise, a copy of such
prospectus and prospectus supplement.

        SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities


                                       11


<PAGE>   12


acts filings under United States Federal and state laws and any applicable laws
of other jurisdictions (including without limitation a registration statement in
respect of the Warrants and Warrant Securities under the Securities Act of 1933)
which may be or become required in connection with the issuance, sale, transfer
and delivery of the Warrant Certificates, the exercise of the Warrants, the
issuance, sale, transfer and delivery of the Warrant Securities issued upon
exercise of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.

        SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.

        SECTION 6.09. HEADINGS. The descriptive headings of the several Articles
or Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

        SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.

        SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent and the Company for inspection by the holder of any Warrant
Certificate. The Warrant Agent or the Company may require such holder to submit
his Warrant Certificate for inspection by it.

        SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will pay
all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.


                                       12


<PAGE>   13


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

                                           ARROW ELECTRONICS, INC.


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




                                           [NAME OF WARRANT AGENT]


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


                                       13


<PAGE>   14


                                     ANNEX A
                              to Warrant Agreement

                          [FORM OF WARRANT CERTIFICATE]

                          [FACE OF WARRANT CERTIFICATE]


[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: PRIOR TO [___________], 20[___] THIS WARRANT CERTIFICATE CANNOT BE
TRANSFERRED OR EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITIES].]

                EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
                            AGENT AS PROVIDED HEREIN

                              WARRANTS TO PURCHASE
                             [TITLE] PREFERRED STOCK

                                    Issued by

                             ARROW ELECTRONICS, INC.


VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON [___________], 20[___]

[No.] ___________________________________________________ Warrants

        This certifies that [the bearer is the] [[__________] or registered
assigns is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any time
[after 5:00 p.m. New York City time on [___________], 20[__] and] at or before
5:00 p.m. New York City time on [___________], 20[__] (or such later date as may
be selected by Arrow Electronics, Inc., a New York corporation (the "Company")
with notice to the holder hereof as provided in the Warrant Agreement (as
hereinafter defined)), [_______] shares of the [title] Preferred Stock (the
"Warrant Securities") of the Company, on the following basis: during the period
from and including [___________], 20[___], the exercise price of each Warrant
will be $[______] per share of [title] Preferred Stock[; during the period from
[___________], 20[__], to and including [___________], 20[__], the exercise
price of each Warrant will be $[______] per share] (the "Warrant Price"). The
holder may exercise the Warrants evidenced hereby by delivery to the Warrant
Agent (as hereinafter defined) of this Warrant Certificate, with the form of
election to purchase on the reverse hereof properly completed and duly executed
and by paying in full [in lawful money of the United States of America] [in the
foreign currency or currency unit in which the Warrant Securities are
denominated] by bank wire transfer in immediately available funds the Warrant


                                       14


<PAGE>   15


Price for each Warrant exercised to the warrant agent, such delivery and payment
to be made at the principal corporate trust office of [name of Warrant Agent] or
its successor as warrant agent (the "Warrant Agent") [,or [___________]],
currently at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and the Warrant Agreement.

        Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities. Upon any exercise of fewer than all
of the Warrants evidenced by this Warrant Certificate, there shall be issued to
the holder hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised, unless sufficient time does not exist to exercise such
Warrants in accordance with the provisions of the Warrant Agreement before the
Warrants become void.

        This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of [___________], 20[__] (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the principal corporate trust
office of the Warrant Agent specified on the reverse hereof [and at
[__________]].

        [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to [___________], 20[__], this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
(the "Offered Securities") to which this Warrant Certificate was initially
attached, and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Offered Securities. After such date, this] [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate
may be registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or [__________]] by the registered
owner or his assigns, in person or by his attorney duly authorized in writing,
in the manner and subject to the limitations provided in the Warrant Agreement.

        [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
office of the Warrant Agent [or [_________]] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].


