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<FILENAME>form8kmarch172004.txt
<DESCRIPTION>FORM 8-K MARCH 17, 2004
<TEXT>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

        Date of report (Date of earliest event reported) March 17, 2004
                                                         --------------


                              BOWATER INCORPORATED
             (Exact name of registrant as specified in its charter)


Delaware                             1-8712                       62-0721803
(State or other                   (Commission                   (IRS Employer
jurisdiction of                   File Number)               Identification No.)
incorporation)


                             55 East Camperdown Way
                                  P.O. Box 1028
                        Greenville, South Carolina 29602
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (864) 271-7733

(Former name or former address, if changed since last report): Not applicable





<PAGE>


ITEM 5.  OTHER EVENTS.

         On March 17, 2004, Bowater Incorporated closed the sale of an aggregate
amount of $250  million of its  floating  rate senior  notes due March 15, 2010,
under  its  effective  shelf  registration  statement  on  file  with  the  U.S.
Securities and Exchange Commission (Registration No. 333-108166).

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits.

     1    Underwriting   Agreement,   dated  March  10,  2004,   among   Bowater
          Incorporated  and  UBS  Securities,  LLC,  as  representative  of  the
          underwriters,  and Barclays  Capital  Inc.,  as qualified  independent
          underwriter.

     4.1  Senior Indenture,  dated March 17, 2004, between Bowater  Incorporated
          and The Bank of New York, as trustee.

     4.2  First  Supplemental  Indenture,  dated March 17, 2004, between Bowater
          Incorporated  and The Bank of New York, as trustee,  providing for the
          issuance of Bowater  Incorporated's  floating  rate  senior  notes due
          March 15, 2010.

     4.3  Form of floating rate senior note (included in Exhibit 4.2).

     5    Opinion of Wyche, Burgess, Freeman & Parham, P.A.

     23   Consent of Wyche, Burgess, Freeman & Parham, P.A. (included in Exhibit
          5).


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, hereunto duly authorized.


                                   BOWATER INCOPORATED
                                   (Registrant)


Date:  March 17, 2004              By: /s/William G. Harvey
                                      -----------------------------------------
                                      Name:  William G. Harvey
                                      Title: Vice President and Treasurer


                                   By: /s/Ronald T. Lindsay
                                      -----------------------------------------
                                      Name:  Ronald T. Lindsay
                                      Title: Vice President - General Counsel
                                             and Secretary


<PAGE>


                                    EXHIBITS

     1    Underwriting   Agreement,   dated  March  10,  2004,   among   Bowater
          Incorporated  and  UBS  Securities,  LLC,  as  representative  of  the
          underwriters,  and Barclays  Capital  Inc.,  as qualified  independent
          underwriter.

     4.1  Senior Indenture,  dated March 17, 2004, between Bowater  Incorporated
          and The Bank of New York, as trustee.

     4.2  First  Supplemental  Indenture,  dated March 17, 2004, between Bowater
          Incorporated  and The Bank of New York, as trustee,  providing for the
          issuance of Bowater  Incorporated's  floating  rate  senior  notes due
          March 15, 2010.

     4.3  Form of floating rate senior note (included in Exhibit 4.2).

     5    Opinion of Wyche, Burgess, Freeman & Parham, P.A.

     23   Consent of Wyche, Burgess, Freeman & Parham, P.A. (included in Exhibit
          5).



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>3
<FILENAME>underwritingagmt.txt
<DESCRIPTION>UNDERWRITING AGREEMENT DATED MARCH 10, 2004
<TEXT>
                                                                EXECUTION COPY
                              BOWATER INCORPORATED

                $250,000,000 FLOATING RATE SENIOR NOTES DUE 2010

                             UNDERWRITING AGREEMENT

                                                                March 10, 2004
                                                            New York, New York
UBS Securities LLC
as Representative for the Several
Underwriters named in Schedule I hereto.

c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171

Ladies and Gentlemen:

     Bowater Incorporated,  a Delaware corporation (the "COMPANY"),  agrees with
you as follows:

     1. Issuance of Notes. The Company proposes to issue and sell to the several
        -----------------
underwriters  listed on  Schedule  1 hereto  (the  "UNDERWRITERS")  for whom UBS
                         -----------
Securities LLC is acting as representative (the  "REPRESENTATIVE")  $250,000,000
aggregate principal amount of Floating Rate Senior Notes due 2010 (the "NOTES").

     The Notes are to be issued pursuant to an indenture (the "BASE  INDENTURE")
dated as of March 17,  2004,  among  the  Company  and The Bank of New York,  as
trustee (the "TRUSTEE") as amended and  supplemented  by the First  Supplemental
Indenture to be dated as of March 17, 2004 (the  "SUPPLEMENTAL  INDENTURE"  and,
together with the Base Indenture, the "INDENTURE").

     The Company has filed,  in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "ACT"),  with the Securities and Exchange  Commission  (the  "COMMISSION") a
registration   statement  on  Form  S-3  (File  No.  333-108166),   including  a
prospectus,  relating to the Notes,  which  incorporates by reference  documents
which the Company has filed or will file in  accordance  with the  provisions of
the Securities  Exchange Act of 1934, as amended,  and the rules and regulations
thereunder  (collectively,  the  "EXCHANGE  ACT").  The Company  has  prepared a
prospectus  supplement (the "PROSPECTUS  SUPPLEMENT") to the prospectus included
in the registration statement referred to above describing the Notes and setting
forth the terms of the offering,  sale and plan of distribution of the Notes and
additional  information concerning the Company and its business. The Company has



<PAGE>

                                      -2-

furnished to you, for use by the Underwriters  and by dealers,  copies of one or
more  preliminary   prospectuses  containing  the  prospectus  included  in  the
registration  statement,  as supplemented by a preliminary Prospectus Supplement
relating to the Notes, and the documents incorporated by reference therein (each
such  preliminary   prospectus  being  referred  to  herein  as  a  "PRELIMINARY
PROSPECTUS") relating to the Notes. Except where the context otherwise requires,
the  registration  statement,  referred to above, as amended when it or the most
recent  post  effective  amendment  filed  prior  to  the  date  hereof,  became
effective,  including all documents  filed as a part thereof or  incorporated by
reference  therein,  and  including  any  information  contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act and
deemed to be part of such  registration  statement at the time of  effectiveness
pursuant  to Rule  430(A)  under  the Act and also  including  any  registration
statement  filed pursuant to Rule 462(b) under the Act, is referred to herein as
the  "REGISTRATION  STATEMENT," and the prospectus  included in the Registration
Statement,  including  all  documents  incorporated  therein  by  reference,  as
supplemented by the final  Prospectus  Supplement  relating to the Notes, in the
form filed by the Company with the Commission  pursuant to Rule 424(b) under the
Act on or before the second  business day after the date hereof (or such earlier
time as may be  required  under  the Act) at the time it  became  effective,  is
herein  called  the  "PROSPECTUS."  Any  reference  herein  to the  Registration
Statement,  the  Prospectus,  any  Preliminary  Prospectus  or any  amendment or
supplement  thereto  shall  be  deemed  to refer to and  include  the  documents
incorporated  by  reference  therein,  and any  reference  herein  to the  terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
the  Prospectus or any  Preliminary  Prospectus  shall be deemed to refer to and
include  the  filing  after  the  execution  hereof  of any  document  with  the
Commission deemed to be incorporated by reference therein.  For purposes of this
Agreement,  all references to the Registration Statement or Prospectus or to any
amendment  or  supplement  thereto  shall be deemed to include any copy  thereof
filed with the Commission  pursuant to its Electronic Data  Gathering,  Analysis
and Retrieval System ("EDGAR").

     This  Agreement,  the Notes and the  Indenture  are  hereinafter  sometimes
referred to collectively as the "NOTE DOCUMENTS."

     2.  Agreements to Sell and Purchase.  On the basis of the  representations,
         -------------------------------
warranties and covenants of the  Underwriters  contained in this Agreement,  the
Company agrees to issue and sell to the  Underwriters,  and, on the basis of the
representations,  warranties  and  covenants  of the Company  contained  in this
Agreement and subject to the terms and conditions  contained in this  Agreement,
the  Underwriters  severally  agree to purchase  from the Company the  aggregate
principal  amount  of the Notes set forth  opposite  their  respective  names in
Schedule  I hereto.  The  purchase  price for the Notes  shall be 98.5% of their
-----------
principal  amount,  plus accrued  interest,  if any,  from March 17, 2004 to the
Closing Date (as  hereinafter  defined).  The Company is advised by you that the
Underwriters  intend (i) to make a public offering of their respective  portions
of the Notes as soon as in your  judgment is  advisable  and (ii)  initially  to


<PAGE>
                                      -3-

offer the Notes upon the terms set forth in the Prospectus. You may from time to
time  increase or decrease the public  offering  price after the initial  public
offering to such extent as you may determine.

     3.  Delivery  and Payment.  Delivery of, and payment of the purchase  price
         ---------------------
for,  the Notes  shall be made at 10:00 a.m.,  New York City time,  on March 17,
2004 (such date and time, the "CLOSING  DATE") at the offices of Cahill Gordon &
Reindel LLP at 80 Pine Street,  New York,  New York 10005.  The Closing Date and
the  location of delivery of and the form of payment for the Notes may be varied
by mutual agreement between you and the Company.

     One or more of the Notes in global form will be  deposited  by or on behalf
of the Company  with The  Depositary  Trust  Company  ("DTC") or its  designated
custodian.  The Company  will deliver the Notes to the  Representative,  for the
account of each Underwriter, against payment by the Underwriters of the purchase
price  therefor  by means of  transfer of  immediately  available  funds to such
account or accounts  specified  by the Company in  accordance  with Section 6(m)
hereof on or prior to the Closing  Date, or by such means as you and the Company
shall agree prior to the Closing Date, by causing DTC to credit the Notes to the
account of the Representative at DTC.


     4.  Agreements  of the Company.  The Company  covenants and agrees with the
         --------------------------
Underwriters and the QIU (as defined in Section 12) as follows:

          (a) to furnish such  information  as may be required and  otherwise to
     cooperate  in  qualifying  the  Notes  for  offering  and  sale  under  the
     securities or blue sky laws of such  jurisdictions as you may designate and
     to  maintain  such  qualifications  in effect so long as  required  for the
     distribution of the Notes. Notwithstanding the foregoing, the Company shall
     not be required to qualify as a foreign  corporation in any jurisdiction in
     which it is not so  qualified  or to file a general  consent  to service of
     process in any such  jurisdiction or subject itself to taxation in any such
     jurisdiction where it is not then so subject, or to incur expenses that the
     Company reasonably believes are excessive in connection with such requested
     qualification or registration;

          (b) to prepare the  Prospectus in a form approved by you and file such
     Prospectus with the Commission pursuant to Rule 424(b) under the Act, on or
     before the second  business day  following  the date of this  Agreement (or
     such  earlier  time as may be required by the Act) and to furnish  promptly
     (and, with respect to the initial  delivery of such  Prospectus,  not later
     than 10:00 A.M.  (New York City time) on or before the second  business day
     following  the date of this  Agreement  or on such other day as the Company
     and you may mutually agree) to the Underwriters copies of the Prospectus in
     such  quantities and at such locations as the  Underwriters  may reasonably
     request  for  the  purposes  contemplated  by  the  Act,  which  Prospectus
     furnished to the  Underwriters  will be identical to the version created to
     be transmitted to the Commission for filing via EDGAR, except to the extent



<PAGE>
                                      -4-

     permitted by Regulation  S-T; in the event any  Underwriter  is required to
     deliver a prospectus  after the  nine-month  period  referred to in Section
     10(a)(3) of the Act in connection  with the sale of the Notes,  the Company
     will prepare promptly upon request, but at the expense of such Underwriter,
     such  amendment  or  amendments  to the  Registration  Statement  and  such
     prospectuses as may be necessary to permit compliance with the requirements
     of Section 10(a)(3) of the Act;

          (c) to advise  you  promptly,  confirming  such  advice in  writing if
     requested  by you, of (i) the receipt of any comments  from the  Commission
     relating  to  the  Registration  Statement,   any  amendment  thereto,  the
     Prospectus  or any amendment or  supplement  thereto,  or any filing of the
     Company  under  the Act or the  Exchange  Act  that  is  filed  during  the
     Distribution Period (as defined below) that is incorporated by reference in
     the  Registration  Statement  or  Prospectus,   (ii)  any  request  by  the
     Commission for amendments or supplements to the  Registration  Statement or
     Prospectus or for additional  information with respect thereto that relates
     to any document filed prior to the conclusion of the  Distribution  Period,
     (iii) the  issuance  by the  Commission  of any stop order  suspending  the
     effectiveness of the  Registration  Statement or of any order preventing or
     suspending the use of any  Preliminary  Prospectus or the  Prospectus,  and
     (iv) the initiation,  threatening or  contemplation  of any proceedings for
     any of such  purposes;  and, if the  Commission  or any other  governmental
     agency or authority  should issue any such order, to make every  reasonable
     effort to obtain the lifting or removal of such order as soon as  possible;
     to  advise  you  promptly  of any  proposal  to  amend  or  supplement  the
     Registration  Statement or  Prospectus,  including by filing any  documents
     that  would  be  incorporated   therein  by  reference,   and,  during  the
     Distribution  Period  (as  defined  below),  to file no such  amendment  or
     supplement to which you shall reasonably object in writing;

          (d) subject to Section 4(l) hereof,  to file  promptly all reports and
     any definitive proxy or information  statement  required to be filed by the
     Company  with the  Commission  in order to  comply  with the  Exchange  Act
     subsequent to the date of the Prospectus and for so long as the delivery of
     a  prospectus  is required in  connection  with the offering or sale of the
     Notes, and to promptly notify you of such filing;

          (e) to advise you promptly of the  happening of any event known to the
     Company  during  such  period of time  after the first  date of the  public
     offering of the Notes during  which a  prospectus  relating to the Notes is
     required  to be  delivered  under the Act in  connection  with sales by the
     Underwriters  or any dealer  (the  "DISTRIBUTION  PERIOD"),  which,  in the



<PAGE>
                                      -5-

     judgment  of the  Company,  would  require  the making of any change in the
     Prospectus then being used, or in the information  incorporated  therein by
     reference,  so that the Prospectus would not include an untrue statement of
     material  fact or omit to  state a  material  fact  necessary  to make  the
     statements  therein, in the light of the circumstances under which they are
     made, not misleading, and, during such time, to prepare and furnish, at the
     Company's  expense,  to  the  Underwriters   promptly  such  amendments  or
     supplements  to such  Prospectus  as may be  necessary  to reflect any such
     change and to furnish you a copy of such  proposed  amendment or supplement
     before filing any such amendment or supplement with the Commission;

          (f) to the extent not publicly  available via EDGAR, to furnish to you
     one copy of the Registration  Statement,  in the form declared effective by
     the Commission,  and all  post-effective  amendments thereto (including all
     exhibits  thereto and  documents  incorporated  by  reference  therein) and
     sufficient  copies of the foregoing  (other than exhibits) for distribution
     of a copy to each of the other Underwriters;

          (g)  prior to the  Closing  Date,  to  furnish  without  charge to the
     Underwriters, (i) as soon as they have been prepared by the Company, a copy
     of any  regularly  prepared  final  internal  financial  statements  of the
     Company  and its  Subsidiaries  for any  period  subsequent  to the  period
     covered by the financial statements appearing in the Registration Statement
     and Prospectus (including any documents incorporated by reference therein),
     (ii) all other  reports and other  communications  (financial or otherwise)
     that the Company mails or otherwise  make publicly  available to all of its
     security holders and (iii) such other information as the Underwriters shall
     reasonably request; provided, however, that the Company's obligations under
     this  paragraph  (g) shall be deemed to be satisfied to the extent that any
     information  required by clauses (i)  through  (iii) is filed and  publicly
     available via EDGAR;

          (h) to use the  proceeds  from  the sale of the  Notes  in the  manner
     described in the Prospectus under the caption "Use of Proceeds";

          (i) to pay all costs, expenses,  fees,  disbursements (including fees,
     expenses and disbursements of counsel to the Company)  reasonably  incurred
     and stamp, documentary or similar taxes incident to (i) the preparation and
     filing of the  Registration  Statement,  any  Preliminary  Prospectus,  the
     Prospectus, and any amendments or supplements thereto, and the printing and
     furnishing  of copies of each  thereof to the  Underwriters  and to dealers
     (including costs of mailing and shipment),  (ii) the  registration,  issue,
     sale and delivery of the Notes,  (iii) the  qualification  of the Notes for
     offering  and  sale  under  state  laws  and  the  determination  of  their
     eligibility  for  investment  under state law as aforesaid  (including  the
     legal  fees and filing  fees and other  disbursements  of  counsel  for the
     Underwriters  relating to such  qualification  and  determination)  and the
     printing  and  furnishing  of  copies  of any  blue  sky  surveys  or legal
     investment surveys to the Underwriters and to dealers,  (iv) any listing of
     the Notes on any  securities  exchange  or  qualification  of the Notes for
     quotation on NASDAQ and any  registration  thereof  under the Exchange Act,
     (v) all expenses  (including  travel expenses) of the Company in connection
     with  any  meetings  with  prospective  investors  in the  Notes,  (vi) the
     preparation, notarization (if necessary) and delivery of the Note Documents



<PAGE>
                                      -6-

     and all other agreements, memoranda,  correspondence and documents prepared
     and  delivered  in  connection  with this  Agreement,  (vii) the  issuance,
     transfer  and  delivery  by the Company of the Notes  respectively,  to the
     Underwriters,  (viii) the preparation of certificates  for the Notes,  (ix)
     the approval of the Notes by DTC for book-entry transfer, (x) the rating of
     the Notes by rating agencies, (xi) the fees and expenses of the Trustee and
     its counsel,  and (xii) the performance of the Company's other  obligations
     under the Note Documents.  In addition, if the transaction  contemplated by
     this  agreement  shall be  terminated  pursuant  to  clause  (i) or (ii) of
     Section   11(b),   then,  in  addition  to  any  other  remedies  that  the
     Underwriters may have, the Company shall pay the reasonable fees,  expenses
     and  disbursements  of  counsel  to the  Underwriters.  If the  transaction
     contemplated  by this  Agreement  shall be  terminated  pursuant to clauses
     (iii),  (iv), (v) or (vi) of Section 11(b),  then, in addition to any other
     remedies that the  Underwriters  may have, the Company and the Underwriters
     shall each pay one-half the reasonable fees,  expenses and disbursements of
     counsel to the  Underwriters.  It is  understood,  however,  that except as
     expressly  provided  in  this  Section  4(i)  and  Section  7  hereof,  the
     Underwriters  will pay all of their own costs and  expenses,  including the
     fees of their counsel, transfer taxes on resale of any of the Notes by them
     and any  advertising  expenses  incurred in connection with any offers they
     may make.

          (j) to do and  perform all things  required  to be done and  performed
     under the Note  Documents by the Company prior to or after the Closing Date
     and to  satisfy  all  conditions  precedent  on the  Company's  part to the
     delivery of the Notes;

          (k) to comply in all material respects with all of its obligations set
     forth in the  representations  letter of the Company to DTC relating to the
     approval  of the  Notes  by DTC for  "book-entry"  transfer  and to use its
     reasonable  best  efforts  to  obtain  approval  of the  Notes  by DTC  for
     "book-entry" transfer;

          (l) during the Distribution  Period,  to furnish to you, not less than
     one business day (at least 24 hours) before filing with the  Commission,  a
     copy of any document  proposed to be filed pursuant to Section 13, 14 or 15
     of the Exchange Act; and

          (m) to  make  generally  available  to its  security  holders,  and to
     deliver to you, an earnings  statement  of the Company  (which will satisfy
     the  provisions  of Section  11(a) of the Act)  covering a period of twelve
     months beginning after the effective date of the Registration Statement (as
     defined  in Rule  158(c) of the Act) as soon as is  reasonably  practicable
     after the termination of such twelve-month period. The requirements of this
     paragraph  4(m) may be  satisfied  by the  timely  filing  of the  periodic
     reports required by Section 13 of the Exchange Act as permitted by Rule 158
     of the Act.


<PAGE>
                                      -7-

     5.  Representations and Warranties.  The Company represents and warrants to
         ------------------------------
the Underwriters and the QIU (as defined in Section 12) as follows:

          (a) the Company and the  transactions  contemplated  by this Agreement
     meet the requirements and conditions for using a registration  statement on
     Form S-3 under the Act. The Registration  Statement has been filed with the
     Commission and has been declared  effective  under the Act (except that the
     Prospectus  Supplement  shall be filed with the Commission on or before the
     second business day following the date of this Agreement). The Registration
     Statement meets the requirements set forth in Rule  415(a)(1)(x)  under the
     Act and complies in all material  respects with such Rule.  The Company has
     not received,  and has no notice of, any order of the Commission preventing
     or suspending  the use of the  Registration  Statement,  or  threatening or
     instituting proceedings for that purpose;

          (b) a  Preliminary  Prospectus,  including  a  preliminary  Prospectus
     Supplement, has been prepared and filed pursuant to Rule 424(b) of the Act.
     Such Preliminary  Prospectus,  at the time of filing thereof,  conformed in
     all material  respects to the  requirements of the Act, and did not include
     an untrue  statement  of  material  fact or omit to state a  material  fact
     necessary  in  order  to make  the  statements  therein,  in  light  of the
     circumstances in which they were made, not misleading,  except that (i) the
     Preliminary  Prospectus omitted pricing and other information  permitted to
     be omitted  therefrom by the rules and  regulations  under the Act and (ii)
     the foregoing  shall not apply to statements  in, or omissions  from,  such
     Preliminary  Prospectus  in reliance on, and in  conformity  with,  written
     information  concerning  the  Underwriters  that was  furnished in writing,
     including by electronic transmission, to the Company by the Representative,
     on  behalf  of  the  several  Underwriters,  specifically  for  use  in the
     preparation thereof;

          (c) the Prospectus,  including a final Prospectus Supplement, has been
     or will be prepared and will be filed pursuant to Rule 424(b) of the Act on
     or before the second  business day following the date of this Agreement (or
     such  earlier  time as may be  required  under the  Act).  Each part of the
     Registration  Statement (other than the documents incorporated by reference
     therein,  which are the  subject of Section  5(d)),  when such part  became
     effective and the  Prospectus and any amendment or supplement  thereto,  on
     the  date of  filing  thereof  with  the  Commission  and the  Registration
     Statement,  the  Prospectus  and the  Indenture  at the  time of  purchase,
     conformed or will conform in all material respects with the requirements of
     the Act and the Trust Indenture Act of 1939, as amended,  and the rules and
     regulations  thereunder  (the  "TRUST  INDENTURE  ACT").  Each  part of the
     Registration  Statement (other than the documents incorporated by reference
     therein,  which are the  subject of Section  5(d)),  when such part  became
     effective,  did not contain an untrue  statement of a material fact or omit
     to state a material fact required to be stated therein or necessary to make


<PAGE>
                                      -8-

     the statements therein not misleading.  The Prospectus and any amendment or
     supplement  thereto,  on the date of  filing  thereof  with the  Commission
     pursuant  to Rule 424(b) and at the time of  purchase,  did not or will not
     include an 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
     foregoing  shall not apply to statements  in, or omissions  from,  any such
     document in reliance  upon,  and in conformity  with,  written  information
     concerning  the  Underwriters  that was furnished in writing,  including by
     electronic transmission, to the Company by the Representative, on behalf of
     the several Underwriters, specifically for use in the preparation thereof;

          (d)  the  documents  incorporated  by  reference  in the  Registration
     Statement,  any Preliminary  Prospectus and the Prospectus or any amendment
     or supplement  thereto,  when they became or become effective under the Act
     or were or are filed with the Commission under the Act or the Exchange Act,
     as the case may be, conformed or will conform in all material respects with
     the  requirements  of the Act and Exchange Act, as applicable,  and none of
     such documents contained or contain an untrue statement of material fact or
     omit or omitted to state a material fact  necessary to make the  statements
     therein,  in light of the  circumstances  under  which they were made,  not
     misleading;

          (e) to the  extent not  publicly  available  via EDGAR,  copies of the
     Registration Statement, any Preliminary Prospectus and the Prospectus,  any
     such amendments or supplements and all documents  incorporated by reference
     therein that were filed with the Commission on or prior to the date of this
     Agreement (including one fully executed copy of the Registration  Statement
     and of each amendment thereto for the Underwriters)  have been delivered to
     the Underwriters or their counsel;

          (f) All of the issued and outstanding shares of capital stock or other
     equity  interests  of the  Company  have been duly  authorized  and validly
     issued,  are fully paid and  nonassessable and were not issued in violation
     of any preemptive or similar  rights.  Attached  hereto as Schedule II is a
                                                                -----------
     true and complete  list of each  subsidiary  of the Company that would be a
     "Significant  Subsidiary"  as defined in Article 1, Rule 1-02 of Regulation
     S-X under the Act, their jurisdictions of incorporation or formation,  type
     of  entity  and  percentage  equity  ownership  by the  Company  (all  such
     Significant  Subsidiaries,  the  "SUBSIDIARIES").  The  entities  listed on
     Schedule II hereto are the only  Subsidiaries,  direct or indirect,  of the
     Company. All of the issued and outstanding shares of capital stock or other
     equity interests of each of the Company's  Subsidiaries  have been duly and
     validly authorized and issued,  are fully paid and nonassessable,  were not
     issued in violation of any preemptive or similar rights and,  except as set
     forth in the Prospectus (including any documents  incorporated by reference
     therein), and except for (A) the 1,000 shares of non-voting, nonconvertible


<PAGE>
                                      -9-

     preferred  stock issued by Bowater Canada Inc. to Fraser and Beatty and (B)
     the 1,000 shares of non-voting,  nonconvertible  preferred  stock issued by
     Bowater  Canadian  Forest  Products  Inc. to Fraser and Beatty,  are owned,
     directly  or  indirectly,  by the  Company  free and clear of all Liens (as
     defined  in the  Indenture)  (other  than  those  imposed by the Act or the
     securities  or "Blue  Sky" laws of  certain  jurisdictions).  Except as set
     forth in the Prospectus (including any documents  incorporated by reference
     therein),  there are no  outstanding  options,  warrants or other rights to
     acquire or purchase,  or instruments  convertible into or exchangeable for,
     any shares of capital stock of any of the Subsidiaries;

          (g) Each of the Company  and the  Subsidiaries  (a) is a  corporation,
     partnership or other entity duly  organized and validly  existing under the
     laws of the jurisdiction of its incorporation or organization,  as the case
     may be;  (b) has all  requisite  corporate  or other  power  and  authority
     necessary  to own its  property  and  carry on its  business  as now  being
     conducted;  and (c) is qualified to do business and is in good  standing in
     all jurisdictions in which the nature of the business conducted by it makes
     such  qualification  necessary  and where failure to be so qualified and in
     good standing individually or in the aggregate could reasonably be expected
     to have a Material  Adverse Effect.  A "MATERIAL  ADVERSE EFFECT" means any
     material  adverse effect on the business,  condition  (financial or other),
     results of operations,  performance, properties or prospects of the Company
     and its subsidiaries, taken as a whole;

          (h) The  Company  has all  requisite  corporate  or  other  power  and
     authority to execute,  deliver and perform all of its obligations under the
     Note Documents and to consummate the transactions  contemplated by the Note
     Documents  to be  consummated  on its part  and,  without  limitation,  the
     Company has all requisite  corporate power and authority to issue, sell and
     deliver and perform its obligations under the Notes;

          (i) This Agreement has been duly authorized, executed and delivered by
     the Company;

          (j) The Indenture has been duly and validly  authorized by the Company
     and,  when duly  executed and  delivered by the Company  (assuming  the due
     authorization,  execution and delivery  thereof by the Trustee),  will be a
     legal,  valid and binding  obligation  of the Company,  enforceable  in all
     material respects against the Company in accordance with its terms,  except
     that (A) the enforcement thereof may be limited by bankruptcy,  insolvency,
     reorganization, fraudulent conveyance, moratorium or other similar laws now
     or hereafter in effect  affecting  the  enforcement  of  creditors'  rights
     generally  and by  general  principles  of equity  (regardless  of  whether
     considered in a proceeding  in equity or at law) and the  discretion of the
     court  before  which any  proceeding  therefor  may be brought  and (B) any
     rights to indemnity or contribution thereunder may be limited by applicable
     laws and public policy  considerations.  The  Indenture,  when executed and
     delivered, will conform in all material respects to the description thereof
     in the Prospectus;


<PAGE>
                                      -10-

          (k) The Notes have been duly and validly  authorized  for issuance and
     sale to the Underwriters by the Company and, when issued, authenticated and
     delivered by the Company against payment by the  Underwriters in accordance
     with the terms of this  Agreement  and the  Indenture,  the  Notes  will be
     legal,  valid and  binding  obligations  of the  Company,  entitled  to the
     benefits of the Indenture and enforceable in all material  respects against
     the Company in accordance with their terms, except that (A) the enforcement
     thereof  may  be  limited  by   bankruptcy,   insolvency,   reorganization,
     fraudulent conveyance, moratorium or other similar laws now or hereafter in
     effect  affecting the  enforcement  of creditors'  rights  generally and by
     general  principles  of  equity  (regardless  of  whether  considered  in a
     proceeding  in equity  or at law) and the  discretion  of the court  before
     which  any  proceeding  therefor  may be  brought  and  (B) any  rights  to
     indemnity or contribution  thereunder may be limited by applicable laws and
     public policy  considerations.  The Notes,  when issued,  authenticated and
     delivered, will conform in all material respects to the description thereof
     in the Prospectus;

          (l) All taxes,  fees and other  governmental  charges that are due and
     payable by the Company on or prior to the Closing Date in  connection  with
     the  execution,  delivery and  performance  of the Note  Documents  and the
     execution,  delivery  and sale of the Notes  shall  have been paid by or on
     behalf of the Company at or prior to the Closing Date;

          (m) None of the Company or the Subsidiaries is (A) in violation of its
     charter, bylaws or other constitutive  documents,  (B) in default (or, with
     notice or lapse of time or both, would be in default) in the performance or
     observance of any obligation, agreement, covenant or condition contained in
     any bond,  debenture,  note,  indenture,  mortgage,  deed of trust, loan or
     credit  agreement,  lease,  license,  franchise  agreement,  authorization,
     permit,  certificate or other  agreement or instrument to which any of them
     is a party or by which any of them is bound or to which any of their assets
     or properties is subject (collectively,  "AGREEMENTS AND INSTRUMENTS"),  or
     (C) in violation of any law, statute, rule, regulation,  judgment, order or
     decree of any domestic or foreign court with  jurisdiction over any of them
     or any of their assets or  properties or other  governmental  or regulatory
     authority,  agency or other body, which, in the case of clauses (B) and (C)
     herein, would reasonably be expected to have, either individually or in the
     aggregate,  a Material Adverse Effect. There exists no condition that, with
     notice, the passage of time or otherwise, would constitute a default by the
     Company or the Subsidiaries under any such document or instrument or result
     in the imposition of any penalty or the  acceleration of any  indebtedness,
     other than penalties, defaults or conditions that would not have a Material
     Adverse Effect;


<PAGE>
                                      -11-

          (n) The execution, delivery and performance by the Company of the Note
     Documents  including the consummation of the offer and sale of the Notes do
     not or will not violate, conflict with or constitute a breach of any of the
     terms or provisions of, or a default under (or an event that with notice or
     the lapse of time, or both, would  constitute a default under),  or require
     consent under, or result in the creation or imposition of a lien, charge or
     encumbrance  on any  property  or  assets  of any  of  the  Company  or any
     Subsidiary or an  acceleration  of any  indebtedness  of the Company or any
     Subsidiary  pursuant  to,  (i) the  charter,  bylaws or other  constitutive
     documents  of any of the  Company  or any  Subsidiary,  (ii)  assuming  the
     consummation of the transactions  contemplated  thereby, any Agreements and
     Instruments,  (iii) any law, statute,  rule or regulation applicable to the
     Company or any Subsidiary or their respective  assets or properties or (iv)
     any  judgment,  order  or  decree  of any  domestic  or  foreign  court  or
     governmental  agency or authority having  jurisdiction  over the Company or
     any Subsidiary or their respective assets or properties, other than, in the
     case of each of clauses (i) through (iv), violations,  conflicts,  breaches
     or defaults,  or creations or impositions of liens, charges or encumbrances
     or  accelerations  of indebtedness  that would not have a Material  Adverse
     Effect.  No  consent,  approval,  authorization  or order  of,  or  filing,
     registration,  qualification,  license  or permit of or with,  any court or
     governmental agency, body or administrative agency, domestic or foreign, is
     required to be obtained  or made by the Company or any  Subsidiary  for the
     execution,  delivery and  performance  by the Company of the Note Documents
     including the consummation of any of the transactions contemplated thereby,
     except  such as have  been or will be  obtained  or made on or prior to the
     Closing   Date  or  such   other   consents,   approvals,   authorizations,
     registrations or  qualifications  as may be required under federal or state
     securities  laws in connection  with the issuance of the Notes. No consents
     or waivers from any other person or entity are required for the  execution,
     delivery  and  performance  of  this  Agreement  or any of the  other  Note
     Documents  or the  consummation  of any  of the  transactions  contemplated
     thereby, other than such consents and waivers as have been obtained or will
     be obtained prior to the Closing Date;

          (o) Except as set forth in the  Prospectus  (including  any  documents
     incorporated  by  reference  therein),  there  is (A) no  action,  suit  or
     proceeding before or by any court,  arbitrator or governmental agency, body
     or official,  domestic or foreign,  now pending or, to the knowledge of the
     Company or any Subsidiary,  threatened,  to which any of the Company or any
     Subsidiary  is or may be a  party  or to  which  the  business,  assets  or
     property  of  such  person  is or may be  subject,  (B) no  statute,  rule,
     regulation  or order  that has been  enacted,  adopted or issued or, to the
     knowledge of the Company,  that has been proposed by any governmental  body
     or agency,  domestic or foreign,  (C) no injunction,  restraining  order or
     order of any  nature  by a  federal  or state  court  or  foreign  court of
     competent  jurisdiction to which any of the Company or any Subsidiary is or
     may be subject that (x) in the case of clause (A) above would reasonably be
     expected,  either individually or in the aggregate,  (1) to have a Material
     Adverse Effect or (2) to interfere with or adversely affect the issuance of



<PAGE>
                                      -12-

     the Notes in any  jurisdiction or adversely  affect the consummation of the
     transactions  contemplated by any of the Note Documents and (y) in the case
     of  clauses  (B)  and (C)  above,  would  reasonably  be  expected,  either
     individually or in the aggregate,  (1) to have a Material Adverse Effect or
     (2) to interfere with or adversely  affect the issuance of the Notes in any
     jurisdiction  or  adversely  affect the  consummation  of the  transactions
     contemplated by any of the Note Documents.  Every request of any securities
     authority or agency of any  jurisdiction  for additional  information  with
     respect  to  the  Notes  that  has  been  received  by the  Company  or any
     Subsidiary  or their  counsel  prior to the date  hereof has been,  or will
     prior to the Closing Date be, complied with in all material respects;

          (p)  Except as would not  reasonably  be  expected  to have a Material
     Adverse Effect, no labor disturbance by the employees of any of the Company
     or the  Subsidiaries  exists  or,  to the  knowledge  of  the  Company,  is
     imminent;

          (q) Except as set forth in the  Prospectus  (including  any  documents
     incorporated by reference therein),  the Company and each Subsidiary (A) is
     in compliance  with, or not subject to costs or  liabilities  under,  laws,
     regulations,  rules of common law,  orders and decrees,  as in effect as of
     the date  hereof,  and any  present  judgments  and  injunctions  issued or
     promulgated  thereunder  relating to pollution or  protection of public and
     employee  health  and  safety,   the  environment  or  hazardous  or  toxic
     substances or wastes,  pollutants or  contaminants  applicable to it or its
     business or operations or ownership or use of its property  ("ENVIRONMENTAL
     LAWS"),  other than  noncompliance  or such costs or liabilities that would
     not  reasonably  be expected  to have a Material  Adverse  Effect,  and (B)
     possesses  all  permits,   licenses  or  other  approvals   required  under
     applicable Environmental Laws, except where the failure to possess any such
     permit, license or other approval would not reasonably be expected to have,
     either  individually or in the aggregate,  a Material  Adverse Effect.  All
     currently  pending  and,  to  the  knowledge  of  the  Company,  threatened
     proceedings,   notices  of   violation,   demands,   notices  of  potential
     responsibility   or   liability,    suits   and   existing    environmental
     investigations  by any  governmental  authority  which the  Company  or the
     Subsidiaries could reasonably expect to result in a Material Adverse Effect
     are  fully  and  accurately  described  in  all  material  respects  in the
     Prospectus (including any documents incorporated by reference therein). The
     Company and each  Subsidiary  maintains a system of internal  environmental
     management   controls   sufficient  to  provide  reasonable   assurance  of
     compliance  in all  material  respects  of its  business  facilities,  real
     property and operations with requirements of applicable Environmental Laws;

