CONE MILLS CORP, S-3, 1995-02-14

CONE MILLS CORP
S-3, 1995-02-14
BROADWOVEN FABRIC MILLS, COTTON

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 14, 1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CONE MILLS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 56-0367025
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>

1201 MAPLE STREET
GREENSBORO, NORTH CAROLINA 27405
(910) 379-6246
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
NEIL W. KOONCE, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
CONE MILLS CORPORATION
1201 MAPLE STREET
GREENSBORO, NORTH CAROLINA 27405
(910) 379-6568
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES OF COMMUNICATIONS TO:
<TABLE>
<S> <C>
DORIS R. BRAY, ESQ. BRUCE N. HAWTHORNE, ESQ.
SCHELL BRAY AYCOCK ABEL & LIVINGSTON L.L.P. KING & SPALDING
POST OFFICE BOX 21847 191 PEACHTREE STREET
GREENSBORO, NORTH CAROLINA 27420 ATLANTA, GEORGIA 30303-1763
(910) 370-8800 (404) 572-4600
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with the dividend or
interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
[CAPTION]
<TABLE>
<S> <C> <C> <C>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
BE REGISTERED REGISTERED PER UNIT (1) PRICE (1)
<S> <C> <C> <C>
Debt Securities............. $100,000,000 100% $100,000,000
<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO REGISTRATION
BE REGISTERED FEE
<S> <C>
Debt Securities............. $34,483
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 14, 1995
PROSPECTUS

(Cone Mills logo appears here)

DEBT SECURITIES
Cone Mills Corporation (the "Company") may offer from time to time, in one
or more series, debt securities consisting of debentures, notes, and/or other
unsecured evidences of indebtedness ("Debt Securities") with an aggregate
initial public offering price of up to $100,000,000 on terms to be determined at
the time of sale. The specific terms of the Debt Securities, including, where
applicable, the designation, aggregate principal amount, denominations, purchase
price, maturity, interest rate (which may be fixed or variable) and time of
payment of interest, if any, any terms for mandatory or optional redemption, any
terms for sinking fund payments, any listing on a securities exchange and any
other specific terms in connection with the sale of the Debt Securities in
respect of which this Prospectus is being delivered are set forth in the
accompanying Prospectus Supplement (the "Prospectus Supplement").
The Debt Securities may be offered directly or through agents, dealers or
underwriters designated from time to time. See "Plan of Distribution." The names
of any such agents, dealers or underwriters are set forth in the accompanying
Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1995

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No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or any agent, dealer or underwriter. Neither the delivery of this
Prospectus or the accompanying Prospectus Supplement nor any sale made hereunder
or thereunder shall, under any circumstances, create any implication that the
information contained herein or in the accompanying Prospectus Supplement is
correct as of any date subsequent to the date hereof or thereof or that there
has been no change in the affairs of the Company since the date hereof or
thereof. Neither this Prospectus nor the accompanying Prospectus Supplement
constitutes an offer to sell or solicitation of an offer to buy Debt Securities
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and 7 World Trade Center, New York, New York 10048. Copies of
such materials can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Company's Common Stock is listed on the New York Stock
Exchange (the "Exchange") and similar information concerning the Company can be
inspected at the offices of the Exchange at 20 Broad Street, New York, New York
10005.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933 (the "Securities Act"). This Prospectus and the
accompanying Prospectus Supplement omit certain of the information contained in
the Registration Statement in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to the Company and the Debt
Securities. Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus as of
their respective dates: (a) Annual Report on Form 10-K for the year ended
January 2, 1994, (b) Quarterly Report on Form 10-Q for the quarter ended April
3, 1994, (c) Quarterly report on Form 10-Q for the quarter ended July 3, 1994,
(d) Quarterly Report on Form 10-Q for the quarter ended October 2, 1994, (e)
Current Report on Form 8-K dated December 2, 1994, and (f) Amendment to Current
Report on Form 8-K/A dated February 13, 1995.
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of any such person, a copy of the documents incorporated by reference
herein (other than exhibits to such documents which are not specifically
incorporated by reference into such documents). Written requests for such copies
should be directed to the Treasurer, Cone Mills Corporation, 1201 Maple Street,
Greensboro, North Carolina 27405. Telephone requests may be directed to (910)
379-6246.
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<PAGE>
THE COMPANY
Cone Mills Corporation is the largest producer of denim fabrics in the
world and is the largest printer of home furnishings fabrics in North America.
The Company is a North Carolina corporation organized in 1948 to succeed a
business founded in 1891. The Company's principal executive offices are located
at 1201 Maple Street, Greensboro, North Carolina 27405, and its telephone number
is (910) 379-6220. The term the "Company" as used herein includes Cone Mills
Corporation and its subsidiaries.
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement
accompanying this Prospectus, the net proceeds from the sale of the Debt
Securities will be used for general corporate purposes, which may include
financing capital expenditures and working capital requirements and repaying
short-term or long-term borrowings. Funds not required immediately for those
purposes may be invested temporarily in short-term marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing earnings by
fixed charges. For this purpose, "earnings" include pretax income from
continuing operations plus certain fixed charges. "Fixed charges" include
interest, whether expensed or capitalized, amortization of debt expense and the
portion of rental expense which is representative of the interest factor in
these rentals. The following table presents (i) the ratio of earnings to fixed
charges of the Company for each of the fiscal years 1989 through 1993 and for
the first nine months of fiscal years 1993 and 1994 and (ii) the pro forma ratio
of earnings to fixed charges for fiscal 1993 and for the first nine months of
fiscal 1994. The pro forma ratios of earnings to fixed charges give effect to
the Company's acquisition of substantially all of the assets of the successor of
Golding Industries, Inc. on December 2, 1994 and the Company's related
borrowings and other transactions described in the pro forma financial
statements incorporated by reference in this Prospectus, in each case as if such
transactions had occurred at the beginning of such periods.
<TABLE>
<CAPTION>
FIRST NINE
MONTHS FISCAL YEAR
1994 1993 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Actual ratio of earnings to fixed charges...................... 6.09 9.26 8.93 5.93 1.74 1.60 2.48
Pro Forma ratio of earnings to fixed charges................... 5.21 6.94
</TABLE>

DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as of February
14, 1995 (hereinafter referred to as of the "Indenture"), between the Company
and Wachovia Bank of North Carolina, N.A., as Trustee (hereinafter referred to
as the "Trustee"). The following statements are subject to the detailed
provisions of the Indenture, a copy of which is filed as an exhibit to the
Registration Statement and which is also available for inspection at the office
of the Trustee. Section references are to the Indenture. The following summaries
of certain provisions of the Indenture do not purport to be complete, and
wherever particular provisions of the Indenture are referred to, such
provisions, including definitions of certain terms, are incorporated by
reference as part of such summaries or terms, which are qualified in their
entirety by such reference to the provisions of the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that the Debt Securities
may be issued from time to time in one or more series. The Debt Securities will
be direct, unsecured and unsubordinated obligations of the Company and will rank
equally with any other unsecured and unsubordinated obligations of the Company
for borrowed money. Except as described under "Certain Covenants," the Indenture
does not limit other indebtedness or securities which may be incurred or issued
by the Company or any of its subsidiaries or contain financial or similar
restrictions on the Company or any of its subsidiaries. The Company's rights and
the rights of its creditors, including holders of Debt Securities, to
participate in any distribution of assets of any subsidiary upon the latter's
liquidation or reorganization or otherwise are effectively subordinated to the
claims of the subsidiary's creditors, except to the extent that the Company or
any of its creditors may itself be a creditor of that subsidiary.
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<PAGE>
The Prospectus Supplement which accompanies this Prospectus sets forth
where applicable the following terms of and information relating to the Debt
Securities offered thereby: (i) the designation of the Debt Securities; (ii) the
aggregate principal amount of the Debt Securities; (iii) the date or dates on
which principal of, and premium, if any, on the Debt Securities is payable; (iv)
the rate or rates at which the Debt Securities shall bear interest, if any, or
the method by which such rate shall be determined, the date or dates from which
such interest will accrue and on which such interest will be payable and the
related record dates; (v) if other than the offices of the Trustee, the place
where the principal of and any premium or interest on the Debt Securities will
be payable; (vi) any redemption, repayment or sinking fund provisions; (vii) if
other than denominations of $1,000 or multiples thereof, the denominations in
which the Debt Securities will be issuable; (viii) if other than the principal
amount thereof, the portion of the principal amount due upon acceleration; (ix)
whether the Debt Securities shall be issued in the form of a global security or
securities; (x) any other specific terms of the Debt Securities; and (xi) if
other than the Trustee, the identity of any trustees, paying agents, transfer
agents or registrars with respect to the Debt Securities. (Section 2.3)
The Debt Securities will be issued either in certificated, fully registered
form, without coupons, or as global securities under a book-entry system, as
specified in the accompanying Prospectus Supplement.
Unless otherwise specified in the accompanying Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will be
transferable and exchangeable without any service charge, at the office of the
Trustee. However, the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection with any such
transfer or exchange. (Section 2.8)
Interest on any series of Debt Securities will be payable on the interest
payment dates set forth in the accompanying Prospectus Supplement to the persons
in whose names the Debt Securities are registered at the close of business on
the related record date and will be paid by checks mailed to such persons.
(Sections 2.7 and 3.1)
If the Debt Securities are issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount, the federal income tax consequences and other special
considerations applicable to such Original Issue Discount Securities will be
generally described in the Prospectus Supplement.
Unless otherwise described in the accompanying Prospectus Supplement, there
are no covenants or provisions contained in the Indenture which afford the
holders of the Debt Securities protection in the event of a highly leveraged
transaction involving the Company.
BOOK-ENTRY SYSTEM
If so specified in the accompanying Prospectus Supplement, Debt Securities
of any series may be issued under a book-entry system in the form of one or more
global securities. Each global security will be deposited with, or on behalf of,
a depositary, which, unless otherwise specified in the accompanying Prospectus
Supplement, will be The Depository Trust Company, New York, New York (the
"Depositary"). The global securities will be registered in the name of the
Depositary or its nominee.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York banking law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of section 17A of the Exchange Act. The Depositary
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
Upon the issuance of a global security in registered form, the Depositary
will credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such global security to
the accounts of participants. The accounts to be credited will be designated by
the underwriters, dealers or agents, if any, or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in the global security will be limited to participants or persons that
may hold interests through participants. Ownership of beneficial interests by
participants in the global security will be shown on, and the transfer of that
ownership interest will be effected only through,
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records maintained by the Depositary (with respect to participants' interests)
or its nominee and the participants (with respect to the owners of beneficial
interests in the global security). Ownership of beneficial interests in the
global security by persons that hold through participants will be shown on, and
the transfer of that ownership interest within such participants will be
effected only through, records maintained by such participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the ability
to transfer beneficial interests in a global security.
So long as the Depositary or its nominee is the registered owner of a
global security, it will be considered the sole owner or holder of the Debt
Securities represented by such global security for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in such
global security will not be entitled to have the Debt Securities represented
thereby registered in their names, will not receive or be entitled to receive
physical delivery of certificates representing the Debt Securities and will not
be considered the owners or holders thereof under the Indenture. Accordingly,
each person owning a beneficial interest in such global security must rely on
the procedures of the Depositary and, if such person is not a participant, on
the procedures of the participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Company understands
that under existing practice, in the event that the Company requests any action
of the holders or a beneficial owner desires to take any action a holder is
entitled to take, the Depositary would act upon the instructions of, or
authorize, the participant to take such action.
Payment of principal of, premium, if any, and interest on Debt Securities
represented by a global security will be made to the Depositary or its nominee,
as the case may be, as the registered owner and holder of the global security
representing such Debt Securities. None of the Company, the Trustee, any paying
agent or registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal, premium, if any, or
interest on the payment date thereof in amounts proportionate to their
respective beneficial interests in the principal amount of the global security
as shown on the records of the Depositary. The Company expects that payments by
participants to owners of beneficial interests in the global security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the responsibility of such
participants.
A global security may not be transferred except as a whole by the
Depositary to a nominee or successor of the Depositary or by a nominee of the
Depositary to another nominee of the Depositary. A global security representing
all but not part of the Debt Securities being offered hereby is exchangeable for
Debt Securities in definitive form of like tenor and terms if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as depositary
for such global security or if at any time the Depositary is no longer eligible
to be or in good standing as a clearing agency registered under the Exchange
Act, and in either case, a successor depositary is not appointed by the Company
within 90 days of receipt by the Company of such notice or of the Company
becoming aware of such ineligibility, or (ii) the Company in its sole discretion
at any time determines not to have all of the Debt Securities represented by a
global security and notifies the Trustee thereof. A global security exchangeable
pursuant to the preceding sentence shall be exchangeable for Debt Securities
registered in such names and in such authorized denominations as the Depositary
for such global security shall direct. (Section 2.12)
CERTAIN COVENANTS
LIMITATIONS ON LIENS. So long as any Debt Securities remain outstanding
(but subject to defeasance as provided in the Indenture), the Company will not,
and will not permit any Subsidiary (as defined below) to, issue, assume or
guarantee any Indebtedness (as defined below) which is secured by a mortgage,
pledge, security interest, lien or encumbrance (each a "lien") upon any property
or assets of the Company or such Subsidiary or any shares of stock of or
Indebtedness issued by any Subsidiary (whether such property, assets, shares of
stock or Indebtedness are now owned or hereafter acquired) without effectively
providing that, for so long as such lien shall continue in existence with
respect to such secured Indebtedness, the Debt Securities (together with, if the
Company shall so determine, any other Indebtedness of the Company ranking
equally with the Debt Securities) shall be equally and ratably secured by a lien
ranking ratably with or equal to (or at the Company's option prior to) such
secured Indebtedness, except that the foregoing shall not apply to the
following:
(a) liens on the property, assets, shares of stock or Indebtedness of
any person existing at the same time such person becomes a Subsidiary;
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(b) liens on the property, assets, shares of stock or Indebtedness of
a person existing at the time such person is merged into or consolidated
with the Company or a Subsidiary or at the time all or substantially all of
such property, assets or shares of stock of such person are purchased,
leased or otherwise acquired by the Company or such Subsidiary;
(c) subject to certain conditions, liens existing at the time of
acquisition of the property or assets affected thereby by the Company or a
Subsidiary, or liens to secure the payment of all or any part of the
purchase price of such property or assets or to secure any Indebtedness
incurred, assumed or guaranteed by the Company or a Subsidiary prior to, at
the time of, or within one year after the acquisition of such property or
assets (or in the case of real property, the completion of construction
(including any improvements on an existing property or asset) or
commencement of full operation of such property or asset, whichever is
later) which Indebtedness is incurred, assumed or guaranteed for the
purpose of financing all or any part of the purchase price thereof or, in
the case of real property, construction or improvements thereon;
(d) liens to secure Indebtedness of a Subsidiary to the Company or
another Subsidiary;
(e) liens in favor of the United States or any State thereof, or any
department, agency or instrumentality or political subdivision of the
United States or any State thereof, or in favor of any other country, or
any political subdivision thereof, to secure partial, progress, advance or
other payments pursuant to any contract, statute, rule or regulation or to
secure any Indebtedness incurred or guaranteed for the purpose of financing
all or any part of the purchase price (or, in the case of real property,
the cost of construction or improvement) of the property or assets subject
to such liens (including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar financing);
(f) pledges, liens or deposits under worker's compensation or similar
legislation and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts (other than
for the payment of money) or leases to which the Company or any Subsidiary
is a party, or to secure the public or statutory obligations of the Company
or any Subsidiary, or in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age pensions, social
security or similar matters, or to secure surety, performance, appeal or
customs bonds to which the Company or any Subsidiary is a party, or in
litigation or other proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, liens or deposits made or incurred
in the ordinary course of business;
(g) certain liens created by or resulting from certain litigation or
other proceedings, including certain liens arising out of certain judgments
or awards or liens incurred for the purpose of obtaining a stay or
discharge in the course of any litigation or other proceeding;
(h) liens for certain taxes or assessments or governmental charges or
levies, landlord's liens, certain liens of carriers, mechanics and
materialman, certain statutory liens of banks and other financial
institutions, and liens and charges incidental to the conduct of the
business of the Company or any Subsidiary, or the ownership of their
property or assets, which were not incurred in connection with the
borrowing of money and which do not, in the opinion of the Board of
Directors of the Company, materially impair the use of such property or
assets in the operation of the business of the Company or such Subsidiary
or the value of such property or assets for the purposes thereof;
(i) liens not permitted by the foregoing clauses (a) to (h),
inclusive, if at the time of, and after giving effect to, the creation or
assumption of such lien, the aggregate amount of all outstanding
Indebtedness of the Company and its Subsidiaries (without duplication)
secured by all liens not so permitted by the foregoing clauses (a) through
(i), inclusive, together with the Attributable Debt (as defined below) in
respect of Sale and Lease-Back Transactions (as defined below) permitted by
paragraph (a) under "LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS" below
does not exceed 10% of Consolidated Net Tangible Assets (as defined below);
or
(j) subject to certain conditions, any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole
or in part, of any lien referred to in the foregoing clauses (a) to (e),
inclusive. (Section 3.9)
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The Company will not, and
will not permit any Subsidiary to, enter into any Sale and Lease-Back
Transaction unless (a) the Company or such Subsidiary would, at the time of
entering into a Sale and Lease-Back Transaction, be entitled to incur
Indebtedness secured by a lien on the property or assets to be leased in an
amount at least equal to the Attributable Debt in respect of such transaction,
without equally and ratably securing the Debt Securities pursuant to the
provisions described under "Limitations on Liens" above, or (b) the direct or
indirect proceeds of the sale of the property or assets to be leased are at
least equal to the fair value of such property or assets (as determined by the
Company's Board of Directors) and an amount equal to the net proceeds from the
sale of the property or assets so leased
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is applied, within 90 days of the effective date of such transaction, (i) to the
purchase or acquisition (or, in the case of real property, commencement of
construction) of property or assets or (ii) to the retirement or repayment
(other than at maturity or pursuant to a mandatory sinking fund or mandatory
redemption provision) of Debt Securities or of Funded Indebtedness (as defined
below) of the Company ranking on a parity with or senior to the Debt Securities
or of Funded Indebtedness of a consolidated Subsidiary (subject to credits for
certain voluntary retirement of Funded Indebtedness and certain delivery of Debt
Securities to the Trustee for retirement and cancellation). (Section 3.10)
DEFINITIONS. "ATTRIBUTABLE DEBT" means in connection with a Sale and
Lease-Back Transaction, as of any particular time, the aggregate of present
values (discounted at a rate per annum equal to the average interest borne by
all outstanding Debt Securities determined on a weighted average basis and
compounded semi-annually) of the obligations of the Company or any Subsidiary
for net rental payments during the remaining term of the applicable lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). The term "net rental payments" under any
lease of any period shall mean the sum of the rental and other payments required
to be paid in such period by the lessee thereunder, not including, however, any
amounts required to be paid by such lessee (whether or not designated as rental
or additional rental) on account of maintenance and repairs, reconstruction,
insurance, taxes, assessment, water rates or similar charges required to be paid
by such lessee thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar charges.
"CONSOLIDATED NET TANGIBLE ASSETS" means, at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries as of the end of a fiscal quarter of the Company,
prepared in accordance with generally accepted accounting principles, less (a)
all current liabilities as shown on such balance sheet and (b) all intangible
assets shown on such balance sheet. "Intangible assets" means the value (net of
any applicable reserves), as shown on or reflected in such balance sheet of: (i)
all trade names, trademarks, licenses, patents, copyrights and goodwill; (ii)
organizational costs; and (iii) deferred charges (other than prepaid items such
as insurance, taxes, interest, commissions, rents and similar items and tangible
assets being amortized); but in no event shall the term "intangible assets"
include product development costs.
"FUNDED INDEBTEDNESS" means any Indebtedness maturing by its terms more
than one year from the date of the determination thereof, including any
Indebtedness renewable or extendible at the option of the obligor to a date
later than one year from the date of the determination thereof.
"INDEBTEDNESS" means, without duplication, (a) all obligations for borrowed
money, (b) all obligations evidenced by debentures, notes or other similar
instruments, (c) all obligations in respect of letters of credit or bankers
acceptances or similar instruments (or reimbursement obligations with respect
thereto), (d) all obligations to pay the deferred purchase price of property of
services, except trade accounts payable arising in the ordinary course of
business, (e) all obligations as lessee which are capitalized in accordance with
generally accepted accounting principles, and (f) all Indebtedness of others
guaranteed by the Company or any of its Subsidiaries or for which the Company or
any of its Subsidiaries is legally responsible or liable (whether by agreement
to purchase indebtedness of, or to supply funds or to invest in, others).
"SALE AND LEASE-BACK TRANSACTION" means an arrangement with any person
providing for the leasing by the Company or a Subsidiary of any property or
asset whereby such property or asset has been or is to be sold or transferred by
the Company or a Subsidiary to such person; provided, however, that the
foregoing shall not apply to any such arrangement involving a lease for a term,
including renewal rights, for not more than three years.
"SUBSIDIARY" means any corporation, association, partnership, joint venture
or other business entity of which at least a majority of the total voting power
of outstanding securities or other interests entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time directly or indirectly owned or controlled by
the Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries; provided, however, that the term "Subsidiary" shall not include
the joint venture between Cone Mills (Mexico), S.A. de C.V. and Compania
Industrial de Parras, S.A. de C.V. or any other partnership or joint venture
substantially all the property of which is located, or substantially all of the
business of which is carried on, outside the United States of America.
MERGER, CONSOLIDATION, SALE, LEASE OR CONVEYANCE
The Indenture provides that the Company will not merge or consolidate with
any other person or sell, lease or convey all or substantially all of its assets
to any person unless (i) either the Company shall be the continuing corporation,
or the resulting, surviving or transferee person shall be a corporation
organized and existing under the laws of the United States or a State thereof or
the District of Columbia and shall expressly assume the payment of principal of,
premium, if any, and
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interest on the Debt Securities and the performance and observance of all of the
covenants and agreements under the Indenture to be performed or observed by the
Company, and (ii) immediately after such merger, consolidation, sale, lease or
conveyance, the Company or such resulting, surviving or transferee person shall
not be in default in the performance or observance of any covenant or agreement
contained in the Indenture to be performed or observed by the Company or such
resulting, surviving or transferee person.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series issued
under the Indenture is defined in the Indenture as being: default for 30 days in
payment of any interest upon any Debt Securities of such series; default in any
payment of principal or premium, if any, upon any Debt Securities of such series
(including any sinking fund payment); default by the Company in performance of
any other of the covenants or agreements in respect of the Debt Securities of
such series or the Indenture which shall not have been remedied for a period of
90 days after written notice to the Company by the Trustee or the holders of at
least 25% of the principal amount of all Debt Securities of all affected series,
specifying that such notice is a "Notice of Default" under the Indenture;
default by the Company in the payment at the final maturity thereof, after the
expiration of any applicable grace period, of principal of, premium, if any, or
interest on indebtedness for money borrowed in the principal amount then
outstanding of $15,000,000 or more, or acceleration of any indebtedness in such
principal amount so that it becomes due and payable prior to the date on which
it would otherwise have become due and payable and such acceleration is not
rescinded within ten business days after notice to the Company by the Trustee or
the holders of at least 25% of the principal amount of all of the Debt
Securities at the time outstanding (treated as one class); certain events
involving bankruptcy, insolvency or reorganization of the Company; or any other
Event of Default established for the Debt Securities of such series as set forth
in the accompanying Prospectus Supplement. (Section 4.1) The Indenture provides
that the Trustee shall transmit notice of any uncured default under the
Indenture with respect to any series, within 90 days after the occurrence of
such default, to the holders of Debt Securities of each affected series, except
that the Trustee may withhold notice to the holders of any series of the Debt
Securities of any default (except in payment of principal of, premium, if any,
or interest on, such series of Debt Securities or any sinking or purchase fund)
if the Trustee considers it in the interest of the holders of such series of
Debt Securities to do so. (Section 4.11)
The Indenture provides that (a) if an Event of Default due to the default
in payment of principal of, premium, if any, or interest on, any series of Debt
Securities issued under the Indenture or due to the default in the performance
or breach of any other covenant or agreement of the Company applicable to the
Debt Securities of such series but not applicable to all outstanding Debt
Securities issued under the Indenture shall have occurred and be continuing,
either the Trustee or the holders of not less than 25% in principal amount of
the Debt Securities of each affected series issued under the Indenture and then
outstanding (each such series voting as a separate class) may declare the
principal of all Debt Securities of such affected series and interest accrued
thereon to be due and payable immediately; and (b) if an Event of Default due to
a default in the performance of any other of the covenants or agreements in the
Indenture applicable to all outstanding Debt Securities issued thereunder and
then outstanding, or due to a default in payment at final maturity or upon
acceleration of indebtedness for money borrowed in the principal amount then
outstanding of $15,000,000 or more, or to certain events of bankruptcy,
insolvency and reorganization of the Company shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in principal
amount of all Debt Securities issued under the Indenture and then outstanding
(treated as one class) may declare the principal of all such Debt Securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal of, premium, if any, or
interest on such Debt Securities) by the holders of a majority in principal
amount of the Debt Securities of all such affected series then outstanding (each
such series voting as a separate class or all such Debt Securities voting as a
single class, as the case may be). (Sections 4.1 and 4.10)
The holders of a majority in principal amount of the Debt Securities of
each series then outstanding and affected (with each series voting as a separate
class) shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to the Debt
Securities of such series under the Indenture, subject to certain limitations
specified in the Indenture, provided that the holders of such Debt Securities
shall have offered to the Trustee reasonable indemnity against expenses and
liabilities. (Sections 4.9 and 5.2(d))
The Indenture provides that no holder of Debt Securities of any series may
institute any action against the Company under the Indenture (except actions for
payment of overdue principal, premium, if any, or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25% in principal
amount of the Debt Securities of each affected series (with each series voting
as a separate class) issued under the Indenture and then outstanding shall have
requested the Trustee to institute such action and shall have offered the
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Trustee reasonable indemnity, and the Trustee shall not have instituted such
action within 60 days of such request, and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority in
principal amount of the Debt Securities of each affected series (with each
series voting as a separate class) issued under such Indenture and then
outstanding. (Sections 4.6 and 4.7)
The Indenture requires the annual filing by the Company with the Trustee of
a written statement as to compliance with the covenants and agreements contained
in the Indenture. (Section 3.5)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or defease its obligations under the Indenture as
set forth below.
The Company may discharge the Indenture with respect to any series of Debt
Securities issued under the Indenture which have not already been delivered to
the Trustee for cancellation and which have either become due and payable or are
by the terms due and payable within one year (or which may be called for
redemption within one year) by irrevocably depositing with the Trustee cash
and/or direct obligations of the United States as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the principal
of, premium, if any, and interest on such Debt Securities. However, the Company
may not thereby avoid its duty to register the transfer or exchange of such
series of Debt Securities, to replace any mutilated, destroyed, lost or stolen
Debt Securities of such series or to maintain an office or agency in respect of
such series of Debt Securities. (Section 9.1)
In the case of any series of Debt Securities in respect of which the exact
amounts of principal of, premium, if any, and interest due on such series can be
determined at the time of making the deposit referred to below, the Company at
its option at any time may also (i) discharge any and all of its obligations to
holders of such series of Debt Securities issued under the Indenture
("defeasance"), but may not thereby avoid its duty to register the transfer or
exchange of such series of Debt Securities, to replace any mutilated, destroyed,
lost, or stolen Debt Securities of such series or to maintain an office or
agency in respect of such series of Debt Securities or (ii) be released with
respect to any outstanding series of Debt Securities issued under the Indenture
from the obligations imposed by the covenants described under the captions
"Certain Covenants" and "Merger, Consolidation, Sale, Lease, or Conveyance"
above and omit to comply with such covenants without creating an Event of
Default ("covenant defeasance"). Defeasance or covenant defeasance may be
effected only if, among other things: (i) the Company irrevocably deposits with
the Trustee cash and/or direct obligations of the United States as trust funds
in an amount certified by a nationally recognized firm of independent public
accountants to be sufficient to pay each installment of principal of, premium,
if any, and interest on all outstanding Debt Securities of such series issued
under the Indenture on the dates such installments of principal, premium, if
any, and interest are due; (ii) no default or Event of Default shall have
occurred and be continuing on the date of the deposit referred to in clause (i)
or, in respect of certain events of bankruptcy, insolvency or reorganization,
during the period ending on the 91st day after the date of such deposit (or any
longer applicable preference period); and (iii) the Company delivers to the
Trustee an opinion of counsel to the effect that the holders of such series of
Debt Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts and in the same manner and at the same times as would have been the case
if such defeasance or covenant defeasance had not occurred (in the case of
defeasance, such opinion must be based on a ruling of the Internal Revenue
Service or a change in the United States federal income tax law occurring after
the date of the Indenture). (Sections 9.2, 9.3, 9.4 and 9.5)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority of principal amount
of the Debt Securities at the time outstanding of all series affected (voting as
one class), to modify the Indenture or any supplemental indenture or the rights
of the holders of the Debt Securities except that no such modification shall (i)
extend the final maturity of any of the Debt Securities or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or reduce the
amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or impair or affect the right or any holder of the Debt
Securities to institute suit for the payment thereof without the consent of the
holder of each of the Debt Securities so affected or (ii) reduce the aforesaid
percentage in principal amount of Debt Securities, the consent of the holders of
which is required for any such modification, without the consent of the holders
of all Debt Securities then outstanding. (Section 7.2)
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CONCERNING THE TRUSTEE
The Trustee may hold Debt Securities, act as a depository for funds of,
make loans to, or perform other services for, the Company and its subsidiaries
as if it were not the Trustee. (Section 5.4)
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby in four ways:
(i) directly to purchasers, (ii) through agents, (iii) through underwriters and
(iv) through dealers. Debt Securities may be sold from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent, who
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Debt Securities in respect of which
this Prospectus is delivered, will be named, and any commissions payable by the
Company to such agent will be set forth, in the accompanying Prospectus
Supplement. Unless otherwise indicated in the accompanying Prospectus
Supplement, any such agent will be acting on a reasonable efforts basis for the
period of its appointment. The Company shall have the sole right to accept
offers to purchase Debt Securities and may reject any proposed offer in whole or
in part. Agents shall have the right, in their sole discretion, to reject any
offer received by them to purchase the Debt Securities in whole or in part.
Agents may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
If an underwriter or underwriters are utilized in the offer or sale of the
Debt Securities in respect of which this Prospectus is delivered, the Company
will execute an underwriting agreement with such underwriters at the time of the
sale to them and the names of the underwriters and the terms of the transaction
will be set forth in the accompanying Prospectus Supplement, which will be used
by the underwriters to make resales of the Debt Securities in respect of which
the Prospectus is delivered to the public. The underwriters may be entitled,
under the relevant underwriting agreement, to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act.
The place and time of delivery of the Debt Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
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EXPERTS
The consolidated balance sheets of the Company as of January 2, 1994 and
January 3, 1993 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended January 2, 1994, and the related financial statement schedules, which
appear in the Company's annual report on Form 10-K for the year ended January 2,
1994, have been incorporated by reference in this Prospectus in reliance upon
the reports, dated February 11, 1994 except for Note 17 as to which the date is
March 8, 1994, of McGladrey & Pullen, LLP, independent accountants, incorporated
by reference herein, and upon the authority of such firm as experts in
accounting and auditing.
The consolidated balance sheet of Golding Industries, Inc. and Subsidiary
as of December 31, 1993 and the consolidated statements of operations,
shareholder's deficit and cash flows for the year then ended, incorporated by
reference in this Prospectus, which appear in the Company's Current Report on
Form 8-K dated December 2, 1994 as amended by the Current Report on Form 8-K/A
dated February 13, 1995, have been incorporated in this Prospectus in reliance
on the report of Coopers & Lybrand L.L.P., independent accountants, incorporated
by reference herein, and given on the authority of that firm as experts in
accounting and auditing.
LEGAL OPINIONS
The validity of the Debt Securities offered hereby will be passed upon for
the Company by Neil W. Koonce, Esq., Vice President and General Counsel for the
Company. Certain legal matters relating to the Debt Securities offered hereby
will be passed upon for the Company by Schell Bray Aycock Abel & Livingston
L.L.P., Greensboro, North Carolina. Doris R. Bray, a partner of Schell Bray
Aycock Abel & Livingston L.L.P., is a director of the Company and beneficially
owns 16,000 shares of Common Stock of the Company.
The validity of the Debt Securities offered hereby will be passed upon for
any underwriters, dealers or agents by King & Spalding, Atlanta, Georgia. King &
Spalding will rely upon the opinion of Schell Bray Aycock Abel & Livingston
L.L.P. as to all matters involving North Carolina law.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All of the expenses in connection with the offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................................... $ 34,483
Legal fees and expenses................................................................... 50,000
Printing and engraving.................................................................... 25,000
Accountant's fees and expenses............................................................ 43,000
Blue Sky qualification fees and expenses.................................................. 10,000
Miscellaneous............................................................................. 7,517
Total................................................................................ $170,000*
</TABLE>

* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XI of the Company's Bylaws, as amended, provides:
ARTICLE XI. INDEMNIFICATION
Section 11-1. EXTENT. In addition to the indemnification otherwise provided
for by law or by the Articles of Incorporation of the Corporation, the
Corporation shall indemnify and hold harmless its directors and officers against
all liability and litigation expense, including reasonable attorneys' fees,
arising out of their status as directors or officers or their activities in any
of such capacities or in any capacity in which any of them is or was serving, at
the Corporation's request, in another corporation, partnership, joint venture,
trust or other enterprise and the Corporation shall indemnify and hold harmless
its directors, officers, and employees who are deemed to be fiduciaries of the
Corporation's employee pension and welfare benefit plans as defined under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA
fiduciaries"), against all liability and litigation expenses, including
reasonable attorneys' fees, arising out of their status or activities as ERISA
fiduciaries; provided, however, that the Corporation shall not indemnify a
director or officer against liability or litigation expense that he may incur on
account of his activities that at the time taken were known or reasonably should
have been known by him to be clearly in conflict with the best interests of the
Corporation, and the Corporation shall not indemnify an ERISA fiduciary against
any liability or litigation expense that he may incur on account of his
activities that at the time taken were known or reasonably should have been
known by him to be clearly in conflict with the best interests of the employee
benefit plan to which the activities relate. The Corporation shall also
indemnify the director, officer or ERISA fiduciary for reasonable costs,
expenses and attorneys' fees in connection with the enforcement of rights to
indemnification granted herein, if it is determined in accordance with Section
11-2 of this Article that the director, officer or ERISA fiduciary is entitled
to indemnification hereunder.
Section 11-2. DETERMINATION. Any indemnification under Section 11-1 shall
be paid by the Corporation in any specific case only after a determination that
the director, officer or ERISA fiduciary did not act in a manner, at the time
the activities were taken, that was known or reasonably should have been known
by him to be clearly in conflict with the best interests of the Corporation, or
the employee benefit plan to which the activities relate, as the case may be.
Such determination shall be made (a) by the affirmative vote of a majority (but
not less than two) of directors who are or were not parties to such action, suit
or proceeding or against whom any such claim is asserted ("disinterested
directors") even though less than a quorum, or (b) if a majority (but not less
than two) of disinterested directors so direct, by independent legal counsel in
a written opinion, or (c) by the vote of a majority of all of the voting shares
other than those owned or controlled by directors, officers or ERISA fiduciaries
who were parties to such action, suit or proceeding or against whom such claim
is asserted, or by a unanimous vote of all of the voting shares, or (d) by a
court of competent jurisdiction.
Section 11-3. ADVANCED EXPENSES. Expenses incurred by a director, officer
or ERISA fiduciary in defending a civil or criminal claim, action, suit or
proceeding may, upon approval of a majority (but not less than two) of the
disinterested directors, even though less than a quorum, or, if there are less
than two disinterested directors, upon unanimous approval of the Board of
Directors, be paid by the Corporation in advance of the final disposition of
such claim, action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director, officer or ERISA fiduciary to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified against
such expenses by the Corporation.
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Section 11-4. CORPORATION. For purposes of this Article, references to
directors, officers or ERISA fiduciaries of the "Corporation" shall be deemed to
include directors, officers and ERISA fiduciaries of Cone Mills Corporation, its
subsidiaries, and all constituent corporations absorbed into Cone Mills
Corporation or any of its subsidiaries by a consolidation or merger.
Section 11-5. RELIANCE AND CONSIDERATION. Any director, officer or ERISA
fiduciary who at any time after the adoption of this Bylaw serves or has served
in any of the aforesaid capacities or any other capacity for or on behalf of the
Corporation shall be deemed to be doing or to have done so in reliance upon, and
as consideration for, the right of indemnification provided herein. Such right
shall inure to the benefit of the legal representatives of any such person and
shall not be exclusive of any other rights to which such person may be entitled
apart from the provision of this Bylaw. No amendment, modification or repeal of
this Article XI shall adversely affect the right of any director, officer or
ERISA fiduciary to indemnification hereunder with respect to any activities
occurring prior to the time of such amendment, modification or repeal.
Section 11-6. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of its directors, officers, employees and agents and those
persons who were serving at the request of the Corporation as a director,
officer, partner or trustee of, or in some other capacity in, another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article or otherwise. Any full or partial payment made by an insurance company
under any insurance policy covering any director, officer, employee or agent
made to or on behalf of a person entitled to indemnification under this Article
shall relieve the Corporation of its liability for indemnification provided for
in this Article or otherwise to the extent of such payment, and no insurer shall
have a right of subrogation against the Corporation with respect to such
payment.
The North Carolina General Statutes contain provisions prescribing the
extent to which directors and officers shall or may be indemnified. These
statutory provisions are set forth below:
CH. 55 N.C. BUSINESS CORPORATION ACT
PART 5. INDEMNIFICATION.
(SECTION MARK)55-8-50. POLICY STATEMENT AND DEFINITIONS.
(a) It is the public policy of this State to enable corporations organized
under this Chapter to attract and maintain responsible, qualified directors,
officers, employees and agents, and, to that end, to permit corporations
organized under this Chapter to allocate the risk of personal liability of
directors, officers, employees and agents through indemnification and insurance
as authorized in this Part.
(b) Definitions in this Part:
(1) "Corporation" includes any domestic or foreign predecessor entity
of a corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or
was serving at the corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other
enterprise. A director is considered to be serving an employee benefit plan
at the corporation's request if his duties to the corporation also impose
duties on, or otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan. "Director" includes, unless
the context requires otherwise, the estate or personal representative of a
director.
(3) "Expenses" means expenses of every kind incurred in defending a
proceeding, including counsel fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a
proceeding.
(4a) "Officer", "employee", or "agent" includes, unless the context
requires otherwise, the estate or personal representative of a person who
acted in that capacity.
(5) "Official capacity" means: (i) when used with respect to a
director, the office of director in a corporation; and (ii) when used with
respect to an individual other than a director, as contemplated in G.S.
55-8-56, the office in a corporation held by the officer or the employment
or agency relationship undertaken by the employee or agent on behalf
II-2