        [IF NYSE LISTED, INSERT--Warrants not exercised by 5 p.m. on the date
specified above ("Expired Unexercised Warrants") shall have a residual value of
one share of Preferred Stock of the Company per 100 Expired Unexercised
Warrants.]



                                       15


<PAGE>   16


        This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive any dividend payments on the Warrant Securities.

        This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any conflict
of laws provisions.

        The Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.

          Dated as of [___________], 20[__].



                                           ARROW ELECTRONICS, INC.

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


                                           [SEAL]


                                           Attest:

                                           -------------------------------------
                                           [Assistant] Secretary


                                           [NAME OF WARRANT AGENT],
                                             As Warrant Agent


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


                                       16


<PAGE>   17


                        (REVERSE OF WARRANT CERTIFICATE)

                      INSTRUCTIONS FOR EXERCISE OF WARRANT

        To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal corporate
trust office at [insert address of Warrant Agent], Attention: [______________],
[or [______________________________]] which wire transfer must specify the name
of the holder and the number of Warrants exercised by such holder. In addition,
the holder must complete the information required below and present this Warrant
Certificate in person or by mail (registered mail is recommended) to the Warrant
Agent at the addresses set forth below. This Warrant Certificate, completed and
duly executed, must be received by the Warrant Agent together with such wire
transfer.

                     TO BE EXECUTED UPON EXERCISE OF WARRANT

        The undersigned hereby irrevocably elects to exercise ________ Warrants,
evidenced by this Warrant Certificate, to purchase _________ shares of the
[title] Preferred Stock (the "Warrant Securities") of Arrow Electronics, Inc.
and represents that he has tendered payment for such Warrant Securities by bank
wire transfer in immediately available funds to the order of Arrow Electronics,
Inc., in care of [insert name and address of Warrant Agent], in the amount of
$______ in accordance with the terms hereof. The undersigned requests that said
number of shares of Warrant Securities be registered in such names and
delivered, all as specified in accordance with the instructions set forth below.

        If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.


                                       17


<PAGE>   18


Dated:

                                             Name
- -----------------------------------              -------------------------------
                                                        (Please Print)
                                             Address
- -----------------------------------                 ----------------------------
(Insert Social Security or Other
Identifying Number of Holder)
                                             -----------------------------------

                                             Signature
                                                      --------------------------


                                       18


<PAGE>   19




The Warrants evidenced hereby may be exercised at the following addresses:
By hand at
               ----------------------------------------------------------------

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

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


By mail at     ----------------------------------------------------------------

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

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


                                       19


<PAGE>   20




                             [IF REGISTERED WARRANT]

                                   ASSIGNMENT

              (FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES
                     TO TRANSFER WARRANTS EVIDENCED HEREBY)

      FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto

                                            Please insert social security
                                            or other identifying number.


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

- ---------------------------------           ---------------------------------
(Please print name and address
  including zip code)

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

The Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________________________, Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.

Dated:




                               --------------------------------------
                                           Signature
                               (Signature must conform in all respects to
                               the name of the holder as specified on the
                               face of this Warrant Certificate and must
                               bear a signature guarantee by a bank, trust
                               company or member broker of the New York,
                               Chicago or Pacific Stock Exchange.)

Signature Guaranteed:

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


                                       20




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.6
<SEQUENCE>8
<FILENAME>y42939a1ex4-6.txt
<DESCRIPTION>FORM OF WARRANT AGREEMENT
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 4.6












                             ARROW ELECTRONICS, INC.

                                       and

                            [NAME OF WARRANT AGENT],
                                  Warrant Agent


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



                        WARRANT AGREEMENT [COMMON STOCK]

                        Dated as of [___________], 20[__]



<PAGE>   2




        WARRANT AGREEMENT dated as of [___________], 20[__] , between ARROW
ELECTRONICS, INC., a New York corporation (the "Company"), and [_____________],
as warrant agent (the "Warrant Agent", which term includes any successor warrant
agent hereunder).