          (r)  The  Company   and  each   Subsidiary   has  (A)  all   licenses,
     certificates,  permits,  authorizations,  approvals,  franchises  and other
     rights from, and has made all declarations and filings with, all applicable
     authorities,  all  self-regulatory  authorities  and all  courts  and other
     tribunals  (each, an  "AUTHORIZATION")  necessary to engage in the business



<PAGE>
                                      -13-

     conducted by it in the manner  described in the  Prospectus  (including any
     documents incorporated by reference therein),  except where failure to hold
     such  Authorizations  would not be  reasonably  expected to have a Material
     Adverse Effect,  and (B) no reason to believe that any governmental body or
     agency,  domestic  or  foreign,  is  considering  limiting,  suspending  or
     revoking any such Authorization,  except where such limitation,  suspension
     or revocation  would not reasonably be expected to have a Material  Adverse
     Effect. All such  Authorizations are valid and in full force and effect and
     the Company and each  Subsidiary is in compliance in all material  respects
     with the terms and conditions of all such Authorizations and with the rules
     and  regulations of the regulatory  authorities  having  jurisdiction  with
     respect to such Authorizations, except for any invalidity, failure to be in
     full force and effect or noncompliance  with any  Authorization  that would
     not reasonably be expected to have a Material Adverse Effect;

          (s) The Company and each  Subsidiary  has valid title in fee simple to
     all items of real property and title to all personal property owned by each
     of them,  in each  case free and clear of any  pledge,  lien,  encumbrance,
     security  interest or other defect or claim of any third party,  except (i)
     as such does not materially and adversely affect the value of such property
     and does not  interfere  with the use made or  proposed  to be made of such
     property  by  the  Company  or  such  Subsidiary  to an  extent  that  such
     interference would have a Material Adverse Effect, and (ii) liens set forth
     in the  Prospectus  (including  any  documents  incorporated  by  reference
     therein).  Any real property and buildings  held under lease by the Company
     or any such  Subsidiary are held under valid,  subsisting  and  enforceable
     leases,  with such  exceptions as do not materially  interfere with the use
     made or proposed to be made of such  property and  buildings by the Company
     or such Subsidiary;

          (t) The Company and each Subsidiary  owns,  possesses or has the right
     to employ all patents,  patent rights,  licenses,  inventions,  copyrights,
     know-how  (including trade secrets and other unpatented and/or unpatentable
     proprietary   or   confidential   information,   systems  or   procedures),
     trademarks, service marks and trade names (collectively,  the "INTELLECTUAL
     PROPERTY")  necessary to conduct the businesses operated by it as described
     in the  Prospectus  (including  any  documents  incorporated  by  reference
     therein),  except  where the  failure to own,  possess or have the right to
     employ such Intellectual  Property would not reasonably be expected to have
     a  Material  Adverse  Effect.  None of the  Company or any  Subsidiary  has
     received any notice of  infringement of or conflict with (and neither knows
     of any such infringement or a conflict with) asserted rights of others with
     respect to any of the foregoing that would reasonably be expected to have a
     Material Adverse Effect. The use of the Intellectual Property in connection
     with the business and operations of the Company and the  Subsidiaries  does
     not infringe on the rights of any person,  except for such  infringement as
     would not reasonably be expected to have a Material Adverse Effect;


<PAGE>
                                      -14-

          (u) All tax  returns  required  to be  filed by the  Company  and each
     Subsidiary  have been filed in all  jurisdictions  where such  returns  are
     required to be filed; and all taxes,  including  withholding  taxes,  value
     added and franchise taxes,  penalties and interest,  assessments,  fees and
     other  charges due or claimed to be due from such  entities or that are due
     and payable have been paid,  other than those being contested in good faith
     and for which  reserves  have been provided in  accordance  with  generally
     accepted  accounting  principles  in effect  from time to time  ("GAAP") or
     those  currently  payable  without penalty or interest and except where the
     failure to make such required  filings or payment  would not  reasonably be
     expected  to  have a  Material  Adverse  Effect.  To the  knowledge  of the
     Company,  there are no material proposed additional tax assessments against
     any of the Company and the Subsidiaries or their assets or property;

          (v)  Neither  the  Company  nor  the  Subsidiaries  has  any  material
     liability for any prohibited  transaction or accumulated funding deficiency
     (within the meaning of Section 412 of the Code) or any  complete or partial
     withdrawal  liability with respect to any pension,  profit sharing or other
     plan which is subject to the  Employee  Retirement  Income  Security Act of
     1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
     makes or ever has made a  contribution  and in which  any  employee  of the
     Company or any of the Subsidiaries is or has ever been a participant.  With
     respect to such  plans,  the  Company  and each of the  Subsidiaries  is in
     compliance  in all material  respects  with all  applicable  provisions  of
     ERISA;

          (w) Neither the Company nor any Subsidiary is an "investment  company"
     or a company  "controlled" by an "investment  company"  incorporated in the
     United States within the meaning of the Investment  Company Act of 1940, as
     amended;

          (x) The  Company  and each  Subsidiary  maintain a system of  internal
     accounting  controls that the Company reasonably  believes is sufficient to
     provide  reasonable  assurance  that:  (A)  transactions  are  executed  in
     accordance  with  management's  general  or  specific  authorizations;  (B)
     transactions  are  recorded  as  necessary  to  permit  preparation  of its
     financial statements in conformity with GAAP and to maintain accountability
     for  assets;  (C) access to assets is  permitted  only in  accordance  with
     management's  general  or  specific  authorization;  and (D)  the  recorded
     accountability  for its  assets is  compared  with the  existing  assets at
     reasonable  intervals and  appropriate  action is taken with respect to any
     differences;

          (y) Except as described in the  Prospectus  (including  any  documents
     incorporated  by  reference  therein),  the  Company  and  each  Subsidiary
     maintain  insurance  covering  its  properties,   assets,   operations  and
     businesses,  and such  insurance  is of such  type and in such  amounts  in
     accordance with customary  industry practice to protect the Company and the
     Subsidiaries and their businesses;


<PAGE>
                                      -15-

          (z) As of December  31, 2003,  neither the Company nor any  Subsidiary
     had any material  liabilities or  obligations,  direct or contingent,  that
     were not set forth in the Company's  consolidated  balance sheet as of such
     date or in the notes  thereto set forth in the  Prospectus  (including  any
     documents  incorporated  by reference  therein).  Since  December 31, 2003,
     except  as set  forth or  contemplated  in the  Prospectus  (including  any
     documents  incorporated by reference therein),  (a) neither the Company nor
     any Subsidiary has (1) incurred any liabilities or  obligations,  direct or
     contingent,  that would  reasonably be expected to have a Material  Adverse
     Effect,  or (2) entered into any material  transaction  not in the ordinary
     course of business,  (b) there has not been any event or  development  with
     respect to the  business or condition  (financial  or other) of the Company
     and the Subsidiaries that, either  individually or in the aggregate,  would
     reasonably  be expected to have a Material  Adverse  Effect,  (c) there has
     been no dividend or distribution of any kind declared,  paid or made by the
     Company on any class of its capital stock, other than the Company's regular
     quarterly  dividend,  and  (d)  there  has  not  been  any  change  in  the
     non-current  portion  of  long-term  debt  of  the  Company  or  any of the
     Subsidiaries;

          (aa)  Neither the Company  nor any of the  Subsidiaries  (or any agent
     thereof acting on their behalf) has taken,  and none of them will take, any
     action that might cause this Agreement or the issuance or sale of the Notes
     to violate  Regulation  T, U or X of the Board of  Governors of the Federal
     Reserve System, as in effect, or as the same may hereafter be in effect, on
     the Closing Date;

          (bb) The Company has received a representation from KPMG LLP that they
     are independent  accountants  within the meaning of the Act. The historical
     financial  statements and the notes thereto  included and  incorporated  by
     reference in the Registration Statement,  any Preliminary Prospectus or the
     Prospectus  present  fairly  in  all  material  respects  the  consolidated
     financial  position  and  results  of  operations  of the  Company  and its
     subsidiaries  at the  respective  dates  and  for  the  respective  periods
     indicated.  Such financial statements have been prepared in accordance with
     GAAP applied on a consistent basis throughout the periods presented (except
     as disclosed in the  Prospectus  (including any documents  incorporated  by
     reference  therein)).  The other financial and statistical  information and
     data included in the Registration Statement,  any Preliminary Prospectus or
     the  Prospectus  are  accurately  presented  in all  material  respects and
     prepared on a basis consistent with the financial  statements and the books
     and records of the Company and its subsidiaries;

          (cc) Except as described in the section entitled "Underwriting" in the
     Prospectus,  there are no contracts,  agreements or understandings  between
     the Company or any of its  Subsidiaries and any other person other than the
     Underwriters that would give rise to a valid claim against the Company, any
     such Subsidiary or the  Underwriters for a brokerage  commission,  finder's
     fee or like payment in connection  with the issuance,  purchase and sale of
     the Notes;


<PAGE>
                                      -16-

          (dd) The  statistical  and  market-related  data  and  forward-looking
     statements (within the meaning of Section 27A of the Act and Section 21E of
     the Exchange Act) included in the Registration  Statement,  any Preliminary
     Prospectus or the  Prospectus are based on or derived from sources that the
     Company  believes to be reliable and accurate in all material  respects and
     represent  their  good faith  estimates  that are made on the basis of data
     derived from such sources;

          (ee)  As  of  the  Closing  Date,  each  of  the  representations  and
     warranties  of the  Company and the  Subsidiaries  set forth in each of the
     Note  Documents  will be true and correct as if made at and as of such date
     (other than to the extent any such  representation or warranty is expressly
     made as to only a certain other date); and

          (ff)  Each  certificate  signed  by any  officer  of the  Company  and
     delivered to the Underwriters or counsel for the Underwriters  pursuant to,
     or  in  connection   with,   this  Agreement   shall  be  deemed  to  be  a
     representation  and warranty by the Company to the  Underwriters  as to the
     matters covered by such certificate.

     The Company  acknowledges  that the  Underwriters  and, for purposes of the
opinions  to be  delivered  to the  Underwriters  pursuant  to Section 6 of this
Agreement, counsel to the Company and counsel to the Underwriters will rely upon
the accuracy and truth of the foregoing representations,  and the Company hereby
consents to such reliance.

     6.  Conditions  of  Underwriters'  Obligations.   The  obligations  of  the
         ------------------------------------------
Underwriters  to  purchase  and pay  for  the  Notes,  as  provided  for in this
Agreement, shall be subject to satisfaction of the following conditions prior to
or concurrently with such purchase:

          (a) All of the representations and warranties of the Company contained
     in this  Agreement  shall be true and  correct,  or true and correct in all
     material  respects  where  such  representations  and  warranties  are  not
     qualified by materiality or Material  Adverse  Effect,  on the date of this
     Agreement  and,  in each  case  after  giving  effect  to the  transactions
     contemplated  hereby,  on the Closing Date, except that if a representation
     and  warranty  is made as of a specific  date,  and such date is  expressly
     referred to therein,  such  representation  and warranty  shall be true and
     correct (or true and correct in all material respects, as applicable) as of
     such date.  The Company  shall have  performed or complied  with all of the
     agreements  and  covenants  contained in this  Agreement and required to be
     performed or complied with by it at or prior to the Closing Date.

          (b) No action shall have been taken and no statute,  rule,  regulation
     or order  shall have been  enacted,  adopted or issued by any  governmental



<PAGE>
                                      -17-

     agency that  would,  as of the Closing  Date,  prevent the  issuance of the
     Notes;  and except as disclosed in the Prospectus  (including any documents
     incorporated  therein by reference),  no action,  suit or proceeding  shall
     have been  commenced  and be pending  against or affecting  or, to the best
     knowledge  of the  Company,  threatened  against  the  Company  and/or  any
     Subsidiary before any court or arbitrator or any governmental  body, agency
     or official that would  reasonably  be expected to have a Material  Adverse
     Effect.

          (c) At the Closing Date there shall not have occurred,  since the date
     of this Agreement, any downgrading, nor shall any notice have been received
     by the Company of (i) any  intended or  potential  downgrading  or (ii) any
     review or possible  change that does not  indicate an  improvement,  in the
     rating  accorded  any  securities  of or  guaranteed  by the Company or any
     Subsidiary by any "nationally  recognized statistical rating organization,"
     as that term is defined in Rule 436(g)(2) promulgated under the Act.

          (d) No  amendment  or  supplement  to the  Registration  Statement  or
     Prospectus,  including  documents  deemed to be  incorporated  by reference
     therein,  shall be filed to which  the  Underwriters  reasonably  object in
     writing.

          (e) All filings with the Commission required by Rule 424 under the Act
     to have been filed by the time of purchase  shall have been made within the
     applicable time period prescribed for such filing by Rule 424.

          (f) Prior to the  Closing  Date (i) no stop order with  respect to the
     effectiveness  of the  Registration  Statement shall have been issued under
     the Act and be  remaining  in effect  and no  proceedings  initiated  under
     Section  8(d) or 8(e) of the Act shall be  pending;  (ii) the  Registration
     Statement and all amendments  thereto,  or modifications  thereof,  if any,
     shall not contain an untrue statement of a material fact or omit to state a
     material  fact  required  to be stated  therein  or  necessary  to make the
     statements  therein  not  misleading;  and  (iii)  the  Prospectus  and all
     amendments or supplements thereto, or modifications  thereof, if any, shall
     not  contain  an 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 are made, not misleading.

          (g) You shall have  received  certificates,  dated the  Closing  Date,
     signed by two  authorized  officers  of the Company  confirming,  as of the
     Closing Date, to their knowledge,  the matters set forth in paragraphs (a),
     (b), (c) and (f) of this Section 6.

          (h) You shall have  received on the Closing Date an opinion  dated the
     Closing Date, addressed to the Underwriters,  of Wyche, Burgess,  Freeman &
     Parham,  P.A., counsel to the Company  substantially in the form of Exhibit
     A, attached hereto and in form and substance reasonably satisfactory to the
     Underwriters and counsel to the Underwriters.


<PAGE>
                                      -18-

          (i) You shall have received on the Closing Date an opinion (reasonably
     satisfactory in form and substance to the  Underwriters)  dated the Closing
     Date of Cahill Gordon & Reindel LLP, counsel to the Underwriters.

          (j) You  shall  have  received  a  "comfort  letter"  from  KPMG  LLP,
     independent  public  accountants  for the  Company,  dated the date of this
     Agreement,  addressed  to  the  Underwriters  and  in  form  and  substance
     reasonably   satisfactory   to  the   Underwriters   and   counsel  to  the
     Underwriters.   In  addition,   the  Underwriters  shall  have  received  a
     "bring-down  comfort  letter" from KPMG LLP (which shall include tick marks
     for the unaudited  financial  data in the  Prospectus  and in the Company's
     Annual Report on Form 10-K for the year ended December 31, 2003),  dated as
     of the  Closing  Date,  addressed  to the  Underwriters  and  in  form  and
     substance  reasonably  satisfactory to the  Underwriters and counsel to the
     Underwriters.

          (k) The Company  shall have entered into the  Indenture  and you shall
     have received copies, conformed as executed, thereof.

          (l) All  government  authorizations  required in  connection  with the
     issue and sale of the Notes as  contemplated  under this  Agreement and the
     performance of the Company's  obligations hereunder and under the Indenture
     and the Notes shall be in full force and effect.

          (m) You shall have been  furnished  with wiring  instructions  for the
     application of the proceeds of the Notes in accordance  with this Agreement
     and such other  information  as you may  reasonably  request in  connection
     therewith.

          (n) Cahill Gordon & Reindel LLP,  counsel to the  Underwriters,  shall
     have been furnished  with such documents as they may reasonably  request to
     enable them to review or pass upon the matters  referred to in this Section
     6 and in order to evidence the accuracy,  completeness  or  satisfaction in
     all  material  respects  of  any  of  the  representations,  warranties  or
     conditions contained in this Agreement.

          (o) All  agreements  set  forth in the  representation  letter  of the
     Company  to  DTC  relating  to  the  approval  of  the  Notes  by  DTC  for
     "book-entry"  transfer  shall  have  been  complied  with  in all  material
     respects.

     If any of the  conditions  specified  in this Section 6 shall not have been
fulfilled in all material  respects when and as required by this Agreement to be
fulfilled (or waived by the  Underwriters),  this Agreement may be terminated by
the Underwriters on notice to the Company at any time at or prior to the Closing
Date, and such termination  shall be without liability of any party to any other
party. Notwithstanding any such termination, the provisions of Sections 4(i), 7,
8, 9 and 10 shall remain in effect.


<PAGE>
                                      -19-

     The documents  required to be delivered by this Section 6 will be delivered
at the office of Cahill Gordon & Reindel LLP on the Closing Date.

     7.  Indemnification.  (a) The Company agrees to indemnify and hold harmless
         ---------------
the Underwriters,  each person, if any, who controls the Underwriters within the
meaning  of  Section 15 of the Act or Section  20(a) of the  Exchange  Act,  the
agents,  employees,  officers and directors of the  Underwriters and the agents,
employees,  officers  and  directors  of any such  controlling  person  from and
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including,  but not  limited,  to  reasonable  attorneys'  fees and any and all
reasonable out-of-pocket expenses actually incurred in investigating,  preparing
or  defending  against any  litigation,  commenced or  threatened,  or any claim
whatsoever,  and any and all reasonable  amounts paid in settlement of any claim
or  litigation  (in the manner set forth in clause  (c)  below))  (collectively,
"LOSSES")  to which they or any of them may become  subject  under the Act,  the
Exchange Act or otherwise insofar as such Losses (or actions in respect thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of  a  material  fact  contained  in  the  Registration  Statement  (or  in  the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
7 being deemed to include any  Preliminary  Prospectus  and the  Prospectus,  as
amended or supplemented  by the Company),  or arise out of or are based upon the
omission or alleged  omission to state therein a material fact necessary to make
the statements  therein, in the light of the circumstances under which they were
made, not  misleading;  provided,  however,  that the Company will not be liable
under this  Section  7(a) to the extent,  but only to the extent,  that any such
Loss arises out of or is based upon any such untrue  statement or alleged untrue
statement or omission or alleged  omission  made therein in reliance upon and in
conformity with information relating to an Underwriter  furnished to the Company
by or on  behalf  of  such  Underwriter  expressly  for use  therein,  provided,
however,  that  with  respect  to any  untrue  statement  or  omission  from the
Preliminary  Prospectus the indemnity  agreement  contained in this Section 7(a)
shall not inure to the benefit of any Underwriter to the extent that the sale to
the person asserting any such Loss was an initial resale by such Underwriter and
any such Loss of or with respect to such Underwriter  results from the fact that
both (A) to the extent  required by applicable law, a copy of the Prospectus was
not sent or given to such person at or prior to the written  confirmation of the
sale of the Notes to such  person and (B) the untrue  statement  in or  omission
from the Preliminary Prospectus was corrected in the Prospectus.  This indemnity
agreement  will be in addition to any  liability  that the Company may otherwise
have, including, but not limited to, liability under this Agreement.

     (b) Each  Underwriter  severally  agrees to indemnify and hold harmless the
Company,  each person,  if any,  who controls the Company  within the meaning of
Section  15 of the Act or Section  20(a) of the  Exchange  Act,  and each of its
respective agents, employees,  officers and directors and the agents, employees,
officers  and  directors  of any such  controlling  person  from and against any



<PAGE>
                                      -20-

Losses  to which  they or any of them may  become  subject  under  the Act,  the
Exchange Act or otherwise insofar as such Losses (or actions in respect thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of  a  material  fact  contained  in  the  Registration  Statement  (or  in  the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a  Prospectus,  or arise out of or are based upon the omission or
alleged  omission  to  state  therein  a  material  fact  necessary  to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading,  in each case to the extent, but only to the extent,  that
any such Loss  arises out of or is based upon any  untrue  statement  or alleged
untrue  statement or omission or alleged  omission made therein in reliance upon
and in conformity with  information  relating to such  Underwriter  furnished in
writing, including by electronic transmission, to the Company by or on behalf of
such  Underwriter  expressly for use therein.  The Company and the  Underwriters
acknowledge that the information  described in Section 9 is the only information
furnished in writing, including by electronic transmission,  by the Underwriters
to  the  Company  expressly  for  use  in  the  Preliminary  Prospectus  or  the
Prospectus.

     (c) Promptly after receipt by an indemnified party under subsection 7(a) or
7(b)  above of notice of the  commencement  of any  action,  suit or  proceeding
(collectively, an "ACTION"), such indemnified party shall, if a claim in respect
thereof is to be made  against the  indemnifying  party  under such  subsection,
notify each party against whom indemnification is to be sought in writing of the
commencement of such action (but the failure so to notify an indemnifying  party
shall not relieve such  indemnifying  party from any liability  that it may have
under this  Section 7 except to the extent  that it has been  prejudiced  in any
material  respect by such failure).  In case any such action is brought  against
any indemnified party, and it notifies an indemnifying party of the commencement
of such action,  the indemnifying  party will be entitled to participate in such
action,  and to the  extent  it may elect by  written  notice  delivered  to the
indemnified  party  promptly  after  receiving  the  aforesaid  notice from such
indemnified   party,   to  assume  the  defense  of  such  action  with  counsel
satisfactory  to such  indemnified  party.  Notwithstanding  the foregoing,  the
indemnified  party or  parties  shall  have the right to employ its or their own
counsel in any such action, but the reasonable fees and expenses of such counsel
shall be at the  expense of such  indemnified  party or  parties  unless (i) the
employment  of such  counsel  shall  have  been  authorized  in  writing  by the
indemnifying  parties in  connection  with the defense of such action,  (ii) the
indemnifying  parties  shall not have  employed  counsel  to take  charge of the
defense of such action within a reasonable  time after notice of commencement of
the action,  or (iii) the named parties to such action  (including any impleaded
parties)  include such indemnified  party and the indemnifying  parties (or such
indemnifying  parties  have  assumed  the  defense  of such  action),  and  such
indemnified  party or parties shall have reasonably  concluded that there may be
defenses  available to it or them that are different from or additional to those
available  to one  or  all  of the  indemnifying  parties  (in  which  case  the
indemnifying  parties  shall not have the right to direct  the  defense  of such
action on behalf of the  indemnified  party or parties),  in any of which events
such reasonable fees and expenses of counsel shall be borne by the  indemnifying
parties.  In no event  shall the  indemnifying  party be liable for the fees and



<PAGE>
                                      -21-

expenses of more than one counsel  (together with appropriate  local counsel) at
any time for all indemnified  parties (including,  without  limitation,  parties
indemnified  under  Section  12  hereof)  in  connection  with any one action or
separate  but  substantially  similar  or  related  actions  arising in the same
jurisdiction  out  of  the  same  general   allegations  or  circumstances.   An
indemnifying party shall not be liable for any settlement of any claim or action
effected  without  its written  consent  which  consent may not be  unreasonably
withheld.  Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an  indemnifying  party to reimburse the  indemnified
party for fees and expenses of counsel as  contemplated  by paragraph (a) or (b)
of this  Section 7, then the  indemnifying  party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 45 business days after receipt by such
indemnifying party of the aforesaid request,  (ii) such indemnifying party shall
not have reimbursed the indemnified  party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 45 days prior notice of its intention to settle.
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.

     8.  Contribution.  In order to provide for contribution in circumstances in
         ------------
which the indemnification provided for in Sections 7 and 12 of this Agreement is
for any  reason  held to be  unavailable  from  the  indemnifying  party,  or is
insufficient  to hold  harmless  a party  indemnified  under  Section  7 of this
Agreement,  each  indemnifying  party  shall  contribute  to the amount  paid or
payable by such  indemnified  party as a result of such aggregate  Losses (i) in
such proportion as is appropriate to reflect the relative  benefits  received by
the Company, on the one hand, and each Underwriter,  on the other hand, from the
offering of the Notes or (ii) if such  allocation is not permitted by applicable
law, in such  proportion  as is  appropriate  to reflect  not only the  relative
benefits  referred to above but also the relative  fault of the Company,  on the
one hand,  and each  Underwriter,  on the other  hand,  in  connection  with the
statements  or  omissions  that  resulted in such  Losses,  as well as any other
relevant  equitable  considerations.  The  relative  benefits  received  by  the
Company,  on the one hand,  and each  Underwriter,  on the other hand,  shall be
deemed to be in the same  proportion as (x) the total proceeds from the offering
of Notes  (net of  discounts  and  commissions  but before  deducting  expenses)
received by the Company are to (y) the total discounts and commissions  received
by such  Underwriter in connection with the offering.  The relative fault of the
Company,  on the one hand,  and each  Underwriter,  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  such
Underwriter and the parties' relative intent,  knowledge,  access to information
and  opportunity  to correct or prevent  such  statement  or omission or alleged
statement or omission.


<PAGE>
                                      -22-

     The  Company  and each  Underwriter  agree  that it  would  not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation  that does not take into account
the equitable  considerations referred to above.  Notwithstanding the provisions
of this Section 8, (i) in no case shall an Underwriter be required to contribute
any amount in excess of the amount by which the total discount applicable to the
Notes  pursuant to this  Agreement  exceeds the amount of any damages  that such
Underwriter  has  otherwise  been  required  to pay by reason  of any  untrue or
alleged  untrue  statement  or omission or alleged  omission  and (ii) no person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(a) of
the Act) shall be entitled to contribution  (within the meaning of Section 11(f)
of  the  Act)  from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  For  purposes of this  Section 8, each  person,  if any, who
controls an  Underwriter  within the meaning of Section 15 of the Act or Section
20(a) of the  Exchange  Act shall have the same rights to  contribution  as such
Underwriter,  and each  person,  if any,  who  controls  the Company  within the
meaning of Section 15 of the Act or Section  20(a) of the  Exchange Act and each
director,  officer, employee and agent of the Company shall have the same rights
to  contribution  as the  Company.  Any party  entitled  to  contribution  will,
promptly  after  receipt of notice of  commencement  of any action  against such
party in respect of which a claim for  contribution  may be made against another
party or parties  under this  Section 8, notify such party or parties  from whom
contribution may be sought,  but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise,  except to
the extent that it has been prejudiced in any material  respect by such failure;
provided,  however,  that no additional notice shall be required with respect to
any action  for which  notice has been given  under  Section 7 for  purposes  of
indemnification.  Anything in this section to the contrary  notwithstanding,  no
party  shall be liable  for  contribution  with  respect  to any action or claim
settled  without its  written  consent,  provided,  however,  that such  written
consent was not unreasonably withheld.

     9. Underwriters'  Information.  The Company and the Underwriters  severally
        --------------------------
acknowledge  that the statements set forth in paragraphs 6-9 and 12-18 under the
caption   "Underwriting"  in  the  Preliminary  Prospectus  and  the  Prospectus
constitute the only  information  furnished in writing,  including by electronic
transmission,   by  the  Underwriters  expressly  for  use  in  the  Preliminary
Prospectus or the Prospectus.

     10. Survival of Representations  and Agreements.  All  representations  and
         -------------------------------------------
warranties,  covenants and agreements contained in this Agreement, including the
agreements  contained in Section  4(i),  the indemnity  agreements  contained in
Section 7 and the  contribution  agreements  contained in Section 8 shall remain
operative and in full force and effect regardless of any  investigation  made by
or on behalf of the  Underwriters or any controlling  person thereof or by or on
behalf of the  Company or any  controlling  person  thereof,  and shall  survive
delivery of and payment for the Notes to and by the Underwriters. The agreements
contained in Sections  4(i), 7, 8, and 9 shall survive the  termination  of this
Agreement, including pursuant to Section 11.


<PAGE>
                                      -23-

     11.  Effective Date of Agreement;  Termination.  (a) This  Agreement  shall
          -----------------------------------------
become effective upon execution and delivery of a counterpart  hereof by each of
the parties hereto.

     (b) The  Underwriters  shall have the right to terminate  this Agreement at
any  time  prior  to the  Closing  Date  by  notice  to  the  Company  from  the
Underwriters, without liability (other than with respect to Sections 4(i), 7 and
8) on the  Underwriters'  part to the Company if, on or prior to such date,  (i)
the Company shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed  under this Agreement when and
as required,  (ii) any other  condition to the  obligations of the  Underwriters
under this Agreement to be fulfilled by the Company pursuant to Section 6 is not
fulfilled  when and as  required  in any  material  respect,  (iii)  trading  in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National  Market shall have been suspended or materially  limited,
or minimum prices shall have been established  thereon by the Commission,  or by
such  exchange  or  other  regulatory  body  or  governmental  authority  having
jurisdiction,  (iv) a general  banking  moratorium  shall have been  declared by
federal or New York  authorities,  (v) there is an  outbreak  or  escalation  of
hostilities or other national or international  calamity,  in any case involving
the United States, on or after the date of this Agreement,  or if there has been
a  declaration  by the  United  States of a national  emergency  or war or other
national or international calamity or crisis (economic,  political, financial or
otherwise) which affects the U.S. and international  markets,  making it, in the
Underwriters' reasonable judgment, impracticable to proceed with the offering or
delivery  of the  Notes  on the  terms  and in the  manner  contemplated  in the
Prospectus  or (vi)  there  shall have been such a  material  adverse  change in
general economic,  political or financial conditions or the effect (or potential
effect if the  financial  markets in the United  States  have not yet opened) of
international  conditions on the financial markets in the United States shall be
such as, in the  Underwriters'  reasonable  judgment,  to make it inadvisable or
impracticable to proceed with the offering or delivery of the Notes on the terms
and in the manner contemplated in the Prospectus.

     (c) Any notice of termination pursuant to this Section 11 shall be given at
the  address  specified  in Section  13 below by  telephone,  telex,  telephonic
facsimile or telegraph, confirmed in writing by letter.

     (d) Subject to Section 7 and this  Section 11, if, at the time of purchase,
any Underwriter shall default in its obligation to take up and pay for the Notes
to be  purchased  by it at such  time  hereunder  (otherwise  than  for a reason
sufficient to justify the  termination of this Agreement under the provisions of
this  Section  11) and if the  aggregate  principal  amount  of Notes  which all
Underwriters  so defaulting  shall have agreed but failed to take up and pay for
at such time does not  exceed  10% of the total  aggregate  principal  amount of
Notes to be purchased at such time, the  non-defaulting  Underwriters shall take
up and pay for (in addition to the aggregate  number of Notes they are obligated



<PAGE>
                                      -24-

to purchase at such time pursuant to Section 2 hereof) the  aggregate  principal
amount of Notes agreed to be purchased by all such  defaulting  Underwriters  at
such time, as hereinafter provided. Such Notes shall be taken up and paid for by
such non-defaulting Underwriter or Underwriters in such amount or amounts as the
Representative  may designate with the consent of each Underwriter so designated
or, in the event no such  designation is made,  such Notes shall be taken up and
paid  for by all  non-defaulting  Underwriters  pro  rata in  proportion  to the
aggregate   principal   amount  of  Notes  set   opposite   the  names  of  such
non-defaulting Underwriters in Schedule I.
                               ----------

     Without   relieving  any  defaulting   Underwriter   from  its  obligations
hereunder, the Company agrees with the non-defaulting  Underwriters that it will
not sell any  Notes  hereunder  unless  all of the Notes  are  purchased  by the
Underwriters (or by substituted Underwriters selected by the Representative with
the approval of the Company or selected by the Company with the Representative's
approval).

     If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting  Underwriter or  Underwriters in accordance with
the foregoing provision,  the Company or the Representative shall have the right
to postpone the time of purchase for a period not  exceeding  five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.

     The term "Underwriter" as used in this Agreement shall refer to and include
any  Underwriter  substituted  under this Section 11 with like effect as if such
substituted Underwriter had originally been named in Schedule I.
                                                     ----------

     If, at the time of purchase,  the aggregate principal amount of Notes which
the defaulting Underwriter or Underwriters agreed to purchase exceeds 10% of the
total  principal  amount of Notes  which  all  Underwriters  agreed to  purchase
hereunder, and if neither the non-defaulting  Underwriters nor the Company shall
make  arrangements  within the five  business  day period  stated  above for the
purchase  of all the Notes  which the  defaulting  Underwriter  or  Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or  deed  and  without  any  liability  on the  part of the  Company  to any
non-defaulting  Underwriter  and  without  any  liability  on  the  part  of any
non-defaulting  Underwriter to the Company.  Nothing in this  paragraph,  and no
action taken hereunder,  shall relieve any defaulting Underwriter from liability
in respect of any  default of such  Underwriter  under this  Agreement.  If this
Agreement  is  terminated  as  contemplated   in  this  paragraph,   or  if  the
Underwriters otherwise fail to perform in any material respect their obligations
hereunder,  then,  in addition to any other  remedies that the Company may have,
the  defaulting  Underwriters  shall be  jointly  and  severally  liable for the
reasonable fees, expenses and disbursements of Company's counsel.

     12. Qualified Independent Underwriter
         ---------------------------------


<PAGE>
                                      -25-

     (a) The Company  agrees to  indemnify,  defend and hold  harmless  Barclays
Capital Inc., in its capacity as a "qualified  independent  underwriter"  within
the meaning of Rule 2720 ("RULE  2720") of the Rules of Conduct of the NASD (the
"QIU"), and its affiliates, and each person, if any, who controls the QIU within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act (collectively,  the "QIU INDEMNIFIED PARTIES") against any and all Losses to
which the QIU may become  subject  under the Act,  the Exchange Act or otherwise
insofar as such Losses (or actions in respect thereof) arise out of or are based
upon any  untrue  statement  or alleged  untrue  statement  of a  material  fact
contained in the  Registration  Statement (or in the  Registration  Statement as
amended  by  any  post-effective  amendment  thereof  by  the  Company)  or in a
Prospectus  (the term Prospectus for the purpose of this Section 12 being deemed
to  include  any  Preliminary  Prospectus  and the  Prospectus,  as  amended  or
supplemented by the Company),  or arise out of or are based upon the omission or
alleged  omission  to  state  therein  a  material  fact  necessary  to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not  misleading;  provided,  however,  that the Company will not be liable
under this Section  12(a) to the extent,  but only to the extent,  that any such
Loss arises out of or is based upon any such untrue  statement or alleged untrue
statement or omission or alleged  omission  made therein in reliance upon and in
conformity with  information  relating to the QIU furnished to the Company by or
on behalf of such the QIU expressly  for use therein,  provided,  however,  that
with respect to any untrue statement or omission from the Preliminary Prospectus
the indemnity  agreement  contained in this Section 12(a) shall not inure to the
benefit of any QIU Indemnified Parties to the extent that the sale to the person
asserting any such Loss was an initial resale by any QIU Indemnified Parties and
any such Loss of or with respect to the QIU Indemnified Parties results from the
fact that both (A) to the  extent  required  by  applicable  law,  a copy of the
Prospectus  was not  sent or  given to such  person  at or prior to the  written
confirmation  of the  sale of the  Notes  to  such  person  and  (B) the  untrue
statement in or omission from the  Preliminary  Prospectus  was corrected in the
Prospectus.  This indemnity  agreement will be in addition to any liability that
the Company may otherwise have,  including,  but not limited to, liability under
this Agreement.;

     (b) Promptly  after receipt by any QIU  Indemnified  Party of notice of the
commencement  of an  action  such QIU  Indemnified  Party  shall,  if a claim in
respect thereof is to be made against the QIU Indemnified  Party under paragraph
12(a), notify the Company in writing of the commencement of such action (but the
failure  so to  notify  the  Company  shall not  relieve  the  Company  from any
liability  that it may have under this  Section 12 except to the extent  that it
has been prejudiced in any material  respect by such failure).  In case any such
action is brought against the QIU Indemnified Party, and it notifies the Company
of the commencement of such action,  the Company will be entitled to participate
in such action,  and to the extent it may elect by written  notice  delivered to
the QIU Indemnified Party promptly after receiving the aforesaid notice from the
QIU  Indemnified  Party,  to assume the  defense  of such  action  with  counsel



<PAGE>
                                      -26-

satisfactory to the QIU Indemnified Party.  Notwithstanding  the foregoing,  the
QIU Indemnified Party shall have the right to employ its own counsel in any such
action,  but the  reasonable  fees and expenses of such counsel  shall be at the
expense of the QIU  Indemnified  Party unless (i) the employment of such counsel
shall have been  authorized  in writing by the  Company in  connection  with the
defense of such action, (ii) the Company shall not have employed counsel to take
charge of the defense of such action  within a  reasonable  time after notice of
commencement of the action, or (iii) the named parties to such action (including
any impleaded parties) include the QIU Indemnified Party and the Company (or the
Company has assumed the defense of such action),  and the QIU Indemnified  Party
shall have reasonably  concluded that there may be defenses available to it that
are different  from or  additional  to those  available to the Company (in which
case the  Company  shall not have the right to direct the defense of such action
on behalf of the QIU Indemnified  Party), in any of which events such reasonable
fees and expenses of counsel  shall be borne by the  Company.  In no event shall
the  Company  be  liable  for the fees and  expenses  of more  than one  counsel
(together  with  appropriate  local  counsel)  at any  time  for the QIU and all
persons  indemnified under Section 7 hereof in connection with any one action or
separate  but  substantially  similar  or  related  actions  arising in the same
jurisdiction out of the same general  allegations or circumstances.  The Company
shall not be liable for any settlement of any claim or action  effected  without
its  written   consent   which  consent  may  not  be   unreasonably   withheld.
Notwithstanding the foregoing sentence, if at any time the QIU Indemnified Party
shall have  requested  the  Company to  reimburse  it for fees and  expenses  of
counsel as  contemplated  by paragraph  (a) of this Section 12, then the Company
agrees that it shall be liable for any  settlement  of any  proceeding  effected
without its written  consent if (i) such settlement is entered into more than 45
business days after receipt by the Company of the  aforesaid  request,  (ii) the
Company shall not have reimbursed the QIU  Indemnified  Party in accordance with
such request prior to the date of such  settlement and (iii) the QIU Indemnified
Party  shall  have  given  the  Company  at least 45 days  prior  notice  of its
intention to settle. The Company shall not, without the prior written consent of
the QIU  Indemnified  Party,  effect any settlement of any pending or threatened
proceeding in respect of which the QIU Indemnified Party is or could have been a
party and  indemnity  could have been sought  hereunder  by the QIU  Indemnified
Party,  unless  such  settlement  includes an  unconditional  release of the QIU
Indemnified  Party from all  liability on claims that are the subject  matter of
such proceeding.