<PAGE>
of the corporation. "Official capacity" does not include service for any
other foreign or domestic corporation or any partnership, joint venture,
trust, employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
(SECTION MARK)55-8-51. AUTHORITY TO INDEMNIFY.
(a) Except as provided in subsection (d), a corporation may indemnify an
individual made a party to a proceeding because he is or was a director against
liability incurred in the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct in his official
capacity with the corporation, that his conduct was in its best interests;
and (ii) in all other cases, that his conduct was at least not opposed to
its best interests; and
(3) In the case of any criminal proceeding, he had no reasonable cause
to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in and
beneficiaries of the plan is conduct that satisfies the requirement of
subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of no contest or its equivalent is not, of itself,
determinative that the director did not meet the standard of conduct described
in this section.
(d) A corporation may not indemnify a director under this section:
(1) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
or
(2) In connection with any other proceeding charging improper personal
benefit to him, whether or not involving action in his official capacity,
in which he was adjudged liable on the basis that personal benefit was
improperly received by him.
(e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation that is concluded without a
final adjudication on the issue of liability is limited to reasonable expenses
incurred in connection with the proceeding.
(f) The authorization, approval or favorable recommendation by the board of
directors of a corporation of indemnification, as permitted by this section,
shall not be deemed an act or corporate transaction in which a director has a
conflict of interest, and no such indemnification shall be void or voidable on
such ground.
(SECTION MARK)55-8-52. MANDATORY INDEMNIFICATION.
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding.
(SECTION MARK)55-8-53. ADVANCE FOR EXPENSES.
Expenses incurred by a director in defending a proceeding may be paid by
the corporation in advance of the final disposition of such proceeding as
authorized by the board of directors in the specific case or as authorized or
required under any provision in the articles of incorporation or bylaws or by
any applicable resolution or contract upon receipt of an undertaking by or on
behalf of the director to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation against such
expenses.
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<PAGE>
(SECTION MARK)55-8-54. COURT-ORDERED INDEMNIFICATION.
Unless a corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court after giving any
notice the court considers necessary may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under G.S.
55-8-52, in which case the court shall also order the corporation to pay
the director's reasonable expenses incurred to obtain court-ordered
indemnification; or
(2) The director is fairly and reasonably entitled to indemnification
in view of all the relevant circumstances, whether or not he met the
standard of conduct set forth in G.S. 55-8-51 or was adjudged liable as
described in G.S. 55-8-51(d), but if he was adjudged so liable his
indemnification is limited to reasonable expenses incurred.
(SECTION MARK)55-8-55. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.
(a) A corporation may not indemnify a director under G.S. 55-8-51 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because he
has met the standard of conduct set forth in G.S. 55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a quorum consisting
of directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision (1), by majority
vote of a committee duly designated by the board of directors (in which
designation directors who are parties may participate), consisting solely
of two or more directors not at the time parties to the proceeding;
(3) By special legal counsel (i) selected by the board of directors or
its committee in the manner prescribed in subdivision (1) or (2); or (ii)
if a quorum of the board of directors cannot be obtained under subdivision
(1) and a committee cannot be designated under subdivision (2), selected by
majority vote of the full board of directors (in which selection directors
who are parties may participate); or
(4) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not
be voted on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection
(b)(3) to select counsel.
(SECTION MARK)55-8-56. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.
Unless a corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under G.S. 55-8-52, and is entitled to apply for
court-ordered indemnification under G.S. 55-8-54, in each case to the same
extent as a director.
(2) The corporation may indemnify and advance expenses under this Part
to an officer, employee, or agent of the corporation to the same extent as
to a director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent, consistent
with public policy, that may be provided by its articles of incorporation,
bylaws, general or specific action of its board of directors, or contract.
(SECTION MARK)55-8-57. ADDITIONAL INDEMNIFICATION AND INSURANCE.
(a) In addition to and separate and apart from the indemnification provided
for in G.S. 55-8-51, 55-8-52, 55-8-54, 55-8-55 and 55-8-56, a corporation may in
its articles of incorporation or bylaws or by contract or resolution indemnify
or agree to indemnify any one or more of its directors, officers, employees, or
agents against liability and expenses in any proceeding (including without
limitation a proceeding brought by or on behalf of the corporation itself)
arising out of their status as such or their activities in any of the foregoing
capacities; provided, however, that a corporation may not indemnify or agree to
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<PAGE>
indemnify a person against liability or expenses he may incur on account of his
activities which were at the time taken known or believed by him to be clearly
in conflict with the best interests of the corporation. A corporation may
likewise and to the same extent indemnify or agree to indemnify any person who,
at the request of the corporation, is or was serving as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or as a trustee or
administrator under an employee benefit plan. Any provision in any articles of
incorporation, bylaw, contract, or resolution permitted under this section may
include provisions for recovery from the corporation of reasonable costs,
expenses, and attorneys' fees in connection with the enforcement of rights to
indemnification granted therein and may further include provisions establishing
reasonable procedures for determining and enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable recommendation by
the board of directors of a public corporation of any provision in any articles
of incorporation, bylaw, contract or resolution, as permitted in this section,
shall not be deemed an act or corporate transaction in which a director has a
conflict of interest, and no such articles of incorporation or bylaw provision
or contract or resolution shall be void or voidable on such grounds. The
authorization, adoption, approval, or favorable recommendation by the board of
directors of a nonpublic corporation of any provision in any articles of
incorporation, bylaw, contract or resolution, as permitted in this section,
which occurred prior to July 1, 1990, shall not be deemed an act or corporate
transaction in which a director has a conflict of interest, and no such articles
of incorporation, bylaw provision, contract or resolution shall be void or
voidable on such grounds. Except as permitted in G.S. 55-8-31, no such bylaw,
contract, or resolution not adopted, authorized, approved or ratified by
shareholders shall be effective as to claims made or liabilities asserted
against any director prior to its adoption, authorization, or approval by the
board of directors.
(c) A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the corporation would have power to indemnify him against the
same liability under any provision of this Chapter.
(SECTION MARK)55-8-58. APPLICATION OF PART.
(a) If articles of incorporation limit indemnification or advance for
expenses, indemnification and advance for expenses are valid only to the extent
consistent with the articles.
(b) This Part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with his appearance as a witness
in a proceeding at a time when he has not been made a named defendant or
respondent to the proceeding.
(c) This Part shall not affect rights or liabilities arising out of acts or
omissions occurring before July 1, 1990.
ITEM 16. EXHIBITS.
The following exhibits are filed as part of the Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
<C> <S> <C>
4.1 Form of Indenture dated as of February 14, 1995 between the Registrant and Wachovia Bank of
North Carolina, N.A., Trustee.
5.1 Opinion of Neil W. Koonce, Esq., Vice President and General Counsel of Registrant as to
validity of Debt Securities.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of McGladrey & Pullen, LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Neil W. Koonce, Esq. is contained in the opinion included as Exhibit 5.1.
25.1 Form T-1, Statement of Eligibility of Trustee.
</TABLE>

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<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant ("Registrant") hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greensboro, State of North Carolina, on February 14,
1995.
CONE MILLS CORPORATION
By: /s/ J. PATRICK DANAHY
J. PATRICK DANAHY, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints J. Patrick Danahy and Terry L.
Weatherford, and each of them (with full power to each of them to act alone),
his or her true and lawful attorneys-in-fact and agents for him or her and on
his or her behalf and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with exhibits and any and
all other documents filed with respect thereto, with the Securities and Exchange
Commission (or any other governmental or regulatory authority), granting unto
said attorneys, and each of them, full power and authority to do and to perform
each and every act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents and purposes as
he or she might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the following
capacities on February 14, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ DEWEY L. TROGDON Chairman of the Board of Directors February 14, 1995
DEWEY L. TROGDON
/s/ J. PATRICK DANAHY Director, President and Chief February 14, 1995
J. PATRICK DANAHY Executive Officer
(Principal Executive Officer)
/s/ JOHN L. BAKANE Director, Vice President and Chief February 14, 1995
JOHN L. BAKANE Financial Officer
(Principal Financial Officer)
/s/ DORIS R. BRAY Director February 14, 1995
DORIS R. BRAY
/s/ LESLIE W. GAULDEN Director February 14, 1995
LESLIE W. GAULDEN
/s/ JEANETTE CONE KIMMEL Director February 14, 1995
JEANETTE CONE KIMMEL
</TABLE>
II-7

<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
/s/ CHARLES M. REID Director February 14, 1995
CHARLES M. REID
<S> <C> <C>
/s/ JOHN W. ROSENBLUM Director February 14, 1995
JOHN W. ROSENBLUM
/s/ RICHARD S. VETACK Director February 14, 1995
RICHARD S. VETACK
/s/ BUD W. WILLIS, III Director February 14, 1995
BUD W. WILLIS, III
/s/ J. D. HOLDER Controller (Principal Accounting Officer) February 14, 1995
J. D. HOLDER
</TABLE>

II-8

<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
<C> <S> <C>
4.1 Form of Indenture dated as of February 14, 1995 between the Registrant and Wachovia Bank of
North Carolina, N.A., Trustee.
5.1 Opinion of Neil W. Koonce, Esq., Vice President and General Counsel of Registrant as to
validity of Debt Securities.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of McGladrey & Pullen, LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Neil W. Koonce, Esq. is contained in the opinion included as Exhibit 5.1.
25.1 Form T-1, Statement of Eligibility of Trustee.
</TABLE>

II-9

*****************************************************************************
APPENDIX

On the Prospectus Cover the Cone Mills logo appears where indicated and
the redherring appears in the left-hand corner of the page, rotated
90 degrees. Text is is as follows:

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such State.

____________________

INDENTURE

____________________

CONE MILLS CORPORATION

AND

WACHOVIA BANK OF NORTH CAROLINA, N.A.,
a national banking association, as Trustee

Dated as of February 14, 1995
<PAGE>

TABLE OF CONTENTS

Page

PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . 1

RECITALS

Authorization of Indenture . . . . . . . . . . . . . 1
Compliance with Legal Requirements . . . . . . . . . 1
Purpose of and Consideration for Indenture . . . . . 1

ARTICLE ONE

DEFINITIONS

SECTION 1.1. Certain Terms Defined. . . . . . . . . . . 1
Attributable Debt. . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . 2
Consolidated Net Tangible Assets . . . . . 2
Corporate Trust Office . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . 3
Dollar . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . 3
Funded Indebtedness. . . . . . . . . . . . 3
Global Security. . . . . . . . . . . . . . 3
Holder, Holder of Securities,
Securityholder . . . . . . . . . . . . . 3
Indebtedness . . . . . . . . . . . . . . . 3
Indenture. . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . 4
Issuer . . . . . . . . . . . . . . . . . . 4
Officers' Certificate. . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . 4
Original Issue Date. . . . . . . . . . . . 4
Original Issue Discount Security . . . . . 4
Outstanding. . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . 5
Principal. . . . . . . . . . . . . . . . . 5
Responsible Officer. . . . . . . . . . . . 5
Sale and Lease-Back Transaction. . . . . . 6
Security or Securities . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . 6
Trustee. . . . . . . . . . . . . . . . . . 6
Trust Indenture Act of 1939. . . . . . . . 6
vice president . . . . . . . . . . . . . . 6
Yield to Maturity. . . . . . . . . . . . . 6

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<PAGE>

ARTICLE TWO

SECURITIES

SECTION 2.1. Forms Generally. . . . . . . . . . . . . . 7
SECTION 2.2. Form of Trustee's Certificate
of Authentication. . . . . . . . . . . . 7
SECTION 2.3. Amount Unlimited; Issuable in Series . . . 7
SECTION 2.4. Authentication and Delivery of
Securities . . . . . . . . . . . . . . . 9
SECTION 2.5. Execution of Securities. . . . . . . . . . 10
SECTION 2.6. Certificate of Authentication. . . . . . . 11
SECTION 2.7. Denomination and Date of
Securities; Payments of Interest . . . . 11
SECTION 2.8. Registration, Transfer and Exchange. . . . 12
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost
and Stolen Securities. . . . . . . . . . 13
SECTION 2.10. Cancellation of Securities;
Destruction Thereof. . . . . . . . . . . 14
SECTION 2.11. Temporary Securities . . . . . . . . . . . 14
SECTION 2.12 Securities Issuable in the Form of a
Global Security. . . . . . . . . . . . . 15

ARTICLE THREE

COVENANTS OF THE ISSUER AND THE TRUSTEE

SECTION 3.1. Payment of Principal and Interest. . . . . 17
SECTION 3.2. Offices for Payments, etc. . . . . . . . . 17
SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee. . . . . . . . . . . . 17
SECTION 3.4. Paying Agents. . . . . . . . . . . . . . . 17
SECTION 3.5. Certificate of the Issuer. . . . . . . . . 18
SECTION 3.6. Securityholders' Lists . . . . . . . . . . 18
SECTION 3.7. Reports by the Issuer. . . . . . . . . . . 19
SECTION 3.8. Reports by the Trustee . . . . . . . . . . 19
SECTION 3.9. Limitations on Liens . . . . . . . . . . . 19
SECTION 3.10. Limitations on Sale and Lease-Back . . . . 22
SECTION 3.11. Notice to Trustee. . . . . . . . . . . . . 22

ARTICLE FOUR

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT

SECTION 4.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default . . . . . 23
SECTION 4.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt . . . . . . . . . 26
SECTION 4.3. Application of Proceeds. . . . . . . . . . 29

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<PAGE>

SECTION 4.4. Suits for Enforcement. . . . . . . . . . . 30
SECTION 4.5. Restoration of Rights on Abandonment
of Proceedings . . . . . . . . . . . . . 30
SECTION 4.6. Limitations on Suits by
Securityholders. . . . . . . . . . . . . 30
SECTION 4.7. Unconditional Right of
Securityholders to Institute
Certain Suits. . . . . . . . . . . . . . 31
SECTION 4.8. Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default. . . . . . . . . . . . . . . . . 31
SECTION 4.9. Control by Securityholders . . . . . . . . 31
SECTION 4.10. Waiver of Past Defaults. . . . . . . . . . 32
SECTION 4.11. Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances. . . . . . . . . . . . . . 33
SECTION 4.12. Right of Court to Require Filing
of Undertaking to Pay Costs. . . . . . . 33

ARTICLE FIVE

CONCERNING THE TRUSTEE

SECTION 5.1. Duties and Responsibilities of the
Trustee; During Default; Prior to
Default. . . . . . . . . . . . . . . . . 34
SECTION 5.2. Certain Rights of the Trustee. . . . . . . 35
SECTION 5.3. Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof. . . . . 36
SECTION 5.4. Trustee and Agents May Hold
Securities; Collections, etc . . . . . . 36
SECTION 5.5. Moneys Held by Trustee . . . . . . . . . . 37
SECTION 5.6. Compensation and Indemnification
of Trustee and Its Prior Claim . . . . . 37
SECTION 5.7. Right of Trustee to Rely on
Officers' Certificate, etc . . . . . . . 37
SECTION 5.8. Persons Eligible for Appointment
as Trustee . . . . . . . . . . . . . . . . 38
SECTION 5.9 Resignation and Removal; Appointment
of Successor Trustee . . . . . . . . . . 38
SECTION 5.10. Acceptance of Appointment by
Successor Trustee. . . . . . . . . . . . 39
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business of Trustee. . . . 40

ARTICLE SIX

CONCERNING THE SECURITYHOLDERS

SECTION 6.1. Evidence of Action Taken by
Securityholders. . . . . . . . . . . . . 41

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<PAGE>

SECTION 6.2. Proof of Execution of Instruments and
of Holding of Securities; Record
Date . . . . . . . . . . . . . . . . . . 41
SECTION 6.3. Holders to Be Treated as Owners. . . . . . 42
SECTION 6.4. Securities Owned by Issuer Deemed Not
Outstanding. . . . . . . . . . . . . . . 42
SECTION 6.5. Right of Revocation of Action Taken. . . . 43

ARTICLE SEVEN

SUPPLEMENTAL INDENTURES

SECTION 7.1. Supplemental Indentures Without
Consent of Securityholders . . . . . . . 43
SECTION 7.2. Supplemental Indentures With Consent
of Securityholders . . . . . . . . . . . 45
SECTION 7.3. Effect of Supplemental Indenture . . . . . 46
SECTION 7.4. Documents to Be Given to Trustee . . . . . 46
SECTION 7.5. Notation on Securities in Respect of
Supplemental Indentures. . . . . . . . . 46

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 8.1. Issuer may Consolidate, etc., on
Certain Terms. . . . . . . . . . . . . . 46
SECTION 8.2. Successor Corporation Substituted. . . . . 47
SECTION 8.3. Opinion of Counsel to Trustee. . . . . . . 47

ARTICLE NINE

SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS

SECTION 9.1. Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . . . 48
SECTION 9.2. Issuer's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . 49
SECTION 9.3. Defeasance and Discharge . . . . . . . . . 49
SECTION 9.4. Covenant Defeasance. . . . . . . . . . . . 50
SECTION 9.5. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . 50
SECTION 9.6. Application by Trustee of Funds
Deposited for Payment of Securities. . . 52
SECTION 9.7. Repayment of Moneys Held by Paying
Agent. . . . . . . . . . . . . . . . . . 52
SECTION 9.8. Return of Moneys Held By Trustee and
Paying Agent Unclaimed for Two Years . . 52
SECTION 9.9. Indemnity for Direct Obligations of
the United States. . . . . . . . . . . . 53

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<PAGE>

SECTION 9.10. Reinstatement. . . . . . . . . . . . . . . 53

ARTICLE TEN

MISCELLANEOUS PROVISIONS

SECTION 10.1. Incorporators, Shareholders, Officers
and Directors of Issuer Exempt from
Individual Liability . . . . . . . . . . 53
SECTION 10.2. Provisions of Indenture for the Sole
Benefit of Parties and Security
holders. . . . . . . . . . . . . . . . . 54
SECTION 10.3. Successors and Assigns of Issuer
Bound by Indenture . . . . . . . . . . . 54
SECTION 10.4. Notices and Demands on Issuer,
Trustee and Securityholders. . . . . . . 54
SECTION 10.5. Officers' Certificates and Opinions
of Counsel; Statements to Be Continued
Therein. . . . . . . . . . . . . . . . . 55
SECTION 10.6. Payments Due on Saturdays, Sundays
and Holidays . . . . . . . . . . . . . . 56
SECTION 10.7. Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939. . . . . . . . . . . . . . . 56
SECTION 10.8. New York Law to Govern . . . . . . . . . . 56
SECTION 10.9. Counterparts . . . . . . . . . . . . . . . 56
SECTION 10.10. Effect of Headings . . . . . . . . . . . 56

ARTICLE ELEVEN

REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 11.1. Applicability of Article . . . . . . . . . 56
SECTION 11.2. Notice of Redemption; Partial
Redemptions. . . . . . . . . . . . . . . 56
SECTION 11.3. Payment of Securities Called for
Redemption . . . . . . . . . . . . . . . 58
SECTION 11.4. Exclusion of Certain Securities from
Eligibility for Selection for
Redemption . . . . . . . . . . . . . . . 58
SECTION 11.5. Mandatory and Optional Sinking
Funds. . . . . . . . . . . . . . . . . . 59

TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . 62
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 62
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . 63

-v-

<PAGE>
THIS INDENTURE, dated as of February 14, 1995 between CONE
MILLS CORPORATION, a North Carolina corporation (the "Issuer"), and
WACHOVIA BANK OF NORTH CAROLINA, N.A., a national banking association,
as Trustee (the "Trustee"),

W I T N E S S E T H:

WHEREAS, the Issuer has duly authorized the issue from time
to time of its unsecured debentures, notes or other evidences of
indebtedness to be issued in one or more series (the "Securities") up
to such Principal amount or amounts as may from time to time be
authorized in accordance with the terms of this Indenture and to
provide, among other things, for the authentication, delivery and
administration thereof, the Issuer has duly authorized the execution
and delivery of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;

NOW, THEREFORE:

In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:

ARTICLE ONE

DEFINITIONS

SECTION 1.1 Certain Terms Defined. The following terms
(except as otherwise expressly provided or unless the context
otherwise clearly requires) for all purposes of this Indenture and of
any indenture supplemental hereto shall have the respective meanings
specified in this Section. All other terms used in this Indenture
that are defined in the Trust Indenture Act of 1939 or the definitions
of which in the Securities Act of 1933 are referred to in the Trust
Indenture Act of 1939, including terms defined therein by reference to
the Securities Act of 1933 (except as herein otherwise expressly
provided or unless the context otherwise clearly requires), shall have
the meanings assigned to such terms in said Trust Indenture Act and in
said Securities Act as in force at the date of this Indenture. All
accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof"
and "hereunder" and other words or similar import refer to this
Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article have the
meanings assigned to them in this Article and include the plural as
well as the singular.

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"Attributable Debt" means, in connection with a Sale and
Lease-Back Transaction, as of any particular time, the aggregate of
present values (discounted at a rate per annum equal to the average
interest borne by all Outstanding Securities (or, if set forth in a
resolution of the Board of Directors or a supplemental indenture
pursuant to Section 2.3 with respect to one or more series, the
Outstanding Securities of such series) determined on a weighted
average basis and compounded semi-annually) of the obligations of the
Issuer or any Subsidiary for net rental payments during the remaining
term of the applicable lease (including any period for which such
lease has been extended or may, at the option of the lessor, be
extended). The term "net rental payments" under any lease of any
period shall mean the sum of the rental and other payments required to
be paid in such period by the lessee thereunder, not including,
however, any amounts required to be paid by such lessee (whether or
not designated as rental or additional rental) on account of
maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges required to be paid by
such lessee thereunder or any amounts required to be paid by such
lessee thereunder contingent upon the amount of sales, maintenance and
repairs, reconstruction, insurance, taxes, assessments, water rates or
similar charges.