        [WHEREAS the Company proposes to sell [title of Securities being
offered] (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase up to [____] shares
of the Common Stock of the Company (the "Warrant Securities"), such warrant
certificates and other warrant certificates issued pursuant to this Agreement
being called the "Warrant Certificates"; and

        WHEREAS the Company desires that the Warrant Agent act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced.

        NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

                                   ARTICLE I.

                 ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY
                             OF WARRANT CERTIFICATES

        SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially issued
in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after [___________], 20[__] (the "Detachable
Date")] [and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase up to [_________] shares of the
Warrant Securities.

        SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Warrant
Certificates, whenever issued, shall be in [bearer] [or] [registered] form [or
both] substantially in the form set forth in Annex A hereto, shall be dated and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or engraved thereon as
the officers of the Company executing the same may approve (execution thereof to
be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange on which the Warrants may be listed, or to conform to
common usage. The Warrant Certificates shall be signed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President, its
Chief Operating Officer, its Chief Financial Officer, one of its Vice Presidents
(whether or not designated by a number or word or words added


                                        2


<PAGE>   3


before or after the title Vice President), its Treasurer or an Assistant
Treasurer under its corporate seal and attested by its Secretary or one of its
Assistant Secretaries. Such signatures may be manual or facsimile signatures of
such authorized officers and may be imprinted or otherwise reproduced on the
Warrant Certificates. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates.

        No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby has
been countersigned by the manual signature of the Warrant Agent. Such signature
by the Warrant Agent upon any Warrant Certificate executed by the Company shall
be conclusive evidence that the Warrant Certificate so countersigned has been
duly issued hereunder.

        In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution of
such Warrant Certificate, shall be the proper officers of the Company, although
at the date of the execution of this Agreement any such person was not such
officer.

        [IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED SECURITIES WITH WARRANTS
WHICH ARE NOT IMMEDIATELY DETACHABLE--prior to the Detachable Date, the
registered owner of the Offered Security to which such Warrant Certificate was
initially attached (or the bearer if the Offered Securities are in bearer form)
and after such Detachable Date] the bearer of such Warrant Certificate.]

        [IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities]. The Company will, or will cause the registrar of the
Offered Securities to, make available at all times to the Warrant Agent such
information as to holders of the Offered Securities with Warrants as may be
necessary to keep the Warrant Agent's records up-to-date.]

        SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant Certificates
evidencing the right to purchase up to [_______] shares of Warrant Securities
(except as provided in Section 2.03(c), 3.02 and 4.01) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Agreement
or from time to time thereafter. The Warrant Agent shall, upon receipt of
Warrant Certificates duly executed on behalf of the Company and upon order of
the Company, countersign Warrant Certificates evidencing Warrants representing
the right to purchase up to [_______] shares of Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original


                                        3


<PAGE>   4


issuance of the Warrant Certificates, the Warrant Agent shall countersign a
Warrant Certificate only if the Warrant Certificate is issued in exchange or
substitution for one or more previously countersigned Warrant Certificates [IF
REGISTERED WARRANTS--or in connection with their transfer] as hereinafter
provided, or as provided in Section 2.03(c).

                                   ARTICLE II.

                WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS

        SECTION 2.01. WARRANT PRICE. During the period from and including
[___________], 20[__], to and including [___________], 20[__], the exercise
price of each Warrant will be $[_____] per share of the Warrant Securities.
[During the period from [___________], 20[__], to and including [___________],
20[__], the exercise price of each Warrant will be $[______] per share.] Such
purchase price of Warrant Securities is subject to Section 2.04 and is referred
to in this Agreement as the "Warrant Price".


        SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[[___________], 20[__]] and at or before 5:00 p.m. New York City time on
[___________], 20[__] or such later date as may be selected by the Company, in a
written statement to the Warrant Agent and with notice to the holders of
Warrants (such date of expiration being called the "Expiration Date"). Each
Warrant not exercised at or before 5:00 p.m. New York City time on the
Expiration Date [(an "Expired Unexercised Warrant")] shall become void and all
rights of the holder of the Warrant Certificate evidencing such Warrant under
this Agreement shall cease.