     (c) In order to provide  for  contribution  in  circumstances  in which the
indemnification   provided   for  in  this   Section  12,   together   with  the
indemnification  provided  in  Section 7 hereof,  is for any  reason  held to be
unavailable from the Company,  or is insufficient to hold harmless the QIU, then
the  Company  shall  contribute  to the  amount  paid or payable by the QIU as a
result of such  aggregate  Losses (i) in such  proportion as is  appropriate  to
reflect the relative benefits received by the Company,  on the one hand, and the
QIU,  on the  other  hand,  from  the  offering  of the  Notes  or  (ii) if such
allocation  is not  permitted  by  applicable  law,  in  such  proportion  as is
appropriate to reflect not only the relative benefits referred to above but also
the relative  fault of the Company,  on the one hand,  and the QIU, on the other
hand,  in  connection  with the  statements  or omissions  that resulted in such
Losses,  as well as any other relevant  equitable  considerations.  The relative



<PAGE>
                                      -27-

benefits  received by the  Company,  on the one hand,  and the QIU, on the other
hand,  shall be deemed to be in the same  proportion  as (x) the total  proceeds
from  the  offering  of Notes  (net of  discounts  and  commissions  but  before
deducting expenses) received by the Company are to (y) the total fee received by
the QIU in connection with the offering.  The relative fault of the Company,  on
the one hand,  and the QIU, 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 the QIU and the  parties'
relative intent, knowledge,  access to information and opportunity to correct or
prevent  such   statement   or  omission  or  alleged   statement  or  omission.
Notwithstanding  anything  to  the  contrary  herein,  the  rights  of  any  QIU
Indemnified  Party under Section 12 (a)-(c) shall not be in  duplication of such
person's rights under Section 7 hereof.

     The  Company and the QIU agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  12(c)  were  determined  by pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable  considerations referred to above.  Notwithstanding the provisions
of this Section  12(c),  (i) in no case shall the QIU be required to  contribute
any amount under this  Section  12(c) in excess of the amount by which the total
fees it receives  pursuant to this  Agreement  exceeds the amount of any damages
that the QIU has  otherwise  been  required  to pay by reason  of any  untrue or
alleged  untrue  statement  or omission or alleged  omission  and (ii) no person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(a) of
the Act) shall be entitled to contribution  (within the meaning of Section 11(f)
of  the  Act)  from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  For purposes of this Section 12(c), each person, if any, who
controls the QIU within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act shall have the same rights to contribution as the QIU, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and each  director,  officer,  employee
and agent of the  Company  shall  have the same  rights to  contribution  as the
Company.  Any party  entitled to  contribution  will,  promptly after receipt of
notice of  commencement  of any action  against such party in respect of which a
claim for  contribution  may be made against another party or parties under this
Section  12(c),  notify  such party or  parties  from whom  contribution  may be
sought,  but the  omission to so notify such party or parties  shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this  Section  12(c) or  otherwise,  except to the extent
that it has been prejudiced in any material  respect by such failure;  provided,
however,  that no additional notice shall be required with respect to any action
for  which  notice  has  been  given  under   Section   12(b)  for  purposes  of
indemnification.  Anything in this section to the contrary  notwithstanding,  no
party  shall be liable  for  contribution  with  respect  to any action or claim
settled  without its  written  consent,  provided,  however,  that such  written
consent was not unreasonably withheld.



<PAGE>
                                      -28-

     (d) The Company  hereby  confirms its engagement of the QIU as, and the QIU
hereby  confirms  its  agreement  with the  Company  to  render  services  as, a
"qualified  independent  underwriter",  within the meaning of Section (b)(15) of
Rule 2720 of the NASD with respect to the  offering  and sale of the Notes.  The
QIU,  solely in its capacity as the qualified  independent  underwriter  and not
otherwise,  is referred to herein as the "QIU". As compensation for the services
of the QIU hereunder,  the Company agrees to pay the QIU $100,000 on the Closing
Date. The yield at which the Securities  will be sold to the public shall not be
lower than the minimum yield recommended by the QIU

     (e) The QIU hereby represents and warrants to, and agrees with, the Company
and the Underwriters  that with respect to the offering and sale of the Notes as
described in the Prospectus:

          (i) the QIU constitutes a "qualified  independent  underwriter" within
          the meaning of Rule 2720; and

          (ii) the QIU has  conducted  due  diligence in respect of the offering
          and sale of the Notes as described in the Prospectus.

     (f) The QIU hereby  agrees with the Company and the  Underwriters  that, as
part of its services  hereunder,  in the event of any amendment or supplement to
the  Prospectus,  the QIU  will  render  services  as a  "qualified  independent
underwriter"  within the meaning of Rule 2720 with  respect to the  offering and
sale  of  the  Securities  as  described  in the  Prospectus  as so  amended  or
supplemented  that are  substantially  the same as those services being rendered
with  respect to the  offering  and sale of the  Securities  as described in the
Prospectus.

     The QIU hereby  consents  to the  references  to it as set forth  under the
caption  "Underwriting"  in the  Prospectus  and in any  amendment or supplement
thereto made in accordance with Section 4 hereof.

     13. Notice.  All  communications  with respect to or under this  Agreement,
         ------
except as may be otherwise specifically provided in this Agreement,  shall be in
writing  and,  if sent to the  Underwriters,  shall be  mailed,  delivered,  or,
telegraphed or telecopied  and confirmed in writing to UBS  Securities  LLC, 299
Park Avenue,  New York, New York 10171 (telephone:  (212) 821-3000,  fax number:
(203)-719-1075),  Attention:  Syndicate Department;  and if sent to the Company,
shall be mailed,  delivered  or,  telegraphed  or  telecopied  and  confirmed in
writing to Bowater Incorporated,  55 East Camperdown Way (29601), P.O. Box 1028,
Greenville,  South Carolina 29602-1028  (telephone:  (864) 282-9413,  fax: (864)
282-9219),  Attention:  Treasurer,  with a copy to (for  informational  purposes
only): Attention: Bowater Incorporated, 55 East Camperdown Way (29601), P.O. Box
1028,  Greenville,  South  Carolina  29602-1028,   Attention:  General  Counsel,
facsimile no. (864) 282-9569.


<PAGE>
                                      -29-

     All such  notices  and  communications  shall be  deemed  to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail,  first class and postage prepaid,  if mailed;  when
receipt acknowledged by telecopier machine, if telecopied;  and one business day
after being timely delivered to a nationally recognized,  reputable next day air
courier.

     14.  Parties.  Except as provided in the last  paragraph of Section 5, this
          -------
Agreement  shall inure solely to the benefit of, and shall be binding upon,  the
Underwriters,  the Company and the controlling persons and agents referred to in
Sections 7 and 8, and their  respective  successors  and  assigns,  and no other
person shall have or be construed to have any legal or equitable  right,  remedy
or claim under or in respect of or by virtue of this  Agreement or any provision
herein  contained.  The term  "successors  and  assigns"  shall  not  include  a
purchaser, in its capacity as such, of Notes from the Underwriters.

     15. Construction.  This Agreement shall be construed in accordance with the
         ------------
internal laws of the State of New York (without  giving effect to any provisions
thereof relating to conflicts of law).

     16. Captions.  The captions  included in this Agreement are included solely
         --------
for  convenience  of  reference  and  are  not to be  considered  a part of this
Agreement.

     17.  Counterparts.  This Agreement may be executed in various  counterparts
          ------------
that together shall constitute one and the same instrument.



<PAGE>




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


                                    Very truly yours,

                                    BOWATER INCORPORATED


                                    By:  /s/ William G. Harvey
                                       ----------------------------------------
                                       Name:  William G. Harvey
                                       Title: Vice President and Treasurer


                                    By: /s/ David G. Maffucci
                                       ----------------------------------------
                                       Name:  David G. Maffucci
                                       Title: Executive Vice President and
                                              Chief Financial Officer




<PAGE>



Confirmed and accepted as of the date first above written:

UBS SECURITIES LLC



By:     /s/ Karl Knapp
       -------------------------------------
       Name:  Karl Knapp
       Title: Managing Director



By:     /s/ Joshua Rosenbaum
       -------------------------------------
       Name:  Joshua Rosenbaum
       Title: Associate Director



For itself and the several  Underwriters  named in  Schedule I to the  foregoing
Agreement.







BARCLAYS CAPITAL  INC.
in its capacity as QIU



By:      /s/ Pamela Kendall
       -------------------------------------
       Name:  Pamela Kendall
       Title: Director








<PAGE>

                                                                     SCHEDULE I


----------------------------------------- -------------------------------------
UNDERWRITERS                                PRINCIPAL AMOUNT OF NOTES
----------------------------------------- -------------------------------------
UBS Securities LLC                             $75,000,000
----------------------------------------- -------------------------------------
J.P. Morgan Securities Inc.                     62,500,000
----------------------------------------- -------------------------------------
Scotia Capital (USA) Inc.                       17,500,000
----------------------------------------- -------------------------------------
Harris Nesbitt Corp.                            17,500,000
----------------------------------------- -------------------------------------
Wachovia Capital Markets LLC                    17,500,000
----------------------------------------- -------------------------------------
SunTrust Capital Markets, Inc.                  17,500,000
----------------------------------------- -------------------------------------
CIBC Inc.                                       10,312,500
----------------------------------------- -------------------------------------
BNY Capital Markets, Inc.                       10,312,500
----------------------------------------- -------------------------------------
TD Securities (USA) Inc.                        10,312,500
----------------------------------------- -------------------------------------
Banc of America Securities LLC                  10,312,500
----------------------------------------- -------------------------------------
Barclays Capital Inc.                           1,250,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total                                        $250,000,000
-------------------------------------------------------------------------------


<PAGE>


                                                                   SCHEDULE II

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

                                                                                           JURISDICTION OF
                                                                       % OWNED BY          INCORPORATION
SUBSIDIARY                                TYPE OF ENTITY               THE COMPANY         OR ORGANIZATION
-------------------------------------     --------------               -----------         ---------------
Bowater Canada Finance Corporation        Corporation                  100%                Nova Scotia

Bowater Canada Inc.                       Corporation                  100%(1)             Canada

Bowater Canadian Forest Products Inc.     Corporation                  100%(2)             Canada

Bowater Canadian Holdings Incorporated    Corporation                  100%                Nova Scotia
</TABLE>

(1) Bowater  Canada Inc. has issued 1,000 shares of  non-voting,  nonconvertible
preferred stock to Fraser and Beatty.

(2) Bowater Canadian Forest Products Inc. has issued 1,000 shares of non-voting,
nonconvertible preferred stock to Fraser and Beatty



<PAGE>


                                                                      EXHIBIT A


            FORM OF OPINION OF WYCHE, BURGESS, FREEMAN & PARHAM, P.A.

     The  opinion of Wyche,  Burgess,  Freeman & Parham,  P.A.,  counsel for the
Company  (capitalized terms not otherwise defined herein shall have the meanings
provided in the  Underwriting  Agreement,  to which this is an  Exhibit),  to be
delivered pursuant to Section 6(h) of the Underwriting Agreement shall be to the
effect that:

          (i) Each of the  Company  and the  Subsidiaries  (a) is a  corporation
     validly existing and in good standing under the laws of the jurisdiction of
     its organization,  and (b) has all requisite  corporate power and authority
     necessary  to own its  property  and  carry on its  business  as now  being
     conducted.

          (ii) The Company has all  requisite  corporate  power and authority to
     execute,  deliver  and  perform  all  of its  obligations  under  the  Note
     Documents  and to  consummate  the  transactions  contemplated  by the Note
     Documents  to be  consummated  on its part  and,  without  limitation,  the
     Company has all requisite  corporate power and authority to issue, sell and
     deliver the Notes.

          (iii) The Underwriting Agreement has been duly and validly authorized,
     executed and delivered by the Company.

          (iv) Each of the Base  Indenture  and the  Supplemental  Indenture has
     been duly and validly  authorized,  executed  and  delivered by the Company
     and, assuming due  authorization,  execution and delivery by the Trustee of
     each of the Base Indenture and the  Supplemental  Indenture,  constitutes a
     legal,  valid and binding  obligation  of the Company,  enforceable  in all
     material respects against the Company in accordance with its terms.

          (v) The Notes have been duly and validly  authorized  for issuance and
     sale to the  Underwriters  by the Company and,  when issued,  authenticated
     under the  Indenture and  delivered by the Company  against  payment by the
     Underwriters in accordance with the terms of the Underwriting Agreement and
     the Indenture,  the Notes will be legal,  valid and binding  obligations of
     the Company,  entitled to the benefits of the Indenture and  enforceable in
     all material respects against the Company in accordance with their terms.

          (vi) The material  terms of the Notes  conform as to legal  matters in
     all  material  respects  to  the  description   thereof  contained  in  the
     Prospectus.

          (vii) The  Registration  Statement and the Prospectus  (including with
     respect to documents incorporated therein by reference,  only the Company's
     Annual  Report on Form 10-K for the year ended  December  31,  2003 and all
     documents filed by the Company  pursuant to the Exchange Act since the date
     of the  Underwriting  Agreement,  (the "Specified  Reports")),  (except for
     operating statistics, exhibits, financial statements and the notes thereto,


                                      A-1-1
<PAGE>

     financial schedules,  and other financial,  statistical and accounting data
     included (or  incorporated  by  reference)  therein,  as to which we do not
     express any opinion) appear on their face when filed with the Commission to
     have complied as to form in all material  respects with the requirements of
     the Exchange Act or the Act, as applicable,  and the  applicable  rules and
     regulations of the Commission thereunder.

          (viii) The Registration Statement was declared effective under the Act
     by the  Commission  at  9:00  a.m.,  Washington,  D.C.  time,  on  Tuesday,
     September 23, 2003, and, to our knowledge,  no stop order  proceedings with
     respect thereto have been instituted or threatened by the Commission  under
     the Act. The Preliminary  Prospectus was filed with the Commission pursuant
     to Rule 424(b)  under the Act on March 10, 2004,  and the final  Prospectus
     Supplement  relating to the Notes was filed with the Commission pursuant to
     Rule 424(b) under the Act on or before March 12, 2004.

          (ix) None of the execution, delivery and performance by the Company of
     the Note Documents, including the consummation of the offer and sale of the
     Notes, does or will violate, conflict with or constitute a breach of any of
     the  terms or  provisions  of, or a  default  under (or an event  that with
     notice or the lapse of time, or both, would constitute a default under), or
     require  consent under,  or result in the creation or imposition of a lien,
     charge or  encumbrance  on any  property  or assets  of the  Company  or an
     acceleration  of any  indebtedness  of the  Company  pursuant  to:  (a) the
     certificate of  incorporation,  as amended,  or bylaws of the Company,  (b)
     assuming the  consummation  of the  transactions  contemplated  by the Note
     Documents,  any  agreement  listed on  Exhibit  A  attached  hereto,  which
                                            ----------
     agreements  have been  identified to us by the Company as being material to
     the  transactions  contemplated  by the Note  Documents  (each, a "Material
     Agreement"),  (c) to our knowledge,  any law,  statute,  rule or regulation
     known to us to be applicable to the Company or its assets or properties, or
     (d) any  judgment,  order or  decree,  in each  case  known  to us,  of any
     domestic  or  foreign  court or  governmental  agency or  authority  having
     jurisdiction over the Company or it assets or properties other than, in the
     case of each of clauses (a) through (d), violations,  conflicts,  breaches,
     defaults,  creations or impositions of liens,  charges or encumbrances,  or
     accelerations  of  indebtedness  that  would  not have a  Material  Adverse
     Effect.

          (x) To our knowledge,  no consent,  approval,  authorizations or other
     order of, or registration  or filing with, any court or other  governmental
     or regulatory  authority or agency is required for the Company's execution,
     delivery  and  performance  of the  Note  Documents,  or the  issuance  and
     delivery  of the Notes or  consummation  of the  transactions  contemplated
     hereby and  thereby and by the  Prospectus,  except such as may be required
     under  federal  and state  securities  laws and except for the order of the
     Commission declaring the Registration Statement effective.

          (xi) To our  knowledge,  there  does not  exist any  judgment,  order,
     injunction  or other  restraint  issued  by or filed  with any  court  with
     respect  to the  transactions  contemplated  by the Note  Documents  or the
     performance by the Company of its obligations under the Note Documents.

                                      A-1-2
<PAGE>

          (xii) To our  knowledge,  none of the Company or any  Subsidiary is an
     "investment company," or a company "controlled" by an "investment company,"
     incorporated  in the United  States  within the  meaning of the  Investment
     Company Act of 1940, as amended.

          (xiii) To our knowledge, none of the Company or any Subsidiary (or any
     agent  thereof  acting  on their  behalf)  has  taken  any  action  that is
     reasonably  likely to cause the  Underwriting  Agreement or the issuance or
     sale  of the  Notes  to  violate  Regulations  T, U or X of  the  Board  of
     Governors of the Federal Reserve System as in effect on the Closing Date.

          (xiv) To our knowledge  and other than as set forth in the  Prospectus
     or the  Registration  Statement or  disclosed in any document  filed by the
     Company  with  the  Commission  and  incorporated  by  reference  into  the
     Prospectus or the  Registration  Statement,  there are no pending  actions,
     suits  or  proceedings  against  or  affecting  the  Company  or any of its
     properties  that could,  individually  or in the  aggregate,  reasonably be
     expected to have a Material  Adverse Effect or could reasonably be expected
     to materially  and  adversely  affect the ability of the Company to perform
     its obligations under the Note Documents or that are otherwise  material in
     the context of the  issuance  and sale of the Notes;  and no such  actions,
     suits or proceedings are, to our knowledge, threatened.

     We have  participated in the preparation of the Registration  Statement and
the  Prospectus  (including  with respect to documents  incorporated  therein by
reference,  only  the  Specified  Reports).  From  time  to  time  we  have  had
discussions  with  officers,  directors  and  employees  of the  Company and its
Subsidiaries,   the  independent   accountants  who  examined  the  consolidated
financial  statements  of the  Company  and  its  Subsidiaries  included  in the
Prospectus,  the  Registration  Statement  and/or the documents  incorporated in
either of them by reference, and the Underwriters,  at which the contents of the
Prospectus,  the  Registration  Statement  and/or the documents  incorporated in
either of them by  reference  and related  matters were  discussed.  We have not
independently   verified   and  are  not  passing   upon,   and  do  not  assume
responsibility  for, the accuracy,  completeness  or fairness of the information
contained  in the  Prospectus,  the  Registration  Statement  or  the  documents
incorporated in either of them by reference.  Based upon the  participation  and
discussions  described above,  however, no facts have come to our attention that
cause  us  to  believe  that  (a)  the  Registration  Statement  (excluding  the
Prospectus covered in (b) below), as of its date or on the date hereof, included
or includes  any untrue  statement  of a material  fact,  or omitted or omits to
state a material fact  necessary in order to make the  statements  therein,  not
misleading,  and (b) the  Prospectus,  as of its  date  or on the  date  hereof,
included or includes  any untrue  statement  of a material  fact,  or omitted or
omits 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  (it being  understood  that we have not been requested to and do not
make any comment or opinion  with  respect to  operating  statistics,  exhibits,
financial  statements  and the  notes  thereto,  financial  schedules,  or other
financial,  statistical or accounting data included or incorporated by reference
therein or filed as an exhibit thereto).


                                     A-1-3


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<FILENAME>indenture-senior.txt
<DESCRIPTION>SENIOR INDENTURE DATED MARCH 17, 2004
<TEXT>










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




                              BOWATER INCORPORATED,
                                    as Issuer

                                       and

                              THE BANK OF NEW YORK,
                                   as Trustee

                                SENIOR INDENTURE

                           dated as of March 17, 2004









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


<PAGE>




                              CROSS-REFERENCE TABLE

    TIA                                               Indenture
  Section                                              Section

ss. 310  (a)(1)..............................         6.09
         (a)(2)..............................         6.09
         (a)(3)..............................         Not Applicable
         (a)(4)..............................         Not Applicable
         (b).................................         6.08, 6.10
ss. 311  (a).................................         6.13
         (b).................................         6.13
ss. 312  (a).................................         7.01, 7.02
         (b).................................         7.02
         (c).................................         7.02
ss. 313  (a).................................         7.03
         (b).................................         7.03
         (c).................................         7.03
         (d).................................         7.03
ss. 314  (a).................................         7.04
         (a)(4)..............................         1.01, 10.04
         (b).................................         Not Applicable
         (c)(1)..............................         1.02
         (c)(2)..............................         1.02
         (c)(3)..............................         Not Applicable
         (d).................................         Not Applicable
         (e).................................         1.02
ss. 315  (a).................................         6.01
         (b).................................         6.02
         (c).................................         6.01
         (d).................................         6.01
         (e).................................         5.14
ss. 316  (a).................................         1.01
         (a)(1)(A)...........................         5.02, 5.12
         (a)(1)(B)...........................         5.13
         (a)(2)..............................         Not Applicable
         (b).................................         5.08
         (c).................................         1.04
ss. 317  (a)(l)..............................         5.03
         (a)(2)..............................         5.04
         (b).................................         10.03
ss. 318  (a).................................         1.07



Note: This  Cross-Reference  Table shall not, for any purpose, be deemed to be a
      part of the Indenture


<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS


                                                                                                               Page
                                                                                                               ----
                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

<S>                   <C>                                                                                        <C>
SECTION 1.01.         Definitions.................................................................................1
SECTION 1.02.         Compliance Certificates and Opinions........................................................8
SECTION 1.03.         Form of Documents Delivered to Trustee......................................................9
SECTION 1.04.         Acts of Holders; Record Dates..............................................................10
SECTION 1.05.         Notices, Etc. to Trustee and Company.......................................................12
SECTION 1.06.         Notice to Holders; Waiver..................................................................12
SECTION 1.07.         Conflict with Trust Indenture Act..........................................................13
SECTION 1.08.         Effect of Headings and Table of Contents...................................................13
SECTION 1.09.         Successors and Assigns.....................................................................13
SECTION 1.10.         Separability Clause........................................................................13
SECTION 1.11.         Benefits of Indenture......................................................................13
SECTION 1.12.         Governing Law..............................................................................13
SECTION 1.13.         Legal Holidays.............................................................................13
SECTION 1.14.         Submission to Jurisdiction; Appointment of Agent...........................................13

                                   ARTICLE II

                                 SECURITY FORMS

SECTION 2.01.         Forms Generally............................................................................14
SECTION 2.02.         Form of Face of Security...................................................................15
SECTION 2.03.         Form of Reverse of Security................................................................16
SECTION 2.04.         Form of Legend for Global Securities.......................................................20
SECTION 2.05.         Form of Trustee's Certificate of Authentication............................................21
SECTION 2.06.         [Intentionally Omitted]....................................................................21
SECTION 2.07.         CUSIP Numbers..............................................................................21

                                   ARTICLE III

                                 THE SECURITIES

SECTION 3.01.         Amount Unlimited; Issuable in Series.......................................................22
SECTION 3.02.         Denominations..............................................................................24
SECTION 3.03.         Execution, Authentication, Delivery and Dating.............................................25
SECTION 3.04.         Temporary Securities.......................................................................26
SECTION 3.05.         Registration, Registration of Transfer and Exchange; Certain Transfers
                         and Exchanges...........................................................................27

                                       -i-
<PAGE>

SECTION 3.06.         Mutilated, Destroyed, Lost and Stolen Securities...........................................28
SECTION 3.07.         Payment of Interest; Interest Rights Preserved.............................................29
SECTION 3.08.         Persons Deemed Owners......................................................................30
SECTION 3.09.         Cancellation...............................................................................30
SECTION 3.10.         Computation of Interest....................................................................31

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 4.01.         Satisfaction and Discharge of Indenture....................................................31
SECTION 4.02.         Application of Trust Money.................................................................32

                                    ARTICLE V

                                    REMEDIES

SECTION 5.01.         Events of Default..........................................................................32
SECTION 5.02.         Acceleration of Maturity; Rescission and Annulment.........................................34
SECTION 5.03.         Collection of Indebtedness and Suits for Enforcement by Trustee............................34
SECTION 5.04.         Trustee May File Proofs of Claim...........................................................35
SECTION 5.05.         Trustee May Enforce Claims Without Possession of Securities................................35
SECTION 5.06.         Application of Money Collected.............................................................36
SECTION 5.07.         Limitation on Suits........................................................................36
SECTION 5.08.         Unconditional Right of Holders To Receive Principal, Premium and Interest..................37
SECTION 5.09.         Restoration of Rights and Remedies.........................................................37
SECTION 5.10.         Rights and Remedies Cumulative.............................................................37
SECTION 5.11.         Delay or Omission Not Waiver...............................................................37
SECTION 5.12.         Control by Holders.........................................................................38
SECTION 5.13.         Waiver of Past Defaults....................................................................38
SECTION 5.14.         Undertaking for Costs......................................................................38
SECTION 5.15.         Waiver of Usury, Stay or Extension Laws....................................................38

                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 6.01.         Certain Duties and Responsibilities........................................................39
SECTION 6.02.         Notice of Defaults.........................................................................39
SECTION 6.03.         Certain Rights of Trustee..................................................................40
SECTION 6.04.         Not Responsible for Recitals or Issuance of Securities.....................................41
SECTION 6.05.         May Hold Securities........................................................................41

                                      -ii-
<PAGE>

SECTION 6.06.         Money Held in Trust........................................................................41
SECTION 6.07.         Compensation and Reimbursement.............................................................41
SECTION 6.08.         Conflicting Interests......................................................................42
SECTION 6.09.         Corporate Trustee Required; Eligibility....................................................42
SECTION 6.10.         Resignation and Removal; Appointment of Successor..........................................43
SECTION 6.11.         Acceptance of Appointment by Successor.....................................................44
SECTION 6.12.         Merger, Conversion, Consolidation or Succession to Business................................45
SECTION 6.13.         Preferential Collection of Claims Against Company..........................................46
SECTION 6.14.         Appointment of Authenticating Agent........................................................46

                                   ARTICLE VII

                           HOLDERS' LISTS AND REPORTS

SECTION 7.01.         Company To Furnish Trustee Names and Addresses of Holders..................................47
SECTION 7.02.         Preservation of Information; Communications to Holders.....................................48
SECTION 7.03.         Reports by Trustee.........................................................................48
SECTION 7.04.         Reports by Company.........................................................................49

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.01.         Company  May Consolidate, Etc., Only on Certain Terms......................................49
SECTION 8.02.         Successor Substituted......................................................................50

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

SECTION 9.01.         Supplemental Indentures Without Consent of Holders.........................................51
SECTION 9.02.         Supplemental Indentures with Consent of Holders............................................52
SECTION 9.03.         Execution of Supplemental Indentures.......................................................53
SECTION 9.04.         Effect of Supplemental Indentures..........................................................53
SECTION 9.05.         Conformity with Trust Indenture Act........................................................53
SECTION 9.06.         Reference in Securities to Supplemental Indentures.........................................53

                                    ARTICLE X

                                    COVENANTS

SECTION 10.01.        Payment of Principal, Premium and Interest.................................................54
SECTION 10.02.        Maintenance of Office or Agency............................................................54
SECTION 10.03.        Money for Securities Payments To Be Held in Trust..........................................54

                                     -iii-
<PAGE>

SECTION 10.04.        Statement by Officers as to Default........................................................55
SECTION 10.05.        Existence..................................................................................55
SECTION 10.06.        Maintenance of Properties..................................................................56
SECTION 10.07.        Payment of Taxes and Other Claims..........................................................56
SECTION 10.08.        Limitation on Sales and Leasebacks.........................................................56
SECTION 10.09.        Restriction on Liens.......................................................................57
SECTION 10.10.        Waiver of Certain Covenants................................................................59

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

SECTION 11.01.        Applicability of Article...................................................................59
SECTION 11.02.        Election To Redeem; Notice to Trustee......................................................59
SECTION 11.03.        Selection by Trustee of Securities To Be Redeemed..........................................60
SECTION 11.04.        Notice of Redemption.......................................................................60
SECTION 11.05.        Deposit of Redemption Price................................................................61
SECTION 11.06.        Securities Payable on Redemption Date......................................................61
SECTION 11.07.        Securities Redeemed in Part................................................................61

                                   ARTICLE XII

                                  SINKING FUNDS

SECTION 12.01.        Applicability of Article...................................................................62
SECTION 12.02.        Satisfaction of Sinking Fund Payments with Securities......................................62
SECTION 12.03.        Redemption of Securities for Sinking Fund..................................................62

                                  ARTICLE XIII


                            CONVERSION OF SECURITIES

SECTION 13.01.        Applicability of Article...................................................................63
SECTION 13.02.        Exercise of Conversion Privilege...........................................................63
SECTION 13.03.        No Fractional Shares.......................................................................64
SECTION 13.04.        Adjustment of Conversion Price.............................................................65
SECTION 13.05.        Notice of Certain Corporate Actions........................................................65
SECTION 13.06.        Reservation of Shares of Common Stock......................................................66
SECTION 13.07.        Payment of Certain Taxes Upon Conversion...................................................66
SECTION 13.08.        Nonassesability............................................................................66
SECTION 13.09.        Effect of Consolidation or Merger on Conversion Privilege..................................67
SECTION 13.10.        Duties of Trustee Regarding Conversion.....................................................68
SECTION 13.11.        Repayment of Certain Funds Upon Conversion.................................................68

                                      -iv-
<PAGE>

                                   ARTICLE XIV

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 14.01.        Company's Option To Effect Defeasance or Covenant Defeasance...............................68
SECTION 14.02.        Defeasance and Discharge...................................................................69
SECTION 14.03.        Covenant Defeasance........................................................................69
SECTION 14.04.        Conditions to Defeasance or Covenant Defeasance............................................69
SECTION 14.05.        Deposited Money and U.S. Government Obligations To Be Held in Trust;
                         Miscellaneous Provisions................................................................71
SECTION 14.06.        Reinstatement..............................................................................72


</TABLE>












                                      -v-
<PAGE>

     SENIOR INDENTURE,  dated as of March 17, 2004, (this "Indenture'),  between
Bowater  Incorporated,  a Delaware corporation (the "Company"),  and The Bank of
New  York,  a New York  banking  corporation,  as  Trustee  (herein  called  the
"Trustee").

                                    RECITALS

     The  Company  has  duly  authorized  the  execution  and  delivery  of this
Indenture to provide for the issuance from time to time of unsecured debentures,
notes or other evidence of indebtedness (herein called the "Securities"),  to be
issued in one or more series as provided in this Indenture.

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

     NOW, THEREFORE, WITNESSETH:

     Each  party  agrees as  follows  for the  benefit of each other and for the
equal and  proportionate  benefit  of all  Holders of the  Securities  or of any
series thereof:

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01. DEFINITIONS.

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

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

          (2) all  other  terms  used  herein  which  are  defined  in the Trust
     Indenture Act, either directly or by reference  therein,  have the meanings
     assigned to them therein;

          (3)  unless  the  context  otherwise  requires,  any  reference  to an
     "Article" or a "Section" refers to an Article or a Section, as the case may
     be, of this Indenture; and

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

     "Act",  when used with respect to any Holder,  has the meaning specified in
Section 1.04.

     "Affiliate"  of any  specified  Person means any other  Person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control  with  such  specified  Person.  For the  purposes  of this  definition,
"control"  when used with  respect to any  specified  Person  means the power to

                                       1
<PAGE>

direct the  management  and  policies of such  Person,  directly or  indirectly,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

     "Agent Member" means any member of, or participant in, the Depositary.

     "Applicable  Procedures" means, with respect to any transfer or transaction
involving  a Global  Security  or  beneficial  interest  therein,  the rules and
procedures of the Depositary for such Security,  Euroclear and  Clearstream,  in
each case to the extent  applicable  to such  transaction  and as in effect from
time to time.

     "Attributable  Debt" means, at the time any determination  thereof is to be
made, with respect to any lease under which the Company or any of its Restricted
Subsidiaries  is  liable,  the  total  net  amount  of rent the  Company  or its
Restricted  Subsidiary must pay under such lease during its remaining term using
a  discount  rate  equal  to the  weighted  average  Yield  to  Maturity  of the
Securities  then  Outstanding  hereunder,  such  average  being  weighted by the
principal  amount  of the  Securities  of each  series.  The net  amount of rent
required to be paid under such lease for any such period shall be the  aggregate
amount  of rent  payable  by the  lessee  with  respect  to such  period,  after
excluding  amounts  required to be paid on account of  maintenance  and repairs,
insurance,  taxes, assessments,  water rates and similar charges. In the case of
any lease that is terminable  upon the payment of a penalty,  such net amount of
rent shall also  include the amount of such  penalty but shall  exclude any rent
attributable to periods subsequent to the first date upon which the lease may be
terminated.

     "Authenticating  Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to  authenticate  Securities  of
one or more series.

     "Board of Directors" means, as to any Person, either the board of directors
of such Person or any duly authorized committee of that board.

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

     "Business Day", when used with respect to any Place of Payment,  means each
Monday,  Tuesday,  Wednesday,  Thursday  and Friday  which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

     "Clearstream" means Clearstream  Banking,  Societe Anonyme,  Luxembourg (or
any successor securities clearing agency).

     "Commission"  means the  Securities and Exchange  Commission,  from time to
time  constituted,  created under the Exchange Act, or, if at any time after the
execution of this Indenture  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.

                                       2
<PAGE>

     "Common  Stock" means the common stock,  $1.00 par value per share,  of the
Company.

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

     "Company  Request"  and  "Company  Order"  mean a written  request or order
signed in the name of the Company by its Chairman of the Board,  Chief Executive
Officer,  President, a Senior Vice President,  Executive Vice President, or Vice
President  and by its  Treasurer,  Assistant  Treasurer,  Secretary or Assistant
Secretary, and delivered to the Trustee.

     "Consolidated  Net Tangible  Assets" means,  at the time any  determination
thereof is to be made,  the  aggregate  amount of assets  appearing  on the most
recent quarterly consolidated balance sheet of the Company and its Subsidiaries,
as determined in accordance with Generally Accepted Accounting Principles,  less
applicable  reserves and other properly  deductible  items,  after deducting the
following:

          (1) current liabilities; and

          (2) all goodwill,  trademarks,  trade names, patents, unamortized debt
     discount and expenses and other like intangibles.

     "Corporate  Trust  Office"  means the office of the Trustee or the Security
Registrar,  as the case may be, at which at any  particular  time its  corporate
trust  business will be  principally  administered,  which office as of the date
hereof is located at 101  Barclay  Street,  Fl.  8W, New York,  New York  10286,
Attention: Corporate Trust Administration.

     "Covenant Defeasance" has the meaning specified in Section 14.03.

     "Defaulted Interest" has the meaning specified in Section 3.07.

     "Defeasance" has the meaning specified in Section 14.02.

     "Depositary"  means,  with respect to Securities of any series  issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered  under the Exchange Act that is designated  to act as Depositary  for
such Securities as contemplated by Section 3.01.

     "DTC" means The Depository Trust Company.