"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act
hereunder.

"Business Day" means, with respect to any Security, a day
that in the city (or in any of the cities, if more than one) in which
amounts are payable, as specified in the form of such Security, is not
a day on which banking institutions are authorized or obligated by law
or regulation to close.

"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities
Exchange Act of 1934, or if at any time after the execution and
delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.

"Consolidated Net Tangible Assets" means at any date, the
total assets appearing on the most recently prepared consolidated
balance sheet of the Issuer and its Subsidiaries as of the end of a
fiscal quarter of the Issuer, prepared in accordance with generally
accepted accounting principles, less (a) all current liabilities as
shown on such balance sheet and (b) all intangible assets shown on
such balance sheet. "Intangible assets" means the value (net of any
applicable reserves), as shown on or reflected in such balance sheet
of: (i) all trade names, trademarks, licenses, patents, copyrights and
goodwill; (ii) organizational costs; and (iii) deferred charges (other
than prepaid items such as insurance, taxes, interest, commissions,
rents and similar items and tangible assets being amortized); but in
no event shall the term "intangible assets" include product

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development costs.

"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any
particular time, be principally administered, which office is, at the
date as of which this Indenture is dated, located at 301 North Church
Street, Winston-Salem, North Carolina 27101 Attention: Corporate
Trust Department.

"Depositary" means, unless otherwise specified by the Issuer
pursuant to either Section 2.3 or 2.14, with respect to Securities of
any series issuable or issued in whole or in part in the form of one
or more Global Securities, The Depository Trust Company, New York, New
York, or any successor thereto registered under the Securities
Exchange Act of 1934, as amended, or other applicable statute or
regulation.

"Dollar" means the coin or currency of the United States of
America which as of the time of payment is legal tender for the
payment of public and private debts.

"Event of Default" means any event or condition specified as
such in Section 4.1.

"Funded Indebtedness" means any Indebtedness maturing by its
terms more than one year from the date of the determination thereof,
including any Indebtedness renewable or extendible at the option of
the obligor to a date later than one year from the date of the
determination thereof.

"Global Security" means a Security issued to evidence all or
part of any series of Securities which is executed by the Issuer and
authenticated and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with this
Indenture and pursuant to an Issuer order, which shall be registered
in the name of the Depositary or its nominee.

"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean the registered holder of any Security.

"Indebtedness", means, without duplication, (a) all
obligations for borrowed money, (b) all obligations evidenced by
bonds, debentures, notes or other similar instruments, (c) all
obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect
thereto), (d) all obligations to pay the deferred purchase price of
property or services, except trade accounts payable arising in the
ordinary course of business, (e) all obligations as lessee which are
capitalized in accordance with generally accepted accounting
principles, and (f) all Indebtedness of others guaranteed by the
Issuer or any of its Subsidiaries or for which the Issuer or any of
its Subsidiaries is legally responsible or liable (whether by
agreement to purchase indebtedness of, or to supply funds or to invest

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in, others).

"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so
amended or supplemented or both, and shall include the forms and terms
of particular series of Securities established as contemplated
hereunder.

"Interest" means, when used with respect to non-interest
bearing Securities, interest payable after maturity.

"Issuer" means (except as otherwise provided in Article
Five) Cone Mills Corporation, a North Carolina corporation, and,
subject to Article Eight, its successors and assigns.

"Officers' Certificate" means a certificate signed by the
chairman or any vice chairman of the Board of Directors or the
president or any vice president and by the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the Issuer
and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 10.5.

"Opinion of Counsel" means an opinion in writing signed by
legal counsel who may be an employee of or counsel to the Issuer and
who shall be satisfactory to the Trustee. Each such opinion shall
comply with Section 314 of the Trust Indenture Act of 1939 and include
the statements provided for in Section 10.5, if and to the extent
required hereby.

"Original Issue Date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of
any Security (or portion thereof) for which such Security was issued
(directly or indirectly) on registration of transfer, exchange or
substitution.

"Original Issue Discount Security" means any Security that
provides for an amount less than the Principal amount thereof to be
due and payable upon a declaration of acceleration of the maturity
thereof pursuant to Section 4.1.

"Outstanding", when used with reference to Securities,
shall, subject to the provisions of Section 6.4, mean, as of any
particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except

(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;

(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent
(other than the Issuer) or shall have been set aside, segregated
and held in trust by the Issuer for the Holders of such

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Securities (if the Issuer shall act as its own paying agent),
provided that if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such
notice; and

(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have
been paid, pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to
the Trustee is presented that such Security is held by a person
in whose hands such Security is a legal, valid and binding
obligation of the Issuer).

In determining whether the Holders of the requisite
Principal amount of Outstanding Securities of any or all series have
given any request, demand, authorization, direction, notice, consent
or waiver hereunder, the Principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the Principal thereof that would be
due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to
Section 4.1.

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

"Principal" whenever used with reference to the Securities
or any Security or any portion thereof, shall be deemed to include
"and premium, if any."

"Responsible Officer" when used with respect to the Trustee
means the chairman of the board of directors, any vice chairman of the
board of directors, the chairman of the trust committee, the chairman
of the executive committee, any vice chairman of the executive
committee, the president, any vice president, the cashier, the
secretary, the treasurer, any trust officer, any assistant trust
officer, any assistant vice president, any assistant cashier, any
assistant secretary, any assistant treasurer, or any other officer or
assistant officer of the Trustee customarily performing functions
similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the
particular subject.

"Sale and Lease-Back Transaction" means any arrangement with
any Person providing for the leasing by the Issuer or a Subsidiary of
any property or assets, whereby such property or asset has been or is
to be sold or transferred by the Issuer or any Subsidiary to such
Person; provided, however, that the foregoing shall not include any

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such arrangement involving a lease for a term, including renewal
rights, for not more than three years.

"Security" or Securities" has the meaning stated in the
first recital of this Indenture, or, as the case may be, Securities
that have been authenticated and delivered under this Indenture.

"Subsidiary" means any corporation, association,
partnership, joint venture or other business entity of which at least
a majority of the total voting power of outstanding securities or
other interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time directly or indirectly owned or
controlled by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries; provided, however, that the term
"Subsidiary" shall not include the joint venture between Cone Mills
(Mexico), S.A. de C.V. and Compania Industrial de Parras, S.A. de C.V.
or any other partnership or joint venture substantially all the
property of which is located, or substantially all of the business of
which is carried on, outside the United States of America.

"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Five,
shall also include any successor trustee.

"Trust Indenture Act of 1939" (except as otherwise provided
in Sections 7.1 and 7.2) means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was originally executed.

"vice president" when used with respect to the Issuer or the
Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title of "vice
president."

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

ARTICLE TWO

SECURITIES

SECTION 2.1 Forms Generally. The Securities of each series
shall be substantially in such form (not inconsistent with this
Indenture) as shall be established by or pursuant to a resolution of
the Board of Directors or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by
this Indenture and may have imprinted or otherwise reproduced thereon

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such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with any rules of any securities
exchange or to conform to general usage, all as may be determined by
the officers executing such Securities, as evidenced by their
execution of the Securities.

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

SECTION 2.2 Form of Trustee's Certificate of
Authentication. The Trustee's certificate of authentication on all
Securities shall be in substantially the following form:

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

WACHOVIA BANK OF
NORTH CAROLINA, N.A.,
as Trustee

By_______________________
Authorized Signatory

SECTION 2.3 Amount Unlimited; Issuable in Series. The
aggregate Principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There
shall be established in or pursuant to a resolution of the Board of
Directors and set forth in an Officers' Certificate, or established in
one or more indentures supplemental hereto, prior to the issuance of
Securities of any series,

(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other
Securities);

(b) any limit upon the aggregate Principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Securities of the series pursuant to Section
2.8, 2.9, 2.11 or 11.3);

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percentage of their Principal amount at which the Securities of
the series will be offered for sale to the public;

(d) the date or dates on which the Principal of the
Securities of the series is payable;

(e) the rate or rates (which may be fixed or variable), or
the method or methods of determination thereof, at which the
Securities of the series shall bear interest, if any, or the
method by which such rate shall be determined, the date or dates
from which such interest shall accrue, the interest payment dates
on which such interest shall be payable and the record dates for
the determination of Holders to whom interest is payable;

(f) the place or places where the Principal of and any
premium and interest on Securities of the series shall be payable
(if other than as provided in Section 3.2);

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

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

(i) if other than Dollars, the coin or currency (including
composite currency units) in which the Securities of the series
are denominated;

(j) if other than the coin or currency in which the
Securities of that series are denominated, the coin or currency
in which payment of the Principal or premium, if any, or interest
(including composite currency units) on the Securities of such
series shall be payable;

(k) if other than the Principal amount thereof, the portion
of the Principal amount of Securities of the series which shall
be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 4.1 or provable in bankruptcy
pursuant to Section 4.2;

(l) whether the Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities;
the terms and conditions, if any, upon which such Global Security
or Securities may be exchanged in whole or in part for other
individual Securities, and the Depositary for Global Security or
Securities;

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(m) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and

(n) if other than the Trustee, any trustees, authenticating
or paying agents, transfer agents or registrars or any other
agents with respect to the Securities of such series.

All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be
provided in or pursuant to such resolution of the Board of Directors
and set forth in the Officers' Certificate referred to above or in any
such indenture supplemental hereto.

SECTION 2.4 Authentication and Delivery of Securities. At
any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Securities of any series
executed by the Issuer to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver such Securities to or
upon the written order of the Issuer, signed by both (a) the chairman
of its Board of Directors, or any vice chairman of its Board of
Directors, or its president or any vice president and (b) by its
secretary or any assistant secretary or its treasurer or any assistant
treasurer, without any further action by the Issuer. In
authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 5.1)
shall be fully protected in relying upon:

(a) a copy of any resolution or resolutions of the Board of
Directors relating to such series, in each case certified by the
secretary or any assistant secretary of the Issuer;

(b) an executed supplemental indenture, if any;

(c) an Officers' Certificate setting forth the form and
terms of the Securities as required pursuant to Section 2.1 and
2.3, respectively, and prepared in accordance with Section 10.5;

(d) an Opinion of Counsel, prepared in accordance with
Section 10.5, which shall state:

(i) that the form or forms and terms of such
Securities have been established by or pursuant to a
resolution of the Board of Directors or by a
supplemental indenture as permitted by Section 2.1
and 2.3 in conformity with the provisions of this
Indenture;

(ii) that such Securities have been duly authorized,
and, when authenticated and delivered by the Trustee and
issued by the Issuer in the manner and subject to any
conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the

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Issuer enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles and similar matters; and

(iii) covering such other matters as the Trustee may
reasonably request.

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

SECTION 2.5 Execution of Securities. The Securities
shall be signed on behalf of the Issuer by both (a) the chairman
of its Board of Directors or any vice chairman of its Board of
Directors or its president or any vice president and (b) by its
treasurer or any assistant treasurer or its secretary or any
assistant secretary, under its corporate seal which may, but need
not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal
of the Issuer may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security that has
been duly authenticated and delivered by the Trustee.

In case any officer of the Issuer who shall have signed
any of the Securities shall cease to be such officer before the
Security so signed shall be authenticated and delivered by the
Trustee or disposed of by the Issuer, such Security nevertheless
may be authenticated and delivered or disposed of as though the
Person who signed such Security had not ceased to be such officer
of the Issuer; and any Security may be signed on behalf of the
Issuer by such Persons as, at the actual date of the execution of
such Security, shall be the proper officers of the Issuer,
although at the date of execution and delivery of this Indenture
any such Person was not such an officer.

SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the
Trustee by the manual signature of one of its authorized
signatories, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by
the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been

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duly authenticated and delivered hereunder and that the Holder is
entitled to the benefits of this Indenture.

SECTION 2.7 Denomination and Date of Securities;
Payments of Interest. The Securities shall be issuable as
registered securities without coupons and in denominations as
shall be specified as contemplated by Section 2.3. In the absence
of any such specification with respect to the Securities of any
series, the Securities of such series shall be issuable in
denominations of $1,000 and any multiple thereof. The Securities
shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plan as the officers of the
Issuer executing the same may determine with the approval of the
Trustee as evidenced by the execution and authentication thereof.

Each Security shall be dated the date of its
authentication, shall bear interest, if any, from the date and
shall be payable on the dates, in each case, which shall be
specified as contemplated by Section 2.3.

The Person in whose name any Security of any series is
registered at the close of business on any record date applicable
to a particular series with respect to any interest payment date
for such series shall be entitled to receive the interest, if any,
payable on such interest payment date notwithstanding any transfer
or exchange of such Security subsequent to the record date and
prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on
such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names
Outstanding Securities for such series are registered at the close
of business on a subsequent record date (which shall be not less
than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on
behalf of the Issuer to the Holders of Securities not less than 15
days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) shall mean the date
specified as such in the terms of the Securities of any particular
series, or, if no such date is so specified, if such interest
payment date is the first day of a calendar month, the fifteenth
day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first
day of such calendar month, whether or not such record date is a
Business Day.

SECTION 2.8 Registration, Transfer and Exchange. The
Issuer will keep or cause to be kept at each office or agency to
be maintained for the purpose as provided in Section 3.2 a
register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will
register the transfer of, Securities as in this Article provided.
Such register shall be in written form in the English language or
in any other form capable of being converted into such form within

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a reasonable time. At all reasonable times such register or
registers shall be open for inspection by the Trustee.

Upon due presentation for registration of transfer of
any Security of any series at any such office or agency to be
maintained for the purpose as provided in Section 3.2, the Issuer
shall execute and the Trustee shall authenticate and deliver in
the name of the transferee or transferees a new Security or
Securities of the same series in authorized denominations for a
like aggregate Principal amount.

Any Security or Securities of any series may be
exchanged for a Security or Securities of the same series in other
authorized denominations, in an equal aggregate Principal amount.
Securities of any series to be exchanged shall be surrendered at
any office or agency to be maintained by the Issuer for the
purpose as provided in Section 3.2, and the Issuer shall execute
and the Trustee shall authenticate and deliver in exchange
therefor the Security or Securities of the same series which the
Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.

All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a
written instrument or instruments of transfer in form satisfactory
to the Issuer and the Trustee, duly executed by the Holder or his
attorney duly authorized in writing.

The Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of
Securities. No service charge shall be made for any such
transaction.

The Issuer shall not be required to exchange or register
a transfer of (a) any Securities of any series for a period of 15
days next preceding the first mailing of notice of redemption of
Securities of such series to be redeemed or (b) any Securities
selected, called or being called for redemption except, in the
case of any Security where public notice has been given that such
Security is to be redeemed in part, the portion thereof not so to
be redeemed.

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

None of the Issuer, the Trustee or any paying agent will
have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or

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reviewing any records relating to such beneficial interests.

SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities. In case any temporary or definitive Security
shall become mutilated, defaced or be destroyed, lost or stolen,
the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall
authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated or defaced Security, or in lieu
of and substitution for the Security so destroyed, lost or stolen.
In every case the applicant for a substitute Security shall
furnish to the Issuer and to the Trustee and any agent of the
Issuer or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them
harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft
of such Security and of the ownership thereof.

Upon the issuance of any substitute Security, the Issuer
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Security which has
matured or is about to mature or has been called for redemption in
full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security,
pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of
them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Issuer and the Trustee and
any agent of the Issuer or the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Security
and of the ownership thereof.

Every substitute Security of any series issued pursuant
to the provisions of this Section by virtue of the fact that any
such Security is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Issuer, whether or not
the destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth
in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered
hereunder. All Securities shall be held and owned upon the
express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, defaced or destroyed, lost or stolen
Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted
to the contrary with respect to the replacement or payment of

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negotiable instruments or other securities without their
surrender.

SECTION 2.10 Cancellation of Securities; Destruction
Thereof. All Securities surrendered for payment, redemption,
registration of transfer or exchange, or for credit against any
payment in respect of a sinking or analogous fund, if surrendered
to the Issuer or any agent of the Issuer or the Trustee, shall be
delivered to the Trustee for cancellation or, if surrendered to
the Trustee, shall be cancelled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall destroy cancelled
Securities held by it and deliver a certificate of destruction to
the Issuer. If the Issuer shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.

SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the Issuer
may execute and the Trustee shall authenticate and deliver
temporary Securities for such series (printed, lithographed,
typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series
shall be issuable as registered Securities without coupons, of any
authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the
concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by the
Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like
effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities
of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each
office or agency to be maintained by the Issuer for that purpose
pursuant to Section 3.2, and the Trustee shall authenticate and
deliver in exchange for such temporary Securities of such series a
like aggregate Principal amount of definitive Securities of the
same series of authorized denominations. Until so exchanged, the
temporary Securities of any series shall be entitled to the same
benefits under this Indenture as definitive Securities of such
series.

SECTION 2.12. Securities Issuable in the Form of a
Global Security. (a) If the Issuer shall establish pursuant to
Section 2.3 that the Securities of a particular series are to be
issued in whole or in part in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall,
in accordance with Section 2.4 and the Issuer order delivered to
the Trustee thereunder, authenticate and deliver, such Global

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Security or Securities, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate Principal amount
of, the Outstanding Securities of such series to be represented by
such Global Security or Securities, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities
or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Unless
and until it is exchanged in whole or in part for Securities in
definitive form, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor
Depositary."

(b) Notwithstanding any other provision of this Section
2.12 or of Section 2.8, unless the terms of a Global Security
expressly permit such Global Security to be exchanged in whole or
in part for individual Securities, a Global Security may be
transferred, in whole but not in part and in the manner provided
in Section 2.8, only to another nominee of the Depositary for such
Global Security, or by the nominee of the Depositary to the
Depositary, or to a successor Depositary for such Global Security
selected or approved by the Issuer or to a nominee of such
successor Depositary.

(c) (i) If at any time the Depositary for a Global
Security notifies the Issuer that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time
the Depositary for the Securities for such series shall no longer
be eligible or in good standing under the Securities Exchange Act
of 1934, as amended, or other applicable statute or regulation,
the Issuer shall appoint a successor Depositary with respect to
such Global Security. If a successor Depositary for such Global
Security is not appointed by the Issuer within 90 days after the
Issuer receives such notice or becomes aware of such
ineligibility, the Issuer's election pursuant to Section 2.3(l)
shall no longer be effective with respect to such Global Security
and the Issuer will execute, and the Trustee, upon receipt of an
Issuer order for the authentication and delivery of individual
Securities of such series in exchange for such Global Security,
will authenticate and deliver individual Securities of such series
of like tenor and terms in definitive form in an aggregate
Principal amount equal to the Principal amount of the Global
Security in exchange for such Global Security.

(c) (ii) The Issuer may at any time and in its sole
discretion determine that the Securities of any series issued or
issuable in the form of one or more Global Securities shall no
longer be represented by such Global Security or Securities. In
such event the Issuer will execute, and the Trustee, upon receipt
of an Issuer order for the authentication and delivery of
individual Securities of such series in exchange in whole or in

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part for such Global Security, will authenticate and deliver
individual Securities of such series of like tenor and terms in
definitive form in an aggregate Principal amount equal to the
Principal amount of such Global Security or Securities
representing such series in exchange for such Global Security or
Securities.

(c) (iii) If specified by the Issuer pursuant to Section
2.3 with respect to Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for
individual Securities of such series of like tenor and terms in
definitive form on such terms as are acceptable to the Issuer and
such Depositary. Thereupon the Issuer shall execute, and the
Trustee shall authenticate and deliver, without service charge,
(A) to each Person specified by such Depositary a new Security or
Securities of the same series of like tenor and terms and of any
authorized denomination as requested by such Person in aggregate
Principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and (B) to such
Depositary a new Global Security of like tenor and terms and in a
denomination equal to the difference, if any, between the
Principal amount of the surrendered Global Security and the
aggregate Principal amount of Securities delivered to Holders
thereof.

(c) (iv) In any exchange provided for in any of the
preceding three paragraphs, the Issuer will execute and the
Trustee will authenticate and deliver individual Securities in
definitive registered form in authorized denominations. Upon the
exchange of a Global Security for individual Securities, such
Global Security shall be cancelled by the Trustee. Securities
issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant
to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
such Securities to the Persons in whose names such Securities are
so registered.

