FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

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

For the quarterly period ended                     March 31, 2005              
                                   --------------------------------------------

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

For the transition period from ___________to____________

                          Commission file number 1-3247
                                                 ------


                              CORNING INCORPORATED
                              --------------------
                                  (Registrant)


                New York                               16-0393470 
----------------------------------------   ------------------------------------
        (State of incorporation)           (I.R.S. Employer Identification No.)


One Riverfront Plaza, Corning, New York                  14831
----------------------------------------   ------------------------------------
(Address of principal executive offices)              (Zip Code)


Registrant's telephone number, including area code: 607-974-9000
                                                    ------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

                     Yes   X                No ____
                          ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                     Yes   X                No ____
                          ---


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

1,422,960,254   shares  of  Corning's  Common  Stock,   $0.50  Par  Value,  were
outstanding as of April 15, 2005.






                                      INDEX
                                      -----

PART I - FINANCIAL INFORMATION
------------------------------

Item 1. Financial Statements

                                                                           Page
                                                                           ----

    Consolidated Statements of Operations (Unaudited) for the three 
       months ended March 31, 2005 and 2004                                  3

    Consolidated Balance Sheets (Unaudited) at March 31, 2005 and
       December 31, 2004                                                     4

    Consolidated Statements of Cash Flows (Unaudited) for the three
       months ended March 31, 2005 and 2004                                  5

    Notes to Consolidated Financial Statements (Unaudited)                   6

Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                            19

Item 3. Quantitative and Qualitative Disclosures About Market Risk          30

Item 4. Controls and Procedures                                             30


PART II - OTHER INFORMATION
---------------------------

Item 1. Legal Proceedings                                                   31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds         35

Item 4. Submission of Matters to a Vote of Security Holders                 35

Item 6. Exhibits                                                            36

Signatures                                                                  37









                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (Unaudited; in millions, except per share amounts)





                                                                                            For the three months ended
                                                                                                      March 31,        
                                                                                          -----------------------------
                                                                                             2005                2004  
                                                                                          ---------           ---------
                                                                                                        
Net sales                                                                                 $   1,050           $     844
Cost of sales                                                                                   621                 544
                                                                                          ---------           ---------

Gross margin                                                                                    429                 300

Operating expenses:
   Selling, general and administrative expenses                                                 184                 160
   Research, development and engineering expenses                                                98                  84
   Amortization of purchased intangibles                                                          5                  10
   Restructuring, impairment and other charges and (credits) (Note 2)                            19                  34
   Asbestos settlement (Note 3)                                                                 (16)                 19
                                                                                          ---------           ---------

Operating income (loss)                                                                         139                  (7)

Interest income                                                                                  10                   6
Interest expense                                                                                (37)                (36)
Loss on repurchases and retirement of debt, net                                                                     (23)
Other expense, net (Note 1)                                                                      (9)                 (4)
                                                                                          ---------           ---------

Income (loss) before income taxes                                                               103                 (64)
(Provision) benefit for income taxes (Note 4)                                                   (19)                 12
                                                                                          ---------           ---------

Income (loss) before minority interests and equity earnings                                      84                 (52)
Minority interests                                                                               (1)
Equity in earnings of associated companies                                                      166                 107
                                                                                          ---------           ---------

Net income                                                                                $     249           $      55
                                                                                          =========           =========

Basic earnings per common share (Note 5)                                                  $    0.18           $    0.04
                                                                                          =========           =========
Diluted earnings per common share (Note 5)                                                $    0.17           $    0.04
                                                                                          =========           =========

Shares used in computing per share amounts for (Note 5):
  Basic earnings per common share                                                             1,411               1,358
                                                                                          =========           =========
  Diluted earnings per common share                                                           1,503               1,437
                                                                                          =========           =========


The accompanying notes are an integral part of these statements.





                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEETS
          (Unaudited; in millions, except share and per share amounts)




                                                                                           March 31,         December 31,
                                                                                             2005                2004    
                                                                                         -----------        -------------
                                                                                                        
Assets

Current assets:
   Cash and cash equivalents                                                              $     847           $   1,009
   Short-term investments, at fair value                                                        700                 872
                                                                                          ---------           ---------
     Total cash, cash equivalents and short-term investments                                  1,547               1,881
   Trade accounts receivable, net of doubtful accounts and allowances - $28 and $30             621                 585
   Inventories (Note 6)                                                                         562                 535
   Deferred income taxes (Note 4)                                                                90                  94
   Other current assets                                                                         208                 188
                                                                                          ---------           ---------
       Total current assets                                                                   3,028               3,283

Investments (Note 7)                                                                          1,485               1,484
Property, net of accumulated depreciation - $3,559 and $3,532                                 4,096               3,941
Goodwill and other intangible assets, net (Note 8)                                              387                 398
Deferred income taxes (Note 4)                                                                  478                 472
Other assets                                                                                    159                 166
                                                                                          ---------           ---------

Total Assets                                                                              $   9,633           $   9,744
                                                                                          =========           =========