     "Euroclear"  means  the  Euroclear   Clearance  System  (or  any  successor
securities clearing agency).

     "Event of Default" has the meaning specified in Section 5.01.

     "Exchange  Act" means the  Securities  Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

                                       3
<PAGE>

     "Expiration Date" has the meaning specified in Section 1.04.

     "Funded Debt" means, at the time any  determination  thereof is to be made,
(1) all Indebtedness  having a maturity of more than 12 months from such date or
having a maturity  of 12 months or less but which by its terms is  renewable  or
extendible  beyond 12  months  from  such  date at the  option  of the  borrower
(excluding any amount thereof  included in current  liabilities)  and (2) rental
obligations  payable  more than 12 months from such date under  leases which are
capitalized in accordance with Generally  Accepted  Accounting  Principles (such
rental  obligations  to be included as Funded Debt at the amount so  capitalized
and to be  included  for the  purposes of the  definition  of  Consolidated  Net
Tangible  Assets  both  as an  asset  and  as  Funded  Debt  at  the  amount  so
capitalized).

     "Generally  Accepted   Accounting   Principles"  means  generally  accepted
accounting principles in the United States, consistently applied.

     "Global  Security"  means  a  Security  that  evidences  all or part of the
Securities and bears the legend set forth in Section 2.04 (or such legend as may
be specified as contemplated by Section 3.01 for such Securities).

     "Holder"  means a Person in whose  name a  Security  is  registered  in the
Security Register.

     "Indebtedness"  means,  with  respect to any Person,  at any time,  without
duplication,  (1) all  Obligations  of such Person for borrowed  money,  (2) all
Obligations  of such  Person  evidenced  by  bonds,  debentures,  notes or other
similar  instruments,  and (3) all  Obligations of such Person in respect of any
letters of credit supporting any Indebtedness of others,  and guarantees by such
Person of Indebtedness of others.

     "Indenture" means this Indenture as originally  executed and as it may from
time to time be supplemented  or amended by one or more indentures  supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all  purposes  of  this  Indenture  and any  such  supplemental  indenture,  the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this  Indenture  and any such  supplemental  indenture,  respectively.  The term
"Indenture"  shall also include the terms of a particular  series of  Securities
established as contemplated by Section 3.01.

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

     "Investment  Company Act" means the Investment  Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

     "Lien" means any mortgage,  pledge,  hypothecation,  encumbrance,  security
interest, lien (statutory or other),  preference,  priority or other security or
similar  agreement or preferential  arrangement of any kind or nature whatsoever
(including,  without  limitation,  any conditional sale or other title retention
agreement  having   substantially  the  same  economic  effect  as  any  of  the
foregoing).

                                       4
<PAGE>

     "Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an  installment  of principal  becomes due and
payable as  therein or herein  provided,  whether at the Stated  Maturity  or by
declaration of acceleration, call for redemption or otherwise.

     "Notice of Default" means a written notice of the kind specified in Section
5.01(4).

     "Obligations"  means all  obligations  for  principal,  premium,  interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness or otherwise.

     "Officers'  Certificate"  means, as to any Person, a certificate  signed by
the Chairman of the Board, the Chief Executive Officer, the President,  a Senior
Vice  President,  Executive  Vice  President,  or  Vice  President,  and  by the
Treasurer, Assistant Treasurer, the Secretary or an Assistant Secretary, of such
Person and  delivered  to the  Trustee.  As to any Person,  one of the  officers
signing an Officers'  Certificate  given  pursuant to Section 10.04 shall be the
principal executive, financial or accounting officer of such Person.

     "Opinion  of  Counsel"  means a written  opinion of counsel (or a certified
public  accountant  in the case of an opinion of counsel  delivered  pursuant to
Section  14.04(4)),  who may be  counsel  for the  Company,  and  who  shall  be
reasonably acceptable to the Trustee.

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

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

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

          (3) Securities as to which  Defeasance  has been effected  pursuant to
     Section 14.02; and

          (4)  Securities  which have been paid  pursuant to Section  3.06 or in
     exchange for or in lieu of which other  Securities have been  authenticated
     and delivered pursuant to this Indenture, other than any such Securities in
     respect of which  there  shall have been  presented  to the  Trustee  proof
     satisfactory  to it that such  Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of the Company;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal  amount of the Outstanding  Securities  have given,  made or taken any
request,  demand,  authorization,  direction,  notice,  consent, waiver or other

                                       5
<PAGE>

action  hereunder  as of any  date,  (A)  the  principal  amount  of a  Security
denominated  in one or more foreign  currencies or currency units which shall be
deemed to be Outstanding shall be the U.S. dollar  equivalent,  determined as of
such date in the  manner  provided  as  contemplated  by  Section  3.01,  of the
principal  amount of such Security,  and (B) Securities  owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other  obligor shall be  disregarded  and deemed not to be  Outstanding,  except
that, in determining  whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
action,  only  Securities  which a Responsible  Officer of the Trustee  actually
knows to be so owned  shall be so  disregarded.  Securities  so owned which have
been  pledged  in good  faith may be  regarded  as  Outstanding  if the  pledgee
establishes  to the  satisfaction  of the Trustee the pledgee's  right so to act
with respect to such  Securities  and that the pledgee is not the Company or any
other  obligor upon the  Securities  or any  Affiliate of the Company or of such
other obligor.

     "Paying  Agent"  means any  Person  authorized  by the  Company  to pay the
principal  of or any  premium or  interest  on any  Securities  on behalf of the
Company.

     "Person"  means  any  individual,  any  corporation,  partnership,  limited
liability company, joint venture,  trust,  unincorporated  organization or other
legal entity or government or any agency or political subdivision thereof.

     "Place of Payment"  means,  when used with respect to the Securities of any
series,  the place or places where the principal of and any premium and interest
on the  Securities  of that series are payable as specified as  contemplated  by
Section 3.01.

     "Predecessor  Security" of any  particular  Security  means every  previous
Security  evidencing all or a portion of the same debt as that evidenced by such
particular  Security;  and,  for the purposes of this  definition,  any Security
authenticated  and delivered  under Section 3.06 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Principal Property" means: (1) any mill,  converting plant,  manufacturing
plant or other  facility  owned on the date hereof or hereafter  acquired by the
Company or any  Restricted  Subsidiary  that is located  within the  continental
United States and the gross book value (including  related land and improvements
thereon and all machinery and equipment  included  therein without  deduction of
any depreciation reserves) of which, on the date of determination, exceeds 1% of
Consolidated Net Tangible Assets, and (2) Timberlands, in each case other than:

          (A) any property which in the opinion of the Board of Directors of the
     Company  as  evidenced  by a  Board  Resolution  of the  Company  is not of
     material  importance  to the  business  conducted  by the  Company  and its
     Restricted Subsidiaries as an entirety,

          (B) a portion  of any  property  which in the  opinion of the Board of
     Directors of the Company as evidenced by a Board Resolution of the Company,
     is not of material importance to the use or operation of such property, or

                                       6
<PAGE>

          (C) any oil, gas or other minerals or mineral rights.

     "Realty Subsidiary" means a Subsidiary engaged primarily in the development
and sale or financing of real property.

     "Redemption  Date" when used with  respect to any  Security to be redeemed,
means the date fixed for such redemption by or pursuant to the applicable series
of Securities and this Indenture.

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

     "Regular Record Date" for the interest payable on any Interest Payment Date
on the  Securities  of any series means the date  specified  for that purpose as
contemplated by Section 3.01.

     "Responsible  Officer"  when used with  respect to the  Trustee,  means any
officer within the corporate trust department of the Trustee, including any vice
president, any assistant treasurer, any trust officer or assistant trust officer
or any other officer of the Trustee customarily  performing functions similar to
those  performed by any of the above  designated  officers and also means,  with
respect to a particular  corporate trust matter,  any other officer to whom such
matter is referred  because of his or her knowledge of and familiarity  with the
particular   subject   and  who  shall  have  direct   responsibility   for  the
administration of this Indenture.

     "Restricted Subsidiary" means a Subsidiary of the Company (1) substantially
all the property of which is located, or substantially all the business of which
is carried on,  within the  continental  United States and (2) which owns one or
more Principal Properties, but shall not include a Realty Subsidiary.

     "Sale and Lease-Back Transaction" means any arrangement whereby the Company
or one of its Restricted  Subsidiaries has sold or transferred,  or will sell or
transfer,  property to any Person and has or will take back a lease  pursuant to
which the rental  payments are  calculated to amortize the purchase price of the
property substantially over the useful life of such property.

     "Securities"  has the  meaning  set  forth  in the  first  recital  of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

     "Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.

     "Security  Register" and "Security  Registrar" have the respective meanings
specified in Section 3.05.

     "Special  Record Date" for the payment of any  Defaulted  Interest  means a
date fixed by the Trustee pursuant to Section 3.07.

                                       7
<PAGE>

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

     "Subsidiary"  means, as to any Person, a corporation,  partnership or other
legal  entity  of  which,  in the case of a  corporation,  more  than 50% of the
outstanding voting stock is owned, directly or indirectly,  by such Person or by
one or more other Subsidiaries of such Person, or by such Person and one or more
other  Subsidiaries  of such Person or, in the case of any  partnership or other
legal entity,  more than 50% of the ordinary equity capital  interests is, owned
or  controlled,   directly  or  indirectly  by  such  Person  and  one  or  more
Subsidiaries of such Person. For the purposes of this definition, "voting stock"
means stock which  ordinarily  has voting power for the  election of  directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.

     "Successor Security" of any particular Security means every Security issued
after,  and  evidencing  all or a portion of the same debt as that evidenced by,
such particular Security; and, for the purposes of this definition, any Security
authenticated  and delivered  under Section 3.06 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Timberlands"  means any real  property  of the  Company or any  Restricted
Subsidiary  located within the continental  United States that contains (or upon
completion  of a growth  cycle then in process is expected to contain)  standing
timber of a commercial quantity and of merchantable quality, excluding, however,
any such real property which at the time of  determination is held primarily for
development  or sale and not primarily for the production of any lumber or other
timber products.

     "Trust  Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb)  as in force at the date as of which this  Indenture was executed;
provided,  however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor  Trustee shall have become such pursuant to the
applicable provisions of this Indenture,  and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.

     "U.S. Government Obligation" has the meaning specified in Section 14.04.

     "Yield to Maturity"  means the yield to maturity on a series of Securities,
calculated  at the time of issuance of such series,  or, if  applicable,  at the
most recent  redetermination  of  interest on such  series,  and  calculated  in
accordance with accepted financial practice.

                                       8
<PAGE>

     SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS.

     Upon any  application  or request by the Company to the Trustee to take any
action under any provision of this  Indenture,  the Company shall furnish to the
Trustee  an  Officers'   Certificate  stating  that  all  conditions   precedent
(including  any  covenants,   compliance  with  which  constitutes  a  condition
precedent),  if any,  provided  for in this  Indenture  relating to the proposed
action have been  complied  with and an Opinion of Counsel  stating that, in the
opinion of such  counsel,  such action is  authorized  or  permitted  under this
Indenture  and that all such  conditions  precedent  (including  any  covenants,
compliance  with which  constitutes  a condition  precedent),  if any, have been
complied with,  except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this  Indenture  relating  to such  particular  application  or  request,  no
additional  certificate or opinion need be furnished.  Each such  certificate or
opinion shall be given in the form of an Officers'  Certificate,  if to be given
by an  officer of the  Company,  or an  Opinion  of  Counsel,  if to be given by
counsel,  and shall comply with the  requirements of the Trust Indenture Act and
any other requirements set forth in this Indenture.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall (except for certificates  provided
in Section 10.04) include,

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

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

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

          (4) a statement as to whether, in the opinion of each such individual,
     such condition or covenant has been complied with.

     SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

     In any case where  several  matters  are  required to be  certified  by, or
covered by an opinion of, any specified  Person,  it is not  necessary  that all
such  matters  be  certified  by, or covered by the  opinion  of,  only one such
Person,  or that they be so certified or covered by only one  document,  but one
such Person may certify or give an opinion  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  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, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with  respect to the  matters  upon which his or her  certificate  or opinion is

                                       9
<PAGE>

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

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

     SECTION 1.04. ACTS OF HOLDERS; RECORD DATES.

     Any request, demand,  authorization,  direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given,  made or taken
by Holders  may be  embodied  in and  evidenced  by one or more  instruments  of
substantially  similar  tenor  signed by such Holders in person or by agent duly
appointed in writing;  and, except as herein otherwise expressly provided,  such
action shall become  effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required,  to the Company. Such
instrument  or  instruments  (and the  action  embodied  therein  and  evidenced
thereby) are herein  sometimes  referred to as the "Act" of the Holders  signing
such instrument or instruments.  Proof of execution of any such instrument or of
a writing  appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section  6.01)  conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

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

     The ownership of Securities shall be proved by the Security Register.

     Any request, demand,  authorization,  direction, notice, consent, waiver or
other Act of the Holder of any Security  shall bind every  future  Holder of the
same Security and the Holder of every Security  issued upon the  registration of
transfer  thereof  or in  exchange  therefor  or in lieu  thereof  in respect of
anything  done,  omitted or suffered to be done by the Trustee or the Company in
reliance  thereon,  whether  or not  notation  of such  action is made upon such
Security.

     The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding  Securities of any series  entitled to give,  make or
take any request, demand,  authorization,  direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given,  made or taken
by Holders of Securities of such series; provided that the Company may not set a
record  date for,  and the  provisions  of this  paragraph  shall not apply with

                                       10
<PAGE>

respect  to,  the  giving or  making  of any  notice,  declaration,  request  or
direction referred to in the next paragraph.  If any record date is set pursuant
to this paragraph,  the Holders of Outstanding Securities of the relevant series
on such  record  date,  and no  other  Holders,  shall be  entitled  to take the
relevant  action,  whether or not such Holders  remain Holders after such record
date;  provided that no such action shall be effective hereunder unless taken on
or prior to the applicable  Expiration Date (as defined below) by Holders of the
requisite  principal  amount of  Outstanding  Securities  of such series on such
record date. Nothing in this paragraph shall be construed to prevent the Company
from  setting a new  record  date for any  action  for  which a record  date has
previously  been set  pursuant  to this  paragraph  (whereupon  the record  date
previously set shall  automatically and with no action by any Person be canceled
and of no effect),  and nothing in this  paragraph  shall be construed to render
ineffective  any action taken by Holders of the  requisite  principal  amount of
Outstanding  Securities of the relevant series on the date such action is taken.
Promptly after any record date is set pursuant to this  paragraph,  the Company,
at its own expense,  shall cause notice of such record date, the proposed action
by Holders  and the  applicable  Expiration  Date to be given to the  Trustee in
writing and to each Holder of  Securities  of the relevant  series in the manner
set forth in Section 1.06.

     The Trustee may set any day as a record date for the purpose of determining
the  Holders of  Outstanding  Securities  of any series  entitled to join in the
giving  or  making  of (i) any  Notice  of  Default,  (ii)  any  declaration  of
acceleration  referred  to in  Section  5.02,  (iii) any  request  to  institute
proceedings  referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12,  in each case with respect to  Securities  of such series.  If any
record  date is set  pursuant  to this  paragraph,  the  Holders of  Outstanding
Securities of such series on such record date,  and no other  Holders,  shall be
entitled to join in such notice, declaration,  request or direction,  whether or
not such Holders  remain  Holders after such record date;  provided that no such
action shall be effective  hereunder  unless taken on or prior to the applicable
Expiration  Date by Holders of the  requisite  principal  amount of  Outstanding
Securities of such series on such record date.  Nothing in this paragraph  shall
be  construed  to prevent  the  Trustee  from  setting a new record date for any
action  for  which a  record  date has  previously  been  set  pursuant  to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any  Person be  canceled  and of no  effect),  and  nothing in this
paragraph  shall be construed to render  ineffective any action taken by Holders
of the  requisite  principal  amount of  Outstanding  Securities of the relevant
series on the date such action is taken.  Promptly  after any record date is set
pursuant to this paragraph,  the Trustee, at the Company's expense,  shall cause
notice of such record date,  the proposed  action by Holders and the  applicable
Expiration  Date to be given to the  Company  in writing  and to each  Holder of
Securities of the relevant series in the manner set forth in Section 1.06.

     With  respect to any record date set  pursuant to this  Section,  the party
hereto which sets such record  dates may  designate  any day as the  "Expiration
Date" and from time to time may change  the  Expiration  Date to any  earlier or
later day;  provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing,  and
to each  Holder of  Securities  in the manner set forth in Section  1.06,  on or
prior to the existing  Expiration  Date. If an Expiration Date is not designated
with respect to any record date set pursuant to this  Section,  the party hereto

                                       11
<PAGE>

which set such  record  date shall be deemed to have  initially  designated  the
180th day after such record date as the  Expiration  Date with respect  thereto,
subject  to its  right  to  change  the  Expiration  Date  as  provided  in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.

     Without  limiting the foregoing,  a Holder  entitled  hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal  amount of such Security or by one or more duly
appointed  agents  each of which may do so  pursuant  to such  appointment  with
regard to all or any part of such principal amount.

     SECTION 1.05. NOTICES, ETC. TO TRUSTEE AND COMPANY.

     Any request, demand,  authorization,  direction, notice, consent, waiver or
Act of Holders or other  document  provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:

          (1) the Trustee by any Holder or the Company shall be  sufficient  for
     every  purpose  hereunder  if made,  given,  furnished  or filed in writing
     (which may be via  facsimile  to (212)  815-5707) to or with the Trustee at
     its Corporate Trust Office, Attention: Corporate Trust Administration, or

          (2) the Company by the Trustee or any Holder shall be  sufficient  for
     every purpose hereunder (unless otherwise herein expressly  provided) if in
     writing and mailed, first-class postage prepaid, to 55 East Camperdown Way,
     P.O. Box 1028, Greenville, South Carolina 29602 Attention: Treasurer, or at
     any other  address  previously  furnished  in writing to the Trustee by the
     Company.

     SECTION 1.06. NOTICE TO HOLDERS; WAIVER.

     Where this  Indenture  provides  for  notice to Holders of any event,  such
notice shall be sufficiently given (unless otherwise herein expressly  provided)
if in writing and mailed,  first-class  postage prepaid, to each Holder affected
by such event, at his or her address as it appears in the Security Register, not
later than the latest date (if any),  and not earlier than the earliest date (if
any),  prescribed  for the giving of such  notice.  In any case where  notice to
Holders  is given by mail,  neither  the  failure to mail such  notice,  nor any
defect in any  notice so  mailed,  to any  particular  Holder  shall  affect the
sufficiency of such notice with respect to other  Holders.  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 by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall  constitute
a sufficient notification for every purpose hereunder.

                                       12
<PAGE>

     SECTION 1.07. CONFLICT WITH TRUST INDENTURE ACT.

     If any provision hereof limits,  qualifies or conflicts with a provision of
the Trust  Indenture  Act which is  required  under such Act to be a part of and
govern this Indenture,  the latter provision shall control.  If any provision of
this  Indenture  modifies or excludes any  provision of the Trust  Indenture Act
which may be so modified or excluded,  the latter  provision  shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

     SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

     SECTION 1.09. SUCCESSORS AND ASSIGNS.

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

     SECTION 1.10. SEPARABILITY CLAUSE.

     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.

     SECTION 1.11. BENEFITS OF INDENTURE.

     Nothing in this Indenture or in the Securities,  express or implied,  shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders,  any benefit or any legal or equitable  right,  remedy or claim
under this Indenture.

     SECTION 1.12. GOVERNING LAW.

     The  Indenture  and the  Securities  shall be governed by and  construed in
accordance  with the law of the State of New York without regard to conflicts of
laws principles (other than Section 5-1401 of the General Obligations Law).

     SECTION 1.13. LEGAL HOLIDAYS.

     In any case where any  Interest  Payment  Date,  Redemption  Date or Stated
Maturity of any  Security  shall not be a Business  Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision  of any  Security  which  specifically  states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and  premium,  if any) need not be made at such  Place of Payment on such date,
but may be made on the next  succeeding  Business  Day at such  Place of Payment
with the same  force  and  effect  as if made on the  Interest  Payment  Date or
Redemption Date or at the Stated Maturity.

                                       13
<PAGE>

     SECTION 1.14. SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT.

     The Company hereby irrevocably submits to the non-exclusive jurisdiction of
the Federal and state courts in the State of New York in any suit or  proceeding
arising out of or relating to this Indenture, the Securities or the transactions
contemplated  hereby.  The Company  irrevocably  appoints  Corporation  Services
Company as its authorized  agent in the State of New York upon which process may
be served in any such suit or  proceeding,  and agrees  that  service of process
upon such agent, and written notice of said service to the Company by the person
serving the same to the address  provided  in Section  1.05,  shall be deemed in
every respect  effective service of process upon the Company in any such suit or
proceeding.  The  Company  further  agrees to take any and all  action as may be
necessary to maintain such  designation  and  appointment  of such agent in full
force and effect for a period of ten years from the date of this  Agreement.  If
for any reason  Corporation  Services Company shall cease to be available to act
as such authorized agent for the Company,  the Company agrees to designate a new
agent in the State of New York on the terms and for the purpose of this  Section
1.14. The Company irrevocably and unconditionally  waives, to the fullest extent
permitted by law, any  objection  that it may have to laying of venue in respect
to any action,  suit or  proceeding  arising out of or in  connection  with this
Indenture, the Securities or the transactions contemplated hereby to which it is
a party  brought in any Federal or state court  located in the State of New York
and hereby  agrees not to plead or claim in any such court that any such action,
suit or proceeding has been brought in an inconvenient  forum.  The Company also
waives,  to the fullest  extent  permitted by law, all right to trial by jury in
any claim or  counterclaim  (whether based upon contract,  tort or otherwise) in
any way arising out of or relating to this Indenture or the Securities.

     SECTION 1.15. FORCE MAJEURE.

                  In no event shall the Trustee be responsible or liable for any
failure or delay in the  performance  of its  obligations  under this  Indenture
arising  out  of or  caused  by,  directly  or  indirectly,  forces  beyond  its
reasonable  control,  including  without  limitation  strikes,  work  stoppages,
accidents, acts of war or terrorism, civil or military disturbances,  nuclear or
natural catastrophes or acts of god, and interruptions,  loss or malfunctions of
utilities, communications or computer (software or hardware) services.

                                   ARTICLE II

                                 SECURITY FORMS

     SECTION 2.01. FORMS GENERALLY.

     The Securities of each series shall be in substantially  the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board  Resolution  of the  Company or in one or more  indentures  supplemental
hereto, in each case with such appropriate insertions, omissions,  substitutions
and other  variations  as are required or permitted by this  Indenture,  and may
have such letters,  numbers or other marks of identification and such legends or
endorsements  placed  thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently  herewith, be
determined  by the officers  executing  such  Securities,  as evidenced by their
execution  thereof.  If the form of Securities of any series is  established  by
action  taken  pursuant  to a  Board  Resolution  of the  Company,  a copy of an
appropriate  record of such action  shall be  certified  by the  Secretary or an
Assistant Secretary of the Company,  and delivered to the Trustee at or prior to

                                       14
<PAGE>

the  delivery  of the  Company  Order  contemplated  by  Section  3.03  for  the
authentication and delivery of such Securities.

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

     SECTION 2.02. FORM OF FACE OF SECURITY.

     [Insert any legend as required by Section 2.04.]

     [Insert  any  legend  required  by  the  Internal   Revenue  Code  and  the
regulations thereunder.]

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


                                                     CUSIP No. [_______________]

                                                           No. [_______________]

$[---------------]

     Bowater Incorporated,  a Delaware corporation (herein called the "Company",
which  term  includes  any  successor  Person  under the  Indenture  hereinafter
referred to), for value received,  hereby promises to pay to  [_______________],
or  registered  assigns,  the  principal  sum of  [_______________]  Dollars  on
[_______________] [if the Security is to bear interest prior to Maturity, insert
- and to pay interest  thereon from  __________or  from the most recent Interest
Payment  Date  to  which  interest  has  been  paid  or duly  provided  for,  on
[_______________]    and    [_______________]    in   each   year,    commencing
[_______________]  at the rate of [_____]% per annum, until the principal hereof
is paid or made  available for payment [if  applicable  then insert - ; provided
that any principal and premium,  and any such installment of interest,  which is
overdue  shall bear  interest at the rate of  [_____]%  per annum (to the extent
that the payment of such interest shall be legally  enforceable),  from the date
such amounts are due until they are paid or made available for payment, and such
interest  shall be payable on demand].  The interest so payable,  and punctually
paid or duly  provided  for, on any Interest  Payment Date will,  as provided in
such  Indenture,  be paid to the Person in whose name this  Security  (or one or
more  Predecessor  Securities)  is  registered  at the close of  business on the
Regular Record Date for such interest,  which shall be the  [_______________] or
[_______________]  (whether  or not a Business  Day),  as the case may be,  next
preceding such Interest  Payment Date. Any such interest not so punctually  paid
or duly  provided for will  forthwith  cease to be payable to the Holder on such
Regular  Record Date and may, at the election of the Company,  either be paid to
the Person in whose name this Security (or one or more  Predecessor  Securities)
is registered at the close of business on a Special  Record Date for the payment
of such Defaulted Interest to

                                       15
<PAGE>

be fixed by the Trustee,  notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special  Record  Date,  or be
paid  at any  time  in  any  other  lawful  manner  not  inconsistent  with  the
requirements  of any securities  exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange,  all as
more fully provided in said Indenture].

     [If the  Security is to bear  interest at a floating or index rate,  insert
the applicable provisions for determining the interest rate.]

     [If the Security is not to bear  interest  prior to Maturity,  insert - The
principal  of this  Security  shall  not bear  interest  except in the case of a
default in payment of principal upon acceleration,  upon redemption or at Stated
Maturity and in such case the overdue  principal  and any overdue  premium shall
bear  interest at the rate of [_____]% per annum (to the extent that the payment
of such interest shall be legally enforceable),  from the dates such amounts are
due until they are paid or made  available for payment.  Interest on any overdue
principal or premium  shall be payable on demand.  Any such  interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of  [_____]%  per annum (to the  extent  that the  payment of such  interest  on
interest shall be legally  enforceable),  from the date of such demand until the
amount so  demanded  is paid or made  available  for  payment.  Interest  on any
overdue interest shall be payable on demand.]

     Payment of the principal of (and premium, if any) [if applicable,  insert -
and any such  interest on] this Security will be made at the office or agency of
the Company  maintained  for that purpose in New York, New York, in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for  payment  of public  and  private  debts [if  applicable,  insert - ;
provided,  however, that at the option of the Company payment of interest may be
made by check  mailed to the  address  of the  Person  entitled  thereto as such
address shall appear in the Security Register].

     Reference  is hereby made to the further  provisions  of this  Security set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

     Unless the  certificate of  authentication  hereon has been executed by the
Trustee  referred to on the reverse  hereof by manual  signature,  this Security
shall  not be  entitled  to any  benefit  under  the  Indenture  or be  valid or
obligatory for any purpose.

     IN WITNESS  WHEREOF,  the  Company  has  caused  this  Security  to be duly
executed.

                                 BOWATER INCORPORATED


                                 By:
                                        ---------------------------------------


     SECTION 2.03. FORM OF REVERSE OF SECURITY.

     This  Security  is one of a duly  authorized  issue  of  securities  of the
Company (herein called the "Securities"), issued and to be issued in one or more
series  under an  Indenture,  dated as of  [_______________],  as  supplemented
(herein called the "Indenture", which term shall have the meaning assigned to it
in such  instrument),  between  the Company  and  [_______________],  as Trustee
(herein  called the "Trustee",  which term includes any successor  trustee under
the

                                       16
<PAGE>

Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights,  limitations of rights,  duties and immunities  thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the  Securities  are, and are to be,  authenticated  and  delivered.  This
Security  is one of the series  designated  on the face  hereof [if  applicable,
insert   -   ,   initially   limited   in   aggregate    principal   amount   to
$[_______________]].  The  Company may at any time issue  additional  securities
under  the  Indenture  in  unlimited  amounts  having  the  same  terms  as  the
Securities.

     [If applicable, insert redemption provisions.]

     [If applicable,  insert - The sinking fund for this series provides for the
redemption  on   [_______________]   in  each  year   beginning  with  the  year
[_______________] and ending with the year  [_______________]of  [if applicable,
insert - not less than  $[_______________]  ("mandatory  sinking  fund") and not
more than ] $[_______________]  aggregate principal amount of Securities of this
series.  Securities of this series acquired or redeemed by the Company otherwise
than through [if  applicable,  insert - mandatory]  sinking fund payments may be
credited  against  subsequent [if applicable,  insert - mandatory]  sinking fund
payments otherwise required to be made [if applicable, insert - , in the inverse
order in which they become due].]

     [If the  Security  is  convertible  at the option of the Holder into Common
Stock of the Company,  insert - Subject to the provisions of the Indenture,  the
Holder of this  Security is  entitled,  at its option,  at any time on or before
[_______________]  (except  that,  in case this  Security or any portion  hereof
shall be called for redemption,  such right shall terminate with respect to this
Security or portion hereof,  as the case may be, so called for redemption at the
close of business on the date fixed for  redemption as provided in the Indenture
unless the  Company  defaults in making the  payment  due upon  redemption),  to
convert the principal  amount of this  Security (or any portion  hereof which is
$[_______________]  or an  integral  multiple  thereof),  into  fully  paid  and
non-assessable  shares  (calculated as to each conversion to the nearest 1/100th
of a  share)  of the  Common  Stock  of the  Company,  as said  shares  shall be
constituted   at  the  date  of   conversion,   at  the   conversion   price  of
$[_______________]  principal  amount  of  Securities  for each  share of Common
Stock, or at the adjusted  conversion  price in effect at the date of conversion
determined  as provided  in the  Indenture,  upon  surrender  of this  Security,
together with the conversion notice hereon duly executed,  to the Company at the
designated  office or agency of the Company in New York,  New York,  accompanied
(if so required by the Company) by instruments of transfer in form  satisfactory
to the Company and to the  Trustee,  duly  executed by the Holder or by its duly
authorized  attorney in writing.  [If the Security is to bear interest  prior to
maturity,  insert - Such surrender shall, if made during any period beginning at
the close of  business  on a Regular  Record  Date and ending at the  opening of
business on the Interest  Payment Date next  following  such Regular Record Date
(unless this Security or the portion being  converted shall have been called for
redemption on a Redemption  Date during such  period),  also be  accompanied  by
payment in funds  acceptable  to the Company of an amount  equal to the interest
payable on such Interest  Payment Date on the principal  amount of this Security
then being converted.  Subject to the aforesaid requirement of repayment and, in
the case of a  conversion  after the  Regular  Record  Date next  preceding  any
Interest  Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any  Predecessor  Security) of record at such
Regular  Record  Date to  receive  an  installment  of  interest  (with  certain
exceptions provided in the Indenture), no adjustment is to be made on conversion

                                       17
<PAGE>

for interest  accrued  hereon for  dividends on shares of Common Stock issued on
conversion.]  The Company is not  required to issue  fractional  shares upon any
such conversion,  but shall make adjustment therefor in cash on the basis of the
current market value of such  fractional  interest as provided in the Indenture.
The conversion  price is subject to adjustment as provided in the Indenture.  In
addition,  the  Indenture  provides  that in case of certain  consolidations  or
mergers to which the Company is a party or the sale of substantially  all of the
assets of the Company,  the Indenture  shall be amended,  without the consent of
any Holders of Securities,  so that this Security, if then Outstanding,  will be
convertible thereafter,  during the period this Security shall be convertible as
specified  above,  only into the kind and amount of  securities,  cash and other
property  receivable upon the  consolidation,  merger or sale by a holder of the
number of shares of Common  Stock  into  which  this  Security  might  have been
converted immediately prior to such consolidation, merger or sale (assuming such
holder of Common  Stock  failed to exercise  any rights or election and received
per share the kind and amount  received per share by a plurality of non-electing
shares).  In the  event of  conversion  of this  Security  in part  only,  a new
Security or Securities for the unconverted portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.] [If applicable,  insert
other conversion features.]

     [If the  Security is  convertible  into other  securities  of the  Company,
insert the applicable conversion features.]

     [If applicable,  insert - The Indenture contains  provisions for defeasance
at any  time  of  [the  entire  indebtedness  of this  Security]  [or]  [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]

     [If the Security is not an original issue discount security, insert - If an
Event of Default  with respect to  Securities  of this series shall occur and be
continuing,  the principal of the  Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

     [If the Security is an original  issue  discount  security,  insert - If an
Event of Default  with respect to  Securities  of this series shall occur and be
continuing,  an amount of  principal  of the  Securities  of this  series may be
declared  due and  payable in the manner  and with the  effect  provided  in the
Indenture.  Such amount shall be equal to [insert  formula for  determining  the
amount]. Upon payment of (i) the amount of principal so declared due and payable
and (ii) interest on any overdue  principal,  premium and interest (in each case
to the extent that the payment of such interest  shall be legally  enforceable),
all of the Company's  obligations  in respect of the payment of the principal of
and  premium  and  interest,  if any, on the  Securities  of this  series  shall
terminate.]

     The Indenture  permits,  with certain  exceptions as therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Company  and the rights of the  Holders of the  Securities  of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 50% in principal  amount of the Securities at the time
Outstanding  of  each  series  to  be  affected.  The  Indenture  also  contains

                                       18
<PAGE>

provisions  permitting the Holders of specified  percentages in principal amount
of the  Securities  of each  series  at the time  Outstanding,  on behalf of the
Holders of all  Securities  of such series,  to waive  compliance by the Company
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this  Security  shall be  conclusive  and binding  upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer  hereof or in  exchange  herefor or in lieu  hereof,  whether or not
notation of such consent or waiver is made upon this Security.

     As provided in and subject to the provisions of the  Indenture,  the Holder
of this  Security  shall not have the right to  institute  any  proceeding  with
respect to the Indenture or for the  appointment of a receiver or trustee or for
any other remedy thereunder,  unless (i) such Holder shall have previously given
the Trustee written notice of a continuing  Event of Default with respect to the
Securities  of this  series,  (ii) the Holders of not less than 25% in principal
amount of the Securities of this series at the time Outstanding  shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee indemnity reasonably  satisfactory
to the  Trustee,  and (iii) the  Trustee  (A) shall not have  received  from the
Holders of a majority in principal  amount of  Securities  of this series at the
time Outstanding a direction  inconsistent with such request, and (B) shall have
failed to  institute  any such  proceeding,  for 60 days  after  receipt of such
notice,  request and offer of indemnity.  The  foregoing  shall not apply to any
suit  instituted  by the  Holder of this  Security  for the  enforcement  of any
payment of  principal  hereof or any premium or interest  hereon on or after the
respective due dates expressed herein.

     No reference  herein to the  Indenture  and no  provision of this  Security
hereof or the  Indenture  shall alter or impair the  obligation  of the Company,
which is absolute and unconditional, to pay the principal of and any premium and
interest  on this  Security  at the  times,  place and rate,  and in the coin or
currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth,  the transfer of this Security is registrable  in the Security  Register,
upon  surrender of this Security for  registration  of transfer at the office or
agency of the  Company in any place where the  principal  of and any premium and
interest on this  Security are payable,  duly endorsed by, or  accompanied  by a
written  instrument  of  transfer  in form  satisfactory  to the Company and the
Security  Registrar  duly  executed by, the Holder hereof or his or her attorney
duly  authorized in writing,  and  thereupon one or more new  Securities of this
series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

     The registered  Holder of this Security may be treated as the owner of this
Security for all purposes.

     The Securities of this series are issuable only in registered  form without
coupons  in  denominations  of $1,000  and any  integral  multiple  thereof.  As
provided in the Indenture and subject to certain  limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of  Securities  of this  series  and of like  tenor  of a  different  authorized
denomination, as requested by the Holder surrendering the same.

                                       19
<PAGE>

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

     Prior to due presentment of this Security for registration of transfer, the
Company,  the  Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this  Security is  registered  as the owner  hereof for all
purposes,  whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     All terms used in this Security  which are defined in the  Indenture  shall
have the meanings assigned to them in the Indenture.

     Pursuant to a  recommendation  promulgated by the Committee on Uniform Note
Identification Procedures, the Company has caused CUSIP numbers to be printed on
the Notes. No  representation is made as the accuracy of such numbers as printed
on the  Notes,  and  reliance  may be placed  only on the  other  identification
numbers placed thereon.

     This Security  shall be governed by and  construed in  accordance  with the
laws of the State of New York  without  regard to  conflicts  of law  principles
thereof (other than Section 5-1401 of the General Obligations Law).

     SECTION 2.04. FORM OF LEGEND FOR GLOBAL SECURITIES.