ARTICLE THREE

COVENANTS OF THE ISSUER AND THE TRUSTEE

SECTION 3.1 Payment of Principal and Interest. The
Issuer covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay or cause to be
paid the Principal of, and interest on, each of the Securities of
such series at the place or places, at the respective times and in
the manner provided in such Securities. Each instalment of
interest on the Securities of any series may be paid by mailing
checks for such interest payable to or upon the written order of

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the Holders of Securities entitled thereto as they shall appear on
the registry books of the Issuer.

SECTION 3.2 Offices for Payments, etc. So long as any
of the Securities remain outstanding, the Issuer will maintain in
The Borough of Manhattan, The City of New York for each series: an
office or agency (a) where the Securities may be presented for
payment, (b) where the Securities may be presented for
registration of transfer and for exchange as provided in this
Indenture and (c) where notices and demands to or upon the Issuer
in respect of the Securities or of this Indenture may be served.
The Issuer will give to the Trustee written notice of the location
of any such office or agency and of any change of location
thereof. Unless otherwise specified in accordance with Section
2.3, the Issuer hereby initially designates the Corporate Trust
Office as the office to be maintained by it for each such purpose.
In case the Issuer shall fail to so designate or maintain any such
office or agency or shall fail to give such notice of the location
or of any change in the location thereof, presentations and
demands may be made and notices may be served at the Corporate
Trust Office.

SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee. The Issuer, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 5.9, a Trustee, so that there shall at all
times be a Trustee with respect to each series of Securities
hereunder.

SECTION 3.4 Paying Agents. Whenever the Issuer shall
appoint a paying agent other than the Trustee with respect to the
Securities of any series, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of
this Section,

(a) that it will hold all sums received by it as such
agent for the payment of the Principal of or interest on the
Securities of such series (whether such sums have been paid
to it by the Issuer or by any other obligor on the Securities
of such series) in trust for the benefit of the Holders of
the Securities of such series or of the Trustee,

(b) that it will give the Trustee notice of any failure
by the Issuer (or by any other obligor on the Securities of
such series) to make any payment of the Principal of or
interest on the Securities of such series when the same shall
be due and payable, and

(c) pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during
the continuance of the failure referred to in clause (b)
above.

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The Issuer will, on or prior to each due date of the
Principal of or interest on the Securities of such series, deposit
with the paying agent a sum sufficient to pay such Principal or
interest so becoming due, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.

If the Issuer shall act as its own paying agent with
respect to the Securities of any series, it will, on or before
each due date of the Principal of or interest on the Securities of
such series, set aside, segregate and hold in trust for the
benefit of the Holders of the Securities of such series a sum
sufficient to pay such Principal or interest so becoming due. The
Issuer will promptly notify the Trustee of any failure to take
such action.

Anything in this Section to the contrary
notwithstanding, the Issuer may at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more
or all series of Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust for
any such series by the Issuer or any paying agent hereunder, as
required by this Section, such sums to be held by the Trustee upon
the trusts herein contained.

Anything in this Section to the contrary
notwithstanding, the agreement to hold sums in trust as provided
in this Section is subject to the provisions of Section 9.3 and
9.4.

SECTION 3.5 Certificate of the Issuer. The Issuer will
furnish to the Trustee on or before 90 days after the end of each
fiscal year of the Issuer (beginning with 1996) a brief
certificate (which need not comply with Section 10.5) executed by
the principal executive, financial or accounting officer of the
Issuer on its behalf as to his or her knowledge, after due
inquiry, of the Issuer's compliance with all covenants and
agreements under the Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice
provided under the Indenture).

SECTION 3.6 Securityholders Lists. If and so long as
the Trustee shall not be the Security registrar for the Securities
of any series, the Issuer will furnish or cause to be furnished to
the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the
Securities of such series pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) semi-annually not more than 15 days
after each record date for the payment of interest on such
Securities, as hereinabove specified, as of such record date and
on dates to be determined pursuant to Section 2.3 for non-interest
bearing securities in each year and (b) at such other times as the
Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request as of a date not more than 15 days

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prior to the time such information is furnished.

SECTION 3.7 Reports by the Issuer. The Issuer
covenants to file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of
the annual reports and of the information, documents, and other
reports which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934.

SECTION 3.8 Reports by the Trustee. Any Trustee's
report required under Section 313(a) of the Trust Indenture Act of
1939 shall be transmitted on or before July 15 in each year
following the date hereof, so long as any securities are
Outstanding hereunder, and shall be dated as of a date convenient
to the Trustee no more than 60 nor less than 45 days prior
thereto.

SECTION 3.9 Limitations on Liens. After the date
hereof and so long as any Securities are Outstanding (but subject
to defeasance as provided in Article Nine), the Issuer will not,
and will not permit any Subsidiary to, issue, assume or guarantee
any Indebtedness which is secured by a mortgage, pledge, security
interest, lien or encumbrance (each a "lien") upon any property or
assets of the Company or such Subsidiary or any shares of stock of
or Indebtedness issued by any Subsidiary (whether such property,
assets, shares of stock or Indebtedness are now owned or hereafter
acquired) without effectively providing that, for so long as such
lien shall continue in existence with respect to such secured
Indebtedness, the Securities (together with, if the Issuer shall
so determine, any other Indebtedness of the Issuer ranking equally
with the Securities) shall be equally and ratably secured by a
lien ranking ratably with or equal to (or at the Issuer's option
prior to) such secured Indebtedness, except that the foregoing
shall not apply to the following:

(a) liens on the property, assets, shares of stock or
Indebtedness of any Person existing at the time such Person
becomes a Subsidiary;

(b) liens on property, assets, shares of stock or
Indebtedness of a Person existing at the time such Person is
merged into or consolidated with the Issuer or a Subsidiary
or at the time all or substantially all of such property,
assets or shares of stock of such Person are purchased,
leased or otherwise acquired by the Issuer or a Subsidiary;

(c) liens existing at the time of acquisition of the
property or assets affected thereby by the Issuer or a
Subsidiary, or liens to secure the payment of all or any part
of the purchase price of such property or assets or to secure
any Indebtedness incurred, assumed or guaranteed by the
Issuer or a Subsidiary prior to, at the time of, or within
one year after the acquisition of such property or assets (or

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in the case of real property, the completion of construction
(including any improvements on an existing property or asset)
or commencement of full operation of such property or asset,
whichever is later) which Indebtedness is incurred, assumed
or guaranteed for the purpose of financing all or any part of
the purchase price thereof or, in the case of real property,
construction or improvements thereon; provided, however, that
in the case of any such acquisition, construction or
improvement, the lien shall not apply to any property or
assets theretofore owned by the Issuer or a Subsidiary other
than the property or assets so acquired, constructed or
improved;

(d) liens to secure Indebtedness of a Subsidiary to the
Issuer or to another Subsidiary;

(e) liens in favor of the United States of America or
any State thereof, or any department, agency or
instrumentality or political subdivision of the United States
of America or any State thereof, or in favor of any other
country, or any political subdivision thereof, to secure
partial, progress, advance or other payments pursuant to any
contract, statute, rule or regulation or to secure any
Indebtedness incurred or guaranteed for the purpose of
financing all or any part of the purchase price (or, in the
case of real property, the cost of construction or
improvement) of the property or assets subject to such liens
(including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar
financings);

(f) pledges, liens or deposits under worker's
compensation laws or similar legislation and liens or
judgments thereunder which are not currently dischargeable,
or in connection with bids, tenders, contracts (other than
for the payment of money) or leases to which the Issuer or
any Subsidiary is a party, or to secure the public or
statutory obligations of the Issuer or any Subsidiary, or in
connection with obtaining or maintaining self-insurance or to
obtain the benefits or any law, regulation or arrangement
pertaining to unemployment insurance, old age pensions,
social security or similar matters, or to secure surety,
performance, appeal or customs bonds to which the Issuer or
any Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, liens or deposits
made or incurred in the ordinary course of business;

(g) liens created by or resulting from any litigation
or other proceeding which is being contested in good faith by
appropriate proceedings, including liens arising out of
judgments or awards against the Issuer or any Subsidiary with
respect to which the Issuer or such Subsidiary is in good
faith prosecuting an appeal or proceedings for review or for

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which the time to make an appeal has not yet expired; or
final unappealable judgment liens which are satisfied within
15 days of the date of judgment; or liens incurred by the
Issuer or any Subsidiary for the purpose of obtaining a stay
or discharge in the course of any litigation or other
proceeding to which the Issuer or such Subsidiary is a party;

(h) liens for taxes or assessments or governmental
charges or levies not yet delinquent, or which can thereafter
be paid without penalty, or which are being contested in good
faith by appropriate proceedings; landlord's liens on
property held under lease; liens of carriers, warehouseman,
mechanics and materialman incurred in the ordinary course of
business for sums not yet due and payable or which are being
contested in good faith by appropriate proceedings; statutory
liens of banks and other financial institutions arising
during the collection of instruments in the ordinary course
of business; and any other liens or charges incidental to the
conduct of the business of the Issuer or any Subsidiary or
the ownership of the property or assets of any of them which
were not incurred in connection with the borrowing of money
or the obtaining of advances or credit and which do not, in
the opinion of the Board of Directors of the Issuer,
materially impair the use of such property or assets in the
operation of the business of the Issuer or such Subsidiary or
the value of such property or assets for the purposes of such
business;

(i) liens not permitted by clauses (a) through (h)
above, if at the time of, and after giving effect to, the
creation or assumption of any such lien, the aggregate amount
of all outstanding Indebtedness of the Issuer and its
Subsidiaries (without duplication) secured by all such liens
not so permitted by clauses (a) through (h) above, together
with the Attributable Debt in respect of Sale and Lease-Back
Transactions permitted by paragraph (a) of Section 3.10 does
not exceed 10% of Consolidated Net Tangible Assets; or

(j) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or
in part of any lien referred to in the foregoing clauses (a)
to (e), inclusive; provided, however, that the Principal
amount of Indebtedness secured thereby shall not exceed the
Principal amount of Indebtedness so secured at the time of
such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or
a part of the assets (or any replacements therefor) which
secured the lien so extended, renewed or replaced (plus
improvements and construction on real property).

SECTION 3.10 Limitations on Sale and Lease-Back
Transactions. The Issuer will not, and will not permit any
Subsidiary to, enter into any Sale and Lease-Back Transaction,
unless:

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(a) the Issuer or such Subsidiary would, at the time of
entering into a Sale and Lease-Back Transaction, be entitled
to incur Indebtedness secured by a lien on the property or
assets to be leased in an amount at least equal to the
Attributable Debt in respect of such Sale and Lease-Back
Transaction without equally and ratably securing the
Securities pursuant to Section 3.9; or

(b) the direct or indirect proceeds of the sale of the
property or assets to be leased are at least equal to their
fair value (as determined by Board of Directors of the
Issuer) and an amount equal to the net proceeds from the sale
of the property or assets so leased is applied, within 90
days of the effective date of any such Sale and Lease-Back
Transaction, (i) to the purchase or acquisition (or, in the
case of real property, the commencement of construction) of
property or assets or (ii) to the retirement or repayment
(other than at maturity or pursuant to a mandatory sinking
fund or mandatory redemption provision) of Securities or
of Funded Indebtedness of the Issuer ranking on a parity with
or senior to the Securities or of Funded Indebtedness of a
consolidated Subsidiary; provided that there shall be credited to
the amount of net proceeds required to be applied pursuant to
this clause (b) an amount equal to the sum of (i) the
Principal amount of Securities delivered within 90 days of
the effective date of such Sale and Lease-Back Transaction to
the Trustee for retirement and cancellation and (ii) the
principal amount of other Funded Indebtedness voluntarily
retired by the Issuer within such 90 day period, excluding
retirements of Securities and other Funded Indebtedness as a
result of conversions or pursuant to mandatory sinking fund
or mandatory prepayment provisions.

SECTION 3.11. Notice to Trustee. The Issuer shall
provide written notice to the Trustee within 30 days of the
occurrence of any Event of Default under Section 4.1.

ARTICLE FOUR

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT

SECTION 4.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default" with respect to
Securities of any series wherever used herein, means any one of

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the following events shall have occurred and be continuing
(whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body):

(a) default in the payment of any installment of
interest upon any of the Securities of such series as and
when the same shall become due and payable, and continuance
of such default for a period of 30 days; or

(b) default in the payment of all or any part of the
Principal on any of the Securities of such series as and when
the same shall become due and payable either at maturity,
upon redemption, by declaration or otherwise; or

(c) default in the payment of any sinking fund
installment as and when the same shall become due and payable
by the terms of the Securities of such series; or

(d) default in the performance or breach of any
covenant or agreement of the Issuer contained in the
Securities of such series or in this Indenture (other than a
covenant or agreement the default in the performance or
breach of which is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a
period of 90 days after the date on which there has been
given, by registered or certified mail, to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at
least 25% in Principal amount of the Outstanding Securities
of all series affected thereby, a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
or

(e) an event of default, as defined in any indenture,
including this Indenture, or instrument evidencing or under
which the Issuer, on the date any determination shall be made
under this clause (e), shall have outstanding at least
$15,000,000 aggregate principal amount of indebtedness for
borrowed money shall happen and be continuing and such event
of default shall involve the failure to pay the principal of
or interest on such indebtedness (or any part thereof) on the
final maturity date thereof after the expiration of any
applicable grace period with respect thereto, or such
indebtedness shall have been accelerated so that the same
shall be or become due and payable prior to the date on which
the same would otherwise have become due and payable, and
such acceleration shall not be rescinded or annulled within
10 Business Days after notice thereof shall have been given
to the Issuer by the Trustee (if such event be known to it)
or to the Issuer and the Trustee by the Holders of at least
25% in aggregate Principal amount of all of the Securities at

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the time Outstanding (treated as one class); provided that,
if such event of default under such indenture or instrument
shall be remedied or cured by the Issuer or waived by the
requisite Holders of such indebtedness, then the Event of
Default hereunder by reason thereof shall be deemed likewise
to have been thereupon remedied, cured or waived without
further action upon the part of either the Trustee or any of
the Securityholders, and provided further, however, that,
subject to the provisions of Sections 5.1 and 5.2, the
Trustee shall not be charged with knowledge of any such event
of default unless written notice thereof shall have been
given to the Trustee by the Issuer, by the holder or an agent
of the holder of any such indebtedness, by the trustee then
acting under any indenture or other instrument under which
such default shall have occurred, or by the Holders of not
less than 25% in the aggregate Principal amount of the
Securities at the time Outstanding (treated as one class); or

(f) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Issuer
in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of the Issuer
or for any substantial part of its property or ordering the
winding up or liquidation of its affairs, and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or

(g) the Issuer shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law,
or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any
substantial part of its property, or make any general
assignment for the benefit of creditors; or

(h) any other Event of Default provided in the
supplemental indenture or resolution of the Board of
Directors under which such series of Securities is issued or
in the form of Security for such series.

If an Event of Default described in clauses (a), (b), (c), (d) or
(h) above (if the Event of Default under clause (d) or (h), as the
case may be, is with respect to less than all series of Securities
then Outstanding) occurs and is continuing, then, and in each and
every such case, unless the Principal of all of the Securities of
such series shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate Principal
amount of the Securities of such series then Outstanding hereunder
(each such series voting as a separate class) by notice in writing
to the Issuer (and to the Trustee if given by Securityholders),

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may declare the entire Principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the
Principal amount as may be specified in the terms of such series)
of all Securities of such series and the interest accrued thereon,
if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable. If
an Event of Default described in clause (d) or (h) (if the Event
of Default under clause (d) or (h), as the case may be, is with
respect to all series of Securities then Outstanding), (e), (f) or
(g) occurs and is continuing, then and in each and every such
case, unless the Principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders
of not less than 25% in aggregate Principal amount of all the
Securities then Outstanding hereunder (treated as one class), by
notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire Principal (or, if any
Securities are Original Issue Discount Securities, such portion of
the Principal as may be specified in the terms thereof) of all the
Securities then Outstanding and interest accrued thereon, if any,
to be due and payable immediately, and upon any such declaration
the same shall become immediately due and payable.

The foregoing provisions, however, are subject to the
condition that if, at any time after the Principal (or, if the
Securities are Original Issue Discount Securities, such portion of
the Principal as may be specified in the terms thereof) of the
Securities of any series (or of all the Securities, as the case
may be) shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient to
pay all matured installments of interest upon all the Securities
of such series (or of all the Securities, as the case may be) and
the Principal of any and all Securities of such series (or of all
the Securities, as the case may be) which shall have become due
otherwise than by acceleration (with interest upon such Principal
and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the
same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of interest
or Yields to Maturity of all the Securities, as the case may be)
to the date of such payment or deposit) and such amount as shall
be sufficient to cover reasonable compensation to the Trustee, its
agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except
as a result of negligence or bad faith, and if any and all Events
of Default under the Indenture, other than the non-payment of the
Principal of Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied
as provided herein--then and in every such case the Holders of a
majority in aggregate Principal amount of all the Securities of
such series, each series voting as a separate class (or of all the
Securities, as the case may be, voting as a single class), then

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outstanding, by written notice to the Issuer and to the Trustee,
may waive all defaults with respect to such series (or with
respect to all the Securities, as the case may be) and rescind and
annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.

For all purposes under this Indenture, if a portion of
the Principal of any Original Issue Discount Securities shall have
been accelerated and declared due and payable pursuant to the
provisions hereof, then, from and after such declaration, unless
such declaration has been rescinded and annulled, the Principal
amount of such Original Issue Discount Securities shall be deemed,
for all purposes hereunder, to be such portion of the Principal
thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the Principal thereof
as shall be due and payable as a result of such acceleration,
together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.

SECTION 4.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. The Issuer covenants that (a) in case
default shall be made in the payment of any instalment of interest
on any of the Securities of any series when such interest shall
have become due and payable, and such default shall have continued
for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the Principal of any of the
Securities of any series when the same shall have become due and
payable, whether upon maturity of the Securities of such series or
upon any redemption or by declaration or otherwise--then upon
demand of the Trustee, the Issuer will pay to the Trustee for the
benefit of the Holders of the Securities of such series the whole
amount that then shall have become due and payable on all
Securities of such series for Principal or interest, as the case
may be (with interest to the date of such payment upon the overdue
Principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series); and in addition
thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable
compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and
liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or
bad faith.

Until such demand is made by the Trustee, the Issuer may
pay the Principal of and interest on the Securities of any series
to the Holders, whether or not the Principal of and interest on
the Securities of such series be overdue.

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In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or
other obligor upon such Securities and collect in the manner
provided by law out of the property of the Issuer or other obligor
upon such Securities, wherever situated, the moneys adjudged or
decreed to be payable.

In case there shall be pending proceedings relative to
the Issuer or any other obligor upon the Securities under Title II
of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or
such other obligor, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the
Securities of any series, or to the creditors or property of the
Issuer or such other obligor, the Trustee, irrespective of whether
the Principal of any Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:

(a) to file and prove a claim or claims for the whole
amount of Principal and interest (or, if the Securities of
any series are Original Issue Discount Securities, such
portion of the Principal amount as may be specified in the
terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith) and
of the Securityholders allowed in any judicial proceedings
relative to the Issuer or other obligor upon the Securities
of any series, or to the creditors or property of the Issuer
or such other obligor,

(b) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of the
Securities of any series in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings, and

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(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute
all amounts received with respect to the claims of the
Securityholders and of the Trustee on their behalf; and any
trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders
to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to
the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence
or bad faith and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 5.6.

Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or
adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment, liquidation or composition affecting the
Securities of any series or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except as set forth in
clause (b) of the preceding paragraph.

All rights of action and to assert claims under this
Indenture or under any of the Securities, may be enforced by the
Trustee without the possession of any of the Securities or the
production thereof on any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Securities
in respect of which such action was taken.

In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Securities in
respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities parties to any
such proceedings.