        SECTION 2.03. EXERCISE OF WARRANTS. (a) During the period specified in
Section 2.02, any whole number of Warrants may be exercised by delivery to the
Warrant Agent of the Warrant Certificate evidencing such Warrant, with the form
of election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed, and by paying in full
[in lawful money of the United States of America] [in the foreign currency or
currency unit in which the Warrant Securities are denominated] by bank wire
transfer in immediately available funds the Warrant Price for each Warrant
exercised to the principal corporate trust office of the Warrant Agent [or at
[________]]. The date on which the duly completed and executed Warrant
Certificate and payment in full of the Warrant Price is received by the Warrant
Agent shall be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the Warrant
Price in an account of the Company maintained with it and shall advise the
Company by telephone at the end of each day on which a wire transfer for the
exercise of Warrants is received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephone advice to the Company in
writing.

               (b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Warrant Securities to which such holder
is entitled upon such exercise, (iii) delivery of Warrant


                                        4


<PAGE>   5


Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise and (iv) such other information as the Company shall reasonably
require.

               (c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which such holder
is entitled, in fully registered form, registered in such name or names as may
be directed by such holder. If fewer than all of the Warrants evidenced by such
Warrant Certificate are exercised, the Company shall execute (attested and under
seal as aforesaid), and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised, unless sufficient time does not
exist before the Expiration Date to exercise such Warrants in accordance with
the provisions of this Agreement.

               (d) The Company shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.

       SECTION 2.04. WARRANT PRICE ADJUSTMENT. [Here insert warrant price
adjustment provisions to protect against dilution.]


                                  ARTICLE III.

                 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
                             OF WARRANT CERTIFICATES

        SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES CONFERRED BY
WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive any
dividend or payment on Warrant Securities.

        SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser or
holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and evidencing a like number of Warrants. Upon the issuance of
any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the


                                        5


<PAGE>   6


benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any law or statute existing or
hereinafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.

        SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce or otherwise
in respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.

        SECTION 3.04. RESERVATION OF SHARES. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
Common Stock, for the purpose of effecting the exercise of the Warrants, the
full number of shares of Common Stock then issuable upon the exercise of all
outstanding Warrants.

                                   ARTICLE IV.

                  EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES

        SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED
INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or [__________]], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so surrendered.
[IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS IMPOSED WITH
RESPECT TO SUCH EXCHANGES)--After the Detachable Date, upon] [Upon] surrender at
the principal corporate trust office of the Warrant Agent [or [__________]],
Warrant Certificates in bearer form may be exchanged for Warrant Certificates in
registered form evidencing a like number of Warrants.] [IF REGISTERED
WARRANTS--The Warrant Agent shall keep, at its corporate trust office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding Warrant
Certificates upon surrender of the Warrant Certificates to the Warrant Agent at
its principal corporate trust office [or [________]] for exchange [or
registration of transfer], properly endorsed or accompanied by


                                        6


<PAGE>   7


appropriate instruments of registration of transfer and written instructions for
transfer, all in form satisfactory to the Company and the Warrant Agent.] The
Company may require payment of a service charge for any exchange [or
registration of transfer] of Warrant Certificates, and may require payment of a
sum sufficient to cover any stamp or other tax or other governmental charge that
may be imposed in connection with any such exchange [or registration of
transfer]. Whenever any Warrant Certificates are so surrendered for exchange [or
registration of transfer] an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect any
exchange [or registration of transfer] which will result in the issuance of a
Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange [or registration of transfer] of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange [or registration of transfer].

        SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Subject to
Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE
IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding. [IF REGISTERED WARRANTS--Every
holder of a Warrant Certificate, by accepting the same, consents and agrees with
the Company, the Warrant Agent and with every subsequent holder of such Warrant
Certificate that until the transfer of the Warrant Certificate is registered on
the books of the Warrant Agent [or the register of the Offered Securities prior
to the Detachable Date], the Company and the Warrant Agent [or the registrar of
the Offered Securities prior to the Detachable Date] may treat such registered
holder as the absolute owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any notice
to contrary notwithstanding.]

        SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise of
the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.


                                        7


<PAGE>   8


                                   ARTICLE V.

                          CONCERNING THE WARRANT AGENT

        SECTION 5.01. WARRANT AGENT. The Company hereby appoints the Warrant
Agent as warrant agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth and
the Warrant Agent hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it in
writing. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.

        SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:

                (a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent hereunder, as well as the
costs and expenses of defending against any claim of such liability.

                (b) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with the Warrant Certificates, the Warrant Agent is acting solely as
agent of the Company and does not assume any fiduciary obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.

                (c) DOCUMENTS. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.

                (d) CERTAIN TRANSACTIONS. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants and/or Warrant Securities and/or Offered Securities, with the same
rights that it or they would have if it were not the Warrant Agent hereunder,
and, to the extent permitted by applicable law, it or they may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depositary, trustee or agent for, any committee or body of holders of
Warrant Securities, Offered Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder.


                                        8


<PAGE>   9


                (e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the Warrant
Certificates.

                (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall transfer
to the Company interest on any monies at any time received by it pursuant to any
of the provisions of this Agreement or of the Warrant Certificates.

                (g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or in
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.

                (h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated
to perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into
this Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
which might involve it in any expense or liability, the payment of which within
a reasonable time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use
by the Company of any of the Warrant Certificates countersigned and delivered by
it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent shall
have no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to initiate
or attempt to initiate any proceedings at law or otherwise, or, except as
provided in Section 6.02 hereof, to make any demand upon the Company.

        SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all the Warrant Certificates are no longer exercisable.

                (b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which it desires its resignation to become effective; provided that
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent hereunder
may be removed at any time by the filing with it of an instrument in writing
signed by or on behalf of the Company and specifying such removal and the date
upon which such removal shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligations of the Company under Section 5.02(a) shall continue to
the extent set forth therein notwithstanding the resignation or removal of the
Warrant Agent.


                                        9


<PAGE>   10


                (c) In case at any time the Warrant Agent shall resign, or shall
be removed, or shall become incapable of acting, or shall be adjudged a bankrupt
or insolvent, or shall file a petition seeking relief under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any other
applicable Federal or state bankruptcy law or similar law or make an assignment
for the benefit of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or state bankruptcy or
similar law, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be appointed by the Company by an instrument in writing, filed with the
successor Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the successor Warrant Agent of such appointment,
the Warrant Agent shall cease to be Warrant Agent hereunder.

                (d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.

                (e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.

                                   ARTICLE VI.

                                  MISCELLANEOUS

        SECTION 6.01. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; provided that such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.


                                       10


<PAGE>   11


        SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.

        SECTION 6.03. ADDRESSES. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to the Warrant
Agent at its principal corporate trust office at [______________________],
[_________________________], Attention: [_________________________], and any
communication from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Arrow Electronics, Inc., 25 Hub Drive, Melville,
New York 11747 Attention: [____________] or such other address as shall be
specified in writing by the Warrant Agent or the Company.

        SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to holders of
Warrants which by any provisions of this Agreement is required or permitted to
be given shall be given [IF REGISTERED WARRANTS--by first class mail, postage
prepaid, at such holder's address as appears on the books of the Warrant Agent
[or on the register of the Offered Securities prior to the Detachable Date]] [IF
BEARER WARRANTS--by publication at least once in a daily morning newspaper in
New York City [, in London] [and in [________]].

        SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.

        SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to the
Warrant Agent sufficient copies of a prospectus with an accompanying prospectus
supplement relating to the Warrant Securities, and the Warrant Agent agrees that
upon the exercise of any Warrant, the Warrant Agent will deliver to the holder
of the Warrant Certificate evidencing such Warrant prior to or concurrently with
the delivery of the Warrant Securities issued upon such exercise, a copy of such
prospectus and prospectus supplement.

        SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and state
laws and any applicable laws of other jurisdictions (including without
limitation a registration statement in respect of the Warrants and Warrant
Securities under the Securities Act of 1933) which may be or become required in
connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrant Securities issued upon exercise of the Warrants or upon
the expiration of the period during which the Warrants are exercisable.

        SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this


                                       11


<PAGE>   12


Agreement.

        SECTION 6.09. HEADINGS. The descriptive headings of the several Articles
or Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

        SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.

        SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent and the Company for inspection by the holder of any Warrant
Certificate. The Warrant Agent or the Company may require such holder to submit
his Warrant Certificate for inspection by it.

        SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will pay
all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.


                                       12


<PAGE>   13


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

                                               ARROW ELECTRONICS, INC.


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




                                               [NAME OF WARRANT AGENT]


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


                                       13


<PAGE>   14


                                     ANNEX A
                              TO WARRANT AGREEMENT

                          [FORM OF WARRANT CERTIFICATE]

                          [FACE OF WARRANT CERTIFICATE]


[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: PRIOR TO [___________], 20[___] THIS WARRANT CERTIFICATE CANNOT BE
TRANSFERRED OR EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITIES].]

                EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
                            AGENT AS PROVIDED HEREIN

                              WARRANTS TO PURCHASE
                                  COMMON STOCK

                                    Issued by

                             ARROW ELECTRONICS, INC.


VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON [___________], 20[___]

[No.] ___________________________________________________ Warrants

        This certifies that [the bearer is the] [[__________] or registered
assigns is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any time
[after 5:00 p.m. New York City time on [___________], 20[__] and] at or before
5:00 p.m. New York City time on [___________], 20[__] (or such later date as may
be selected by Arrow Electronics, Inc., a New York corporation (the "Company")
with notice to the holder hereof as provided in the Warrant Agreement (as
hereinafter defined)), [_______] shares of the Common Stock (the "Warrant
Securities") of the Company, on the following basis: during the period from and
including [___________], 20[___], the exercise price of each Warrant will be
$[______] per share of Common Stock[; during the period from [___________],
20[__], to and including [___________], 20[__], the exercise price of each
Warrant will be $[______] per share] (the "Warrant Price"). The holder may
exercise the Warrants evidenced hereby by delivery to the Warrant Agent (as
hereinafter defined) of this Warrant Certificate, with the form of election to
purchase on the reverse hereof properly completed and duly executed and by
paying in full, [in lawful money of the United States of America] [in the
foreign currency or currency unit in which the Warrant Securities are
denominated] by bank wire transfer in immediately available funds the Warrant
Price for each


                                       14


<PAGE>   15


Warrant exercised to the warrant agent, such delivery and payment to be made at
the principal corporate trust office of [name of Warrant Agent] or its successor
as warrant agent (the "Warrant Agent") [,or [___________]], currently at the
address specified on the reverse hereof, and upon compliance with and subject to
the conditions set forth herein and the Warrant Agreement.

        Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities. Upon any exercise of fewer than all
of the Warrants evidenced by this Warrant Certificate, there shall be issued to
the holder hereof a new Warrant Certificate evidencing the number of Warrants
remaining unexercised, unless sufficient time does not exist to exercise such
Warrants in accordance with the provisions of the Warrant Agreement before the
Warrants become void.

        This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of [___________], 20[__] (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the principal corporate trust
office of the Warrant Agent specified on the reverse hereof [and at
[__________]].

        [IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to [___________], 20[__], this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
(the "Offered Securities") to which this Warrant Certificate was initially
attached, and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Offered Securities. After such date, this] [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate
may be registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or [__________]] by the registered
owner or his assigns, in person or by his attorney duly authorized in writing,
in the manner and subject to the limitations provided in the Warrant Agreement.