     Unless  otherwise  specified  as  contemplated  by  Section  3.01  for  the
Securities evidenced thereby,  every Global Security authenticated and delivered
hereunder shall bear one or more of the appropriate legends in substantially the
following forms as relevant below:

     [IF THE  SECURITY IS A GLOBAL  SECURITY,  THEN INSERT - THIS  SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE  HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY  OR A NOMINEE  THEREOF.  THIS SECURITY
MAY NOT BE  EXCHANGED  IN  WHOLE OR IN PART FOR A  SECURITY  REGISTERED,  AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED,  IN THE NAME OF
ANY  PERSON  OTHER  THAN SUCH  DEPOSITARY  OR A NOMINEE  THEREOF,  EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

     [IF THE SECURITY IS A GLOBAL  SECURITY AND THE DEPOSITORY  TRUST COMPANY IS
TO BE THE  DEPOSITARY  THEREFOR,  THEN  INSERT  -  UNLESS  THIS  CERTIFICATE  IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK  CORPORATION  ("DTC"),  TO THE  ISSUER  OR ITS AGENT  FOR  REGISTRATION  OF
TRANSFER  EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE  ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME  AS IS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE  OF DTC (AND ANY  PAYMENT  IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF DTC),  ANY TRANSFER,
PLEDGE  OR OTHER  USE  HEREOF  FOR  VALUE OR  OTHERWISE  BY OR TO ANY  PERSON IS
WRONGFUL  INASMUCH AS THE REGISTERED  OWNER HEREOF,  CEDE & CO., HAS AN INTEREST
HEREIN.]

                                       20
<PAGE>

     SECTION 2.05. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

     The Trustee's  certificates of authentication shall be in substantially the
following form:

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

Dated:
        ----------------------------
                                             -------------------------------,
                                                                  As Trustee


                                         By:
                                             --------------------------------
                                             Authorized Signatory


     SECTION 2.06. [INTENTIONALLY OMITTED].

     SECTION 2.07. CUSIP NUMBERS.

     The  Company  in  issuing  Securities  may use  "CUSIP"  numbers  (if  then
generally in use),  and, if so, the Trustee shall use "CUSIP" numbers in notices
of  redemption as a  convenience  to Holders;  provided that any such notice may
state  that no  representation  is made as to the  correctness  of such  numbers
either  as  printed  on  the  Securities  or as  contained  in any  notice  of a
redemption  and that  reliance  may be placed  only on the other  identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.  The Company shall promptly notify
the Trustee of any change in the CUSIP numbers.

                                  ARTICLE III

                                 THE SECURITIES

     SECTION 3.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES.

     The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

     The  Securities  may be  issued  in one or  more  series.  There  shall  be
established in or pursuant to a Board  Resolution of the Company and, subject to
Section 3.03, set forth, or determined in the manner  provided,  in an Officers'
Certificate  of  the  Company,   or  established  in  one  or  more   indentures
supplemental hereto, prior to the issuance of the Securities of any series:

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

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be  authenticated  and delivered  under this Indenture
     (except for Securities  authenticated  and delivered upon  registration  of
     transfer  of, or in  exchange  for, or in lieu of other  Securities  of the
     series pursuant to Section 3.04,  3.05, 3.06, 9.06, or 11.07 and except for

                                       21
<PAGE>

     any  Securities  which,  pursuant to Section 3.03, are deemed never to have
     been authenticated and delivered hereunder);

          (3) the Person to whom any  interest on a Security of the series shall
     be payable, if other than the Person in whose name that Security (or one or
     more Predecessor  Securities) is registered at the close of business on the
     Regular Record Date for such interest;

          (4) the price  (expressed  as a  percentage  of the  principal  amount
     thereof) at which the Securities of the series will be issued;

          (5) the date or dates on which the principal of any  Securities of the
     series is payable;

          (6) the rate or rates at which any Securities of the series shall bear
     interest,  if any,  the date or dates  from which any such  interest  shall
     accrue,  the Interest  Payment  Dates on which any such  interest  shall be
     payable and the Regular  Record Date for any such  interest  payable on any
     Interest Payment Date;

          (7) the place or places  where the  principal  of and any  premium and
     interest on any Securities of the series shall be payable;

          (8) the period or periods  within which,  the price or prices at which
     and the terms and conditions upon which any Securities of the series may be
     redeemed,  in whole or in part,  at the option of the Company and, if other
     than by a Board Resolution of the Company, the manner in which any election
     by the Company to redeem the Securities shall be evidenced;

          (9) the  obligation,  if any, of the Company to redeem or purchase any
     Securities  of  the  series  pursuant  to any  sinking  fund  or  analogous
     provisions or at the option of the Holder thereof and the period or periods
     within  which,  the price or  prices at which and the terms and  conditions
     upon which any Securities of the series shall be redeemed or purchased,  in
     whole or in part, pursuant to such obligation;

          (10) the terms of any right or  requirement  to  convert  or  exchange
     Securities of the series, either at the option of the Holder thereof or the
     Company,  or  automatically  or  mandatorily,  into or for shares of Common
     Stock, or other securities or property of the Company,  including,  without
     limitation,  the  period or  periods  within  which and the price or prices
     (including adjustments thereto) at which any Securities of the series shall
     be converted or exchanged, in whole or in part;

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

                                       22
<PAGE>

          (12) if the amount of  principal  of or any premium or interest on any
     Securities  of the series may be determined  with  reference to an index or
     pursuant  to  a  formula,  the  manner  in  which  such  amounts  shall  be
     determined;

          (13) if other than the currency of the United  States of America,  the
     currency,  currencies  or currency  units in which the  principal of or any
     premium or interest on any  Securities  of the series  shall be payable and
     the manner of  determining  the  equivalent  thereof in the currency of the
     United  States of America for any  purpose,  including  for purposes of the
     definition of "Outstanding" in Section 1.01;

          (14) if the principal of or any premium or interest on any  Securities
     of the  series is to be  payable,  at the  election  of the  Company or the
     Holder thereof, in one or more currencies or currency units other than that
     or those in which such  Securities are stated to be payable,  the currency,
     currencies  or currency  units in which the  principal of or any premium or
     interest  on such  Securities  as to which such  election  is made shall be
     payable,  the periods within which and the terms and conditions  upon which
     such  election  is to be made and the amount so  payable  (or the manner in
     which such amount shall be determined);

          (15) if other than the entire principal amount thereof, the portion of
     the principal amount of any Securities of the series which shall be payable
     upon  declaration  of  acceleration  of the  Maturity  thereof  pursuant to
     Section 5.02;

          (16) if the  principal  amount  payable at the Stated  Maturity of any
     Securities  of the series  will not be  determinable  as of any one or more
     dates prior to the Stated Maturity,  the amount which shall be deemed to be
     the principal amount of such Securities as of any such date for any purpose
     thereunder or hereunder, including the principal amount thereof which shall
     be due and  payable  upon any  Maturity  other than the Stated  Maturity or
     which shall be deemed to be  Outstanding as of any date prior to the Stated
     Maturity  (or, in any such case,  the manner in which such amount deemed to
     be the principal amount shall be determined);

          (17) if applicable, that the Securities of the series, in whole or any
     specified  part,  shall be defeasible  pursuant to Section 14.02 or Section
     14.03 or both such Sections and, if other than by a Board Resolution of the
     Company,  the manner in which any  election by the Company to defease  such
     Securities shall be evidenced;

          (18) if  applicable,  that  any  Securities  of the  series  shall  be
     issuable in whole or in part in the form of one or more  Global  Securities
     and, in such case, the respective  Depositaries for such Global Securities,
     the form of any legend or legends  which  shall be borne by any such Global
     Security in  addition  to or in lieu of that set forth in Section  2.04 and
     any  circumstances  in  addition to or in lieu of those set forth in Clause
     (2) of the last paragraph of Section 3.05 in which any such Global Security
     may be  exchanged  in whole or in part for  Securities  registered,  and in
     which  any  transfer  of such  Global  Security  in whole or in part may be
     registered,  in the name or names of Persons other than the  Depositary for
     such Global Security or a nominee thereof;

                                       23
<PAGE>

          (19) any addition to or change in the Events of Default  which applies
     to any  Securities of the series and any change in the right of the Trustee
     or the requisite Holders of such Securities to declare the principal amount
     thereof due and payable pursuant to Section 5.02;

          (20) any addition to or change in the  covenants  set forth in Article
     Ten which applies to Securities of the series;

          (21) the Company's  right, if any to defer payment of interest and the
     maximum length of any deferral period; and

          (22)  any  other  terms  of  the  series  (which  terms  shall  not be
     inconsistent with the provisions of this Indenture,  except as permitted by
     Section 9.01(5)).

     All Securities of any one series shall be substantially identical except as
to  denomination  and except as may  otherwise be provided in or pursuant to the
Board  Resolution  referred to above and (subject to Section 3.03) set forth, or
determined  in the manner  provided in, the  Officers'  Certificate  referred to
above or in any such indenture supplemental hereto.

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

     SECTION 3.02. DENOMINATIONS.

     The  Securities of each series shall be issuable  only in  registered  form
without  coupons  and  only in such  denominations  as  shall  be  specified  as
contemplated by Section 3.01. In the absence of any such specified  denomination
with respect to the  Securities  of any series,  the  Securities  of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

     SECTION 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

     The Securities shall be executed on behalf of the Company,  by its Chairman
of the Board,  the Chief  Executive  Officer,  its President,  an Executive Vice
President, a Senior Vice President, Treasurer or one of its Vice Presidents. The
signature of any of these officers on the Securities may be manual or facsimile.

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

     At any time and from time to time after the  execution and delivery of this
Indenture,  the  Company may deliver  Securities  of any series  executed by the
Company to the Trustee for authentication, together with a Company Order for the

                                       24
<PAGE>

authentication  and delivery of such  Securities,  and the Trustee in accordance
with the Company Order shall  authenticate and deliver such  Securities.  If the
form or terms of the  Securities  of the  series  have  been  established  by or
pursuant to one or more Board  Resolutions  as  permitted  by Sections  2.01 and
3.01,  in   authenticating   such  Securities,   and  accepting  the  additional
responsibilities  under this  Indenture  in  relation  to such  Securities,  the
Trustee  shall be provided  with,  and (subject to Section  6.01) shall be fully
protected in relying upon, an Opinion of Counsel stating to the effect that:

          (1) if the form of such Securities has been established by or pursuant
     to Board  Resolution as permitted by Section 2.01,  that such form has been
     established in conformity with the provisions of this Indenture;

          (2) if the  terms  of such  Securities  have  been  established  by or
     pursuant to Board  Resolution as permitted by Section 3.01, that such terms
     have been established in conformity with the provisions of this Indenture;

          (3) that all conditions  precedent to the  authentication and delivery
     of the Securities  have been complied with and that such  Securities,  when
     authenticated and delivered by the Trustee and issued by the Company in the
     manner and subject to any conditions  specified in such Opinion of Counsel,
     will be valid and legally  binding  obligations of the Company  entitled to
     the  benefits  of  the  Indenture,   enforceable  against  the  Company  in
     accordance with their terms,  except to the extent that enforcement thereof
     may be limited by (i) bankruptcy, insolvency,  reorganization,  moratorium,
     fraudulent  conveyance  or other  similar  laws now or  hereafter in effect
     relating to or  affecting  creditors'  rights  generally,  and (ii) general
     principles of equity (regardless of whether enforceability is considered in
     a proceeding at law or in equity); and

          (4) that the execution and delivery of such  Securities by the Company
     will not violate any  applicable  law,  except for any such  violation that
     would not, individually or in the aggregate, have a material adverse effect
     on the  general  affairs,  management,  financial  position,  stockholders'
     equity or results of  operations  of the Company  taken as a whole with its
     subsidiaries and that  authentication and delivery of the Securities by the
     Trustee will not violate the terms of this Indenture.

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

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

     Notwithstanding  the  provisions  of  Section  3.01  and of  the  preceding
paragraph,  if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers'  Certificate  otherwise

                                       25
<PAGE>

required  pursuant to Section  3.01 or the Company  Order and Opinion of Counsel
otherwise  required  pursuant  to such  preceding  paragraph  at or prior to the
authentication  of each Security of a series if such  documents are delivered at
or prior to the  authentication  upon original issuance of the first Security of
such series to be issued.

     Each Security shall be dated the date of its authentication.

     No Security  shall be entitled to any benefit  under this  Indenture  or be
valid or  obligatory  for any purpose  unless there  appears on such  Security a
certificate  of  authentication  substantially  in the form  provided for herein
executed  by the  Trustee by manual  signature,  and such  certificate  upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has  been  duly  authenticated  and  delivered  hereunder.  Notwithstanding  the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the  Company,  and the Company  shall  deliver such
Security to the Trustee for  cancellation  as provided in Section 3.09,  for all
purposes of this  Indenture  such  Security  shall be deemed  never to have been
authenticated  and  delivered  hereunder  and  shall  never be  entitled  to the
benefits of this Indenture.

     SECTION 3.04. TEMPORARY SECURITIES.

     Pending the preparation of definitive Securities of any series, the Company
may execute,  and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities, which are printed, lithographed, typewritten, mimeographed
or otherwise  produced,  in any authorized  denomination,  substantially  of the
tenor of the  definitive  Securities  in lieu of which  they are issued and with
such appropriate  insertions,  omissions,  substitutions and other variations as
the officers  executing such  Securities  may  determine,  as evidenced by their
execution of such Securities.

     If temporary  Securities  of any series are issued,  the Company will cause
definitive  Securities of that series to be prepared without unreasonable delay.
After the  preparation  of definitive  Securities of such series,  the temporary
Securities of such series shall be  exchangeable  for  definitive  Securities of
such series upon  surrender of the  temporary  Securities  of such series at the
office or agency of the  Company in a Place of  Payment  for that  series,  such
exchange  will be made by the Company at its  expense and 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  one or more  definitive  Securities  of the same
series of any authorized denominations and of like tenor and aggregate principal
amount. Until so exchanged,  the temporary Securities of any series shall in all
respects be entitled to the same  benefits  under this  Indenture as  definitive
Securities of such series and tenor.

     SECTION 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

     The Company  shall cause to be kept at the  Corporate  Trust  Office of the
Trustee a register  (the  register  maintained  in such  office and in any other
office of agency of the  Company  in a Place of  Payment  are  herein  sometimes
collectively  referred to as the "Security  Register") in which, subject to such

                                       26
<PAGE>

reasonable  regulations as it may  prescribe,  the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
initially  appointed  "Security   Registrar"  for  the  purpose  of  registering
Securities and transfers of Securities as herein provided.

     Upon surrender for  registration of transfer of any Security of a series at
the office or agency of the  Company in a Place of Payment,  the  Company  shall
execute,  and the Trustee  shall  authenticate  and deliver,  in the name of the
designated  transferee or  transferees,  one or more new  Securities of the same
series,  of  any  authorized  denominations  and of  like  tenor  and  aggregate
principal amount.

     At the option of the Holder,  Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate  principal  amount,  upon  surrender of the Securities to be
exchanged at such office or agency.  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.

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

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

     No  service  charge  shall  be made for any  registration  of  transfer  or
exchange of Securities,  but the Company may require payment of a sum sufficient
to cover any tax or other governmental  charge that may be imposed in connection
with any  registration  of  transfer  or  exchange  of  Securities,  other  than
exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.

     If the Securities of any series (or of any series and specified  tenor) are
to be redeemed in part, the Company shall not be required (a) to issue, register
the  transfer of or exchange  any  Securities  during a period  beginning at the
opening of business 15 days before the day of mailing of a notice of  redemption
of any such  Securities of that series (or that series and specified  tenor,  as
the case may be) selected for  redemption  under Section 11.03 and ending at the
close of business on the day after such mailing, or (b) to register the transfer
of or exchange  any  Security so selected  for  redemption  in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

     The  provisions  of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

                                       27
<PAGE>

          (1) Each Global Security  authenticated  under this Indenture shall be
     registered  in the  name  of the  Depositary  designated  for  such  Global
     Security or a nominee thereof and delivered to such Depositary or a nominee
     thereof  or  custodian  therefor,  and  each  such  Global  Security  shall
     constitute a single Security for all purposes of this Indenture.

          (2) Notwithstanding  any other provision in this Indenture,  no Global
     Security may be exchanged  in whole or in part for  Securities  registered,
     and no transfer of a Global Security in whole or in part may be registered,
     in the name of any  Person  other  than  the  Depositary  for  such  Global
     Security or a nominee  thereof unless (A) such  Depositary (i) has notified
     the Company that it is unwilling  or unable to continue as  Depositary  for
     such Global Security or (ii) has ceased to be a clearing agency  registered
     under the Exchange Act, (B) the Company in its sole  discretion  determines
     that such Global Security shall be exchangeable  for definitive  registered
     Securities  and executes  and delivers to the Security  Registrar a Company
     Order  providing that such Global  Security shall be so  exchangeable,  (C)
     there  shall have  occurred  and be  continuing  an Event of  Default  with
     respect  to  such   Global   Security   or  (D)  there   shall  exist  such
     circumstances,  if any, in addition to or in lieu of the  foregoing as have
     been specified for this purpose as contemplated by Section 3.01.

          (3) Subject to Clause (2) above, any exchange of a Global Security for
     other Securities may be made in whole or in part, and all Securities issued
     in  exchange  for a  Global  Security  or  any  portion  thereof  shall  be
     registered in such names as the Depositary  for such Global  Security shall
     direct.

          (4) Every Security  authenticated  and delivered upon  registration of
     transfer  of, or in  exchange  for or in lieu of, a Global  Security or any
     portion thereof, whether pursuant to this Section, Section 3.04, 3.06, 9.06
     or 11.07 or otherwise, shall be authenticated and delivered in the form of,
     and shall be, a Global Security,  unless such Security is registered in the
     name of a Person other than the  Depositary  for such Global  Security or a
     nominee thereof.

     SECTION 3.06. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

     If any mutilated  Security is surrendered to the Trustee,  then the Company
shall  execute  and the  Trustee  shall  authenticate  and  deliver in  exchange
therefor a new  Security of the same series of like tenor and  principal  amount
and bearing a number not contemporaneously outstanding.

     If there shall be  delivered to the Company and the Trustee (1) evidence to
their  satisfaction  of the  destruction,  loss or theft of any Security and (2)
such  security or  indemnity as may be required by them to save each of them and
any agent of either of them  harmless,  then,  in the  absence  of notice to the
Company or the  Trustee  that such  Security  has been  acquired  by a bona fide
purchaser,  the Company  shall execute and the Trustee  shall  authenticate  and
deliver, in lieu of any such destroyed,  lost or stolen Security, a new Security
of like tenor and  principal  amount and bearing a number not  contemporaneously
outstanding.

                                       28
<PAGE>

     In case any such mutilated,  destroyed,  lost or stolen Security has become
or is about to become  due and  payable,  the  Company  in its  discretion  may,
instead of issuing a new Security, pay such Security.

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

     Every new Security of any series issued pursuant to this Section in lieu of
any destroyed,  lost or stolen Security shall constitute an original  additional
contractual  obligation  of the Company  whether or not the  destroyed,  lost or
stolen  Security  shall be at any  time  enforceable  by  anyone,  and  shall be
entitled to all the benefits of this Indenture equally and proportionately  with
any and all other Securities.

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

     SECTION 3.07. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

     Except as otherwise  provided as  contemplated by Section 3.01 with respect
to any series of Securities,  interest on any Security which is payable,  and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to  the  Person  in  whose  name  that  Security  (or  one or  more  Predecessor
Securities)  is registered  at the close of business on the Regular  Record Date
for such interest.

     Any  interest on any  Security of any series  which is payable,  but is not
punctually  paid or duly  provided  for, on any  Interest  Payment  Date (herein
called  "Defaulted  Interest") shall forthwith cease to be payable to the Holder
on the relevant  Regular  Record Date by virtue of having been such Holder,  and
such  Defaulted  Interest  may be paid by the  Company,  at its election in each
case, as provided in Clause (1) or (2) below:

          (1) The Company may elect to make payment of any Defaulted Interest to
     the  Persons  in whose  names  the  Securities  of such  series  (or  their
     respective Predecessor  Securities) are registered at the close of business
     on a Special Record Date for the payment of such Defaulted Interest,  which
     shall be fixed in the  following  manner.  The  Company  shall  notify  the
     Trustee in writing of the amount of Defaulted  Interest proposed to be paid
     on each Security of such series and the date of the proposed  payment,  and
     at the same time the Company  shall  deposit  with the Trustee an amount of
     money equal to the aggregate  amount proposed to be paid in respect of such
     Defaulted  Interest or shall make arrangements  satisfactory to the Trustee
     for such deposit prior to the date of the proposed payment, such money when
     deposited  to be held in trust for the benefit of the  Persons  entitled to
     such Defaulted  Interest as in this Clause provided.  Thereupon the Trustee
     shall fix a Special Record Date for the payment of such Defaulted  Interest
     which shall be not more than 15 days and not less than 10 days prior to the
     date of the proposed payment and not less than 10 days after the receipt by
     the  Trustee of the  notice of the  proposed  payment.  The  Trustee  shall

                                       29
<PAGE>

     promptly  notify the Company of such  Special  Record Date and, in the name
     and at the  expense of the  Company,  shall  cause  notice of the  proposed
     payment of such Defaulted  Interest and the Special Record Date therefor to
     be given to each  Holder of  Securities  of such  series in the  manner set
     forth in Section 1.06,  not less than 10 days prior to such Special  Record
     Date.  Notice of the proposed  payment of such  Defaulted  Interest and the
     Special Record Date therefor having been so mailed, such Defaulted Interest
     shall be paid to the Persons in whose names the  Securities  of such series
     (or their respective Predecessor Securities) are registered at the close of
     business  on such  Special  Record  Date and  shall no  longer  be  payable
     pursuant to the following Clause (2).

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

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

     SECTION 3.08. PERSONS DEEMED OWNERS.

     Prior to due presentment of a Security for  registration  of transfer,  the
Company,  the  Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such  Security is  registered as the owner of such Security
for the  purpose  of  receiving  payment of  principal  of and any  premium  and
(subject  to  Section  3.07) any  interest  on such  Security  and for all other
purposes  whatsoever,  whether or not such Security be overdue,  and neither the
Company,  the  Trustee  nor any agent of the  Company  or the  Trustee  shall be
affected by notice to the contrary.

     SECTION 3.09. CANCELLATION.

     All  Securities  surrendered  for  payment,  redemption,   registration  of
transfer or exchange or of credit  against any sinking  fund payment  shall,  if
surrendered  to any Person other than the  Trustee,  be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities  previously  authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever,  and may
deliver to the Trustee (or to any other  Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold,  and all  Securities  so  delivered  shall be  promptly
canceled by the Trustee.  No Securities  shall be authenticated in lieu of or in
exchange  for any  Securities  canceled as provided in this  Section,  except as
expressly  permitted  by this  Indenture.  All canceled  Securities  held by the
Trustee shall be disposed of in accordance with its customary procedures.

                                       30
<PAGE>

     SECTION 3.10. COMPUTATION OF INTEREST.

     Except  as  otherwise   specified  as  contemplated  by  Section  3.01  for
Securities  of any series,  interest on the  Securities  of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

     SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.

     This  Indenture  shall upon Company  Request cease to be of further  effect
(except as to any surviving  rights of  registration  of transfer or exchange of
Securities  herein expressly  provided for), and the Trustee,  at the expense of
the Company,  shall execute proper  instruments  acknowledging  satisfaction and
discharge of this Indenture, when:

          (1) either:

               (A) all Securities theretofore authenticated and delivered (other
          than (i)  Securities  which  have been  destroyed,  lost or stolen and
          which have been  replaced or paid as provided in Section 3.06 and (ii)
          Securities for whose payment money has  theretofore  been deposited in
          trust or  segregated  and held in trust by the Company and  thereafter
          repaid to the Company or  discharged  from such trust,  as provided in
          Section 10.03) have been delivered to the Trustee for cancellation; or

               (B) all such Securities not theretofore  delivered to the Trustee
          for cancellation

                    (i) have become due and payable,

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

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

                    and the  Company,  in the case of (i),  (ii) or (iii) above,
               has deposited or caused to be deposited with the Trustee as trust
               funds in trust for the purpose  money in an amount  sufficient to
               pay and discharge the entire  indebtedness on such Securities not
               theretofore  delivered  to  the  Trustee  for  cancellation,  for
               principal  and  any  premium  and  interest  to the  date of such
               deposit  (in the case of  Securities  which  have  become due and
               payable) or to the Stated Maturity or the Redemption Date, as the
               case may be;

                                       31
<PAGE>

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

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

     Notwithstanding  the  satisfaction  and  discharge of this  Indenture,  the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Company to any  Authenticating  Agent under Section 6.14 and, if money shall
have been deposited with the Trustee  pursuant to subclause (B) of Clause (1) of
this  Section,  the  obligations  of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.

     SECTION 4.02. APPLICATION OF TRUST MONEY.

     Subject to the provisions of the last paragraph of Section 10.03, all money
deposited  with the Trustee  pursuant to Section 4.01 shall be held in trust and
applied by it, in  accordance  with the  provisions of the  Securities  and this
Indenture,  to  the  payment,  either  directly  or  through  any  Paying  Agent
(including  the  Company  acting as its own  Paying  Agent) as the  Trustee  may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                   ARTICLE V

                                    REMEDIES

     SECTION 5.01. EVENTS OF DEFAULT.

     "Event of Default",  wherever used herein with respect to Securities of any
series,  means any one of the  following  events  (whatever  the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

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

          (2) default in the payment of the  principal  of or any premium on any
     Security of that series at its Maturity; or

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

          (4) default in the performance, or breach, of any covenant or warranty
     of the  Company in this  Indenture  (other  than a covenant  or  warranty a
     default in whose  performance  or whose breach is elsewhere in this Section
     specifically  dealt  with or which  has  expressly  been  included  in this

                                       32
<PAGE>

     Indenture solely for the benefit of any series other than that series), and
     continuance  of such  default or breach for a period of 60 days after there
     has been given,  by  registered  or certified  mail,  to the Company by the
     Trustee or to the Company and the Trustee by the Holders of at least 25% in
     principal amount of the Outstanding  Securities a written notice specifying
     such  default or breach and  requiring  it to be remedied  and stating that
     such notice is a "Notice of Default" hereunder; or

          (5) the entry by a court having  jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company in an involuntary case
     or proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization  or other similar law or (B) a decree or order adjudging the
     Company a bankrupt or insolvent,  or approving as properly filed a petition
     seeking  reorganization,  arrangement,  adjustment or  composition of or in
     respect of the  Company  under any  applicable  Federal  or State  law,  or
     appointing   a  custodian,   receiver,   liquidator,   assignee,   trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its  property,  or ordering  the winding up or  liquidation  of its
     affairs,  and the continuance of any such decree or order for relief or any
     such  other  decree  or order  unstayed  and in  effect  for a period of 90
     consecutive days; or

          (6) the  commencement by the Company of a voluntary case or proceeding
     under   any   applicable   Federal   or   State   bankruptcy,   insolvency,
     reorganization  or other  similar law or of any other case or proceeding to
     be  adjudicated a bankrupt or insolvent,  or the consent by it to the entry
     of a decree or order for relief in respect of the Company in an involuntary
     case or  proceeding  under  any  applicable  Federal  or State  bankruptcy,
     insolvency,  reorganization  or other similar law or to the commencement of
     any bankruptcy or insolvency  case or proceeding  against it, or the filing
     by it of a petition or answer or consent seeking  reorganization  or relief
     under any  applicable  Federal  or State law,  or the  consent by it to the
     filing of such petition or to the appointment of or taking  possession by a
     custodian, receiver,  liquidator,  assignee, trustee, sequestrator or other
     similar official of the Company or of any substantial part of its property,
     or the making by it of an assignment  for the benefit of creditors,  or the
     admission by it in writing of its  inability to pay its debts  generally as
     they  become  due,  or the  taking of  corporate  action by the  Company in
     furtherance of any such action; or

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

     SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

     If an Event of Default (other than an Event of Default specified in Section
5.01(5)  or  5.01(6))  with  respect  to  Securities  of any  series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal  amount of the Outstanding  Securities
of that series may declare the  principal  amount of all the  Securities of that
series to be due and payable immediately,  by a notice in writing to the Company
(and to the Trustee if given by  Holders),  and upon any such  declaration  such
principal amount (or specified amount) shall become immediately due and payable.
If an Event of Default  specified in Section  5.01(5) or 5.01(6) with respect to
Securities of any series at

                                       33
<PAGE>

the time Outstanding  occurs, the principal amount of all the Securities of that
series shall  automatically,  and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.

     At any time  after  such a  declaration  of  acceleration  with  respect to
Securities  of any  series  has been made and  before a  judgment  or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article  provided,  the  Holders of not less than 50% in principal amount of the
Outstanding  Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:

          (1)  the  Company  has  paid  or  deposited  with  the  Trustee  a sum
     sufficient to pay:

               (A) all overdue interest on all Securities of that series,

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

               (C) to the  extent  that  payment  of such  interest  is  lawful,
          interest  upon  overdue  interest  at the  rate  or  rates  prescribed
          therefor in such Securities, and

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

          (2) all Events of Default with respect to  Securities  of that series,
     other than the  nonpayment  of the  principal of  Securities of that series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 5.13.

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

     SECTION  5.03.  COLLECTION OF  INDEBTEDNESS  AND SUITS FOR  ENFORCEMENT  BY
                     TRUSTEE.

     The Company covenants that if:

          (1)  default is made in the payment of any  interest  on any  Security
     when such interest becomes due and payable and such default continues for a
     period of 30 days, or

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

the Company will, upon demand of the Trustee,  pay to it, for the benefit of the
Holders  of such  Securities,  the whole  amount  then due and  payable  on such
Securities  for  principal,  including  any sinking  fund  payment or  analogous
obligations,  and any premium and  interest  and, to the extent that  payment of
such interest shall be legally  enforceable,  interest on any overdue  principal
and  premium  and on any  overdue  interest,  at the  rate or  rates  prescribed
therefor in such Securities,  and, in addition  thereto,  such further amount as

                                       34
<PAGE>

shall be sufficient to cover the costs and expenses of collection, including the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel.

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

     SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM.

     In case of any  judicial  proceeding  relative to the Company (or any other
obligor  upon the  Securities),  their  respective  property or  creditors,  the
Trustee shall be entitled and empowered,  by  intervention in such proceeding or
otherwise,  to take any and all actions authorized under the Trust Indenture Act
in order to have  claims of the  Holders  and the  Trustee  allowed  in any such
proceeding.  In  particular,  the  Trustee  shall be  authorized  to collect and
receive any moneys or other  property  payable or deliverable on any such claims
and to distribute  the same;  and any custodian,  receiver,  assignee,  trustee,
liquidator,  sequestrator  or  other  similar  official  in  any  such  judicial
proceeding  is hereby  authorized  by each  Holder 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 it for
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee,  its agents and counsel,  and any other  amounts due the Trustee  under
Section 6.07.

     No provision of this Indenture  shall be deemed to authorize 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;  provided,  however,
that the  Trustee  may,  on behalf of the  Holders,  vote for the  election of a
trustee in  bankruptcy  or similar  official and be a member of a creditors'  or
other similar committee.

     SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

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

                                       35
<PAGE>

     SECTION 5.06. APPLICATION OF MONEY COLLECTED.

     Any money  collected  by the  Trustee  pursuant  to this  Article  shall be
applied in the following  order,  at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

          FIRST:  To the payment of all amounts  due the Trustee  under  Section
     6.07;

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

          THIRD: To the Company.

     SECTION 5.07. LIMITATION ON SUITS.

     No Holder of any  Security of any series  shall have any right to institute
any proceeding,  judicial or otherwise,  with respect to this Indenture,  or for
the  appointment  of a receiver or trustee,  or for any other remedy  hereunder,
unless

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

          (2) the  Holders  of not less  than  25% in  principal  amount  of the
     Outstanding  Securities  of that series shall have made written  request to
     the Trustee to institute proceedings in respect of such Event of Default in
     its own name as Trustee hereunder;

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

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

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

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

                                       36
<PAGE>

     SECTION 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,  PREMIUM
                   AND INTEREST.

     Notwithstanding  any other provision in this  Indenture,  the Holder of any
Security shall have the right, which is absolute and  unconditional,  to receive
payment of the  principal  of and any  premium  and  (subject  to Section  3.07)
interest on such Security on the respective Stated Maturities  expressed in such
Security  (or,  in the  case  of  redemption,  on the  Redemption  Date)  and to
institute suit for the  enforcement  of any such payment,  and such rights shall
not be impaired without the consent of such Holder.

     SECTION 5.09. 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 every such case,  subject to any  determination  in
such  proceeding,  the  Company,  the Trustee and the Holders  shall be restored
severally and  respectively to their former  positions  hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall  continue as though
no such proceeding had been instituted.

     SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.

     Except as otherwise  provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.06, 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 5.11. DELAY OR OMISSION NOT WAIVER.

     No delay or omission of the Trustee or of any Holder of any  Securities  to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or  constitute  a waiver of any such Event of Default or an
acquiescence therein.  Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised  from time to time,  and as often
as may be deemed  expedient,  by the Trustee or by the Holders,  as the case may
be.

     SECTION 5.12. CONTROL BY HOLDERS.

     The Holders of a majority in principal amount of the Outstanding Securities
of any  series  shall  have the right to direct  the time,  method  and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power  conferred on the Trustee,  with respect to the Securities of
such series; provided that

                                       37
<PAGE>

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

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

     SECTION 5.13. WAIVER OF PAST DEFAULTS.

     The  Holders  of not  less  than a  majority  in  principal  amount  of the
Outstanding  Securities  of any series by notice to the Trustee may on behalf of
the  Holders  of all the  Securities  of such  series  waive  any  past  default
hereunder with respect to such series and its consequences, except a default:

          (1) in the payment of the  principal  of or any premium or interest on
     any Security of such series, or

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

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

     SECTION 5.14. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an  undertaking  to pay  the  costs  of such  suit,  and may  assess  costs
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel)  against any such party  litigant,  in the manner and to the
extent provided in the Trust  Indenture Act;  provided that neither this Section
nor the Trust  Indenture  Act shall be deemed to authorize  any court to require
such an undertaking or to make such an assessment in any suit  instituted by the
Company or the Trustee.

     SECTION 5.15. WAIVER OF USURY, STAY OR EXTENSION LAWS.

     The Company  covenants  (to the extent that it may  lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or  advantage  of, any usury,  stay or  extension  law wherever
enacted,  now or at any time hereafter in force,  which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and  covenants  that it will not hinder,  delay or impede the  execution  of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                       38
<PAGE>

                                   ARTICLE VI

                                   THE TRUSTEE

     SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.

     The duties and  responsibilities of the Trustee shall be as provided by the
Trust  Indenture  Act.  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  hereunder.  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 Section.

     The Trustee  undertakes  to perform such duties and only such duties as are
specifically  set  forth  in  this  Indenture,   and  no  implied  covenants  or
obligations shall be read into this Indenture against the Trustee.

     In the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions  expressed
therein,  upon certificates or opinions  furnished to the Trustee and conforming
to the requirements of this Indenture;  but in the case of any such certificates
or  opinions  which by any  provision  hereof are  specifically  required  to be
furnished to the Trustee,  the Trustee shall be under a duty to examine the same
to determine  whether or not they conform to the  requirements of this Indenture
(but need not confirm or investigate the accuracy of  mathematical  calculations
or other facts stated therein).

     The  Trustee  shall not be liable  for any error of  judgment  made in good
faith by a Responsible  Officer,  unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.

     SECTION 6.02. NOTICE OF DEFAULTS.

     If a default  occurs  hereunder with respect to Securities of any series of
which the Trustee  has  received  written  notice,  the  Trustee  shall give the
Holders of Securities of such series notice of such default as and to the extent
provided by the Trust  Indenture Act. For the purpose of this Section,  the term
"default"  means  any event  which is, or after  notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.

     SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE.