Liabilities and Shareholders' Equity

Current liabilities:
   Short-term borrowings, including current portion of long-term debt (Note 9)            $     288           $     478
   Accounts payable                                                                             667                 682
   Other accrued liabilities                                                                  1,001               1,178
                                                                                          ---------           ---------
       Total current liabilities                                                              1,956               2,338

Long-term debt (Note 9)                                                                       2,125               2,214
Postretirement benefits other than pensions                                                     595                 600
Other liabilities                                                                               740                 747
                                                                                          ---------           ---------
       Total liabilities                                                                      5,416               5,899
                                                                                          ---------           ---------

Commitments and contingencies (Note 3)
Minority interests                                                                               29                  29
Shareholders' equity:
   Preferred stock - Par value $100.00 per share; Shares authorized: 10 million
     Series C mandatory convertible preferred stock - Shares issued: 5.75 million;
     Shares outstanding: 633 thousand and 637 thousand                                           63                  64
   Common stock - Par value $0.50 per share; Shares authorized: 3.8 billion;
     Shares issued: 1,437 million and 1,424 million                                             719                 712
   Additional paid-in capital                                                                10,484              10,363
   Accumulated deficit                                                                       (7,060)             (7,309)
   Treasury stock, at cost; Shares held: 15 million and 16 million                             (155)               (162)
   Accumulated other comprehensive income                                                       137                 148
                                                                                          ---------           ---------
       Total shareholders' equity                                                             4,188               3,816
                                                                                          ---------           ---------

Total Liabilities and Shareholders' Equity                                                $   9,633           $   9,744
                                                                                          =========           =========


The accompanying notes are an integral part of these statements.





                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited; in millions)



                                                                                            For the three months ended
                                                                                                     March 31,         
                                                                                          -----------------------------
                                                                                             2005                2004  
                                                                                          ---------           ---------
                                                                                                        
Cash Flows from Operating Activities:
   Income from continuing operations                                                      $     249           $      55
   Adjustments to reconcile income from continuing operations to net
    cash provided by operating activities:
     Depreciation                                                                               120                 120
     Amortization of purchased intangibles                                                        5                  10
     Asbestos settlement                                                                        (16)                 19
     Restructuring, impairment and other charges and (credits)                                   19                  34
     Loss on repurchases and retirement of debt                                                                      23
     Undistributed earnings of associated companies                                             (23)                (29)
     Deferred taxes                                                                               3                 (40)
     Restructuring payments                                                                      (9)                (34)
     Customer deposits                                                                           20
     Changes in certain working capital items:
        Trade accounts receivable                                                               (54)                (17)
        Inventories                                                                             (39)                (32)
        Other current assets                                                                    (16)                  3
        Accounts payable and other current liabilities, net of restructuring payments          (151)                (66)
     Other, net                                                                                  34                  (1)
                                                                                          ---------           ---------
Net cash provided by operating activities                                                       142                  45
                                                                                          ---------           ---------

Cash Flows from Investing Activities:
   Capital expenditures                                                                        (323)               (134)
   Short-term investments - acquisitions                                                       (314)               (544)
   Short-term investments - liquidations                                                        486                 421
   Other, net                                                                                     2                  11
                                                                                          ---------           ---------
Net cash used in investing activities                                                          (149)               (246)
                                                                                          ---------           ---------

Cash Flows from Financing Activities:
   Repayments of short-term borrowings and current portion of long-term debt                   (192)                 (2)
   Proceeds from issuance of long-term debt, net                                                 48                 396
   Retirements of long-term debt                                                                 (2)               (141)
   Proceeds from issuance of common stock, net                                                   12                  11
   Proceeds from the exercise of stock options                                                    9                  12
   Other, net                                                                                    (5)                 (2)
                                                                                          ---------           ---------
Net cash (used in) provided by financing activities                                            (130)                274
                                                                                          ---------           ---------
Effect of exchange rates on cash                                                                (25)                 (1)
                                                                                          ---------           ---------
Net (decrease) increase in cash and cash equivalents                                           (162)                 72
Cash and cash equivalents at beginning of period                                              1,009                 688
                                                                                          ---------           ---------

Cash and cash equivalents at end of period                                                $     847           $     760
                                                                                          =========           =========


The accompanying notes are an integral part of these statements.





                  CORNING INCORPORATED AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Basis of Presentation

General

In these  notes,  the terms  "Corning,"  "Company,"  "we,"  "us," or "our"  mean
Corning Incorporated and subsidiary companies.

The accompanying  unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange  Commission
(SEC) and in accordance with  accounting  principles  generally  accepted in the
United  States of America  (GAAP) for  interim  financial  information.  Certain
information  and note  disclosures  normally  included in  financial  statements
prepared in accordance  with GAAP have been omitted or condensed.  These interim
consolidated  financial  statements should be read in conjunction with Corning's
consolidated  financial  statements  and notes  thereto  included  in its Annual
Report on Form 10-K for the year ended  December  31,  2004  (2004  Form  10-K).
Except as disclosed herein, there has been no material change in the information
disclosed in the notes to the consolidated  financial statements included in the
2004 Form 10-K.