        [IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
office of the Warrant Agent [or [_________]] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].

        [IF NYSE LISTED, INSERT--Warrants not exercised by 5 p.m. on the date
specified above ("Expired Unexercised Warrants") shall have a residual value of
one share of Common Stock of the Company per 100 Expired Unexercised Warrants.]


                                       15


<PAGE>   16


        This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive any dividend payments on the Warrant Securities.

        This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any conflict
of laws provisions.

        The Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.

        Dated as of [___________], 20[__].



                                            ARROW ELECTRONICS, INC.

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


                                            [SEAL]


                                            Attest:


                                            -----------------------------------
                                            [Assistant] Secretary


                                            [NAME OF WARRANT AGENT],
                                              As Warrant Agent


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


                                       16


<PAGE>   17


                        (REVERSE OF WARRANT CERTIFICATE)

                      INSTRUCTIONS FOR EXERCISE OF WARRANT

        To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal corporate
trust office at [insert address of Warrant Agent], Attention: [______________],
[or [______________________________]] which wire transfer must specify the name
of the holder and the number of Warrants exercised by such holder. In addition,
the holder must complete the information required below and present this Warrant
Certificate in person or by mail (registered mail is recommended) to the Warrant
Agent at the addresses set forth below. This Warrant Certificate, completed and
duly executed, must be received by the Warrant Agent together with such wire
transfer.

                     TO BE EXECUTED UPON EXERCISE OF WARRANT

        The undersigned hereby irrevocably elects to exercise ________ Warrants,
evidenced by this Warrant Certificate, to purchase _________ shares of the
Common Stock (the "Warrant Securities") of Arrow Electronics, Inc. and
represents that he has tendered payment for such Warrant Securities by bank wire
transfer in immediately available funds to the order of Arrow Electronics, Inc.,
in care of [insert name and address of Warrant Agent], in the amount of $______
in accordance with the terms hereof. The undersigned requests that said number
of shares of Warrant Securities be registered in such names and delivered, all
as specified in accordance with the instructions set forth below.

        If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.


                                       17


<PAGE>   18


Dated:

                                             Name
- -----------------------------------              -------------------------------
                                                          (Please Print)
                                             Address
- -----------------------------------                 ----------------------------
(Insert Social Security or Other
Identifying Number of Holder)
                                             -----------------------------------

                                             Signature
                                                      --------------------------


                                       18


<PAGE>   19


The Warrants evidenced hereby may be exercised at the following addresses:
By hand at
               ----------------------------------------------------------------

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

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

By mail at
               ----------------------------------------------------------------

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

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


                                       19


<PAGE>   20


                             [IF REGISTERED WARRANT]

                                   ASSIGNMENT

              (FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES
                     TO TRANSFER WARRANTS EVIDENCED HEREBY)

      FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto

                                            Please insert social security
                                            or other identifying number.

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

- ---------------------------------           ---------------------------------
  (Please print name and address
     including zip code)

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

The Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________________________, Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.

Dated:




                                     --------------------------------------
                                                    Signature
                                     (Signature must conform in all respects to
                                     the name of the holder as specified on the
                                     face of this Warrant Certificate and must
                                     bear a signature guarantee by a bank, trust
                                     company or member broker of the New York,
                                     Chicago or Pacific Stock Exchange.)

Signature Guaranteed:

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


                                       20




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>9
<FILENAME>y42939a1ex5-1.txt
<DESCRIPTION>OPINION OF MILBANK, TWEED, HADLEY & MCCLOY LLP
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 5.1

                                      February 13, 2001

Arrow Electronics, Inc.
25 Hub Drive
Melville, NY 11747

Ladies and Gentlemen:


            We have acted as counsel to Arrow Electronics, Inc., a New York
corporation (the "Company), in connection with its filing of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, for the
purpose of registering the following securities to be offered from time to time
by the Company on the terms to be determined at the time of the offering: (i)
common Stock, par value $1.00, of the Company (the "Common Stock"); (ii)
preferred stock of the Company (the "Preferred Stock"); (iii) senior and
subordinated debt securities of the Company (collectively; the "Debt
Securities"); and (iv) warrants to purchase Common Stock, Preferred Stock and
Debt Securities (collectively, the "Warrants").