SECTION 4.3 Application of Proceeds. Any moneys
collected by the Trustee pursuant to this Article in respect of
any series shall be applied in the following order at the date or
dates fixed by the Trustee and, in case of the distribution of
such moneys on account of Principal or interest, upon presentation
of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment,
or issuing Securities of such series in reduced Principal amounts

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in exchange for the presented Securities of like series if only
partially paid, or upon surrender thereof if fully paid:

FIRST: To the payment of costs and expenses applicable
to such series in respect of which monies have been
collected, including reasonable compensation to the Trustee
and each predecessor Trustee and their respective agents and
attorneys and of all expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith, and
all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 5.6;

SECOND: In case the Principal of the Securities of such
series in respect of which moneys have been collected shall
not have become and be then due and payable, to the payment
of interest on the Securities of such series in default in
the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue installments
of interest at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount
Securities) specified in such Securities, such payments to be
made ratably to the Persons entitled thereto, without
discrimination or preference;

THIRD: In case the Principal of the Securities of such
series in respect of which moneys have been collected shall
have become and shall be then due and payable, to the payment
of the whole amount then owing and unpaid upon all the
Securities of such series for Principal and interest, with
interest upon the overdue Principal, and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such
series; and in case such moneys shall be insufficient to pay
in full the whole amount so due and unpaid upon the
Securities of such series, then to the payment of such
Principal and interest or Yield to Maturity, without
preference or priority of Principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over Principal,
or of any instalment of interest over any other instalment of
interest, or of any Security of such series over any other
Security of such series, ratably to the aggregate of such
Principal and accrued and unpaid interest or Yield to
Maturity; and

FOURTH: To the payment of the remainder, if any, to
the Issuer or any other Person lawfully entitled thereto.

SECTION 4.4 Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the
Trustee may in its discretion proceed to protect and enforce the

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rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect
and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law.

SECTION 4.5 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee shall have proceeded to enforce
any right under this Indenture and such proceedings shall have
been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case
the Issuer and the Trustee shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies
and powers of the Issuer, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.

SECTION 4.6 Limitations on Suits by Securityholders.
No Holder of any Security of any series shall have any right by
virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other
remedy hereunder, unless such Holder previously shall have given
to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided and unless also the Holders of
not less than 25% in aggregate Principal amount of the Securities
of such series then Outstanding shall have made written request
upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any
such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee pursuant to
Section 4.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every
other taker and Holder and the Trustee, that no one or more
Holders of Securities of any series shall have any right in any
manner whatever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other
such Holder of Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series. For the protection and
enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

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SECTION 4.7 Unconditional Right of Securityholders to
Institute Certain Suits. Notwithstanding any other provision in
this Indenture and any provision of any Security, the right of any
Holder of any Security to receive payment of the Principal of and
interest on such Security on or after the respective due dates
expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such
Holder.

SECTION 4.8 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. Except as provided in Section
4.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Securityholders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

No delay or omission of the Trustee or of any
Securityholder to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein;
and, subject to Section 4.6, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may
be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Securityholders.

SECTION 4.9 Control by Securityholders. The Holders of
a majority in aggregate Principal amount of the Securities of each
series affected (with each series voting as a separate class) at
the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Securities of such
series by this Indenture; provided that such direction shall not
be otherwise than in accordance with law and the provisions of
this Indenture and provided further that (subject to the
provisions of Section 5.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised
by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good
faith by its board of directors, the executive committee, or a
trust committee of directors or Responsible Officers of the
Trustee shall determine that the action or proceedings so directed
would involve the Trustee in personal liability or if the Trustee
in good faith shall so determine that the actions or forbearances
specified in or pursuant to such direction would be unduly
prejudicial to the interests of Holders of the Securities of all
series so affected not joining in the giving of said direction, it

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being understood that (subject to Section 5.1) the Trustee shall
have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.

Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the
Trustee and which is not inconsistent with such direction or
directions by Securityholders.

SECTION 4.10 Waiver of Past Defaults. Prior to a
declaration of the acceleration of the maturity of the Securities
of any series as provided in Section 4.1, the Holders of a
majority in aggregate Principal amount of the Securities of such
series at the time Outstanding (each such series voting as a
separate class) may on behalf of the Holders of all the Securities
of such series waive any past default or Event of Default
described in clause (d) or (h) of Section 4.1 which relates to
less than all series of Securities then Outstanding, except a
default in respect of a covenant or provision hereof which cannot
be modified or amended without the consent of each Holder affected
as provided in Section 7.2. Prior to a declaration of
acceleration of the maturity of the Securities of any series as
provided in Section 4.1, the Holders of Securities of a majority
in Principal amount of all the Securities then Outstanding (voting
as one class) may on behalf of all Holders waive any past default
or Event of Default referred to in said clause (d) or (h) which
relates to all series of Securities then Outstanding, or described
in clause (e), (f) or (g) of Section 4.1, except a default in
respect of a covenant or provision hereof which cannot be modified
or amended without the consent of the Holder of each Security
affected as provided in Section 7.2. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Securities
of each series affected shall be restored to their former
positions and rights hereunder, respectively.

Upon any such waiver, such default shall cease to exist
and be deemed to have been cured and not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been
cured, and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent
thereon.

SECTION 4.11 Trustee to Give Notice of Default, But May
Withhold in Certain Circumstances. The Trustee shall give to the
Securityholders of any series, as the names and addresses of such
Holders appear on the registry books, notice by mail of all
defaults known to the Trustee which have occurred with respect to
such series, such notice to be transmitted within 90 days after
the occurrence thereof, unless such defaults shall have been cured
before the giving of such notice (the term "default" or "defaults"
for the purposes of this Section being hereby defined to mean any
event or condition which is, or with notice or lapse of time or
both would become, an Event of Default); provided that, except in

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the case of default in the payment of the Principal of or interest
on any of the Securities of such series, or in the payment of any
sinking or purchase fund instalment with respect to the Securities
of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interests of the
Securityholders of such series.

SECTION 4.12 Right of Court to Require Filing of
Undertaking to Pay Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against
any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Securityholder or group of Securityholders of any series holding
in the aggregate more than 10% in aggregate Principal amount of
the Securities of such series, or, in the case of any suit
relating to or arising under clauses (d) or (h) of Section 4.1 (if
the suit relates to Securities of more than one but less than all
series), 10% in aggregate Principal amount of Securities
Outstanding affected thereby, or in the case of any suit relating
to or arising under clauses (d) (if the suit relates to all the
Securities or all series then Outstanding), (e), (f) or (g) of
Section 4.1, 10% in aggregate Principal amount of all Securities
Outstanding, or to any suit instituted by any Securityholder for
the enforcement of the payment of the Principal of or interest on
any Security on or after the due date expressed in such Security.

ARTICLE FIVE

CONCERNING THE TRUSTEE

SECTION 5.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. With respect to the Holders of
any series of Securities issued hereunder, the Trustee, prior to
the occurrence of an Event of Default with respect to the
Securities of a particular series and after the curing or waiving
of all Events of Default which may have occurred with respect to
such series, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case
an Event of Default with respect to the Securities of a series has
occurred (which has not been cured or waived) the Trustee shall

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exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own wilful misconduct,
except that:

(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing
or waiving of all such Events of Default with respect to such
series which may have occurred:

(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be
determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and

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

(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and

(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to
Section 4.9 relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.

None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of

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its duties or in the exercise of any of its rights or powers, if
there shall be reasonable ground for believing that the repayment
of such funds or adequate indemnity against such liability is not
reasonably assured to it.

The provisions of this Section 5.1 are in furtherance of
and subject to Sections 315 and 316 of the Trust Indenture Act of
1939.

SECTION 5.2 Certain Rights of the Trustee. In
furtherance of and subject to the Trust Indenture Act of 1939, and
subject to Section 5.1:

(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officers' Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed
or presented by the proper party or parties;

(b) any request, direction, order or demand of the
Issuer mentioned herein shall be sufficiently evidenced by an
Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the
Trustee by a copy thereof certified by the secretary or an
assistant secretary of the Issuer;

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

(d) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Indenture,
unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred therein or
thereby;

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

(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,

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report, notice, request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or
document unless requested in writing so to do by the Holders
of not less than a majority in aggregate Principal amount of
the Securities of all series affected then Outstanding;
provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such
investigation reasonably requested by the Holders as
aforesaid shall be paid by the Issuer or, if paid by the
Trustee or any predecessor trustee, shall be repaid by the
Issuer upon demand; and

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

SECTION 5.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof. The
recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the
statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes
no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.

SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the
Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities with the same rights it would have
if it were not the Trustee or such agent and may otherwise deal
with the Issuer and its subsidiaries and receive, collect, hold
and retain collections from, make loans to, or perform other
services for, the Issuer and its Subsidiaries with the same rights
it would have if it were not the Trustee or such agent.

SECTION 5.5 Moneys Held by Trustee. Subject to the
provisions of Section 9.8 hereof, all moneys received by the
Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required
by mandatory provisions of law. Neither the Trustee nor any agent
of the Issuer or the Trustee shall be under any liability for
interest on any moneys received by it hereunder.

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SECTION 5.6 Compensation and Indemnification of Trustee
and Its Prior Claim. The Issuer covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled
to, such compensation as the Company and the Trustee shall from
time to time agree upon in writing (which shall not be limited by
any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and
of all agents and other Persons not regularly in its employ)
except to the extent any such expense, disbursement or advance may
arise from its negligence or bad faith. The Issuer also covenants
to indemnify the Trustee and each predecessor trustee for, and to
hold it harmless against, any loss, liability or expense arising
out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and the performance of its
duties hereunder, including the costs and expenses of defending
itself against or investigating any claim of liability in the
premises, except to the extent such loss liability or expense is
due to the negligence or bad faith of the Trustee or such
predecessor trustee. The obligations of the Issuer under this
Section to compensate and indemnify the Trustee and each
predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Securities
upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of
particular Securities, and the Securities are hereby subordinated
to such senior claim.

SECTION 5.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 5.1 and 5.2, whenever in
the administration of the trusts of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate
delivered to the Trustee, and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted
by it under the provisions of this Indenture upon the faith
thereof.

SECTION 5.8 Persons Eligible for Appointment as
Trustee. The Trustee for each series of Securities hereunder
shall at all times be a corporation having a combined capital and
surplus of at least $50,000,000, and which is eligible in

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accordance with the provisions of Section 310(a) of the Trust
Indenture Act of 1939. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of a Federal, State or District of Columbia
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.

SECTION 5.9 Resignation and Removal; Appointment of
Successor Trustee. (a) The Trustee, or any trustee or trustees
hereafter appointed, may at any time resign with respect to one or
more or all series of Securities by giving written notice of
resignation to the Issuer and by mailing notice thereof by first
class mail to Holders of the applicable series of Securities at
their last addresses as they shall appear on the Security
register. Upon receiving such notice of resignation, the Issuer
shall promptly appoint a successor trustee or trustees with
respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no
successor trustee shall have been so appointed with respect to any
series and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction for the appointment
of a successor trustee, or any Securityholder who has been a bona
fide Holder of a Security or Securities of the applicable series
for at least six months may, subject to the provisions of Section
4.12, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribed, appoint a successor trustee.

(b) In case at any time any of the following shall
occur:

(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act of
1939 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who
has been a bona fide Holder of a Security or Securities of
such series for at least six months; or

(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written
request therefor by the Issuer or by any Securityholder; or

(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a
bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its

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property or affairs for the purpose of rehabilitation,
conservation or liquidation;

then, in any such case, the Issuer may remove the Trustee with
respect to the applicable series of Securities and appoint a
successor trustee for such series by written instrument, in
duplicate, executed by order of the Board of Directors of the
Issuer, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act of 1939, any
Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months may on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series.
Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a
successor trustee.

(c) The Holders of a majority in aggregate Principal
amount of the Securities of each series at the time outstanding
may at any time remove the Trustee with respect to Securities of
such series and appoint a successor trustee with respect to the
Securities of such series by delivering to the Trustee so removed,
to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 6.1 of the action in that regard
taken by the Securityholders.

(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor trustee
with respect to such series pursuant to any of the provisions of
this Section 5.9 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 5.10.

SECTION 5.10 Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section
5.9 shall execute and deliver to the Issuer and to its predecessor
trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
with respect to all or any applicable series shall become
effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all rights, powers,
duties and obligations with respect to such series of its
predecessor hereunder, with like effect as if originally named as
trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon
payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 9.8, pay over to the successor trustee
all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all
instruments in writing to more fully confirm to such successor
trustee all such rights, powers, duties and obligations. Any

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trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of
Section 5.6.

If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the
predecessor Trustee and each successor trustee with respect to the
Securities of any applicable series shall execute and deliver an
indenture supplemental hereto which shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with
respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in
the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such trustees co-
trustees of the same trust and that each such trustee shall be
trustee of a trust or trusts under separate indentures.

Upon acceptance of appointment by any successor trustee
as provided in this Section 5.10, the Issuer shall mail notice
thereof by first class mail to the Holders of Securities of any
series for which such successor trustee is acting as trustee at
their last addresses as they shall appear in the Security
register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called
for by Section 5.9. If the Issuer fails to mail such notice
within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be
mailed at the expense of the Issuer.

SECTION 5.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation or national
banking association into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party,
or any corporation or national banking association succeeding to
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation
or national banking association shall be eligible under the
provisions of Section 5.8, without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities of any series shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and

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deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in
the name of the successor trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the
certificate of the Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor trustee
or to authenticate Securities of any series in the name of any
predecessor trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

ARTICLE SIX

CONCERNING THE SECURITYHOLDERS

SECTION 6.1 Evidence of Action Taken by
Securityholders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture
to be given or taken by a specified percentage in Principal amount
of the Securityholders of any or all series may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 5.1 and 5.2) conclusive in
favor of the Trustee and the Issuer, if made in the manner
provided in this Article.

SECTION 6.2 Proof of Execution of Instruments and of
Holding of Securities; Record Date. Subject to Sections 5.1 and
5.2, the execution of any instrument by a Securityholder or his
agent or proxy may be proved in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding
of Securities shall be proved by the Security register or by a
certificate of the registrar thereof. The Issuer may set a record
date for purposes of determining the identity of Holders of
Securities of any series entitled to vote or consent to any action
referred to in Section 6.1, which record date may be set at any
time or from time to time by notice to the Trustee, for any date
or dates (in the case of any adjournment or reconsideration) not
more than 60 days nor less than 5 days prior to the proposed date
of such vote or consent, and thereafter, notwithstanding any other
provisions hereof, only Holders of Securities of such series of
record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.

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SECTION 6.3 Holders to be Treated as Owners. The
Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the Person in whose name any Security shall be
registered upon the Security register for such series as the
absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or
on account of the Principal of and, subject to the provisions of
this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of
the Issuer or the Trustee shall be affected by any notice to the
contrary. All such payments so made to any such Person, or upon
his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security.

SECTION 6.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite
aggregate Principal amount of Outstanding Securities of any or all
series have concurred in any direction, consent or waiver under
this Indenture, Securities which are owned by the Issuer or any
other obligor on the Securities with respect to which such
determination is being made or by any Person directly or
indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on
the Securities with respect to which such determination is being
made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Securities which the
Trustee knows are so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other
obligor upon the Securities or any Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known
by the Issuer to be owned or held by or for the account of any of
the above described Persons; and, subject to Sections 5.1 and 5.2,
the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for
the purpose of any such determination.

SECTION 6.5 Right of Revocation of Action Taken. At
any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 6.1, of the taking of any action by the
Holders of the percentage in aggregate Principal amount of the

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Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be
included among the serial numbers of the Securities the Holders of
which have consented to such action may, by filing written notice
at the Corporate Trust Office and upon proof of holding as
provided in this Article, revoke such action so far as concerns
such Security. Except as aforesaid any such action taken by the
Holder of any Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Security and
of any Securities issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is
made upon any such Security. Any action taken by the Holders of
the percentage in aggregate Principal amount of the Securities of
any or all series, as the case may be, specified in this Indenture
in connection with such action shall be conclusively binding upon
the Issuer, the Trustee and the Holders of all the Securities
affected by such action.

ARTICLE SEVEN

SUPPLEMENTAL INDENTURES

SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of
its Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution
thereof) for one or more of the following purposes:

(a) to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Securities of one or more
series any property or assets;

(b) to evidence the succession of another corporation
to the Issuer, or successive successions, and the assumption
by the successor corporation of the covenants, agreements and
obligations of the Issuer pursuant to Article Eight;

(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its
Board of Directors and the Trustee shall consider to be for
the protection of the Holders of Securities, and to make the
occurrence, or the occurrence and continuance, of a default
in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture
as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer

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than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such an Event of
Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate Principal amount of the
Securities of such series to waive such an Event of Default;

(d) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental
indenture which may be defective or inconsistent with any
other provision contained herein or in any supplemental
indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable and which shall not adversely affect
the interests of the Holders of the Securities in any
material respect;

(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3; and

(f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to
the Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the
requirements of Section 5.10.

The Trustee is hereby authorized to join with the Issuer
in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer,
assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions
of this Section may be executed without the consent of the Holders
of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 7.2.

SECTION 7.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in
Article Six) of the Holders of not less than a majority in
aggregate Principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture
(voting as one class), the Issuer, when authorized by a resolution
of its Board of Directors, and the Trustee may, from time to time
and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of execution
thereof) for the purpose of adding any provisions to or changing

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in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any
manner the rights of the Holders of the Securities of each such
series; provided, that no such supplemental indenture shall (a)
extend the final maturity of any Security, or reduce the Principal
amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any amount payable on redemption
thereof or make the Principal thereof (including any amount in
respect of original issued discount) or interest thereon payable
in any coin or currency other than that provided in the Securities
or in accordance with the terms thereof, or reduce the amount of
the Principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof
pursuant to Section 4.1 or the amount thereof provable in
bankruptcy pursuant to Section 4.2, or impair or affect the right
of any Securityholder to institute suit for the payment thereof
or, if the Securities provide therefor, any right of repayment at
the option of the Securityholder, in each case without the consent
of the Holder of each Security so affected, or (b) reduce the
aforesaid percentage of Securities of any series, the consent of
the Holders of which is required for any such supplemental
indenture, without the consent of the Holders of each Security so
affected.

Upon the request of the Issuer, accompanied by a copy of
a resolution of the Board of Directors certified by the secretary
or an assistant secretary of the Issuer authorizing the execution
of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Securityholders as aforesaid
and other documents, if any, required by Section 6.1, the Trustee
shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.

It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient
if such consent shall approve the substance thereof.

Promptly after the execution by the Issuer and the
Trustee of any supplemental indenture pursuant to the provisions
of this Section, the Issuer shall mail a notice thereof by first
class mail to the Holders of Securities of each series affected
thereby at their addresses as they shall appear on the registry
books of the Issuer, setting forth in general terms the substance
of such supplemental indenture. Any failure of the Issuer to mail
such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.

SECTION 7.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and

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amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under
this Indenture of the Trustee, the Issuer and the Holders of
Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

SECTION 7.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 5.1 and 5.2, may
receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed
pursuant to this Article Seven complies with the applicable
provisions of this Indenture.

SECTION 7.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenticated
and delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article may bear a notation in
form approved by the Trustee for such series as to any matter
provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform,
in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental
indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such
series then outstanding.

ARTICLE EIGHT

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 8.1 Issuer May Consolidate, etc., on Certain
Terms. The Issuer will not merge or consolidate with any other
Person or sell or convey all or substantially all of its assets to
any Person unless (i) either the Issuer shall be the continuing
corporation or the resulting, surviving or transferee Person shall
be a corporation organized and existing under the laws of the
United States of America or any State thereof or the District of
Columbia and shall expressly assume the due and punctual payment
of the Principal of, premium, if any, and interest on all the
Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and agreements
of this Indenture to be performed or observed by the Issuer, by
supplemental indenture satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation, and (ii) immediately
after such merger, consolidation, sale, lease or conveyance, the
Issuer or such resulting, surviving or transferee Person, as the
case may be, shall not be in default in the performance of any

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covenant or agreement contained in this Indenture to be performed
or observed by the Issuer or such resulting, surviving or
transferee Person.