     Subject to the provisions of Section 6.01:

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

                                       39
<PAGE>

          (2) any request or direction of the Company  mentioned herein shall be
     sufficiently  evidenced by a Company  Request or Company Order, as the case
     may be,  and any  resolution  of the  Board of  Directors,  or a  committee
     thereof, shall be sufficiently evidenced by a Board Resolution;

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

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

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

          (6) the Trustee shall not be bound to make any investigation  into the
     facts  or  matters  stated  in  any  resolution,   certificate,  statement,
     instrument,  opinion, report, notice, request,  direction,  consent, order,
     bond,  debenture,  note,  other evidence of  indebtedness or other paper or
     document, but the Trustee, in its discretion, may make such further inquiry
     or investigation  into such facts or matters as it may see fit, and, if the
     Trustee shall determine to make such further inquiry or  investigation,  it
     shall be entitled to examine the books, records and premises of the Company
     at the expense of the Company, personally or by agent or attorney and shall
     incur no liability by reason of such inquiry or investigation;

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

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

          (9) the  Trustee  shall not be deemed to have notice of any default or
     Event of Default  unless a  Responsible  Officer of the  Trustee has actual
     knowledge  thereof or unless  written  notice of any event which is in fact

                                       40
<PAGE>

     such a default is received by the Trustee at the Corporate  Trust Office of
     the Trustee, and such notice references the Securities and this Indenture;

          (10) the rights,  privileges,  protections,  immunities  and  benefits
     given  to the  Trustee,  including,  without  limitation,  its  right to be
     indemnified,  are extended to, and shall be enforceable  by, the Trustee in
     each of its capacities  hereunder,  and to each agent,  custodian and other
     Person employed to act hereunder; and

          (11) the  Trustee may request  that the Company  deliver an  Officers'
     Certificate  setting  forth  the  names of  individuals  and/or  titles  of
     officers authorized at such time to take specified actions pursuant to this
     Indenture,  which  Officers'  Certificate  may  be  signed  by  any  person
     authorized to sign an Officers' Certificate, including any person specified
     as so  authorized  in any such  certificate  previously  delivered  and not
     superceded.

     SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

     The recitals  contained herein and in the Securities,  except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating  Agent assumes any responsibility
for their  correctness.  The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the  Securities.  Neither the Trustee nor
any Authenticating  Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

     SECTION 6.05. MAY HOLD SECURITIES.

     The Trustee,  any  Authenticating  Agent,  any Paying  Agent,  any Security
Registrar  or any other agent of the  Company,  in its  individual  or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were  not  Trustee,  Authenticating  Agent,  Paying  Agent,  Security
Registrar or such other agent.

     SECTION 6.06. MONEY HELD IN TRUST.

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

     SECTION 6.07. COMPENSATION AND REIMBURSEMENT.

     The Company agrees:

          (1) to pay to the Trustee from time to time such compensation as shall
     be agreed in writing  from time to time between the Company and the Trustee
     for all services rendered by it hereunder (which  compensation shall not be
     limited by any provision of law in regard to the  compensation of a trustee
     of an express trust);

                                       41
<PAGE>

          (2) except as otherwise  expressly  provided herein,  to reimburse the
     Trustee upon its request for all  reasonable  expenses,  disbursements  and
     advances  incurred or made by the Trustee in accordance  with any provision
     of this Indenture  (including the reasonable  compensation and the expenses
     and  disbursements  of its agents and  counsel),  except any such  expense,
     disbursement  or advance as shall be  determined to have been caused by its
     own negligence or willful misconduct; and

          (3) to fully indemnify each of the Trustee or any predecessor  Trustee
     and its agents  for,  and to hold it  harmless  against,  any and all loss,
     liability,  claim,  damage or expense  asserted  by any  Person  (including
     reasonable legal fees and expenses), incurred without negligence or willful
     misconduct on its part, arising out of or in connection with the acceptance
     or administration of the trust or trusts hereunder, including the costs and
     expenses of defending  itself  against any claim or liability in connection
     with the exercise or performance of any of its powers or duties hereunder.

     The Trustee  shall have a lien prior to the  Securities  as to all property
and  funds  held by it  hereunder  for any  amount  owing it or any  predecessor
Trustee  pursuant to this  Section  6.07,  except with  respect to funds held in
trust for the benefits of Holders of particular Securities.

     When the Trustee incurs expenses or renders  services in connection with an
Event of Default  specified in Section 5.01(5) or Section 5.01(6),  the expenses
(including  the  reasonable  charges  and  expenses  of  its  counsel)  and  the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration  under any applicable Federal or state bankruptcy,  insolvency or
other similar law.

     The  provision  of this  Section  shall  survive  the  termination  of this
Indenture and resignation or removal of the Trustee.

     SECTION 6.08. CONFLICTING INTERESTS.

     If the  Trustee  has or shall  acquire a  conflicting  interest  within the
meaning of the Trust  Indenture  Act, the Trustee  shall either  eliminate  such
interest or resign,  to the extent and in the manner provided by, and subject to
the provisions  of, the Trust  Indenture Act and this  Indenture.  To the extent
permitted  by such Act,  the Trustee  shall not be deemed to have a  conflicting
interest  by virtue of being a trustee  under  this  Indenture  with  respect to
Securities of more than one series.

                                       42
<PAGE>

     SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

     There  shall at all  times be one (and  only one)  Trustee  hereunder  with
respect to the  Securities  of each series,  which may be Trustee  hereunder for
Securities  of one or more  series.  Each  Trustee  shall  be a  person  that is
eligible  pursuant to the Trust  Indenture Act to act as such and has a combined
capital  and  surplus  of at least  $50,000,000.  If any such  Person  publishes
reports of condition at least annually,  pursuant to law or to the  requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent  report of condition so  published.  If at any time
the  Trustee  with  respect to the  Securities  of any series  shall cease to be
eligible in accordance  with the  provisions  of this  Section,  it shall resign
immediately  in the  manner and with the effect  hereinafter  specified  in this
Article.

     SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

     No  resignation or removal of the Trustee and no appointment of a successor
Trustee  pursuant to this Article shall become effective until the acceptance of
appointment  by  the  successor   Trustee  in  accordance  with  the  applicable
requirements of Section 6.11.

     The Trustee may resign at any time with respect to the Securities of one or
more series by giving written  notice thereof to the Company.  If the instrument
of  acceptance  by a successor  Trustee  required by Section 6.11 shall not have
been  delivered to the Trustee within 30 days after the giving of such notice of
resignation,  the  resigning  Trustee may petition at the expense of the Company
any court of competent jurisdiction for the appointment of a successor Trustee.

     The Trustee may be removed at any time with  respect to the  Securities  of
any  series by Act of the  Holders  of a  majority  in  principal  amount of the
Outstanding  Securities,  delivered  to the Trustee and to the  Company.  If the
instrument of acceptance by a successor  Trustee  required by Section 6.11 shall
not have been  delivered to the Trustee  within 30 days after the giving of such
notice of removal, the Trustee being removed may, at the expense of the Company,
petition any court of competent  jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

     If at any time:

          (1) the Trustee  shall fail to comply with Section 6.08 after  written
     request  therefor  by the Company or by any Holder who has been a bona fide
     Holder of a Security for at least six months, or

          (2) the  Trustee  shall cease to be eligible  under  Section  6.09 and
     shall fail to resign after  written  request  therefor by the Company or by
     any such Holder, or

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

then,  in any such case,  (A) the Company by a Board  Resolution  may remove the
Trustee  with respect to all  Securities,  or (B) subject to Section  5.14,  any
Holder  who has been a bona fide  Holder of a  Security  for at least six months
may, on behalf of himself and all others similarly situated,  petition any court
of  competent  jurisdiction  for the removal of the Trustee  with respect to all
Securities and the appointment of a successor Trustee or Trustees.

                                       43
<PAGE>

     If the Trustee shall resign,  be removed or become incapable of acting,  or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
all Securities of one or more series, the Company, by a Board Resolution,  shall
promptly appoint a successor  Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and  that at any  time  there  shall be only one  Trustee  with  respect  to the
Securities  of any  particular  series)  and shall  comply  with the  applicable
requirements  of Section  6.11.  If,  within  one year  after such  resignation,
removal or incapability,  or the occurrence of such vacancy, a successor Trustee
with  respect to the  Securities  of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding  Securities of such
series delivered to the Company and the retiring Trustee,  the successor Trustee
so  appointed  shall,  forthwith  upon its  acceptance  of such  appointment  in
accordance  with  the  applicable  requirements  of  Section  6.11,  become  the
successor  Trustee  with  respect to the  Securities  of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee  with  respect  to the  Securities  of any  series  shall  have  been so
appointed by the Company or the Holders and accepted  appointment  in the manner
required  by  Section  6.11,  any  Holder  who has been a bona fide  Holder of a
Security  of such  series for at least six months  may, on behalf of himself and
all others similarly situated,  petition any court of competent jurisdiction for
the  appointment  of a successor  Trustee with respect to the Securities of such
series.

     The Company shall give notice of each  resignation  and each removal of the
Trustee with respect to the  Securities of any series and each  appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner  provided in Section  1.06.  Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.

     SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

     In case of the appointment hereunder of a successor Trustee with respect to
all  Securities,  every such  successor  Trustee  so  appointed  shall  execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting  such  appointment,  and thereupon the  resignation  or removal of the
retiring Trustee shall become effective and such successor Trustee,  without any
further  act,  deed or  conveyance,  shall  become  vested  with all the rights,
powers,  trusts and duties of the retiring  Trustee;  but, on the request of the
Company or the successor  Trustee,  such retiring Trustee shall, upon payment of
its charges,  execute and deliver an instrument  transferring  to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign,  transfer and deliver to such  successor  Trustee all property and money
held by such retiring Trustee hereunder.

     In case of the appointment hereunder of a successor Trustee with respect to
the  Securities  of one or more (but not all series)  series,  the Company,  the
retiring  Trustee and each  successor  Trustee with respect to the Securities of
one or more series shall  execute and deliver an indenture  supplemental  hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain  such  provisions  as shall be  necessary  or  desirable to transfer and
confirm to, and to vest in,  each  successor  Trustee  all the  rights,  powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,  (2)
if the retiring  Trustee is not retiring with respect to all  Securities,  shall

                                       44
<PAGE>

contain  such  provisions  as shall be deemed  necessary or desirable to confirm
that all the rights,  powers,  trusts and duties of the  retiring  Trustee  with
respect  to the  Securities  of that or those  series as to which  the  retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the  provisions of this  Indenture as shall be
necessary  to  provide  for or  facilitate  the  administration  of  the  trusts
hereunder by more than one Trustee,  it being  understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same  trust and that each such  Trustee  shall be  trustee  of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder  administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture  the  resignation  or removal of the  retiring  Trustee  shall  become
effective  to the  extent  provided  therein  and each such  successor  Trustee,
without any further act,  deed or  conveyance,  shall become vested with all the
rights,  powers,  trusts and duties of the retiring  Trustee with respect to the
Securities of that or those series to which the  appointment  of such  successor
Trustee relates;  but, on request of the Company or any successor Trustee,  such
retiring  Trustee  shall duly  assign,  transfer  and deliver to such  successor
Trustee all  property and money held by such  retiring  Trustee  hereunder  with
respect to the  Securities of that or those series to which the  appointment  of
such successor Trustee relates.

     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
first or second preceding paragraph, as the case may be.

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

     SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

     Any  corporation  into which the Trustee may be merged or converted or with
which it may be  consolidated,  or any  corporation  resulting  from any merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  succeeding to all or substantially all the corporate trust business
of the Trustee  (including  the trust created by this  Indenture),  shall be the
successor of the Trustee  hereunder;  provided  that such  corporation  shall be
otherwise  qualified and eligible  under this Article,  without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated,  but not delivered, by the
Trustee then in office, any successor by merger,  conversion or consolidation to
such  authenticating  Trustee  may adopt such  authentication  and  deliver  the
Securities so  authenticated  with the same effect as if such successor  Trustee
had itself authenticated such Securities.

     SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

     If and when the  Trustee  shall be or become a creditor  of the Company (or
any other  obligor  upon the  Securities),  the Trustee  shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

                                       45
<PAGE>

     SECTION 6.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.

     The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior  Indebtedness  and shall not be liable to any such holders if the Trustee
shall in good faith  mistakenly  pay over or distribute to Holders of Securities
or to the Company or to any other person cash,  property or  securities to which
any holders of Senior  Indebtedness  shall be entitled by virtue of this Article
or otherwise.  With respect to the holders of Senior  Indebtedness,  the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are  specifically  set  forth  in  this  Article  and no  implied  covenants  or
obligations  with respect to holders of Senior  Indebtedness  shall be read into
this Indenture against the Trustee.

     SECTION 6.15. APPOINTMENT OF AUTHENTICATING AGENT.

     The Trustee may appoint an  Authenticating  Agent or Agents with respect to
one or more series of  Securities  which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange and registration of transfer or partial  redemption thereof or
pursuant to Section 3.06, and Securities so  authenticated  shall be entitled to
the  benefits  of this  Indenture  and  shall be valid  and  obligatory  for all
purposes as if authenticated  by the Trustee  hereunder.  Wherever  reference is
made in this Indenture to the  authentication  and delivery of Securities by the
Trustee or the Trustee's certificate of authentication,  such reference shall be
deemed to include  authentication  and  delivery  on behalf of the Trustee by an
Authenticating  Agent and a certificate of authentication  executed on behalf of
the  Trustee by an  Authenticating  Agent.  Each  Authenticating  Agent shall be
acceptable to the Company and shall at all times be a corporation  organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent,  having a combined  capital and surplus of not less than  $50,000,000 and
subject to supervision or  examination  by Federal or State  authority.  If such
Authenticating Agent publishes reports of condition at least annually,  pursuant
to law or to the requirements of said supervising or examining  authority,  then
for the  purposes  of this  Section,  the  combined  capital and surplus of such
Authenticating  Agent shall be deemed to be its combined  capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this Section,  such Authenticating  Agent shall resign immediately
in the manner and with the effect specified in this Section.

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

                                       46
<PAGE>

     An  Authenticating  Agent may resign at any time by giving  written  notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an  Authenticating  Agent by giving written notice thereof to such
Authenticating  Agent  and to the  Company.  Upon  receiving  such a  notice  of
resignation  or  upon  such  a  termination,   or  in  case  at  any  time  such
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this Section,  the Trustee may appoint a successor  Authenticating
Agent  which  shall be  acceptable  to the Company and shall give notice of such
appointment in the manner  provided in Section 1.06 to all Holders of Securities
of the series with respect to which such  Authenticating  Agent will serve.  Any
successor  Authenticating  Agent upon  acceptance of its  appointment  hereunder
shall become  vested with all the rights,  powers and duties of its  predecessor
hereunder,  with like effect as if originally named as an Authenticating  Agent.
No successor  Authenticating  Agent shall be appointed unless eligible under the
provisions of this Section.

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

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

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

Dated:
        ----------------------------

                                                  --------------------------- ,
                                                                   As Trustee


                                            By:
                                                  ----------------------------
                                                  As Authenticating Agent




                                            By:
                                                  ----------------------------
                                                  As Authenticating Signatory


                                  ARTICLE VII

                           HOLDERS' LISTS AND REPORTS

     SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

     The  Trustee  shall  preserve  in  as  current  a  form  as  is  reasonably
practicable  the most recent list  available to it of the names and addresses of
the Holders of the Securities. If the Trustee is not Registrar, the Company will
furnish or cause to be furnished to the Trustee

                                       47
<PAGE>

          (1) semi-annually, not more than 15 days after the Regular Record Date
     in respect of the  Securities  of such series or on June 30th and  December
     31st of each year with respect to each series of  Securities to which there
     are no  Regular  Record  Dates,  a list,  in such form as the  Trustee  may
     reasonably require, of the names and addresses of the Holders of Securities
     of each  series as of such  Regular  Record  Date or June 15th or  December
     15th, as the case may be, and

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

excluding from any such list names and addresses  received by the Trustee in its
capacity as Security Registrar, which the Security Registrar will furnish to the
Company in a similar manner.

     SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

     The  Trustee  shall  preserve,  in as  current  a  form  as  is  reasonably
practicable,  the names and  addresses  of Holders  contained in the most recent
list  furnished  to the Trustee as  provided  in Section  7.01 and the names and
addresses  of Holders  received  by the  Trustee  in its  capacity  as  Security
Registrar.  The  Trustee may  destroy  any list  furnished  to it as provided in
Section 7.01 upon receipt of a new list so furnished.

     The rights of Holders to  communicate  with other  Holders  with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights  and  privileges  of the  Trustee,  shall  be as  provided  by the  Trust
Indenture Act.

     Every Holder of Securities,  by receiving and holding the same, agrees with
the  Company and the  Trustee  that  neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information  as to names and  addresses  of Holders  made  pursuant to the Trust
Indenture Act.

     SECTION 7.03. REPORTS BY TRUSTEE.

     The Trustee shall  transmit to Holders such reports  concerning the Trustee
and its actions  under this  Indenture as may be required  pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.  Reports
so required to be  transmitted  at stated  intervals  of not more than 12 months
shall be transmitted no later than May 15 in each calendar year,  commencing the
first full  calendar  year  following the initial date of issuance of Securities
under this  Indenture.  A copy of each such  report  shall,  at the time of such
transmission  to Holders,  be filed by the Trustee with each stock exchange upon
which any Securities are listed,  with the Commission and with the Company.  The
Company will promptly  notify the Trustee when any  Securities are listed on any
stock exchange or of any delisting thereof.

                                       48
<PAGE>

     SECTION 7.04. REPORTS BY COMPANY.

     So long as any  Securities  are  Outstanding,  (a) during  such time as the
Company is subject to the reporting  requirements  of Section 13 or 15(d) of the
Exchange  Act,  the Company  shall  deliver to the  Trustee  (or make  available
through the Commission's EDGAR system), within five days after it is required to
file them with the  Commission,  the annual and quarterly  financial  statements
that the Company files with the  Commission,  including,  with respect to annual
information  only,  a  report  thereon  by  its  certified   independent  public
accountants,  and (b) if at any time  the  Company  is not  required  to  remain
subject to the  reporting  requirements  of Section 13 or 15(d) of the  Exchange
Act, then the Company shall  continue to file with, or furnish to the Commission
and to provide to the Trustee (or make available through the Commission's  EDGAR
system):

          (i) within 120 days after the end of each fiscal year,  annual reports
     on Form 10-K (or any successor form) containing the information required to
     be contained therein;

          (ii)  within 60 days after the end of each of the first  three  fiscal
     quarters of each fiscal year, reports on Form 10-Q (or any successor form);
     and

          (iii)  promptly  from time to time  after the  occurrence  of an event
     required  to be reported by Form 8-K (or any  successor  form),  a Form 8-K
     with respect to that event;

provided,  however,  that the Company will not be obligated to file such reports
with the SEC if the SEC does not permit such filings.

     Delivery of such reports,  information  and documents to the Trustee is for
informational  purposes  only  and  the  Trustee's  receipt  of such  shall  not
constitute   constructive  notice  of  any  information   contained  therein  or
determinable from information  contained  therein,  including  compliance by the
Company with any of the covenants hereunder (as to which the Trustee is entitled
to conclusively rely exclusively on Officers' Certificates).

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

     SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

     The  Company  may not  consolidate  with or merge into any other  Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person,  and the Company may not permit any Person to consolidate with or
merge into the Company or convey,  transfer or lease its  properties  and assets
substantially as an entirety to the Company unless:

          (1) in case the Company shall  consolidate  with or merge into another
     Person or convey, transfer or lease its properties and assets substantially
     as an entirety to any Person,  the Person formed by such  consolidation  or
     into which the Company is merged or the Person which acquires by conveyance
     or transfer,  or which  leases,  the  properties  and assets of the Company
     substantially as an entirety shall be a corporation,  partnership or trust,

                                       49
<PAGE>

     shall be organized and validly existing under the laws of the United States
     of  America,  any State  thereof  or the  District  of  Columbia  and shall
     expressly  assume,  by  an  indenture  supplemental  hereto,  executed  and
     delivered to the Trustee, in form satisfactory to the Trustee,  the due and
     punctual  payment of the  principal  of and any premium and interest on all
     the Securities, and the performance or observance of every covenant of this
     Indenture  on the part of the Company to be  performed  or observed;

          (2) immediately  after giving effect to such  transaction and treating
     any Indebtedness  which becomes an obligation of the Company as a result of
     such transaction as having been incurred by the Company at the time of such
     transaction, no Event of Default, and no event which, after notice or lapse
     of time or both, would become an Event of Default,  shall have happened and
     be continuing;

          (3) if,  as a  result  of any such  consolidation  or  merger  or such
     conveyance,  transfer or lease,  properties  or assets of the Company would
     become  subject to a mortgage,  pledge,  lien,  security  interest or other
     encumbrance which would not be permitted by this Indenture,  the Company or
     such successor  Person,  as the case may be, shall take such steps as shall
     be necessary  effectively to secure the Securities equally and ratably with
     (or prior to) all indebtedness secured thereby; and

          (4) the Company has delivered to the Trustee an Officers'  Certificate
     and an Opinion of Counsel,  each stating that such  consolidation,  merger,
     conveyance,  transfer or lease and, if a supplemental indenture is required
     in connection with such  transaction,  such  supplemental  indenture comply
     with this Article and that all  conditions  precedent  herein  provided for
     relating to such transaction have been complied with.

     SECTION 8.02. SUCCESSOR SUBSTITUTED.

     Upon any  consolidation of the Company with, or merger of the Company into,
any other  Person or any  conveyance,  transfer or lease of the  properties  and
assets of the Company  substantially  as an entirety in accordance  with Section
8.01,  the  successor  Person  formed by such  consolidation  or into  which the
Company is merged or to which such  conveyance,  transfer or lease 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, and thereafter,  except in the case
of a lease,  the  predecessor  Person shall be relieved of all  obligations  and
covenants under this Indenture or the Securities.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

     SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

     Without the consent of any Holders, the Company, when authorized by a Board
Resolution,  and the Trustee,  at any time and from time to time, may enter into

                                       50
<PAGE>

one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

          (1) to evidence the  succession  of another  Person to the Company and
     the assumption by any such successor of the covenants of the Company herein
     or in the Securities; or

          (2) to add to the  covenants  of the  Company  for the  benefit of the
     Holders of all or any series of Securities (and if such covenants are to be
     for the benefit of less than all series of  Securities,  stating  that such
     covenants  are  expressly  being  included  solely for the  benefit of such
     series)  or to  surrender  any  right or power  herein  conferred  upon the
     Company; or

          (3) to add any  additional  Events of Default  for the  benefit of the
     Holders of all or any series of Securities (and if such  additional  Events
     of Default are to be for the benefit of less than all series of Securities,
     stating that such additional Events of Default are expressly being included
     solely for the benefit of such series); or

          (4) to add to or change any of the  provisions  of this  Indenture  to
     such extent as shall be necessary to permit or  facilitate  the issuance of
     Securities in bearer form,  registrable or not registrable as to principal,
     and with or  without  interest  coupons,  or to  permit or  facilitate  the
     issuance of Securities in uncertificated form; or

          (5) to add to,  change  or  eliminate  any of the  provisions  of this
     Indenture in respect of one or more series of Securities; provided that any
     such  addition,  change or  elimination  (A) shall neither (i) apply to any
     Security of any series created prior to the execution of such  supplemental
     indenture and entitled to the benefit of such provision nor (ii) modify the
     rights of the Holder of any such Security with respect to such provision or
     (B) shall become effective only when there is no such Security Outstanding;
     or

          (6) to secure the Securities  pursuant to the  requirements of Section
     10.09 or otherwise; or

          (7) to  establish  the form or terms of  Securities  of any  series as
     permitted by Sections 2.01 and 3.01; or

          (8)  to  evidence  and  provide  for  the  acceptance  of  appointment
     hereunder by a successor  Trustee with respect to the  Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate  the  administration  of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 6.11; or

          (9) to make provision with respect to the conversion rights of Holders
     consistent with the requirements of Article XV; or

                                       51
<PAGE>

          (10) to cure any  ambiguity,  to correct or  supplement  any provision
     herein  which may be  defective or  inconsistent  with any other  provision
     herein,  or to make  any  other  provisions  with  respect  to  matters  or
     questions arising under this Indenture,  provided that such action pursuant
     to this Clause (9) shall not adversely  affect the interests of the Holders
     of Securities of any series.

     Any  supplemental  indenture  authorized by the  provisions of this Section
9.01 may be executed  by the Company and the Trustee  without the consent of the
Holders of any of the Securities at the time Outstanding, notwithstanding any of
the provisions of Section 9.02.

     SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

     With the consent of the Holders of not less than 50% in principal amount of
the Outstanding  Securities  (including  consents  obtained in connection with a
tender  offer or exchange  offer) of each series  affected by such  supplemental
indenture,  by Act of said Holders delivered to the Company and the Trustee, the
Company,  when authorized by a Board Resolution,  and the Trustee may enter into
an indenture  or  indentures  supplemental  hereto for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this  Indenture  or of  modifying  in any manner  the  rights of the  Holders of
Securities of such series under this Indenture;  provided, however, that no such
supplemental  indenture  shall,  without  the  consent  of the  Holder  of  each
Outstanding  Security  (including  consents obtained in connection with a tender
offer or exchange offer) affected thereby,

          (1) change the Stated Maturity of the principal of, or any installment
     of principal of or interest on, any Security or reduce the principal amount
     thereof  or the  rate of  interest  thereon  or any  premium  payable  upon
     redemption  thereof,  or reduce the amount of the principal of any Security
     which would be due and payable upon a declaration  of  acceleration  of the
     Maturity  thereof  pursuant to Section 5.02, or change any Place of Payment
     where,  or the coin or  currency in which,  any  Security or any premium or
     interest thereon is payable,  or impair the right to institute suit for the
     enforcement  of any such  payment on or after the Stated  Maturity  thereof
     (or, in the case of redemption, on or after the Redemption Date), or

          (2) reduce  the  percentage  in  principal  amount of the  Outstanding
     Securities of any series,  the consent of whose Holders is required for any
     such  supplemental  indenture,  or the consent of whose Holders is required
     for any waiver (of compliance with certain  provisions of this Indenture or
     certain  defaults  hereunder and their  consequences)  provided for in this
     Indenture, or

          (3) modify any of the  provisions  of this  Section,  Section  5.13 or
     Section  10.10,  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; provided, however, that this clause shall not be deemed to require
     the consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant  changes in this Section and Section 10.10, or the
     deletion of this provision, in accordance with the requirements of Sections
     6.11 and 9.01(8).

                                       52
<PAGE>

     A supplemental  indenture which changes or eliminates any covenant or other
provision of this  Indenture  which has expressly  been included  solely for the
benefit of one or more  particular  series of Securities,  or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other  provision,  shall be  deemed  not to  affect  the  rights  under  this
Indenture  of the Holders of  Securities  of any other  series.  It shall not be
necessary  for any Act of Holders  under this Section to approve the  particular
form of any proposed supplemental indenture,  but it shall be sufficient if such
Act shall approve the substance thereof.

     SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.

     In  executing,   or  accepting  the  additional   trusts  created  by,  any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts  created by this  Indenture,  the Trustee shall be provided with, and
(subject to Section 6.01) shall be fully protected in relying upon, an Officers'
Certificate  and an  Opinion  of  Counsel  stating  that the  execution  of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such  supplemental  indenture
which  affects  the  Trustee's  own  rights,  duties or  immunities  under  this
Indenture or otherwise.

     SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTUREs

     Upon the execution of any supplemental  indenture under this Article,  this
Indenture  shall be  modified in  accordance  therewith,  and such  supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities  theretofore or thereafter  authenticated and delivered  hereunder
shall be bound thereby.

     SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT.

     Every  supplemental  indenture  executed  pursuant  to this  Article  shall
conform to the requirements of the Trust Indenture Act.

     SECTION 9.06. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

     Securities of any series authenticated and delivered after the execution of
any supplemental  indenture  pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental  indenture. If the Company shall so determine,
new  Securities  of any series so modified as to conform,  in the opinion of the
Trustee and the Company, to any such supplemental  indenture may be prepared and
executed  by the  Company  and  authenticated  and  delivered  by the Trustee in
exchange for Outstanding Securities of such series.

                                   ARTICLE X

                                    COVENANTS

     SECTION 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

     The  Company  covenants  and  agrees  for the  benefit  of each  series  of
Securities that it will duly and punctually pay the principal of and any premium

                                       53
<PAGE>

and interest on the  Securities of that series in  accordance  with the terms of
the Securities and this Indenture.

     SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCy

     The Company will maintain,  or will cause the Paying Agent to maintain,  in
each Place of Payment  for any series of  Securities  an office or agency  where
Securities  of that series may be presented or  surrendered  for payment,  where
Securities of that series may be  surrendered  for  registration  of transfer or
exchange and where  notices and demands to or upon the Company in respect of the
Securities of that series,  and this  Indenture may be served.  The Company will
give prompt written notice to the Trustee of the location, and any change in the
location,  of such office or agency.  If at any time the  Company  shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof,  such presentations,  surrenders,  notices and demands
may be made or served at the  Corporate  Trust  Office  of the  Trustee  and the
Company  hereby   appoints  the  Trustee  as  its  agent  to  receive  all  such
presentations, surrenders, notices and demands.

     The Company may also from time to time  designate one or more other offices
or  agencies  where the  Securities  of one or more series may be  presented  or
surrendered  for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for  Securities  of any series for such  purposes.  The
Company will give prompt written  notice to the Trustee of any such  designation
or  rescission  and of any change in the  location  of any such other  office or
agency.

     SECTION 10.03. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

     If the Company  shall at any time act as its own Paying  Agent with respect
to any  series  of  Securities,  it  will,  on or  before  each  due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate  and hold in trust for the benefit of the Persons  entitled  thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided  and will  promptly  notify the  Trustee of its action or failure so to
act.

     Whenever the Company shall have one or more Paying Agents for any series of
Securities,  it will,  prior to 10:30 a.m. New York time on each due date of the
principal  of or any  premium or  interest  on any  Securities  of that  series,
deposit with a Paying Agent a sum sufficient to pay such amount,  such sum to be
held as provided by the Trust  Indenture  Act,  and (unless such Paying Agent is
the  Trustee)  the  Company  will  promptly  notify the Trustee of its action or
failure so to act.

     The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and  deliver to the Trustee an  instrument  in which
such Paying Agent shall agree with the  Trustee,  subject to the  provisions  of
this Section,  that such Paying Agent will (1) comply with the provisions of the
Trust  Indenture  Act  applicable  to it as a Paying  Agent and (2)  during  the
continuance  of any  default  by the  Company  (or any  other  obligor  upon the
Securities  of that  series)  in the  making of any  payment  in  respect of the

                                       54
<PAGE>

Securities of that series,  upon the written  request of the Trustee,  forthwith
pay to the Trustee  all sums held in trust by such  Paying  Agent for payment in
respect of the Securities of that series.

     The Company may at any time, for the purpose of obtaining the  satisfaction
and  discharge of this  Indenture or for any other  purpose,  pay, or by Company
Order  direct any Paying  Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying  Agent,  such sums to be held by the Trustee upon the
same  trusts as those  upon  which  such sums were held by the  Company  or such
Paying Agent;  and,  upon such payment by any Paying Agent to the Trustee,  such
Paying Agent shall be released from all further  liability  with respect to such
money.

     Any money  deposited with the Trustee or any Paying Agent,  or then held by
the  Company,  in trust for the  payment of the  principal  of or any premium or
interest  on any  Security  and  remaining  unclaimed  for two years  after such
principal,  premium or interest has become due and payable  shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from  such  trust;  and the  Holder of such  Security  shall  thereafter,  as an
unsecured  general creditor,  look only to the Company for payment thereof,  and
all  liability  of the Trustee or such Paying  Agent with  respect to such trust
money,  and all  liability of the Company as trustee  thereof,  shall  thereupon
cease;  provided,  however,  that the Trustee or such Paying Agent, before being
required to make any such repayment, may, at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general  circulation  in New York,  notice
that such money remains  unclaimed  and that,  after a date  specified  therein,
which  shall  not be less than 30 days  from the date of such  publication,  any
unclaimed balance of such money, then remaining will be repaid to the Company.

     SECTION 10.04. STATEMENT BY OFFICERS AS TO DEFAULT.

     The Company will  deliver to the Trustee,  within 120 days after the end of
its fiscal year ending after the date hereof, an Officers' Certificate,  stating
whether or not to the best  knowledge  of the signers  thereof the Company is in
default in the  performance  and observance of any of the terms,  provisions and
conditions  of  this  Indenture  (without  regard  to any  period  of  grace  or
requirement  of notice  provided  hereunder)  and,  if the  Company  shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have  knowledge.  The Company will give the Trustee notice of any Event
of Default within 10 days after any  Responsible  Officer of the Company becomes
aware of or receives actual notice of such default or Event of Default.

     SECTION 10.05. EXISTENCE.

     Subject  to  Article  Eight,  the  Company  will do or cause to be done all
things  necessary to preserve  and keep in full force and effect its  existence,
rights  (charter and  statutory) and  franchises;  provided,  however,  that the
Company  shall not be required to preserve  any such right or  franchise  if the
Board of Directors  shall determine that the  preservation  thereof is no longer
desirable  in the  conduct  of the  business  of the  Company  and that the loss
thereof is not disadvantageous in any material respect to the Holders.

                                       55
<PAGE>

     SECTION 10.06. MAINTENANCE OF PROPERTIES.

     The Company will cause all properties  used or useful in the conduct of its
business or the business of any  Subsidiary  to be  maintained  and kept in good
condition,  repair and working order and supplied  with all necessary  equipment
and  will  cause  to be made  all  necessary  repairs,  renewals,  replacements,
betterments and improvements  thereof, all as in the judgment of the Company may
be necessary  so that the business  carried on in  connection  therewith  may be
properly and  advantageously  conducted at all times;  provided,  however,  that
nothing in this  Section  shall  prevent  the  Company  from  discontinuing  the
operation or maintenance of any of such properties if such discontinuance is, in
the  judgment of the  Company,  desirable  in the conduct of its business or the
business of any Subsidiary and not  disadvantageous  in any material  respect to
the Holders.

     SECTION 10.07. PAYMENT OF TAXES AND OTHER CLAIMS.

     The Company will pay or discharge or cause to be paid or discharged, before
the same shall become  delinquent,  (1) all taxes,  assessments and governmental
charges  levied or imposed upon the Company or any of its  Subsidiaries  or upon
the income,  profits or property of the Company or any of its Subsidiaries,  and
(2) all lawful claims for labor,  materials and supplies which, if unpaid, might
by  law  become  a  lien  upon  the  property  of  the  Company  or  any  of its
Subsidiaries;  provided,  however,  that  neither  the  Company  nor  any of its
Subsidiaries  shall  be  required  to pay or  discharge  or  cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.

     SECTION 10.08. LIMITATION ON SALES AND LEASEBACKS.

     The  Company  will  not,  and  will  not  permit  any  of  its   Restricted
Subsidiaries to, enter into any Sale and Lease-Back  Transaction with respect to
any Principal Property unless, after giving effect thereto, the aggregate amount
of all Attributable  Debt with respect to Sale and Lease-Back  Transactions plus
the aggregate  amount of Indebtedness  secured by Liens incurred without equally
and ratably  securing the Securities  pursuant to Section 10.09 would not exceed
10% of Consolidated Net Tangible Assets;  provided,  however,  that this Section
10.08 shall not apply to, and there shall be excluded from  Attributable Debt in
any  computation  under this Section or Section  10.09,  Attributable  Debt with
respect to any Sale and Lease-Back Transaction if:

          (1) the lease in such Sale and Lease-Back Transaction is for a period,
     including renewal rights, of three years or less;

          (2) the Company or any of its Restricted Subsidiaries, within 180 days
     after the Sale and Lease-Back Transaction,  applies an amount not less than
     the  greater  of the net  proceeds  of the sale of the  Principal  Property
     leased  pursuant to the Sale and Lease-Back  Transaction or the fair market
     value of the Principal  Property so leased at the time of entering into the
     Sale and Lease-Back  Transaction  (as determined in any manner  approved by
     the Board of Directors) to (A) the  prepayment or retirement of Funded Debt
     of the Company or any of its  Restricted  Subsidiaries;  provided  however,
     that the amount to be  applied  to the  prepayment  or  retirement  of such
     Funded Debt of the  Company or of a  Restricted  Subsidiary  of the Company
     shall be reduced by an amount equal to the sum of (i) the principal  amount
     of any  Securities (or other notes or debentures  constituting  such Funded

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<PAGE>

     Debt)  delivered  within  such  180-day  period  to the  Trustee  or  other
     applicable  trustee for retirement and  cancellation and (ii) the principal
     amount of such Funded Debt,  other than items  referred to in the preceding
     clause (i),  voluntarily  prepaid or retired by the Company or a Restricted
     Subsidiary within 180 days after such sale; and provided further,  however,
     that,  notwithstanding the foregoing,  no prepayment or retirement referred
     to in this Clause (A) may be effected by payment at maturity or pursuant to
     any  mandatory  sinking fund payment or any other  mandatory  prepayment or
     retirement  provision,  or (B) the  purchase of other  property  which will
     constitute Principal Property having a fair market value, in the opinion of
     the Board of  Directors,  at least  equal to the fair  market  value of the
     Principal Property leased in such Sale and Lease-Back Transaction;

          (3) the  lease in such  Sale and  Lease-Back  Transaction  secures  or
     relates to  obligations  issued by a State,  territory or possession of the
     United States,  any political  subdivision of any of the foregoing,  or the
     District  of  Columbia,  to finance  the  acquisition  or  construction  of
     property,  and on which the  interest is not, in the opinion of tax counsel
     of  recognized  standing  or in  accordance  with a  ruling  issued  by the
     Internal  Revenue  Service,  includible  in gross  income of the  holder by
     reason of Section  103(a) of the Internal  Revenue Code of 1986, as amended
     (or any  successor  to such  provision),  as in  effect  at the time of the
     issuance of such obligations; or

          (4) such Sale and  Lease-Back  Transaction is entered into between the
     Company  and  a   wholly-owned   Subsidiary   of  the  Company  or  between
     wholly-owned Subsidiaries of the Company.