            We have examined such records, documents and matters of law and
satisfied ourselves as to such matters of fact as we have considered relevant
for the purposes of this opinion.

            On the basis of such examination, we are of the opinion that, when
the Registration Statement, as it may be amended, has become effective under the
Securities Act and any applicable state securities or Blue Sky laws have been
complied with:

            1. The Common Stock, when duly authorized, will be validly issued,
fully paid, and nonassessable at such time as: (i) the terms of the issuance and
sale of the Common Stock have been duly authorized by appropriate action of the
Company and (ii) the Common Stock has been duly issued and sold as contemplated
by the Registration Statement and any prospectus supplement relating thereto.
<PAGE>   2

            2. The Preferred Stock, when duly authorized, will be validly
issued, fully paid, and nonassessable at such time as: (i) the terms of the
issuance and sale of the Preferred Stock have been duly authorized by
appropriate action of the Company and (ii) the Preferred Stock has been duly
issued and sold as contemplated by the Registration Statement and any prospectus
supplement relating thereto.

            3. The Debt Securities will be valid and legally binding obligations
of the Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles at such time as:
(i) the terms of the Debt Securities and of their issuance and sale have been
approved by appropriate action of the Company; (ii) the Debt Securities have
been duly executed, authenticated and delivered in accordance with the
applicable indenture or supplemental indenture; and (iii) the Debt Securities
have been duly issued and sold as contemplated by the Registration Statement and
any prospectus supplement relating thereto and the applicable indenture or
supplemental indenture.

            4. The Warrants, when duly authorized, will be valid and legally
binding obligations of the Company, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles at such time as: (i) the terms of the Warrants and of their issuance
and sale have been approved by appropriate action of the Company and the
applicable warrant agent; and (ii) the Warrants have been duly executed,
authenticated and delivered in accordance with the applicable warrant agreement.

            We hereby consent to the reference to us under the heading "Validity
of Securities" in the prospectus constituting a part of the Registration
Statement and to the filing of this opinion as Exhibit 5.1 to the Registration
Statement. By giving this consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended and the rules and regulations promulgated thereunder.

                                        Very truly yours,


                                        /s/ Milbank, Tweed, Hadley & McCloy LLP
                                        ----------------------------------------

DBB/HSK


                                       2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>10
<FILENAME>y42939a1ex23-2.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 23.2



[LETTERHEAD OF ERNST & YOUNG]



                        CONSENT OF INDEPENDENT AUDITORS



We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Amendment No. 1 to Form S-3 No. 333-50572) and related
Prospectus of Arrow Electronics, Inc. for the sale of up to $2,000,000,000 in
aggregate offering price of any combination of securities described in the
Prospectus and to the incorporation by reference therein of our report dated
February 16, 2000 with respect to the consolidated financial statements and
schedule of Arrow Electronics, Inc. included in the Annual Report (Form 10-K)
for the year ended December 31, 1999, as filed with the Securities and Exchange
Commission.



/s/ Ernst & Young LLP

New York, NY


February 13, 2001



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>11
<FILENAME>y42939a1ex23-3.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 23.3


                       Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of Arrow Electronics, Inc. of our report dated March 21,
2000, except for second paragraph of Note 1 which the date is August 7, 2000 and
except for fourth paragraph of Note 8 which the date is August 4, 2000 relating
to the financial statements of Wyle Electronics Group, which appears in the
Current Report on Form 8-K of Arrow Electronics, Inc. dated September 1, 2000.



/s/  PricewaterhouseCoopers LLP
February 13, 2001
San Jose, California



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