SECTION 8.2 Successor Corporation Substituted. In case
of any such consolidation, merger, sale, lease or conveyance in
which the Issuer is not the resulting, surviving or transferee
Person, and following such an assumption by such Person, such
Person shall succeed to and be substituted for the Issuer, with
the same effect as if it had been named herein. Such successor
Issuer may cause to be signed, and may issue either in its own
name or in the name of the Issuer prior to such succession any or
all of the Securities issuable hereunder which theretofore shall
not have been signed by the Issuer and delivered to the Trustee;
and, upon the order of such successor Issuer instead of the Issuer
and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall
deliver any Securities which previously shall have been signed and
delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor Issuer
thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All of the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture
as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.

In case of any such consolidation, merger, sale, lease
or conveyance such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued
as may be appropriate.

In the event of any such sale or conveyance (other than
a conveyance by way of lease) the Issuer or any successor Issuer
which shall theretofore have become such in the manner described
in this Article shall be discharged from all obligations and
covenants under this Indenture and the Securities and may be
liquidated and dissolved.

SECTION 8.3 Opinion of Counsel to Trustee. The
Trustee, subject to the provisions of Sections 5.1 and 5.2, may
receive an Opinion of Counsel, prepared in accordance with Section
11.5, as conclusive evidence that any such consolidation, merger,
sale, lease or conveyance, and any such assumption, and any such
liquidation or dissolution, complies with the applicable
provisions of this Indenture.

ARTICLE NINE

SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS

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SECTION 9.1 Satisfaction and Discharge of Indenture. If at
any time (a) the Issuer shall have paid or caused to be paid the
Principal of and interest on all the Securities of any series
outstanding hereunder (other than Securities of such series which
have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.9) as and when the same shall
have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancellation all securities of any
series theretofore authenticated (other than any Securities of
such series which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section 2.9)
or (c) (i) all the securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable
within one year or may, at the option of the Issuer, be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) the
Issuer shall have irrevocably deposited or caused to be deposited
with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the
Issuer in accordance with Section 9.8) and/or direct obligations
of the United States of America, backed by its full faith and
credit, maturing as to principal and interest in such amounts and
at such times as will insure the availability of cash sufficient,
in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption
all Securities of such series (other than any Securities of such
series which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) not
theretofore delivered to the Trustee for cancellation, including
Principal and interest due or to become due on or prior to such
date of maturity or date of redemption, as the case may be, and
if, in any such case, the Issuer shall also pay or cause to be
paid all other sums payable hereunder by the Issuer with respect
to Securities of such series, then this Indenture shall cease to
be of further effect with respect to Securities of such series
(except as to (i) rights of registration of transfer and exchange
of Securities of such series, and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of Holders to
receive payments of Principal thereof and interest thereon upon
the original stated due dates therefor (but not upon acceleration)
and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, in each case solely out of property so
deposited with the Trustee, (iv) the rights, obligations and
immunities of the Trustee hereunder, (v) the rights of Holders of
Securities of such series as beneficiaries hereunder with respect
to the property so deposited with the Trustee payable to all or
any of them, and (vi) the obligations of the Issuer under Section
3.2) and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost
and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture

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with respect to such series; provided, that the rights of Holders
of the Securities to receive amounts in respect of Principal of
and interest on the Securities held by them shall not be delayed
longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities are
listed. The Issuer agrees to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture
or the Securities of such series.

SECTION 9.2 Issuer's Option to Effect Defeasance or
Covenant Defeasance. In addition to discharge of the Indenture
pursuant to Section 9.1, with respect to any series of Securities
where the exact amount of Principal and interest due on which can
be determined at the time of making the deposit referred to in
Section 9.5(a), the Issuer may at its option by resolution of the
Board of Directors elect at any time either (a) to effect a
defeasance (as defined in Section 9.3) of the Securities of such
series under Section 9.3 or (b) to effect a covenant defeasance
(as defined in Section 9.4) of the Securities of such series under
Section 9.4, in each case upon compliance with the applicable
conditions set forth below in this Article Nine.

SECTION 9.3 Defeasance and Discharge. Upon the
Issuer's exercise of the option set forth in clause (a) of Section
9.2 with respect to the Securities of a series, the Issuer shall
be deemed to have been discharged from its obligations with
respect to the Securities of such series on and after the date the
conditions precedent set forth in Section 9.5 are satisfied
(hereinafter, "defeasance") . For this purpose, such defeasance
means that the Issuer shall be deemed to have paid and discharged
the entire indebtedness represented by the Securities of such
series and to have satisfied all its other obligations under the
Securities of such series and under this Indenture relating to the
Securities of such series (and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging the same),
except for, (i) rights of registration of transfer and exchange of
Securities of such series, and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities, (iii) rights of Holders to
receive payments of Principal thereof and interest thereon, upon
the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, in each case solely from
the trust funds described in Section 9.5(a); (iv) the rights,
obligations and immunities of the Trustee hereunder; (v) the
rights of Holders of Securities of such series as beneficiaries
hereunder with respect to the property so deposited with the
Trustee payable to all or any of them; and (vi) the obligations of
the Issuer under Section 3.2. Subject to compliance with this
Article Nine, the Issuer may exercise its option under this
Section 9.3 notwithstanding the prior exercise of its option under
Section 9.4 with respect to the Securities of such series.

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SECTION 9.4 Covenant Defeasance. Upon the Issuer's
exercise of the option set forth in clause (b) of Section 9.2 with
respect to the Securities of a series, the Issuer shall be
released from its obligations under Sections 3.9, 3.10 and 8.1
with respect to the Securities of such series on and after the
date the conditions precedent set forth in Section 9.5 are
satisfied (hereinafter, "covenant defeasance"). For this purpose,
such covenant defeasance means that, with respect to the
Securities of such series, the Issuer may omit to comply with and
shall have no liability in respect of any term, condition or
limitation set forth in any such Section, whether directly or
indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any
other provision herein or in any other document and such omission
to comply shall not constitute an Event of Default under Section
4.1, but the remainder of this Indenture and such Securities shall
be unaffected thereby.

SECTION 9.5 Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions precedent to
the application of either Section 9.3 or Section 9.4 to the
Securities of such series:

(a) the Issuer shall irrevocably have deposited or
caused to be deposited with the Trustee, under the terms of
an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust,
specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such
series (i) money in an amount, or (ii) direct obligations of
the United States of America, backed by its full faith and
credit, which through the scheduled payment of Principal and
interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of
any payment in respect of the Securities of such series,
money in an amount, or (iii) a combination thereof,
sufficient (without consideration of any reinvestment of such
money, Principal or interest), in the opinion of a nationally
recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee,
to pay and discharge, and which shall be applied by the
Trustee to pay and discharge, (A) the Principal of and
interest on all Securities of such series on each date such
Principal or interest is due and payable and (B) any
mandatory sinking fund payments on the dates on which such
payments are due and payable in accordance with the terms of
this Indenture and the Securities of such series. Before
such a deposit the Issuer may make arrangements satisfactory
to the Trustee for the redemption of the Securities of such
series at a future date or dates in accordance with Article
Eleven, if applicable to the Securities of such series, which
shall be given effect in applying the foregoing.

(b) No Event of Default or event which with notice or

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lapse of time or both would become an Event of Default with
respect to the Securities of such series shall have occurred
and be continuing (i) on the date of such deposit or (ii)
insofar as Subsections 4.1(f) and 4.1(g) are concerned, at
any time during the period ending on the 91st day after the
date of such deposit or, if longer, ending on the date
following the expiration of the longest preference period
applicable to the Issuer in respect of such deposit (it being
understood that this condition shall not be deemed satisfied
until the expiration of such period).

(c) Such defeasance or covenant defeasance will not (i)
cause the Trustee for the Securities of such series to have a
conflicting interest for purposes of the Trust Indenture Act
of 1939 with respect to any securities of the Issuer or (ii)
result in the trust arising from such deposit to constitute,
unless it is qualified as, a regulated investment company
under the Investment Company Act of 1940, as amended.

(d) Such defeasance or covenant defeasance will not
result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to
which the Issuer is a party or by which it is bound.

(e) If the Securities of such series are then listed on
any national securities exchange registered under the
Securities Exchange Act of 1934, as amended, the Issuer shall
have delivered to the Trustee on Opinion of Counsel to the
effect that the exercise of the option under Section 9.3 or
9.4, as the case may be, will not cause such Securities to be
delisted.

(f) In the case of an election under Section 9.3, the
Issuer shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Issuer has received from the
United States Internal Revenue Service (the "IRS") a private
letter ruling, (ii) there has been published by the IRS a
general revenue ruling, or (iii) since the date of this
Indenture there has been a change in the applicable Federal
income tax law, in each case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.

(g) In the case of an election under Section 9.4, the
Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Securities of
such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as

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would have been the case if such covenant defeasance had not
occurred.

(h) Such defeasance or covenant defeasance shall be
effected in compliance with any additional terms, conditions
or limitations which may be imposed on the Issuer in
connection therewith pursuant to Section 2.3.

(i) The Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for relating to either
the defeasance under Section 9.3 or the covenant defeasance
under Section 9.4 (as the case may be) have been complied
with.

SECTION 9.6 Application by Trustee of Funds Deposited
for Payment of Securities. Subject to Section 9.8, all moneys
deposited with the Trustee pursuant to Section 9.1 or 9.5 shall be
held in trust and applied by it to the payment, either directly or
through any paying agent (including the Issuer acting as its own
paying agent), to the Holders of the particular Securities of such
series for the payment or redemption of which such moneys have
been deposited with the Trustee, of all sums due and to become due
thereon for Principal and interest; but such money need not be
segregated from other funds except to the extent required by law.

SECTION 9.7 Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture with respect to Securities of any series, all moneys
then held by any paying agent under the provisions of this
Indenture with respect to such series of Securities shall, upon
demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further
liability with respect to such moneys.

SECTION 9.8 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. Any moneys deposited with or paid
to the Trustee or any paying agent for the payment of the
Principal of or interest on any Security of any series and not
applied but remaining unclaimed for two years after the date upon
which such Principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be repaid to the Issuer by
the Trustee for such series or such paying agent, and the Holder
of the Security of such series shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any paying agent with respect to such
moneys shall thereupon cease.

SECTION 9.9 Indemnity for Direct Obligations of the
United States. The Issuer shall pay and indemnify the Trustee

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against any tax, fee or other charge imposed on or assessed
against the money or the direct obligations of the United States
of America deposited pursuant to Section 9.1 or 9.5 or the
Principal or interest received in respect of such obligations.

SECTION 9.10 Reinstatement. If the Trustee or the
paying agent is unable to apply any money or direct obligations of
the United States of America in accordance with Section 9.1 or 9.5
by reason of any legal proceedings or order or judgment of any
court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuer's
obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Nine until such time as the Trustee or
paying agent is permitted to apply all such money in accordance
with this Article Nine; provided that, if the Issuer makes any
payment of Principal of or interest on any such Security following
the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Securities to
receive such payment from the money or direct obligations of the
United States of America held by the Trustee or the paying agent.

ARTICLE TEN

MISCELLANEOUS PROVISIONS

SECTION 10.1 Incorporators, Shareholders. Officers and
Directors of Issuer Exempt from Individual Liability. No recourse
under or upon any obligation, covenant or agreement contained in
this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such
or against any past, present or future shareholder, officer or
director, as such, of the Issuer or of any successor, either
directly or through the Issuer or any successor, under any rule of
law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released
by the acceptance of the Securities by the Holders thereof and as
part of the consideration for, and as a condition of, the issue of
the Securities.

SECTION 10.2 Provisions of Indenture for the Sole
Benefit of Parties and Securityholders. Nothing in this Indenture
or in the Securities, expressed or implied, shall give or be
construed to give to any Person, firm or corporation, other than
the parties hereto and their successors and the Holders of the
Securities, any legal or equitable right, remedy or claim under
this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole
benefit of the parties hereto and their successors and of the
Holders of the Securities.

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SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the
Issuer shall bind its successors and assigns, whether so expressed
or not.

SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by
the Trustee or by the Holders of Securities to or on the Issuer
may be given or served by being deposited postage prepaid, first-
class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the
Issuer with the Trustee) to Cone Mills Corporation, 1201 Maple
Street, Greensboro, NC 27405 Attention: Treasurer. Any notice,
direction, request or demand by the Issuer or any Securityholder
to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made and received at
the Corporate Trust Office.

Where this Indenture provides for notice to Holders,
such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder entitled thereto, at his last address as
it appears in the Security register. In any case where notice to
Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken
in reliance upon such waiver.

In case, by reason of the suspension of or
irregularities in regular mail service, it shall be impracticable
to mail notice to the Issuer and Securityholders when such notice
is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.

SECTION 10.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. Upon any application
or demand by the Issuer to the Trustee to take any action under
any of the provisions of this Indenture, the Issuer shall furnish
to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the
case of any such application or demand as to which the furnishing

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of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.

Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant provided for in this Indenture shall
include (a) a statement that the Person making such certificate or
opinion has read such covenant or condition, (b) a brief statement
as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the
opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been
complied with.

Any certificate, statement or opinion of an officer of
the Issuer may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or representations by counsel,
unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are
erroneous. Any certificate, statement or opinion of counsel may
be based, insofar as it relates to factual matters, information
with respect to which is in the possession of the Issuer, upon the
certificate, statement or opinion of or representations by an
officer of officers of the Issuer, unless such counsel knows that
the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous.

Any certificate, statement or opinion of an officer of
the Issuer or of counsel may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants in the
employ of the Issuer, unless such officer or counsel, as the case
may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous.

Any certificate or opinion of any independent firm of
public accountants filed with the Trustee shall contain a
statement that such firm is independent.

SECTION 10.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of interest on or Principal of
the Securities of any series or the date fixed for redemption or
repayment of any such Security shall not be a Business Day, then
payment of interest or Principal need not be made on such date,
but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date

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fixed for redemption, and no interest shall accrue for the period
after such date.

SECTION 10.7 Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture by operation of
Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939
(an "incorporated provision"), such incorporated provision shall
control.

SECTION 10.8 New York Law to Govern. This Indenture
and each Security shall be deemed to be a contract under the laws
of the State of New York, and for all purposes shall be construed
in accordance with the laws of such State, without regard to
principles of the conflict of laws thereof.

SECTION 10.9 Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one
and the same instrument.

SECTION 10.10 Effect of Headings. The Article and
Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 11.1 Applicability of Article. The provisions
of this Article shall be applicable to the Securities of any
series which are redeemable before their maturity or to any
sinking fund for the retirement of Securities of a series except
as otherwise specified as contemplated by Section 2.3 for
Securities of such series.

SECTION 11.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to
be redeemed as a whole or in part at the option of the Issuer
shall be given by mailing notice of such redemption by first class
mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been
duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the
Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings
for the redemption of any other Security of such series.

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The notice of redemption to each such Holder shall
specify the Principal amount of each Security of such series held
by such Holder to be redeemed, and any accrued interest, the date
fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender
of such Securities, that such redemption is pursuant to the
mandatory or optional sinking fund, or both, if such be the case,
that interest accrued to the date fixed for redemption will be
paid as specified in such notice and that on and after said date
interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is to be
redeemed in part only the notice of redemption shall state the
portion of the Principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities of such
series in Principal amount equal to the unredeemed portion thereof
will be issued.

The notice of redemption of Securities of any series to
be redeemed at the option of the Issuer shall be given by the
Issuer or, at the Issuer's request, by the Trustee in the name and
at the expense of the Issuer.

At least one Business Day prior to the redemption date
specified in the notice of redemption given as provided in this
Section, the Issuer will deposit with the Trustee or with one or
more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in
Section 3.4) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for
redemption at the appropriate redemption price, together with
accrued interest to the date fixed for redemption. If less than
all the Outstanding Securities of a series are to be redeemed, the
Issuer will deliver to the Trustee at least 60 days prior to the
date fixed for redemption, an Officers' Certificate stating the
aggregate Principal amount of Securities to be redeemed.

If less than all the Securities of a series are to be
redeemed, the Trustee shall select, in such manner as it shall
deem appropriate and fair, Securities of such series to be
redeemed in whole or in part. Securities may be redeemed in part
in multiples equal to the minimum authorized denomination for
Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of
such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the
Principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities of any series shall
relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the Principal amount of such
Security which has been or is to be redeemed.

SECTION 11.3 Payment of Securities Called for

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Redemption. If notice of redemption has been given as above
provided, the Securities or portions of Securities specified in
such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption,
and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with
interest accrued to said date) interest on the Securities or
portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 5.5 and 9.8, such
Securities shall cease from and after the date fixed for
redemption to be entitled to any benefit or security under this
Indenture, and the Holders thereof shall have no right in respect
of such Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a
place of payment specified in said notice, said Securities or the
specified portions thereof shall be paid and redeemed by the
Issuer at the applicable redemption price, together with interest
accrued thereon to the date fixed for redemption; provided that
any semiannual payment of interest becoming due on the date fixed
for redemption shall be payable to the Holders of such Securities
registered as such on the relevant record date subject to the
terms and provisions of Section 2.4 hereof.

If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the Principal shall,
until paid or duly provided for, bear interest from the date fixed
for redemption at the rate of interest or Yield to Maturity (in
the case of an Original Issue Discount Security) borne by the
Security.

Upon presentation of any Security redeemed in part only,
the Issuer shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense
of the Issuer, a new Security or Securities of such series , of
authorized denominations, in Principal amount equal to the
unredeemed portion of the Security so presented.

SECTION 11.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be
excluded from eligibility for selection for redemption if they are
identified by registration and certificate number in a written
statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date
on which notice of redemption may be given as being owned of
record and beneficially by, and not pledged or hypothecated by,
either (a) the Issuer or (b) an entity specifically identified in
such written statement directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Issuer.

SECTION 11.5 Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the

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terms of Securities of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of
such minimum amount provided for by the terms of Securities of any
series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made
is herein referred to as the "sinking fund payment date".

In lieu of making all or any part of any mandatory
sinking fund payment with respect to any series of Securities in
cash, the Issuer may at its option (a) deliver to the Trustee
Securities of such series theretofore purchased or otherwise
acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by the Issuer and
delivered to the Trustee for cancellation pursuant to Section 2.7,
(b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption
provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee
at the sinking fund redemption price specified in such Securities.

On or before the sixtieth day next preceding each
sinking fund payment date for any series, the Issuer will deliver
to the Trustee an Officers' Certificate signed by an authorized
officer of the Issuer (a) specifying the portion of the mandatory
sinking fund payment to be satisfied by payment of cash and the
portion to be satisfied by credit of Securities of such series,
(b) stating that none of the Securities of such series has
theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such
series have occurred (which have not been waived or cured) and are
continuing and (d) stating whether or not the Issuer intends to
exercise its right to make an optional sinking fund payment with
respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on
or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be
delivered to the Trustee in order for the Issuer to be entitled to
credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such written
statement (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and
upon its receipt by the Trustee the Issuer shall become
unconditionally obligated to make all the cash payments or
payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on
or before any such sixtieth day, to deliver such written statement
and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date,
the irrevocable election of the Issuer (i) that the mandatory

-59-

<PAGE>

sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in
respect thereof and (ii) that the Issuer will make no optional
sinking fund payment with respect to such series as provided in
this Section.

If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding
sinking fund payment date plus any unused balance of any preceding
sinking fund payments made in cash shall exceed $50,000 (or a
lesser sum if the Issuer shall so request) with respect to the
Securities of any particular series, such cash shall be applied on
the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption.
If such amount shall be $50,000 or less and the Issuer makes no
such request then it shall be carried over until a sum in excess
of $50,000 is available. The Trustee shall select, in the manner
provided in Section 11.2, for redemption on such sinking fund
payment date a sufficient Principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if
requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions
thereof) so selected. Securities of any series which are (a)
owned by the Issuer or an entity known by the Trustee to be
directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer, as shown by the
Security register, and not known to the Trustee to have been
pledged or hypothecated by the Issuer or any such entity or (b)
identified in an Officers' Certificate at least 60 days prior to
the sinking fund payment date as being beneficially owned by, and
not pledged or hypothecated by, the Issuer or an entity directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer shall be excluded from
Securities of such series eligible for selection for redemption.
The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it shall so request the Trustee in writing) shall cause
notice of redemption of the Securities of such series to be given
in substantially the manner provided in Section 11.2 (and with the
effect provided in Section 11.3) for the redemption of Securities
of such series in part at the option of the Issuer. The amount of
any sinking fund payments not so applied or allocated to the
redemption of Securities of such series shall be added to the next
cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of
this Section. Any and all sinking fund moneys held on the stated
maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for
the payment or redemption of particular Securities of such series
shall be applied, together with other moneys, if necessary,
sufficient for the purpose, to the payment of the Principal of,
and interest on, the Securities of such series at maturity.

