                                                                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



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                                      -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


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                                      -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



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                                      -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



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                                      -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



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                                      -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.


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                                      -7-

     5.  Representations and Warranties.  The Company represents and warrants to
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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


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                                      -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