     SECTION 10.09. RESTRICTION ON LIENS.

     The  Company  will  not,  and  will  not  permit  any  of  its   Restricted
Subsidiaries  to  create,  incur,  assume  or  suffer to exist any Lien upon any
Principal  Property,  whether owned at the date of this  Indenture or thereafter
acquired, to secure any Indebtedness, without making effective provision whereby
the  Securities  (together  with,  if  the  Company  shall  so  determine,   any
Indebtedness  of the  Company or any  Restricted  Subsidiary  then  existing  or
thereafter  created which is not subordinate to the Securities) shall be secured
by such  Lien  equally  and  ratably  with  (or  prior  to)  any  and all  other
Indebtedness secured by Liens so long as that Indebtedness is so secured unless,
after giving effect thereto, the aggregate amount of all Indebtedness secured by
Liens plus all Attributable Debt of the Company and its Restricted  Subsidiaries
with  respect  to Sale and  Lease-Back  Transactions  would  not  exceed  10% of
Consolidated Net Tangible  Assets;  provided,  however,  that this Section 10.09
shall not apply to, and there shall be  excluded  from  Indebtedness  secured by
Liens in any computation under this Section 10.09 or Section 10.08, Indebtedness
secured by any of the following:

          (1)  Liens  existing  on the date of the  Indenture  (including  those
     securing any refinancing of debt underlying such liens);

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<PAGE>

          (2) Liens on any property existing at the time of acquisition  thereof
     by the Company or a Restricted Subsidiary; provided that (A) each such Lien
     shall at all times be  confined  solely to the asset or assets so  acquired
     and (B) the  principal  amount of  Indebtedness  secured  by each such Lien
     shall at no time  exceed the cost of the assets in  question to the Company
     or the respective  Restricted Subsidiary (including the principal amount of
     the Indebtedness secured thereby);

          (3)  Liens in  favor of the  Company  or any  wholly-owned  Restricted
     Subsidiary;

          (4)  Liens in  favor  of any  governmental  body to  secure  progress,
     advance or other  payments  pursuant to any  contract or  provision  of any
     statute;

          (5) Liens on property to secure all or part of the cost of  acquiring,
     substantially   repairing  or   altering,   constructing,   developing   or
     substantially  improving such property,  or to secure Indebtedness incurred
     to provide  funds for any such  purpose;  provided that (A) such Lien comes
     into  existence  not  later  than  180  days  after  the  later  of (i) the
     completion  of  the   acquisition,   substantial   repair  or   alteration,
     construction,  development or  substantial  improvement of such property or
     (ii) the placing in  operation of such  property or of such  property as so
     substantially repaired or altered, constructed,  developed or substantially
     improved and (B) the principal amount of Indebtedness  secured by such Lien
     does  not  exceed  the  cost  of  such  acquisition,   repair,  alteration,
     construction,  development or improvement;  provided, however, that if such
     Indebtedness is in connection with the acquisition of any Timberlands,  and
     the Board of  Directors of the Company has  determined,  within 180 days of
     such  acquisition,  that the Company  will seek such  Indebtedness  (from a
     lender or  investor  not  including  the Company or any  Subsidiary  of the
     Company),  then the applicable  Lien shall be deemed to be included in this
     clause (5) if such Lien is created  within a further 180 days after the end
     of such first 180-day period;

          (6)  Liens  securing  obligations  issued  by a  State,  territory  or
     possession of the United States, or any political subdivision of any of the
     foregoing,  or the  District of  Columbia,  to finance the  acquisition  or
     construction of property,  and on which the interest is not, in the opinion
     of tax counsel of recognized standing or in accordance with a ruling issued
     by the Internal Revenue  Service,  includible in gross income of the holder
     by reason  of  Section  103(a) of the  Internal  Revenue  Code of 1986,  as
     amended (or any successor to such  provision),  as in effect at the time of
     the issuance of such obligations; or

          (7) Any extension,  renewal or replacement (or successive  extensions,
     renewals or  replacements),  as a whole or in part, of any Lien referred to
     in the foregoing  clauses (1) through (6),  inclusive;  provided,  however,
     that such  extension,  renewal or replacement  Lien shall (A) be limited to
     all or part of the same property that secured the Lien extended, renewed or
     replaced  (plus  improvements  on such  property)  and (B) not  exceed  the
     principal  amount of  Indebtedness,  plus any  premium  of fee  payable  in
     connection with any such extension,  renewal or replacement,  so secured at
     the time of such extension, renewal or replacement.

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<PAGE>

     For purposes of this Section 10.09 and Section 10.08, an  "acquisition"  of
property  (including real,  personal or intangible property or shares of capital
stock or  Indebtedness)  shall include any transaction or series of transactions
by  which  the  Company  or  a  Restricted  Subsidiary  acquires,   directly  or
indirectly,  an interest,  or an additional interest (to the extent thereof), in
such property, including an acquisition through merger or consolidation with, or
an acquisition of an interest in, a Person owning an interest in such property.

     SECTION 10.10. WAIVER OF CERTAIN COVENANTS.

     Except  as  otherwise   specified  as  contemplated  by  Section  3.01  for
Securities of such series,  the Company may,  with respect to the  Securities of
any series, omit in any particular  instance to comply with any term,  provision
or condition set forth in any covenant  provided  pursuant to Section  3.01(18),
9.01(2) or 9.01(7)  for the benefit of the Holders of such series and in Section
10.08 or 10.09 if before the time for such  compliance  the  Holders of at least
50% in principal  amount of the Outstanding  Securities of such series shall, by
Act of such Holders,  either waive such compliance in such instance or generally
waive  compliance  with such term,  provision or  condition,  but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so  expressly  waived,  and,  until such  waiver  shall  become  effective,  the
obligations  of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

     SECTION 11.01. APPLICABILITY OF ARTICLE.

     Securities of any series which are redeemable  before their Stated Maturity
shall be  redeemable  in  accordance  with their terms and (except as  otherwise
specified as  contemplated  by Section 3.01 for such  Securities)  in accordance
with this Article.

     SECTION 11.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE.

     The election of the Company to redeem any Securities  shall be evidenced by
a Board Resolution of the Company or in another manner specified as contemplated
by Section 3.01 for such  Securities.  In case of any redemption at the election
of the Company, the Company shall, at least 60 days prior to the Redemption Date
fixed by the  Company  (unless a shorter  notice  shall be  satisfactory  to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed,  and, if  applicable,  of the tenor of
the Securities to be redeemed. In the case of any redemption of Securities prior
to the expiration of any restriction on such redemption provided in the terms of
such  Securities or elsewhere in this  Indenture,  the Company shall furnish the
Trustee  with  an  Officers'   Certificate   evidencing   compliance  with  such
restriction.

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<PAGE>

     SECTION 11.03. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

     If less than all the  Securities  of any series are to be redeemed  (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless  such  redemption  affects  only  a  single  Security),   the  particular
Securities  to be redeemed  shall be selected not more than 60 days prior to the
Redemption Date by the Trustee,  from the Outstanding  Securities of such series
not previously  called for  redemption,  on a pro rata basis,  by lot or by such
method as the  Trustee  shall deem  appropriate  and which may  provide  for the
selection for redemption of a portion of the principal amount of any Security of
such series, provided that the unredeemed portion of the principal amount of any
Security  shall be in an authorized  denomination  (which shall not be less than
the minimum  authorized  denomination)  for such Security.  If less than all the
Securities  of such series and of a specified  tenor are to be redeemed  (unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding  Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.

     The Trustee shall promptly  notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.

     The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security,  whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed  portion  of the  principal  amount  of the  Security  shall be in an
authorized  denomination  (which  shall not be less than the minimum  authorized
denomination) for such Security.

     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  Securities  redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

     SECTION 11.04. NOTICE OF REDEMPTION.

     Notice of redemption shall be given by first-class  mail,  postage prepaid,
mailed not less than 30 nor more than 60 days prior to the  Redemption  Date, to
each Holder of Securities to be redeemed, at his or her address appearing in the
Security Register.

     All notices of  redemption  shall  identify the  Securities  to be redeemed
(including CUSIP number) and shall state:

          (1) the Redemption Date,

          (2) the Redemption Price,

          (3) if  less  than  all  the  Outstanding  Securities  of  any  series
     consisting  of  more  than  a  single  Security  are  to be  redeemed,  the
     identification  (and,  in the  case  of  partial  redemption  of  any  such
     Securities,  the  principal  amounts) of the  particular  Securities  to be
     redeemed  and, if less than all the  Outstanding  Securities  of any series

                                       60
<PAGE>

     consisting of a single Security are to be redeemed, the principal amount of
     the particular Security to be redeemed,

          (4) that on the Redemption  Date the Redemption  Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5) the place or places where each such Security is to be  surrendered
     for payment of the Redemption Price, and

          (6) that the redemption is for a sinking fund, if such is the case.

     Notice of  redemption  of  Securities to be redeemed at the election 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 and shall be irrevocable.

     SECTION 11.05. DEPOSIT OF REDEMPTION PRICE.

     Prior to 10:30 a.m. New York time on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent,  segregate and hold in trust as provided in Section 10.03)
an amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest  Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.

     SECTION 11.06. SECURITIES PAYABLE ON REDEMPTION DATE.

     Notice of redemption  having been given as aforesaid,  the Securities so to
be  redeemed  shall,  on the  Redemption  Date,  become  due and  payable at the
Redemption  Price  therein  specified,  and from and after such date (unless the
Company  shall  default  in the  payment  of the  Redemption  Price and  accrued
interest) such  Securities  shall cease to bear interest.  Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption  Price,  together with accrued interest
to the Redemption Date; provided,  however,  that, unless otherwise specified as
contemplated by Section 3.01,  installments of interest whose Stated Maturity is
on or prior to the  Redemption  Date  will be  payable  to the  Holders  of such
Securities,  or one or more  Predecessor  Securities,  registered as such at the
close of business on the relevant  Record Dates according to their terms and the
provisions of Section 3.07.

     If any Security  called for redemption  shall not be so paid upon surrender
thereof for  redemption,  the principal and any premium shall,  until paid, bear
interest  from  the  Redemption  Date at the  rate  prescribed  therefor  in the
Security.

     SECTION 11.07. SECURITIES REDEEMED IN PART.

     Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires,  due
endorsement by, or a written  instrument of transfer in form satisfactory to the
Company  and the  Trustee  duly  executed  by, the Holder  thereof or his or her

                                       61
<PAGE>

attorney duly  authorized in writing),  and the Company shall  execute,  and the
Trustee shall  authenticate  and deliver to the Holder of such Security  without
service  charge,  a new  Security or  Securities  of the same series and of like
tenor, of any authorized  denomination as requested by such Holder, in aggregate
principal  amount  equal to and in exchange  for the  unredeemed  portion of the
principal of the Security so surrendered.

                                   ARTICLE XII

                                  SINKING FUNDS

     SECTION 12.01. APPLICABILITY OF ARTICLE.

     The  provisions of this Article shall be applicable to any sinking fund for
the  retirement of  Securities  of any series  except as otherwise  specified as
contemplated by Section 3.01 for such Securities.

     The minimum amount of any sinking fund payment provided for by the terms of
any Securities is herein referred to as a "mandatory sinking fund payment",  and
any payment in excess of such minimum  amount  provided for by the terms of such
Securities  is herein  referred to as an  "optional  sinking fund  payment".  If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section  12.02.  Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.

     SECTION 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

     The Company (1) may deliver Outstanding  Securities of a series (other than
any previously  called for redemption) and (2) may apply as a credit  Securities
of a series  which have been  redeemed  either at the  election  of the  Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any  Securities  of such series  required to be made pursuant to the terms of
such  Securities  as and to the  extent  provided  for  by  the  terms  of  such
Securities;  provided  that  the  Securities  to be so  credited  have  not been
previously so credited.  The  Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption  Price,  as specified
in the  Securities so to be redeemed,  for redemption  through  operation of the
sinking  fund and the  amount of such  sinking  fund  payment  shall be  reduced
accordingly.

     SECTION 12.03. REDEMPTION OF SECURITIES FOR SINKING FUND.

     Not less  than 45 days  prior to each  sinking  fund  payment  date for any
Securities,  the Company will  deliver to the Trustee an  Officers'  Certificate
specifying  the  amount  of the  next  ensuing  sinking  fund  payment  for such
Securities  pursuant to the terms of such Securities,  the portion  thereof,  if
any,  which is to be  satisfied by payment of cash and the portion  thereof,  if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section  12.02 and will also  deliver to the  Trustee  any  Securities  to be so
delivered.  Not less than 30 days prior to each such sinking fund payment  date,

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the Trustee  shall select the  Securities  to be redeemed upon such sinking fund
payment date in the manner  specified  in Section  11.03 and cause notice of the
redemption  thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 11.04. Such notice having been duly given, the
redemption  of such  Securities  shall be made upon the terms and in the  manner
stated in Sections 11.06 and 11.07.

                                  ARTICLE XIII

                            CONVERSION OF SECURITIES

     SECTION 13.01. APPLICABILITY OF ARTICLE.

     Securities of any series which are convertible  into shares of Common Stock
or  other  securities  or  property  of the  Company  shall  be  convertible  in
accordance  with their terms and (except as otherwise  specified as contemplated
by Section 3.01 for such Securities) in accordance with this Article.

     SECTION 13.02. EXERCISE OF CONVERSION PRIVILEGE.

     In order to exercise a conversion privilege,  the Holder of a Security of a
series with such a privilege shall surrender such Security to the Company at the
office  or  agency  maintained  for that  purpose  pursuant  to  Section  10.02,
accompanied  by written  notice to the Company that the Holder elects to convert
such Security or a specified  portion thereof.  Such notice shall also state, if
different  from the name and  address of such  Holder,  the name or names  (with
address) in which the certificate or certificates for shares of Common Stock, or
the other securities or property of the Company,  as applicable,  which shall be
issuable  on  such  conversion  shall  be  issued.  Securities  surrendered  for
conversion shall (if so required by the Company or the Trustee) be duly endorsed
by or  accompanied  by  instruments  of  transfer in forms  satisfactory  to the
Company and the Trustee duly executed by the  registered  Holder or its attorney
duly authorized in writing;  and Securities so surrendered for conversion during
the period from the close of business on any Regular  Record Date to the opening
of business on the next succeeding  Interest Payment Date (excluding  Securities
or portions  thereof  called for  redemption  during such period)  shall also be
accompanied by payment in funds  acceptable to the Company of an amount equal to
the interest  payable on such Interest  Payment Date on the principal  amount of
such Security then being  converted,  and such interest shall be payable to such
registered Holder  notwithstanding  the conversion of such Security,  subject to
the provisions of Section 3.07 relating to the payment of Defaulted  Interest by
the Company.  As promptly as practicable after the receipt of such notice and of
any payment  required  pursuant to a Board  Resolution  and,  subject to Section
3.03,  set  forth,  or  determined  in  the  manner  provided,  in an  Officers'
Certificate or established in one or more indentures supplemental hereto setting
forth the terms of such series of Security,  and the  surrender of such Security
in accordance with such reasonable regulations as the Company may prescribe, the

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Company  shall  issue and shall  deliver,  at the office or agency at which such
Security is  surrendered,  to such Holder or on its written order, a certificate
or  certificates  for the number of full  shares of Common  Stock,  or the other
securities or property of the Company,  as  applicable,  which shall be issuable
upon  the  conversion  of such  Security  (or  specified  portion  thereof),  in
accordance with the provisions of such Board Resolution,  Officers'  Certificate
or  supplemental  indenture,  and cash as  provided  therein  in  respect of any
fractional  share of such Common  Stock or other  securities  or property of the
Company, as applicable, otherwise issuable upon such conversion. Such conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which such notice and such payment, if required,  shall have been
received in proper order for  conversion by the Company and such Security  shall
have been surrendered as aforesaid (unless such Holder shall have so surrendered
such Security and shall have  instructed the Company to effect the conversion on
a particular  date following such surrender and such Holder shall be entitled to
convert  such  Security  on such date,  in which case such  conversion  shall be
deemed to be effected  immediately  prior to the close of business on such date)
and at such time the  rights of the  Holder of such  Security  as such  Security
Holder  shall  cease  and the  person  or  persons  in whose  name or names  any
certificate or  certificates  for shares of Common Stock of the Company,  or any
securities or other property of the Company,  as  applicable,  shall be issuable
upon such  conversion  shall be deemed to have  become  the Holder or Holders of
record of such shares or other securities or property. Except as set forth above
and subject to the final  paragraph of Section  3.07,  no payment or  adjustment
shall be made upon any  conversion  on  account of any  interest  accrued on the
Securities  surrendered  for  conversion  or on account of any  dividends on the
Common Stock, or with respect to other securities or property of the Company, as
applicable, issued upon such conversion.

     In the case of any  Security  which is  converted  in part only,  upon such
conversion  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 the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.

     SECTION 13.03. NO FRACTIONAL SHARES OF CAPITAL STOCK.

     No  fractional  share of Common Stock or other capital stock of the Company
shall be issued upon  conversions of Securities of any series.  If more than one
Security shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion  shall be computed
on the basis of the aggregate  principal  amount of the Securities (or specified
portions thereof to the extent permitted hereby) so surrendered.  If, except for
the provisions of this Section,  any Holder of a Security or Securities would be
entitled to a  fractional  share of Common Stock or other  capital  stock of the
Company  upon the  conversion  of such  Security  or  Securities,  or  specified
portions  thereof,  the Company shall pay to such Holder an amount in cash equal
to the current  market  value of such  fractional  share  computed,  (i) if such
Common Stock or other  capital  stock is listed or admitted to unlisted  trading
privileges on a national securities exchange,  on the basis of the last reported
sale price  regular way on such  exchange  on the last  trading day prior to the
date of conversion  upon which such a sale shall have been effected,  or (ii) if
such  Common  Stock or other  capital  stock  is not at the  time so  listed  or
admitted to unlisted trading privileges on a national  securities  exchange,  on
the basis of the  average of the bid and asked  prices of such  Common  Stock or
other  capital  stock in the  over-the-counter  market,  on the last trading day
prior to the date of conversion,  as reported by the National  Quotation Bureau,
Incorporated  or  similar   organization  if  the  National   Quotation  Bureau,
Incorporated is no longer  reporting such  information,  or if not so available,
the fair market price as determined  by the Board of Directors.  For purposes of
this Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday other than any day on which the Common Stock or other  capital  stock

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<PAGE>

is not traded on the New York Stock  Exchange,  or if the Common  Stock or other
capital  stock is not traded on the New York Stock  Exchange,  on the  principal
exchange or market on which the Common Stock or other capital stock is traded or
quoted.

     SECTION  13.04.  ADJUSTMENT OF CONVERSION  PRICE OF SECURITIES  CONVERTIBLE
                      INTO COMMON STOCK.

     The conversion  price of Securities of any series that is convertible  into
Common  Stock of the Company  shall be adjusted for any stock  dividends,  stock
splits,  reclassification,  combinations  or similar  transactions in accordance
with the terms of the supplemental  indenture or Board Resolutions setting forth
the terms of the Securities of such series.

     Whenever the  conversion  price is adjusted,  the Company shall compute the
adjusted  conversion  price in  accordance  with terms of the  applicable  Board
Resolution or supplemental  indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate  shall forthwith
be filed at each office or agency  maintained  for the purpose of  conversion of
Securities  pursuant to Section 10.02 and, if different,  with the Trustee.  The
Company shall  forthwith  cause a notice  setting forth the adjusted  conversion
price to be mailed, first class postage prepaid, to each Holder of Securities of
such  series  at its  address  appearing  on the  Security  Resister  and to any
conversion agent other than the Trustee.

     SECTION 13.05. NOTICE OF CERTAIN CORPORATE ACTIONS.

     In case:

          (1) the Company shall  declare a dividend (or any other  distribution)
     on its Common  Stock  payable  otherwise  than in cash out of its  retained
     earnings  (other than a dividend for which approval of any  shareholders of
     Company is required); or

          (2) the Company  shall  authorize  the  granting to the holders of its
     Common Stock of rights,  options or warrants to  subscribe  for or purchase
     any shares of capital stock of any class or of any other rights (other than
     any such grant for which  approval  of any  shareholders  of the Company is
     required); or

          (3) of any  reclassification of the Common Stock of the Company (other
     than a  subdivision  or  combination  of its  outstanding  shares of Common
     Stock,  or of any  consolidation,  merger  or share  exchange  to which the
     Company  is a party  and for  which  approval  of any  shareholders  of the
     Company is  required),  or of the sale of all or  substantially  all of the
     assets of the Company; or

          (4)  of the  voluntary  or  involuntary  dissolution,  liquidation  or
     winding up of the Company;

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<PAGE>

then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders of Securities  convertible into Common Stock at their last
addresses as they shall appear in the Securities Register,  at least 20 days (or
10  days  in any  case  specified  in  clause  (1) or (2)  above)  prior  to the
applicable record date hereinafter  specified,  a notice stating (i) the date on
which a record is to be taken for the  purpose of such  dividend,  distribution,
rights,  options or warrants, or, if a record is not to be taken, the date as of
which the holders of Common  Stock of record to be  entitled  to such  dividend,
distribution, rights, options or warrants are to be determined, or (ii) the date
on which such  reclassification,  consolidation,  merger, share exchange,  sale,
dissolution,  liquidation or winding up is expected to become effective, and the
date as of which it is expected  that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities,  cash or other
property deliverable upon such  reclassification,  consolidation,  merger, share
exchange,  sale,  dissolution,  liquidation  or  winding  up. If at any time the
Trustee  shall not be the  conversion  agent,  a copy of such notice  shall also
forthwith be filed by the Company with the Trustee.

     SECTION 13.06. RESERVATION OF SHARES OR OTHER PROPERTY.

     The  Company  shall at all  times  reserve  and keep  available,  free from
preemptive or similar  rights,  for the purpose of effecting  the  conversion of
Securities,  the full number of shares of Common Stock or other  securities,  or
the property, as applicable, of the Company then issuable upon the conversion of
all Outstanding Securities of any series that has conversion rights.

     SECTION 13.07. PAYMENT OF CERTAIN TAXES UPON CONVERSION.

     The  Company  will pay any and all taxes  that may be payable in respect of
the issue or  delivery of shares of its Common  Stock,  or other  securities  or
property of the Company,  as  applicable,  on conversion of Securities  pursuant
hereto. The Company shall not, however,  be required to pay any tax which may be
payable in respect of any transfer  involved in the issue and delivery of shares
of its  Common  Stock,  or other  securities  or  property  of the  Company,  as
applicable,  in a name  other  than  that  of the  Holder  of  the  Security  or
Securities to be converted,  and no such issue or delivery  shall be made unless
and until the person requesting such issue has paid to the Company the amount of
any such tax, or has established,  to the satisfaction of the Company, that such
tax has been paid.

     SECTION 13.08. NONASSESSABILITY OF SHARES OF CAPITAL STOCK.

     The Company  covenants that all shares of its Common Stock or other capital
stock  which may be issued  upon  conversion  of  Securities  will upon issue in
accordance  with the terms hereof be duly and validly  issued and fully paid and
nonassessable.

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<PAGE>

     SECTION 13.09. EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE OF
                    SECURITIES CONVERTIBLE INTO COMMON STOCK.

     In case of any  consolidation of the Company with, or merger of the Company
into or with any other  Person,  or in case of any sale of all or  substantially
all of the assets of the  Company,  the  Company  or the  Person  formed by such
consolidation or the Person into which the Company shall have been merged or the
Person which shall have acquired such assets,  as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then  Outstanding  of any series that is  convertible  into Common
Stock of the Company  shall have the right,  which right shall be the  exclusive
conversion  right  thereafter  available to said Holder (until the expiration of
the conversion  right of such Security),  to convert such Security into the kind
and amount of shares of stock or other  securities or property  (including cash)
receivable upon such consolidation,  merger or sale by a holder of the number of
shares of Common Stock of the Company into which such  Security  might have been
converted  immediately prior to such  consolidation,  merger or sale, subject to
compliance with the other  provisions of this Indenture,  such Security and such
supplemental   indenture.   Such   supplemental   indenture  shall  provide  for
adjustments  which shall be as nearly  equivalent as may be  practicable  to the
adjustments provided for in such Security.  The above provisions of this Section
shall  similarly  apply to successive  consolidations,  mergers or sales.  It is
expressly  agreed and understood that anything in this Indenture to the contrary
notwithstanding,  if, pursuant to such merger, consolidation or sale, holders of
outstanding  shares of Common  Stock of the  Company  do not  receive  shares of
common stock of the surviving corporation but receive other securities,  cash or
other property or any combination thereof,  Holders of Securities shall not have
the right to  thereafter  convert  their  Securities  into  common  stock of the
surviving  corporation or the corporation which shall have acquired such assets,
but  rather,  shall have the right  upon such  conversion  to receive  the other
securities,  cash or other  property  receivable  by a holder  of the  number of
shares of Common  Stock of the Company  into which the  Securities  held by such
holder might have been converted immediately prior to such consolidation, merger
or sale,  all as more fully  provided  in the first  sentence  of this  Section.
Anything in this Section to the contrary notwithstanding, the provisions of this
Section shall not apply to a merger or consolidation of another corporation with
or into the  Company  pursuant  to which both of the  following  conditions  are
applicable:  (i)  the  Company  is  the  surviving  corporation;  and  (ii)  the
outstanding  shares of Common  Stock of the Company are not changed or converted
into any other  securities  or  property  (including  cash) or changed in number
(other  than  as  the  result  of  the  issuance  of  new  shares  for  valuable
consideration) or character or reclassified pursuant to the terms of such merger
or consolidation.

     As evidence  of the kind and amount of shares of stock or other  securities
or property  (including  cash) into which Securities may properly be convertible
after  any  such  consolidation,  merger  or  sale,  or  as to  the  appropriate
adjustments  of the  conversion  prices  applicable  with respect  thereto,  the
Trustee shall be furnished with and may accept the  certificate or opinion of an
independent  certified  public  accountant  with  respect  thereto;  and, in the
absence of bad faith on the part of the  Trustee,  the Trustee may  conclusively
rely  thereon,  and shall not be  responsible  or  accountable  to any Holder of
Securities  for any  provision  in  conformity  therewith  or  approved  by such
independent  certified  accountant  which may be contained in said  supplemental
indenture.

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<PAGE>

     SECTION 13.10. DUTIES OF TRUSTEE REGARDING CONVERSION.

     Neither the Trustee nor any conversion agent shall at any time be under any
duty or  responsibility  to any  Holder  of  Securities  of any  series  that is
convertible  into Common Stock, or other  securities or property of the Company,
as  applicable,  to  determine  whether  any facts  exist  which may require any
adjustment of the conversion  price,  or with respect to the nature or extent of
any such adjustment when made, or with respect to the method  employed,  whether
herein  or in any  supplemental  indenture,  any  resolutions  of the  Board  of
Directors or written instrument  executed by one or more officers of the Company
provided  to be  employed  in  making  the same.  Neither  the  Trustee  nor any
conversion  agent shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Common Stock, or of any other securities or
property of the Company,  which may at any time be issued or delivered  upon the
conversion of any Securities  and neither the Trustee nor any  conversion  agent
makes any  representation  with  respect  thereto.  Neither  the Trustee nor any
conversion  agent shall be responsible  for any failure of the Company to issue,
transfer  or deliver  any shares of its Common  Stock or stock  certificates  or
other  securities  or property of the Company upon the surrender of any Security
for the  purpose of  conversion  or to comply with any of the  covenants  of the
Company contained in this Article or in the applicable  supplemental  indenture,
resolutions of the Board of Directors or written  instrument  executed by one or
more duly authorized officers of the Company.

     SECTION 13.11. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.

     Any funds which at any time shall have been  deposited by the Company or on
its behalf with the Trustee or any other  paying agent for the purpose of paying
the  principal  of, and  premium,  if any, and  interest,  if any, on any of the
Securities  (including funds deposited for any sinking fund) and which shall not
be required for such purposes  because of the  conversion of such  Securities as
provided in this Article shall after such conversion be repaid to the Company by
the Trustee upon the Company's written request.

                                  ARTICLE XIV

                       DEFEASANCE AND COVENANT DEFEASANCE

     SECTION  14.01.   COMPANY'S   OPTION  TO  EFFECT   DEFEASANCE  OR  COVENANT
                       DEFEASANCE.

     The Company may elect,  at its option at any time, to have Section 14.02 or
Section 14.03 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 3.01 as being defeasible pursuant to such
Section 14.02 or 14.03, in accordance with any applicable  requirements provided
pursuant to Section 3.01 and upon compliance with the conditions set forth below
in this Article.  Any such election shall be evidenced by a Board  Resolution of
the Company or in another manner  specified as  contemplated by Section 3.01 for
such Securities.

     SECTION 14.02. DEFEASANCE AND DISCHARGE.

     Upon the  Company's  exercise  of its option (if any) to have this  Section
applied to any  Securities  or any series of  Securities,  the Company  shall be
deemed  to have  been  discharged  from its  obligations  with  respect  to such
Securities as provided in this Section on and after the date the  conditions set
forth in Section 14.04 are satisfied (hereinafter called "Defeasance"). For this

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purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire  indebtedness  represented by such  Securities and to have
satisfied all their other  obligations  under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company,  shall execute proper instruments  acknowledging the same),  subject to
the  following  which shall  survive  until  otherwise  terminated or discharged
hereunder:  (1) the rights of Holders of such Securities to receive, solely from
the trust fund  described  in Section  14.04 and as more fully set forth in such
Section, payments in respect of the principal of and any premium and interest on
such  Securities  when  payments are due,  (2) the  Company's  obligations  with
respect to such Securities under Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (3)
the rights,  powers,  trusts, duties and immunities of the Trustee hereunder and
(4) this  Article.  Subject to  compliance  with this  Article,  the Company may
exercise  its option (if any) to have this  Section  applied to such  Securities
notwithstanding  the prior exercise of its option (if any) to have Section 14.03
applied to such Securities.

     SECTION 14.03. COVENANT DEFEASANCE.

     Upon the  Company's  exercise  of its option (if any) to have this  Section
applied to any  Securities  or any series of  Securities as the case may be, (1)
the Company shall be released from its obligations  under Section 7.04,  Section
8.01(3),  Sections 10.06 through 10.09,  inclusive,  and any covenants  provided
pursuant to Section 3.01(23),  9.01(2) or 9.01(7) for the benefit of the Holders
of such  Securities,  and (2) the occurrence of any event  specified in Sections
5.01(4)  (with  respect to any of Section 8.01,  Sections  10.06 through  10.09,
inclusive,  and any such  covenants  provided  pursuant  to  Section  9.01(2) or
9.01(7)),  and 5.01(5) through 5.01(7) shall be deemed not to be or result in an
Event of Default,  in each case with respect to such  Securities  as provided in
this Section on and after the date the conditions set forth in Section 14.04 are
satisfied  (hereinafter called "Covenant  Defeasance").  For this purpose,  such
Covenant Defeasance means that, with respect to such Securities, the Company may
omit to  comply  with and  shall  have no  liability  in  respect  of any  term,
condition or limitation set forth in any such  specified  Section (to the extent
so specified in the case of Section 5.01(4)),  whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference  in any such  Section  to any other  provision  herein or in any other
document,  but the  remainder of this  Indenture  and such  Securities  shall be
unaffected thereby.

     SECTION 14.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

     The following  shall be the conditions to the  application of Section 14.02
or Section 14.03 to any Securities or any series of Securities,  as the case may
be:

          (1) The  Company  shall  irrevocably  have  deposited  or caused to be
     deposited  with  the  Trustee  (or  another  trustee  which  satisfies  the
     requirements  contemplated  by Section  6.09 and agrees to comply  with the
     provisions  of this Article  applicable  to it) as trust funds in trust for
     the  purpose  of making the  following  payments,  specifically  pledged as
     security for, and dedicated  solely to, the benefits of the Holders of such
     Securities,  (A) money in an  amount,  or (B) U.S.  Government  Obligations
     which  through the  scheduled  payment of principal and interest in respect
     thereof in accordance with their terms will provide, not later than one day
     before  the  due  date  of  any  payment,  money  in an  amount,  or  (C) a

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     combination  thereof,  in  each  case  sufficient,  in  the  opinion  of  a
     nationally recognized firm of independent public accountants expressed in a
     written  certification  thereof  delivered  to  the  Trustee,  to  pay  and
     discharge,  and which  shall be applied by the  Trustee  (or any such other
     qualifying  trustee) to pay and  discharge,  (i) the  principal  of and any
     premium and interest on such Securities on the respective Stated Maturities
     and  (ii)  any  mandatory  sinking  fund  payments  or  analogous  payments
     applicable to the Outstanding Securities of such series on the day on which
     such  payments are due and payable,  in  accordance  with the terms of this
     Indenture and such Securities. As used herein, "U.S. Government Obligation"
     means  (x) any  security  which is (i) a direct  obligation  of the  United
     States of America for the payment of which the full faith and credit of the
     United  States of  America is  pledged  or (ii) an  obligation  of a Person
     controlled or supervised by and acting as 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,  which,  in either case (i) or (ii), is not callable or redeemable
     at the option of the issuer thereof,  and (y) any depositary receipt issued
     by a bank  (as  defined  in  Section  3(a)(2)  of the  Securities  Act)  as
     custodian with respect to any U.S. Government Obligation which is specified
     in Clause (x) above and held by such bank for the  account of the holder of
     such  depositary  receipt,  or with  respect  to any  specific  payment  of
     principal  of or interest  on any U.S.  Government  Obligation  which is so
     specified  and  held;  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  depositary  receipt from any amount  received by the
     custodian  in respect of the U.S.  Government  Obligation  or the  specific
     payment of principal or interest evidenced by such depositary receipt.

          (2) In the event of an  election  to have  Section  14.02 apply to any
     Securities  or any series of  Securities,  as the case may be, the  Company
     shall have delivered to the Trustee an Opinion of Counsel  stating that (A)
     the Company has received from, or there has been published by, the Internal
     Revenue Service a ruling or (B) since the date of this Indenture, there has
     been a change in the applicable  Federal income tax law, in either case (A)
     or (B) to the effect that,  and based  thereon such opinion  shall  confirm
     that,  the Holders of such  Securities  will not recognize gain or loss for
     Federal  income tax  purposes as a result of the  deposit,  Defeasance  and
     discharge  to be  effected  with  respect  to such  Securities  and will be
     subject to Federal income tax on the same amount, in the same manner and at
     the  same  times  as would  be the  case if such  deposit,  Defeasance  and
     discharge were not to occur.

          (3) In the event of an  election  to have  Section  14.03 apply to any
     Securities  or any series of  Securities,  as the case may be, the  Company
     shall  have  delivered  to the  Trustee an Opinion of Counsel to the effect
     that the Holders of such  Securities  will not  recognize  gain or loss for
     Federal  income  tax  purposes  as a result  of the  deposit  and  Covenant
     Defeasance  to be  effected  with  respect to such  Securities  and will be
     subject to Federal income tax on the same amount, in the same manner and at
     the same times as would be the case if such deposit and Covenant Defeasance
     were not to occur.

                                       70
<PAGE>

          (4) The  Company  shall have  delivered  to the  Trustee an  Officers'
     Certificate  to the  effect  that  neither  such  Securities  nor any other
     Securities of the same series,  if then listed on any securities  exchange,
     will be delisted as a result of such deposit.

          (5) No event which is, or after  notice or lapse of time or both would
     become,  an Event of Default with respect to such  Securities  or any other
     Securities  shall  have  occurred  and be  continuing  at the  time of such
     deposit or, with regard to any such event specified in Sections 5.01(5) and
     (6), at any time on or prior to the 90th day after the date of such deposit
     (it being  understood  that this  condition  shall not be deemed  satisfied
     until after such 90th day).

          (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
     to  have a  conflicting  interest  and  within  the  meaning  of the  Trust
     Indenture Act (assuming all Securities are in default within the meaning of
     such Act).

          (7) Such  Defeasance  or  Covenant  Defeasance  shall not  result in a
     breach or violation of, or constitute a default under,  any other agreement
     or instrument to which the Company is a party or by which it is bound.