-60-

<PAGE>

At least one Business Day before each sinking fund
payment date, the Issuer shall pay to the Trustee in cash or shall
otherwise provide for the payment of all interest accrued to the
date fixed for redemption on Securities to be redeemed on the next
following sinking fund payment date.

The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or mail any notice
of redemption of Securities for such series by operation of the
sinking fund during the continuance of a default in payment of
interest on such Securities or of any Event of Default except
that, where the mailing of notice of redemption of any Securities
shall theretofore have been made, the Trustee shall redeem or
cause to be redeemed such Securities, provided that it shall have
received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund,
shall, during the continuance of such default or Event of Default,
be deemed to have been collected under Article Four and held for
the payment of all such Securities. In case such Event of Default
shall have been waived as provided in Section 4.9 or the default
cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance
with this Section to the redemption of such Securities.

-61-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of ______, 1995.

CONE MILLS CORPORATION

By:____________________________
[CORPORATE SEAL]
Title:_________________________
Attest:

By___________________________

WACHOVIA BANK OF
NORTH CAROLINA, N.A.

By:____________________________

Title:_________________________

[CORPORATE SEAL]

Attest:

By___________________________

-62-

<PAGE>

STATE OF )
) ss.:
COUNTY OF )

On this __th day of _______ 1995 before me personally came
____________ to me personally known, who, being by me duly sworn,
did depose and say that he resides at ______________, that he is
the ________________ of Cone Mills Corporation, one of the
corporations described in and which executed the above instrument;
that he knows the corporate seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it
was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like
authority.

[NOTARIAL SEAL]

________________________
Notary Public

-63-

<PAGE>

STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK)

On this ___th day of ________, 1995, before me personally
came ______ to me personally known, who, being by me duly sworn,
did depose and say that he resides at ______________ of
___________________ (New York), the national banking association
described in and which executed the above instrument; that he
knows that corporate seal of said national banking association;
that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of
said national banking association, and that he signed her name
thereto by like authority.

[NOTARIAL SEAL]

________________________
Notary Public

-64-

<PAGE>

CONE MILLS CORPORATION
GREENSBORO, N.C. 27405

February 14, 1995

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Re: Cone Mills Corporation
Registration Statement on Form S-3

Gentlemen:

I am General Counsel of Cone Mills Corporation, a North Carolina
corporation (the "Corporation"), and have represented the Corporation in
connection with the registration under the Securities Act of 1933, as
amended (the "Act") of $100,000,000 aggregate principal amount of the
Corporation's debt securities (the "Debt Securities").

I have examined the Corporation's Restated Articles of Incorporation,
its Amended and Restated Bylaws and such of its corporate records as I
deemed necessary for purposes of rendering this opinion, the Registration
Statement on Form S-3 relating to the Debt Securities (the "Registration
Statement"), filed today with the Securities and Exchange Commission (the
"Commission"), including the Prospectus therein (the "Prospectus") and
the form of Indenture between the Corporation and Wachovia Bank of
North Carolina, N.A., as Trustee (the "Indenture") included as an
exhibit thereto.

Based on the foregoing, I am of the following opinions:

(1) The Indenture has been duly authorized by the Corporation and,
when duly executed and delivered by the parties thereto, will
constitute a valid and legally binding instrument of the
Corporation;

(2) The Debt Securities, when and if duly executed, authenticated and
delivered in accordance with the Indenture and issued against
receipt of the agreed

(Cone Mills logo appears here)

<PAGE>

Securities and Exchange Commission
February 14, 1995
Page 2

purchase price therefor, will be duly issued, valid and binding
obligations of the Corporation entitled to the benefits of the
Indenture, assuming due execution and delivery of the Indenture
by the parties thereto.

The opinions set forth above are subject to the following qualifications
and limitations:

(a) The enforceability of any obligation of the Corporation is subject to
applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting creditors' rights
and remedies generally and subject to general principles of
equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity).

(b) The Indenture contains a provision to the effect that the
acceptance by the Trustee or the Securityholders of a past due
installment by the Corporation shall not be deemed a waiver of its
or their right to accelerate. The North Carolina Court of Appeals
has held that, when a holder of an obligation regularly accepts
late payments, it is deemed to waive its right to accelerate the
debt because of the late payments until it notifies the maker of
the obligation that prompt payments are again required.

(c) Section 6-21.2 of the General Statutes of North Carolina sets
forth certain procedures and limitations applicable to the
collection of attorneys' fees, and my opinions are conditioned
upon the application of and compliance with those provisions.

(d) I express no opinion as to any provision of the Indenture
purporting to relieve the Trustee of the exercise of reasonable
diligence.

(e) I express no opinion (i) as to, and assume compliance with any
applicable, federal or state securities law or (ii) with respect
to the enforceability of any provision of the Indenture pursuant
to which any party is indemnified against a liability arising
under applicable securities laws.

(f) The opinions set forth herein are limited to the laws of the
State of North Carolina as applied by courts located in North
Carolina. Pursuant to its terms, the Indenture

<PAGE>

Securities and Exchange Commission
February 14, 1995
Page 3

is governed by the laws of the State of New York; for purposes of
this opinion I have assumed, without independent investigation,
that the laws of the State of New York governing the Indenture
are the same as those which would govern the Indenture if it were
governed by the law of the State of North Carolina, notwithstanding
the choice of law provisions therein.

I hereby consent to the use of this opinion as Exhibit 5.1 of the
Registration Statement as filed today under the Act with the Commission,
and to any reference to this opinion and to my name under the heading
"Legal Opinions" in the Prospectus. I do not, however, thereby admit that
I am within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder.

Very truly yours,

CONE MILLS CORPORATION

(Signature of Neil W. Koonce)
Neil W. Koonce
General Counsel

Exhibit 12.1

COMPUTATION OF ACTUAL RATIO OF EARNINGS TO FIXED CHARGES

(dollar amounts in thousands)

First Nine Months Fiscal Year
1994 1993 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $44,147 $61,815 $79,487 $70,181 $16,443 $15,014 $36,176

Fixed charges:
Interest expense 5,868 5,210 6,950 10,938 18,973 21,651 21,482
Interest expense - capitalized 141 81 115 19 2 226 370
Interest expense - capitalized of
50% owned subsidiary 443
Amortization of debt expense 175 175 234 782 856 671 609
Interest portion of rental expense 1,967 2,004 2,672 2,480 2,340 2,057 1,744
Total fixed charges 8,594 7,470 9,971 14,219 22,171 24,605 24,205

Less:
Interest expense - capitalized 141 81 115 19 2 226 370
Interest expense - capitalized of
50% owned subsidiary 443
Undistributed earnings of affiliate -
equity method (220) 317

Earnings available for fixed charge
coverage $52,377 $69,204 $89,026 $84,381 $38,612 $39,393 $60,011

Ratio of earnings to fixed charges 6.09 9.26 8.93 5.93 1.74 1.60 2.48
</TABLE>

<PAGE>

COMPUTATION OF PRO FORMA RATIO OF EARNINGS TO FIXED CHARGES

(dollar amounts in thousands)

First Nine Months 1994 (1) Fiscal Year 1993 (1)
CONE GOLDING ADJUSTMENTS PRO FORMA CONE GOLDING ADJUSTMENTS PRO FOR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $44,147 ($5,121) $8,343 $47,369 $79,487 ($808) $1,646 $80,325

Fixed charges:
Interest expense 5,868 3,502 (1,009) 8,361 6,950 5,247 (2,072) 10,125
Interest expense - capitalized 141 141 115 115
Interest expense - capitalized of
50% owned subsidiary 443 443
Amortization of debt expense 175 175 234 234
Interest portion of rental expense 1,967 82 2,049 2,672 307 2,979
Total fixed charges 8,594 3,584 (1,009) 11,169 9,971 5,554 (2,072) 13,453

Less:
Interest expense - capitalized 141 141 115 115
Interest expense - capitalized of
50% owned subsidiary 443 443
Undistributed earnings of affiliate -
equity method (220) (220) 317 317

Earnings available for fixed charge
coverage $52,377 ($1,537) $7,334 $58,174 $89,026 $4,746 ($426) $93,346

Pro forma ratio of earnings to fixed charges 5.21 6.94
</TABLE>

(1) Assumes the acquisition of Golding Industries, Inc. was consummated at
the beginning of the periods presented.

<PAGE>

<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANT
We hereby consent to the incorporation by reference in the February 14,
1995 Registration Statement on Form S-3 of our reports, dated February 11, 1994
except for Note 17 as to which the date is March 8, 1994, which appear on pages
40 and 74 of the annual report on Form 10-K of Cone Mills Corporation and
subsidiaries for the year ended January 2, 1994, with respect to their
consolidated financial statements and financial statement schedules. We also
consent to the reference to our firm under the caption "Experts" in this
Registration Statement.
MCGLADREY & PULLEN, LLP
Greensboro, North Carolina
February 14, 1995
<PAGE>

<PAGE>
EXHIBIT 23.2
CONSENT OF COOPERS & LYBRAND L.L.P.
We consent to the incorporation by reference in this registration statement
on Form S-3 of Cone Mills Corporation (File No. 1-3634) of our report dated
February 25, 1994, except for Note 11 as to which the date is April 18, 1994, on
our audit of the consolidated financial statements of Golding Industries, Inc.
and Subsidiary, a wholly-owned subsidiary of Lancer Industries, Inc., as of
December 31, 1993, and for the year then ended, which report is included in Cone
Mills Corporation's Current Report on Form 8-K, as amended, dated February 13,
1995. We also consent to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Charlotte, North Carolina
February 14, 1995
<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form T-1

STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Wachovia Bank of North Carolina, N.A.
(Exact name of trustee as specified in its charter)

(State of incorporation 56-0927594
if not a national bank) (I.R.S. employer
identification No.)

301 N. Main St., 27102
Winston-Salem, North Carolina (Zip Code)
(address of trustee's principal
executive offices)

Cone Mills Corporation
(Exact name of obligor as specified in its charter)

North Carolina 56-0367025
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)

1201 Market Street
Greensboro,
North Carolina 27405
(Address of principal executive offices) (Zip Code)

Debt Securities
(Title of the indenture securities)

<PAGE>

GENERAL

1. General Information.

Furnish the following information as to the trustee:

a. Name and address of each examining or supervising authority to
which it is subject.

i. Comptroller of the Currency, Administrator of National
Banks, Southeastern District Office, Atlanta, Georgia

ii. Federal Reserve Bank of Richmond, 5th District,
Richmond, Virginia
(Board of Governors of the Federal Reserve System)

iii. Federal Deposit Insurance Corporation,
Washington, D.C.

b. Whether it is authorized to exercise corporate trust powers.

The trustee is authorized to exercise corporate trust powers.

2. Affiliations with Obligor and Underwriters.

If the obligor or any underwriter for the obligor is an affiliate of
the trustee, describe each such affiliation.

None

3. Defaults by Obligor.

State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such
default.

None

If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in
any other securities, of the obligor are outstanding, or is trustee
for more than one outstanding series of securities under the
indenture, state whether there has been a default under any such
indenture or series, identify the indenture or series affected, and
explain the nature of such default.

None

<PAGE>

The trustee is not a trustee under another such indenture or with
respect to another such series with respect to which there has been
a default.

None

15. Foreign Trustee

Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to
be qualified under the Act.

Not applicable

16. List of Exhibits

Exhibit T-1 A copy of the Articles of Association of Wachovia Bank of North Carolina,
N.A. (formerly Wachovia Bank and Trust Company, N.A.) filed with the
Comptroller of the Currency, September 20, 1968, as amended to date;
incorporated herein by reference to Exhibit T-1 filed with Form T-1
statement, registration no. 22-24616.

Exhibit T-2 A copy of the By-laws of Wachovia Bank of North Carolina, N.A., as
amended to date; incorporated herein by reference to Exhibit T-2 filed
with Form T-1 statement, registration no. 22-24616.

Exhibit T-3 The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, as amended.

Exhibit T-4 A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
</TABLE>

<PAGE>

NOTE

Note 1: All the shares of Wachovia Bank of North Carolina,
N.A. stock are held by Wachovia Corporation. Wachovia Bank of North
Carolina, N.A. has outstanding 10,272,000 shares of common stock, $5 par
value. Wachovia Corporation has outstanding 171,069,908 shares of
common stock, $5 par value.

In answering any item in this statement of eligibility and
qualification which relates to matters peculiarly within the knowledge
of the obligor, or its directors or officers, or an underwriter for the
obligor, the undersigned, Wachovia Bank of North Carolina, N.A., has
relied upon information furnished to it by the obligor and will rely on
information to be furnished by such underwriter.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, Wachovia Bank of North Carolina, N.A., a corporation
existing under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Winston-Salem, North Carolina on the 10th day of February, 1995.

Wachovia Bank of North Carolina, N.A.
Trustee

By: /s/ Robert W. Seifert
---------------------------------
Robert W. Seifert
Vice President

<PAGE>

EXHIBIT T-3

CONSENT OF TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed
issuance of debt securities by Cone Mills Corporation, Wachovia Bank of
North Carolina, N.A., hereby consents that reports of examinations by
Federal, State, Territorial or District Authorities may be furnished by
such authorities to the Securities and Exchange Commission upon request
therefor.

Wachovia Bank of North Carolina, N.A.

By: /s/ Robert W. Seifert
-----------------------------------
Robert W. Seifert
Vice President

<PAGE>

EXHIBIT T-4
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: Wachovia Bank of North Carolina, NA Call Date: 12/31/94 ST-BK: 37-2230 FFIEC 031
Address: P.O. Box 3099 Page RC-1
City, State Zip: Winston-Salem, NC 27102
FDIC Certificate No.: 00817
</TABLE>

Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for December 31, 1994

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.

Schedule RC--Balance Sheet

C400 <-

Dollar Amounts in Thousands RCFD Bil Mil Thou
<S> <C> <C> <C>

ASSETS ////////////////////

1. Cash and balances due from depository institutions (from Schedule RC-A): ////////////////////

a. Noninterest-bearing balances and currency and coin(1).................... 0081 1,448,814 1.a.

b. Interest-bearing balances (2)............................................ 0071 1,870 1.b.

2. Securities: ////////////////////

a. Held-to-maturity securities (from Schedule RC-B, column A)............... 1754 2,666,535 2.a.

b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 2,483,257 2.b.

3. Federal funds sold and securities purchased under agreements to resell in ////////////////////

domestic offices of the bank and of its Edge and Agreement subsidiaries, ////////////////////

and in IBFs: ////////////////////

a. Federal funds sold....................................................... 0276 2,217,655 3.a.

b. Securities purchased under agreements to resell.......................... 0277 0 3.b.

4. Loans and lease financing receivables: ////////////////////

a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 11,635,719 //////////////////// 4.a.

b. LESS: Allowance for loan and lease losses.................... RCFD 3123 130,886 //////////////////// 4.b.

c. LESS: Allocated transfer risk reserve........................ RCFD 3128 0 //////////////////// 4.c.

d. Loans and leases, net of unearned income, ////////////////////

allowance, and reserve (item 4.a minus 4.b and 4.c)...................... 2125 11,504,833 4.d.

5. Assets held in trading accounts............................................. 3545 843,609 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 193,255 6.

7. Other real estate owned (from Schedule RC-M)................................ 2150 6,553 7.

8. Investments in unconsolidated subsidiaries and associated companies

(from schedule RC-M)........................................................ 2130 0 8.

9. Customers' liability to this bank on acceptances outstanding................ 2155 188,305 9.

10. Intangible assets (from schedule RC-M)...................................... 2143 1,384 10.

11. Other assets (from Schedule RC-F).......................................... 2160 669,293 11.

12. Total assets (sum of items 1 through 11).................................... 2170 22,225,363 12.

</TABLE>

(1) Includes cash items in process of collection and unposted debits.

(2) Includes time certificates of deposit not held in trading accounts.

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: Wachovia Bank of North Carolina, NA Call Date: 12/31/94 ST-BK: 37-2230 FFIEC 031
Address: P.O. Box 3099 Page RC-2
City, State Zip: Winston-Salem, NC 27102
FDIC Certificate No.: 00817
</TABLE>

Schedule RC--Continued

Dollar Amounts in Thousands ////////// Bil Mil Thou
<S> <C> <C> <C>

LIABILITIES ////////////////////

13. Deposits:

a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, ////////////////////

part I)................................................................. RCON 2200 10,505,176 13.a.

(1) Noninterest-bearing (1)................................... RCON 6631 3,017,242 //////////////////// 13.a.(1)

(2) Interest-bearing.......................................... RCON 6636 7,487,934 //////////////////// 13.a.(2)

b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from ////////////////////

Schedule RC-E, part II)................................................. RCFN 2200 660,848 13.b.

(1) Noninterest-bearing....................................... RCFN 6631 5,143 //////////////////// 13.b.(1)

(2) Interest-bearing.......................................... RCFN 6636 655,705 //////////////////// 13.b.(2)

14. Federal funds purchased and securities sold under agreements to repurchase ////////////////////

in domestic offices of the bank and of its Edge and Agreement subsidiaries, ////////////////////

and in IBFs: ////////////////////

a. Federal funds purchased................................................. RCFD 0278 3,154,127 14.a.

b. Securities sold under agreements to repurchase.......................... RCFD 0279 1,255,256 14.b.

15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 110,643 15.a.

b. Trading liabilities..................................................... RCFD 3548 8,947 15.b.

16. Other borrowed money: ////////////////////

a. With original maturity of one year or less.............................. RCFD 2332 669,181 16.a.

b. With original maturity of more than one year............................ RCFD 2333 3,955,318 16.b.

17. Mortgage indebtedness and obligations under capitalized leases............. RCFD 2910 1,324 17.

18. Bank's liability on acceptances executed and outstanding................... RCFD 2920 188,305 18.

19. Subordinated notes and debentures.......................................... RCFD 3200 125,000 19.

20. Other liabilities (from Schedule RC-G)..................................... RCFD 2930 109,697 20.

21. Total liabilities (sum of items 13 through 20)............................. RCFD 2948 20,743,822 21.

////////////////////

22. Limited-life preferred stock and related surplus........................... RCFD 3282 0 22.

EQUITY CAPITAL ////////////////////

23. Perpetual preferred stock and related surplus.............................. RCFD 3838 0 23.

24. Common stock............................................................... RCFD 3230 51,360 24.

25. Surplus (exclude all surplus related to preferred stock)................... RCFD 3839 99,183 25.

26. a. Undivided profits and capital reserves.................................. RCFD 3632 1,359,940 26.a.

b. Net unrealized holding gains (losses) on available-for-sale securities.. RCFD 8434 (28,942) 26.b.

27. Cumulative foreign currency translation adjustments........................ RCFD 3284 0 27.

28. Total equity capital (sum of items 23 through 27).......................... RCFD 3210 1,481,541 28.

29. Total liabilities, limited-life preferred stock, and equity capital ////////////////////

(sum of items 21, 22, and 28).............................................. RCFD 3300 22,225,363 29.

Memorandum

To be reported only with the March Report of Condition.

1. Indicate in the box at the right the number of the statement below that

best describes the most comprehensive level of auditing work performed Number

for the bank by independent external auditors as of any date during 1993... RCFD 6724 N/A M.1.
</TABLE>

1 = Independent audit of the bank conducted in accordance with generally

accepted auditing standards by a certified public accounting firm

which submits a report on the bank

2 = Independent audit of the bank's parent holding company conducted in

accordance with generally accepted auditing standards by a certified

public accounting firm which submits a report on the consolidated

holding company (but not on the bank separately)

3 = Directors' examination of the bank conducted in accordance with

generally accepted auditing standards by a certified public accounting

firm (may be required by state chartering authority)

4 = Directors' examination of the bank performed by other external auditors

(may be required by state chartering authority)

5 = Review of the bank's financial statements by external auditors

6 = Compilation of the bank's financial statements by external auditors

7 = Other audit procedures (excluding tax preparation work)

8 = No external audit work

(1) Includes total demand deposits and noninterest-bearing time and savings

deposits.

<PAGE>