          (8) Such  Defeasance  or Covenant  Defeasance  shall not result in the
     trust arising from such deposit  constituting an investment  company within
     the  meaning  of the  Investment  Company  Act unless  such trust  shall be
     registered under such Act or exempt from registration thereunder.

          (9) The  Company  shall have  delivered  to the  Trustee an  Officers'
     Certificate  and an Opinion of Counsel,  each stating  that all  conditions
     precedent with respect to such Defeasance or Covenant  Defeasance have been
     complied with.

     SECTION 14.05.  DEPOSITED MONEY AND U.S. GOVERNMENT  OBLIGATIONS TO BE HELD
                     IN TRUST; MISCELLANEOUS PROVISIONS.

     Subject to the provisions of the last paragraph of Section 10.03, all money
and U.S. Government  Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section  14.06,  the  Trustee  and  any  such  other  trustee  are  referred  to
collectively  as the  "Trustee")  pursuant  to  Section  14.04 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such  Securities and this  Indenture,  to the payment,  either
directly or through any such Paying Agent  (including  the Company acting as its
own  Paying  Agent)  as the  Trustee  may  determine,  to the  Holders  of  such
Securities,  of all sums due and to become due  thereon in respect of  principal
and any premium and interest,  but money so held in trust 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 14.04 or the  principal and interest  received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.

                                       71
<PAGE>

     Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon  Company  Request any money
or U.S.  Government  Obligations  held by it as provided  in Section  14.04 with
respect to any Securities which, in the opinion of a nationally  recognized firm
of independent public accountants  expressed in a written  certification thereof
delivered to the Trustee,  are in excess of the amount  thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance,  as
the case may be, with respect to such Securities.

     SECTION 14.06. REINSTATEMENT.

     If the  Trustee  or the  Paying  Agent  is  unable  to apply  any  money in
accordance  with this Article with  respect to any  Securities  by reason of any
order or judgment of any court or governmental authority enjoining,  restraining
or otherwise  prohibiting  such  application,  then the  obligations  under this
Indenture  and such  Securities  from which the Company has been  discharged  or
released  pursuant to Section 14.02 or 14.03 shall be revived and  reinstated as
though no deposit had  occurred  pursuant to this  Article  with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all  money  held in  trust  pursuant  to  Section  14.05  with  respect  to such
Securities  in  accordance  with this Article;  provided,  however,  that if the
Company makes any payment of principal of or any premium or interest on any such
Security following such  reinstatement of its obligations,  the Company shall be
subrogated  to the rights (if any) of the Holders of such  Securities to receive
such payment from the money so held in trust.

     This  instrument  may be  executed in any number of  counterparts,  each of
which so executed shall be deemed to be an original,  but all such  counterparts
shall together constitute but one and the same instrument.

                      [SIGNATURES FOLLOW ON SEPARATE PAGE]








                                       72
<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Indenture to be
duly executed, all as of the day and year first above written.


                               BOWATER INCORPORATED


                               By:     /s/ David G. Maffucci
                                      -----------------------------------------
                                      Name:  David G. Maffucci
                                      Title: Executive Vice President and
                                             Chief Executive Officer

    By:                                /s/ William G. Harvey
                                      -----------------------------------------
                                      Name:  William G. Harvey
                                      Title: Vice President and Treasurer



                               THE BANK OF NEW YORK




                               By:     /s/ Kisha A. Holder
                                      -----------------------------------------
                                      Name:  Kisha A. Holder
                                      Title: Assistant Vice President




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>5
<FILENAME>suppindenture.txt
<DESCRIPTION>FIRST SUPPLEMENTAL INDENTURE DATED MARCH 17, 2004
<TEXT>

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




                              BOWATER INCORPORATED,
                                    as Issuer

                                       and

                              THE BANK OF NEW YORK,
                                   as Trustee

                          FIRST SUPPLEMENTAL INDENTURE

                           dated as of March 17, 2004



                                  $250,000,000

                       Floating Rate Senior Notes due 2010




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


<PAGE>





                                TABLE OF CONTENTS


                                                                          Page

                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01.         Relation to Base Indenture..............................2
SECTION 1.02.         Definitions.............................................2

                                   ARTICLE II

                        TERMS AND CONDITIONS OF THE NOTES

SECTION 2.01.         Establishment...........................................3
SECTION 2.02.         Payment of Principal and Interest; Maturity.............3
SECTION 2.03.         Determination of Interest...............................4
SECTION 2.04.         Optional Redemption of the Notes by the Company.........4
SECTION 2.05.         Sinking Fund............................................4
SECTION 2.06.         Defeasance..............................................5
SECTION 2.07.         Other Terms of Notes....................................5

                                   ARTICLE III

                                  MISCELLANEOUS

SECTION 3.01.         Ratification of Indenture...............................5
SECTION 3.02.         Trustee Not Responsible for Recitals....................5
SECTION 3.03.         Effect of Headings and Table of Contents................5
SECTION 3.04.         New York Law to Govern..................................5
SECTION 3.05.         Separability Clause.....................................5
SECTION 3.06.         Counterparts............................................6



                                      -i-

<PAGE>


5

     THIS FIRST SUPPLEMENTAL INDENTURE,  dated as of March 17, 2004 (this "First
Supplemental Indenture"),  between Bowater Incorporated,  a Delaware corporation
(the "Company"),  and The Bank of New York, a New York banking  corporation,  as
Trustee (herein called the "Trustee").

                                    RECITALS

     WHEREAS, the Company previously has executed and delivered to the Trustee a
Senior  Indenture dated as of March 17, 2004 between the Company and the Trustee
(the "Base Indenture" and, together with this First Supplemental Indenture,  the
"Indenture"),  providing  for the  issuance  from  time to time of series of the
Company's Securities;

     WHEREAS,  Section 9.01 of the Base Indenture  provides for various  matters
with respect to Securities  of any series issued under the Base  Indenture to be
established  in an indenture  supplemental  to the Base  Indenture,  and Section
9.01(7) of the Base Indenture  provides for the Company and the Trustee to enter
into an indenture  supplemental  to the Base  Indenture to establish the form or
terms of  Securities  of any series as provided by Sections 2.01 and 3.01 of the
Base Indenture;

     WHEREAS,  pursuant to the terms of the Base Indenture,  the Company desires
to provide for the  establishment  of a new series of its Securities to be known
as its Floating Rate Senior Notes due 2010 (the "Notes"), the form and substance
of such Notes and the terms,  provisions and conditions  thereof to be set forth
as provided in this First Supplemental Indenture; and

     WHEREAS,  the Company has  requested  that the Trustee  execute and deliver
this First  Supplemental  Indenture,  and the Company further certifies that all
requirements  necessary  to make  this  First  Supplemental  Indenture  a valid,
binding and enforceable instrument in accordance with its terms, and to make the
Notes,  when  executed by the Company and  authenticated  and  delivered  by the
Trustee,  the valid,  binding and enforceable  obligations of the Company,  have
been  done  and  performed,  and  the  execution  and  delivery  of  this  First
Supplemental Indenture has been duly authorized in all respects;

                           NOW, THEREFORE, WITNESSETH:

     In  consideration  of the covenants and agreements set forth herein and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged,  each party agrees as follows for the benefit of each other
and for the equal and proportionate benefit of all Holders of the Notes:

                                      1

<PAGE>

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01. RELATION TO BASE INDENTURE.

     This First Supplemental  Indenture constitutes an integral part of the Base
Indenture.

     SECTION 1.02. DEFINITIONS.

     Except  as  otherwise  expressly  provided  herein or  unless  the  context
otherwise requires:

          (1) a term  defined in the Base  Indenture  has the same  meaning when
     used in this First  Supplemental  Indenture  unless the term is amended and
     supplemented pursuant to this First Supplemental Indenture;

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

          (3) all  other  terms  used  herein  which  are  defined  in the Trust
     Indenture Act, either directly or by reference  therein,  have the meanings
     assigned to them therein;

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

          (5) a term defined anywhere in this First  Supplemental  Indenture has
     the same meaning throughout.

     "Calculation  Agent" means The Bank of New York, or its successor appointed
by the Company, acting as Calculation Agent.

     "Daily Interest Amount" has the meaning specified in Section 2.03 hereof.

     "Determination  Date" means, with respect to an Interest Period, the second
London Banking Day preceding the first day of such Interest Period.

     "Interest  Period" means,  with respect to the Notes, the period commencing
on and  including an Interest  Payment Date and ending on and  including the day
immediately  preceding the next  succeeding  Interest  Payment  Date;  provided,
however, that the first Interest Period with respect to the Notes shall commence
on and include March 17, 2004 and end on and include June 14, 2004.

     "LIBOR" means, with respect to an Interest Period, the rate (expressed as a
percentage  per annum) for  deposits in United  States  dollars for  three-month
periods  beginning  on the first day of such  Interest  Period  that  appears on

                                       2
<PAGE>

Telerate Page 3750 as of 11:00 a.m., London time, on the Determination  Date. If
Telerate  Page  3750  does  not  include  such a  rate  or is  unavailable  on a
Determination  Date,  the  Calculation  Agent will request the principal  London
office of each of four major banks in the London interbank  market,  as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum),  as of approximately  11:00 a.m.,  London time, on such
Determination  Date, to prime banks in the London  interbank market for deposits
in a  Representative  Amount in United States  dollars for a three-month  period
beginning on the first day of such Interest Period. If at least two such offered
quotations are so provided, LIBOR for the Interest Period will be the arithmetic
mean of such quotations.  If fewer than two such quotations are so provided, the
Calculation  Agent will request  each of three major banks in New York City,  as
selected by the  Calculation  Agent, to provide such bank's rate (expressed as a
percentage per annum),  as of  approximately  11:00 a.m., New York City time, on
such Determination  Date, for loans in a Representative  Amount in United States
dollars to leading  European  banks for a  three-month  period  beginning on the
first day of such Interest  Period.  If at least two such rates are so provided,
LIBOR for the  Interest  Period will be the  arithmetic  mean of such rates.  If
fewer than two such rates are so provided,  then LIBOR for the  Interest  Period
will be LIBOR in effect  with  respect  to the  immediately  preceding  Interest
Period.

     "London  Banking  Day"  means any day in which  dealings  in United  States
dollars are  transacted  or, with respect to any future date, are expected to be
transacted in the London interbank market.

     "Representative  Amount"  means a  principal  amount  of not less than U.S.
$1,000,000 for a single transaction in the relevant market at the relevant time.

     "Telerate  Page 3750"  means the display  designated  as "Page 3750" on the
Moneyline  Telerate service (or such other page as may replace Page 3750 on that
service).

                                   ARTICLE II

                        TERMS AND CONDITIONS OF THE NOTES

     SECTION 2.01. ESTABLISHMENT.

     There is hereby  established  a new  series of  Securities  designated  the
"Floating Rate Senior Notes due 2010," limited in aggregate  principal amount to
$250,000,000.  The  Notes  shall be  issued  in the  form of one or more  Global
Securities  registered  in  the  name  of the  Depositary  (which  shall  be The
Depository  Trust Company) or its nominee,  in  substantially  the form attached
hereto as Exhibit A. The Trustee's  certificate of authentication to be endorsed
on the Notes shall be in substantially in the form attached hereto as Exhibit B.

     SECTION 2.02. PAYMENT OF PRINCIPAL AND INTEREST; MATURITY.

     The  principal  of the Notes  shall be due at Stated  Maturity.  The unpaid
principal  amount of the Notes shall bear interest for each  Interest  Period at
the rate determined  pursuant to Section 2.03 hereof until paid or duly provided
for. Interest shall be paid quarterly in arrears on each Interest Payment Date.

                                       3

<PAGE>

     SECTION 2.03. DETERMINATION OF INTEREST.

     The Notes will bear interest for each  Interest  Period at a per annum rate
equal to LIBOR plus 3.0%, as determined by the Calculation Agent, subject to the
maximum  interest rate permitted by New York or other  applicable  state law, as
such law may be modified by United States law of general application. The amount
of interest to be paid on the Notes for each Interest Period shall equal the sum
of the Daily  Interest  Amounts (as defined below) for each day in such Interest
Period.  The "Daily Interest Amount" for each day that the Notes are Outstanding
shall be an amount  equal to the product of (i) the quotient of (A) the interest
rate in effect for such day, as determined by the Calculation Agent,  divided by
(B) 360,  multiplied by (ii) the aggregate principal amount of Notes Outstanding
on such day. In  calculating  the Daily  Interest  Amount and interest rate, all
percentages   shall   be   rounded,   if   necessary,   to   the   nearest   one
hundred-thousandth  of  a  percentage  point,  with  five  one-millionths  of  a
percentage  point being rounded  upwards (e.g.,  9.876545% (or .09876545)  being
rounded to 9.87655% (or .0987655)),  and all dollar amounts used in or resulting
from such  calculations  will be rounded to the nearest cent (with one-half cent
being rounded upwards).

     Promptly upon making its  determination  of the interest rate in effect for
any  Interest  Period,  the  Calculation  Agent shall notify the Company and the
Trustee,  if the Trustee is not then serving as the  Calculation  Agent,  of the
interest rate for such  Interest  Period.  The interest  rate  determined by the
Calculation  Agent,  absent manifest error, shall be binding and conclusive upon
the  beneficial  owners and Holders of the Notes,  the Company and the  Trustee.
Upon the request of a Holder of Notes,  the  Calculation  Agent will  provide to
such Holder the interest rate in effect with respect to the Notes on the date of
such request.

     SECTION 2.04. OPTIONAL REDEMPTION OF THE NOTES BY THE COMPANY.

     Subject to the provisions of Article XI of the Base Indenture,  the Company
shall have the right to redeem the  Notes,  in whole or in part,  at any time or
from time to time, on and after March 15, 2006,  at a redemption  price equal to
the accrued  and unpaid  interest on the Notes so redeemed to the date fixed for
redemption plus:

          (1) 102% of the aggregate  Outstanding  principal  amount thereof,  if
     redeemed during the twelve-month period commencing on March 15, 2006;

          (2) 101% of the aggregate  Outstanding  principal  amount thereof,  if
     redeemed during the twelve-month period commencing on March 15, 2007; and

          (3) 100% of the aggregate  Outstanding  principal  amount thereof,  if
     redeemed on or after March 15, 2008.

     SECTION 2.05. SINKING FUND.

     The Notes are not entitled to the benefit of any sinking fund.

                                       4
<PAGE>

     SECTION 2.06. DEFEASANCE.

     The Notes shall not be defeasible in whole or in part.

     SECTION 2.07. OTHER TERMS OF NOTES.

     The other terms of the Notes shall be as expressly set forth in Article III
hereof and Exhibit A hereto.

                                   ARTICLE III

                                  MISCELLANEOUS

     SECTION 3.01. RATIFICATION OF INDENTURE.

     The Base Indenture,  as supplemented by this First Supplemental  Indenture,
is in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed  part of the Base  Indenture  in the  manner  and to the  extent
herein and therein provided.

     SECTION 3.02. TRUSTEE NOT RESPONSIBLE FOR RECITALS.

     The  recitals  contained  herein  are  made by the  Company  and not by the
Trustee,  and the Trustee assumes no responsibility for the correctness thereof.
The Trustee  makes no  representations  to the validity or  sufficiency  of this
First Supplemental Indenture.

     SECTION 3.03. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

     SECTION 3.04. NEW YORK LAW TO GOVERN.

     THIS  FIRST  SUPPLEMENTAL  INDENTURE  AND EACH  NOTE  SHALL BE DEEMED TO BE
CONTRACTS  MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY
AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE  STATE OF NEW YORK  WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES  THEREOF (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW).

     SECTION 3.05. SEPARABILITY CLAUSE.

     In case any provision in this First Supplemental  Indenture or in the Notes
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.

                                       5
<PAGE>


     SECTION 3.06. COUNTERPARTS.

     This  First  Supplemental  Indenture  may  be  executed  in any  number  of
counterparts  each of which shall be an original,  but such  counterparts  shall
together constitute but one and the same instrument.



                      [SIGNATURES FOLLOW ON SEPARATE PAGE]



















                                       6
<PAGE>


          IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  First
     Supplemental  Indenture  to be duly  executed,  all as of the day and  year
     first above written.

                                     BOWATER INCORPORATED


                                     By: /s/ David G. Maffucci
                                        ---------------------------------------
                                        Name:    David G. Maffucci
                                        Title:   Executive Vice President and
                                                 Chief Financial Officer


                                     By: /s/ William G. Harvey
                                        ---------------------------------------
                                        Name:    William G. Harvey
                                        Title:   Vice President and Treasurer



                                     THE BANK OF NEW YORK


                                     By: /s/ Kisha A. Holder
                                        ---------------------------------------
                                        Name:     Kisha A. Holder
                                        Title:    Assistant Vice President






                                       7

<PAGE>


                                    EXHIBIT A

                                  FORM OF NOTE


         THIS SECURITY IS A GLOBAL  SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A
NOMINEE  THEREOF.  THIS  SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED,  IN THE NAME OF ANY PERSON OTHER THAN SUCH  DEPOSITARY  OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),  TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME AS IS
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  &  CO.  OR  TO  SUCH  OTHER  ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.








                                      A-1
<PAGE>


                              BOWATER INCORPORATED



                                                            CUSIP No. 102183AL4

                                                                    No. [     ]
                                                                         -----

$[          ]
  ----------

     Bowater Incorporated,  a Delaware corporation (herein called the "Company",
which  term  includes  any  successor  Person  under the  Indenture  hereinafter
referred  to),  for value  received,  hereby  promises  to pay to Cede & Co., or
registered  assigns,  the  principal sum of [           ] Dollars on March 15,
                                             -----------
2010 and to pay  interest  thereon  from March 17,  2004 or from the most recent
Interest  Payment  Date to which  interest has been paid or duly  provided  for,
quarterly in arrears on each  Interest  Payment  Date, on the 15th day of March,
June,  September  and December in each year  commencing on June 15, 2004, at the
rate of LIBOR (as  defined  below)  plus 3.0% per annum (to the extent  that the
payment of such interest shall be legally enforceable), determined in accordance
with the provisions  specified below, until the principal hereof is paid or made
available  for payment.  The interest so payable,  and  punctually  paid or duly
provided for, on any Interest  Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this  Security  (or one or more  Predecessor
Securities)  is registered  at the close of business on the Regular  Record Date
for such  interest,  which shall be the 1st day of March,  June,  September  and
December  (whether  or not a  Business  Day),  as the case  may be,  immediately
preceding such Interest  Payment Date. Any such interest not so punctually  paid
or duly  provided for will  forthwith  cease to be payable to the Holder on such
Regular  Record Date and may, at the election of the Company,  either be paid to
the Person in whose name this Security (or one or more  Predecessor  Securities)
is registered at the close of business on a Special  Record Date for the payment
of such Defaulted  Interest to be fixed by the Trustee,  notice whereof shall be
given to Holders  of  Securities  of this  series not less than 10 days prior to
such Special  Record Date, or be paid at any time in any other lawful manner not
inconsistent  with the  requirements  of any  securities  exchange  on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.

     The  Securities  (as defined on the reverse  hereof) will bear interest for
each Interest Period at a per annum rate equal to LIBOR plus 3.0%, as determined
by the Calculation Agent,  subject to the maximum interest rate permitted by New
York or other applicable state law, as such law may be modified by United States
law of general application.  The amount of interest to be paid on the Securities
for each Interest  Period shall equal the sum of the Daily Interest  Amounts (as
defined below) for each day in such Interest Period. The "Daily Interest Amount"
for each day that the Securities are Outstanding shall be an amount equal to the
product of (i) the quotient of (A) the interest  rate in effect for such day, as
determined by the Calculation Agent,  divided by (B) 360, multiplied by (ii) the
aggregate principal amount of Securities Outstanding on such day. In calculating
the Daily Interest Amount and interest rate, all  percentages  shall be rounded,
if necessary,  to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upwards (e.g., 9.876545%

                                      A-2
<PAGE>

(or .09876545) being rounded to 9.87655% (or .0987655)),  and all dollar amounts
used in or resulting from such  calculations will be rounded to the nearest cent
(with one-half cent being rounded upwards).

     "Calculation  Agent" means The Bank of New York, or its successor appointed
by the Company, acting as Calculation Agent.

     "Determination  Date" means, with respect to an Interest Period, the second
London Banking Day preceding the first day of the Interest Period.

     "Interest  Period"  means,  with  respect  to the  Securities,  the  period
commencing on and including an Interest Payment Date and ending on and including
the day  immediately  preceding  the  next  succeeding  Interest  Payment  Date;
provided,  however, that the first Interest Period shall commence on and include
March 17, 2004 and end on and include June 14, 2004.

     "LIBOR" means, with respect to an Interest Period, the rate (expressed as a
percentage  per annum) for  deposits in United  States  dollars for  three-month
periods  beginning  on the first day of such  Interest  Period  that  appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the Determination  Date. If
Telerate  Page  3750  does  not  include  such a  rate  or is  unavailable  on a
Determination  Date,  the  Calculation  Agent will request the principal  London
office of each of four major banks in the London interbank  market,  as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum),  as of approximately  11:00 a.m.,  London time, on such
Determination  Date, to prime banks in the London  interbank market for deposits
in a  Representative  Amount in United States  dollars for a three-month  period
beginning on the first day of such Interest Period. If at least two such offered
quotations are so provided, LIBOR for the Interest Period will be the arithmetic
mean of such quotations.  If fewer than two such quotations are so provided, the
Calculation  Agent will request  each of three major banks in New York City,  as
selected by the  Calculation  Agent, to provide such bank's rate (expressed as a
percentage per annum),  as of  approximately  11:00 a.m., New York City time, on
such Determination  Date, for loans in a Representative  Amount in United States
dollars to leading  European  banks for a  three-month  period  beginning on the
first day of such Interest  Period.  If at least two such rates are so provided,
LIBOR for the  Interest  Period will be the  arithmetic  mean of such rates.  If
fewer than two such rates are so provided,  then LIBOR for the  Interest  Period
will be LIBOR in effect  with  respect  to the  immediately  preceding  Interest
Period.

     "London  Banking Day" is any day in which dealings in United States dollars
are  transacted  or,  with  respect  to any  future  date,  are  expected  to be
transacted in the London interbank market.

     "Representative  Amount"  means a  principal  amount  of not less than U.S.
$1,000,000 for a single transaction in the relevant market at the relevant time.

     "Telerate  Page 3750"  means the display  designated  as "Page 3750" on the
Moneyline  Telerate service (or such other page as may replace Page 3750 on that
service).

                                      A-3
<PAGE>

     Promptly upon making its  determination  of the interest rate in effect for
any  Interest  Period,  the  Calculation  Agent shall notify the Company and the
Trustee,  if the Trustee is not then serving as the  Calculation  Agent,  of the
interest rate for such  Interest  Period.  The interest  rate  determined by the
Calculation  Agent,  absent manifest error, shall be binding and conclusive upon
the  beneficial  owners  and  Holders of the  Securities,  the  Company  and the
Trustee. Upon the request of a Holder of Securities,  the Calculation Agent will
provide  to  such  Holder  the  interest  rate in  effect  with  respect  to the
Securities on the date of such request.

     Payment of the  principal  of (and  premium,  if any) and  interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in New York,  New York, in such coin or currency of the United States of
America  as at the time of payment  is legal  tender  for  payment of public and
private debts;  provided,  however, that at the option of the Company payment of
interest  may be made by check  mailed to the  address  of the  Person  entitled
thereto as such address shall appear in the Security Register.

     Reference  is hereby made to the further  provisions  of this  Security set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

     Unless the  certificate of  authentication  hereon has been executed by the
Trustee  referred to on the reverse  hereof by manual  signature,  this Security
shall  not be  entitled  to any  benefit  under  the  Indenture  or be  valid or
obligatory for any purpose.










                                      A-4
<PAGE>


         IN WITNESS  WHEREOF,  the Company  has caused this  Security to be duly
executed.

                                        BOWATER INCORPORATED


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


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



Date:  [          ]
        ----------












<PAGE>


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

Date:  [---------]                        THE BANK OF NEW YORK, as Trustee



                                          By:
                                             ----------------------------------
                                             Authorized Signatory











                                      A-6
<PAGE>


                           (Reverse Side of Security)


     This  Security  is one of a duly  authorized  issue  of  securities  of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture,  dated as of March 17, 2004, as supplemented  (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument),  between the Company and The Bank of New York,  as Trustee  (herein
called the  "Trustee",  which term  includes  any  successor  trustee  under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights,  limitations of rights,  duties and immunities  thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which  the  Securities  are,  and  are  to  be,   authenticated  and  delivered.
Capitalized terms used and not otherwise defined in this Security shall have the
meanings provided in the Indenture.

     This Security is one of the series designated on the face hereof, initially
limited in aggregate  principal amount to  $250,000,000.  The Company may at any
time issue additional securities under the Indenture in unlimited amounts having
the same terms as the Securities.

     The Securities of this series are subject to redemption, as a whole or from
time to time in part,  on and after  March 15,  2006,  upon not less than 30 nor
more than 60 days' notice  mailed to each Holder of Securities to be redeemed at
such Holder's address as it appears in the Securities Register,  at a redemption
price equal to the accrued and unpaid  interest on the Securities so redeemed to
the date  fixed  for  redemption  plus:  (i)102%  of the  aggregate  Outstanding
principal amount thereof,  if redeemed during the twelve-month period commencing
on March 15,  2006;  (ii) 101% of the  aggregate  Outstanding  principal  amount
thereof,  if redeemed  during the  twelve-month  period  commencing on March 15,
2007; and (iii)100% of the aggregate  Outstanding  principal amount thereof,  if
redeemed on or after March 15, 2008.

     This Security is not defeasible in whole or in part.

     If an Event of Default  with  respect to  Securities  of this series  shall
occur and be  continuing,  the principal of the Securities of this series may be
declared  due and  payable in the manner  and with the  effect  provided  in the
Indenture.

     The Indenture  permits,  with certain  exceptions as therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Company  and the rights of the  Holders of the  Securities  of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 50% in principal  amount of the Securities at the time
Outstanding  of  each  series  to  be  affected.  The  Indenture  also  contains
provisions  permitting the Holders of specified  percentages in principal amount
of the  Securities  of each  series  at the time  Outstanding,  on behalf of the
Holders of all  Securities  of such series,  to waive  compliance by the Company
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this  Security  shall be  conclusive  and binding  upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer  hereof or in  exchange  herefor or in lieu  hereof,  whether or not
notation of such consent or waiver is made upon this Security.

                                      A-7
<PAGE>

     As provided in and subject to the provisions of the  Indenture,  the Holder
of this  Security  shall not have the right to  institute  any  proceeding  with
respect to the Indenture or for the  appointment of a receiver or trustee or for
any other remedy thereunder,  unless such Holder shall have previously given the
Trustee  written  notice of a  continuing  Event of Default  with respect to the
Securities of this series,  the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the  Trustee  to  institute  proceedings  in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably  satisfactory to
the  Trustee,  and the  Trustee  shall not have  received  from the Holders of a
majority  in  principal  amount  of  Securities  of  this  series  at  the  time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity.  The foregoing shall not apply to any suit instituted by
the Holder of this  Security  for the  enforcement  of any payment of  principal
hereof or any premium or interest  hereon on or after the  respective  due dates
expressed herein.

     No reference  herein to the  Indenture and no provision of this Security or
the  Indenture  shall alter or impair the  obligation  of the Company,  which is
absolute and unconditional, to pay the principal of and any premium and interest
on this  Security  at the times,  place and rate,  and in the coin or  currency,
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth,  the transfer of this Security is registrable  in the Security  Register,
upon  surrender of this Security for  registration  of transfer at the office or
agency of the  Company in any place where the  principal  of and any premium and
interest on this  Security are payable,  duly endorsed by, or  accompanied  by a
written  instrument  of  transfer  in form  satisfactory  to the Company and the
Security  Registrar  duly  executed by, the Holder  hereof or his attorney  duly
authorized in writing,  and thereupon one or more new  Securities of this series
and of like  tenor,  of  authorized  denominations  and for the  same  aggregate
principal amount, will be issued to the designated transferee or transferees.

     The registered  Holder of this Security may be treated as the owner of this
Security for all purposes.

     The Securities of this series are issuable only in registered  form without
coupons  in  denominations  of $1,000  and any  integral  multiple  thereof.  As
provided in the Indenture and subject to certain  limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of  Securities  of this  series  and of like  tenor  of a  different  authorized
denomination, as requested by the Holder surrendering the same.

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

     Prior to due presentment of this Security for registration of transfer, the
Company,  the  Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this  Security is  registered  as the owner  hereof for all
purposes,  whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                      A-8
<PAGE>

     All terms used in this Security  which are defined in the  Indenture  shall
have the meanings assigned to them in the Indenture.

     Pursuant to a  recommendation  promulgated by the Committee on Uniform Note
Identification Procedures, the Company has caused CUSIP numbers to be printed on
the Notes.  No  representation  is made as to the  accuracy  of such  numbers as
printed  on  the  Notes,   and   reliance  may  be  placed  only  on  the  other
identification numbers placed thereon.

     This Security  shall be governed by and  construed in  accordance  with the
laws of the State of New York  without  regard to  conflicts  of law  principles
thereof (other than Section 5-1401 of the General Obligations Law).










                                      A-9
<PAGE>


B-1

                                    EXHIBIT B

                      FORM OF CERTIFICATE OF AUTHENTICATION



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

Date:  [-----------]                         THE BANK OF NEW YORK, as Trustee



                                             By:
                                                -------------------------------
                                                Authorized Signatory






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>6
<FILENAME>wycheopinion.txt
<DESCRIPTION>WYCHE OPINION
<TEXT>

                                 March 17, 2004

Bowater Incorporated
55 East Camperdown Way
P.O. Box 1028 Greenville, South Carolina 29602

RE:  Registration  Statement on Form S-3 filed by Bowater Incorporated under the
     Securities Act of 1933, as amended (the "Securities  Act") (Commission File
     No. 333-108166) and offering of $250,000,000 in aggregate  principal amount
     of Floating Rate Senior Notes due 2010.

Ladies and Gentlemen:

     We have acted as counsel to Bowater  Incorporated,  a Delaware  corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-3  (Commission  File No.  333-108166)  filed with the  Securities and Exchange
Commission (the "Commission") and declared  effective on Tuesday,  September 23,
2003 (the "Registration Statement") and the offering thereunder (the "Offering")
of $250,000,000  in aggregate  principal  amount of the Company's  Floating Rate
Senior Notes due 2010 (the "Notes").  The Notes are issued  pursuant to a Senior
Indenture, dated as of March 17, 2004 (the "Indenture"), between the Company and
The Bank of New York,  as  trustee  (the  "Trustee"),  and a First  Supplemental
Indenture,  also  dated as of March  17,  2004 (the  "Supplemental  Indenture"),
between the Company and the Trustee.

     In rendering the opinions expressed below, we have examined:

    (i)   the Indenture;

    (ii)  the Supplemental Indenture;

    (iii) the Registration Statement;

    (iv)  that  certain  Underwriting   Agreement  dated  March  10,  2004  (the
          "Underwriting  Agreement")  by and among the Company,  UBS  Securities
          LLC, as representative of the several Underwriters named in Schedule I
          thereto (the  "Underwriters")  and Barclays Capital Inc., as qualified
          independent underwriter;

    (v)   a  Preliminary  Prospectus  Supplement  dated March 10, 2004 and filed
          with  the  Commission  on  such  date  (the  "Preliminary   Prospectus
          Supplement");

    (vi)  a  Prospectus  Supplement  dated  March 12,  2004 and  filed  with the
          Commission on such date (the "Prospectus Supplement");  (vii) the form
          of the Notes (items (i) through

    (vii) are collectively  referred to herein as the "Transaction  Documents");
          and

    (viii)such corporate  records,  agreements and  instruments of the Company
          and such other documents and records as we have deemed  necessary as a
          basis for the opinions expressed below.

     In our  examination,  we have  assumed  the legal  capacity  of all natural
persons,  the genuiness of all signatures,  the authenticity and completeness of
all documents  submitted to us as originals and the  conformity  with  authentic
original  documents of all documents  submitted to us as copies thereof.  To the
extent that the obligations of the Company may be dependent on such matters,  we
have  assumed  for the  purpose of this  opinion  that:  (i) the  parties to the
Transaction  Documents other than the Company (the "Other  Parties") are validly
existing and in good standing under the laws of their  respective  jurisdictions
of  organization;  (ii) the Other  Parties  have full  power  and  authority  to
execute,  deliver and perform their  obligations  under each of the  Transaction
Documents to which they are parties and each of the other documents  executed by
them in connection  therewith;  (iii) each such  document  executed by the Other
Parties has been duly  authorized,  executed and  delivered by the Other Parties
and  constitutes the legal,  valid and binding  obligation of the Other Parties,
enforceable  against them in accordance  with its terms;  (iv) the execution and
delivery of each such  document  does not violate  any law,  regulation,  order,
judgment,  or decree  applicable to any Other Party;  (v) the Other Parties will
act in good faith and will seek to enforce  their rights and remedies  under the
Transaction  Documents  in a  manner  that  is  commercially  reasonable  and in
accordance with applicable laws; and (vi) the  representations and warranties of
the  Other  Parties  as set  forth in the  Underwriting  Agreement  are true and
correct in all material  respects,  and the Other  Parties  will  perform  their
covenants  and  agreements  under  the  Transaction  Documents  in all  material
respects. We express no opinion as to the applicability to the Other Parties of,
or the effect of noncompliance by the Other Parties with, any laws applicable to
the transactions contemplated by the Transaction Documents because of the nature
of any business of any of the Other Parties. As to questions of fact material to
this  opinion,  we have  relied upon  certificates  of public  officials  and of
officers and representatives of the Company.

     An  attorney  in our firm is admitted to practice in the State of New York,
and we express no opinion as to matters governed by any laws other than the laws
of the State of New York, the Delaware  General  Corporation Law and the Federal
laws of the United States of America.

          Based upon the  foregoing and subject to the  conditions,  limitations
     and assumptions  set forth herein,  it is our opinion that, upon receipt by
     the Company of the purchase  price  therefor set forth in the  Underwriting
     Agreement, the Notes will be legally issued and will be binding obligations
     of the Company,  except that (A) the enforcement  thereof may be limited by
     bankruptcy, insolvency,  reorganization,  fraudulent conveyance, moratorium
     or  other  similar  laws,  now or  hereafter  in  effect,  relating  to the
     enforcement  of creditors'  rights  generally and by general  principles of
     equity  (regardless  of whether  considered in a proceeding in equity or at
     law) and the discretion of the court before which any  proceeding  therefor
     may be brought and (B) any rights to indemnity or  contribution  thereunder
     may be limited by applicable law and public policy considerations.

     This  letter  speaks  only as of its date and  applies  only to the matters
specifically  covered by this letter.  We expressly  disclaim any  obligation to
supplement  this  opinion if any  applicable  laws change after the date of this
opinion,  or if we become  aware of any facts  that might  change  the  opinions
expressed  above after the date of this opinion.  This opinion is limited to the
matters  expressly set forth  herein,  and no other opinion is implied or may be
inferred  beyond the matters  expressly  stated  herein.  Our  opinion  that any
document  is valid,  binding and  enforceable  is  qualified,  and no opinion is
given,  as to the  enforceability  of any  provision:  (a) regarding  consent to
jurisdiction  in federal court or selection of forum or venue;  (b) requiring or
in effect  requiring  that any waiver or amendment to any  provision or document
may be effected only in writing;  and (c) providing  that rights or remedies are
cumulative to the extent that remedies are potentially  mutually  exclusive.  We
further  express no opinion  with  respect to any matter  governed by or arising
under the  Securities Act of 1933, as amended,  the  Securities  Exchange Act of
1934, as amended, any state securities or blue sky laws, any other law governing
the adequacy of disclosure,  the Investment Company Act, as amended,  the Public
Utility Holding Company Act, as amended,  the Federal Power Act, as amended,  or
any other matters not explicitly stated in this opinion letter.

     We hereby  consent to the filing of this  opinion as Exhibit 5 to a current
report  on Form  8-K to be  incorporated  by  reference  into  the  Registration
Statement  and to the reference to us under the caption  "Legal  Matters" in the
prospectus  constituting  part  of the  Registration  Statement,  including  the
Preliminary Prospectus Supplement and the Prospectus Supplement.  In giving such
consent, we do not thereby admit that we are included in the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations promulgated thereunder.  This opinion may not be furnished or quoted
to, or relied  upon by, any other  person  for any  purpose,  without  our prior
written consent.


                                  Very truly yours,

                                  WYCHE, BURGESS, FREEMAN & PARHAM, P.A.

                                  /s/ Wyche, Burgess, Freeman & Parham, P.A.

</TEXT>
</DOCUMENT>
</SUBMISSION>