The unaudited  consolidated  financial statements reflect all adjustments which,
in the opinion of management,  are necessary for a fair statement of the results
of  operations,  financial  position  and cash  flows  for the  interim  periods
presented.  All such adjustments are of a normal recurring  nature.  The results
for  interim  periods are not  necessarily  indicative  of results  which may be
expected for any other interim period or for the full year.

Certain amounts for 2004 were reclassified to conform with 2005 classifications.
Additionally,  we have  reclassified  the 2004 interim results to conform to the
2004  year-end   classification   of  auction  rate   securities  as  short-term
investments instead of cash equivalents.  These  reclassifications had no impact
on results of operations or shareholders' equity.

Foreign Currency Translation and Transactions

Effective January 1, 2005, our Taiwan subsidiary changed its functional currency
from the new Taiwan  dollar (its local  currency) to the Japanese yen due to the
increased significance of Japanese yen based transactions of that subsidiary. As
a result of this change in functional  currency,  exchange rate gains and losses
are  recognized on  transactions  in currencies  other than the Japanese yen and
included in income for the period in which the exchange rates changed.

Stock-Based Compensation

We apply Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to  Employees"  (APB 25), for our  stock-based  compensation  plans.  The
following  table  illustrates  the effect on income and earnings per share if we
had  applied  the fair value  recognition  provisions  of  Financial  Accounting
Standards Board (FASB)  Statement of Financial  Accounting  Standards (SFAS) No.
123,  "Accounting  for  Stock-Based  Compensation"  (SFAS 123),  to  stock-based
employee compensation.







(In millions, except per share amounts):
------------------------------------------------------------------------------------------------------------------------------------
                                                                                         For the three months ended March 31,
                                                                                         ------------------------------------
                                                                                               2005              2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Net income - as reported                                                                     $    249         $      55
Add:  Stock-based employee compensation expense
  determined under APB 25, included in reported net income, net of tax                              7                 2
Less:  Stock-based employee compensation expense determined
  under fair value based method, net of tax                                                       (23)              (29)
------------------------------------------------------------------------------------------------------------------------------------
Net income - pro forma                                                                       $    233         $      28

Earnings per common share:
    Basic - as reported                                                                      $   0.18         $    0.04
    Basic - pro forma                                                                        $   0.17         $    0.02

    Diluted - as reported                                                                    $   0.17         $    0.04
    Diluted - pro forma                                                                      $   0.16         $    0.02
------------------------------------------------------------------------------------------------------------------------------------


For purposes of SFAS 123 fair value disclosures,  each option grant's fair value
is estimated on the grant date using the Black-Scholes option-pricing model. The
following  are  weighted-average  assumptions  used for  grants  under our stock
option plans:
--------------------------------------------------------------------------------
                                            For the three months ended March 31,
                                            ------------------------------------
                                               2005                    2004
--------------------------------------------------------------------------------

Expected life in years                            4                       4
Risk free interest rate                         3.7%                    3.2%
Expected volatility                            50.0%                   50.0%
--------------------------------------------------------------------------------

Changes in the status of outstanding options follow:
--------------------------------------------------------------------------------
                                        Number of Shares       Weighted-Average
                                         (in thousands)         Exercise Price
--------------------------------------------------------------------------------

Options outstanding December 31, 2004        139,023              $   20.43
Options granted under plans                    3,476              $   11.40
Options exercised                             (1,450)             $    6.38
Options terminated                              (975)             $   33.72
                                             -------

Options outstanding March 31, 2005           140,074              $   20.26
                                             =======
Options exercisable March 31, 2005           112,443              $   23.01
--------------------------------------------------------------------------------

New Accounting Standards

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment"  (SFAS 123R),  which replaces SFAS 123 and supercedes APB 25. SFAS 123R
requires all  share-based  payments to employees,  including  grants of employee
stock options,  to be recognized in the financial  statements at fair value.  On
April 14,  2005,  the SEC issued a new rule that amends the  required  effective
dates for SFAS 123R. As a result of the SEC amendment,  Corning intends to adopt
SFAS 123R in the first quarter of 2006.  The SEC  amendment  does not change the
accounting required under SFAS 123R.






Under SFAS 123R,  Corning must determine the appropriate  fair value model to be
used for valuing share-based payments,  the amortization method for compensation
cost,  and the  transition  method  to be used at date of  adoption.  As we will
implement the  provisions of SFAS 123R on January 1, 2006, we must select one of
the following transition method adoption alternatives permitted by the standard:

.    "Prospective adoption" would require Corning to begin expensing share-based
     payments  no later  than  January  1,  2006.  Prior  periods  would  not be
     restated.
.    "Modified  retrospective adoption" would require Corning to begin expensing
     share-based  payments no later than January 1, 2006. Prior periods would be
     restated.

We are  currently  evaluating  the  impact  that  SFAS  123R  will  have  on our
consolidated results of operations and financial  condition,  which in part will
be  dependent on the  amortization  methods used to adopt the new rules in 2006.
Our current  estimate is that our incremental  share-based  compensation  pretax
expense would be approximately $60 million in 2006 and beyond.

In  March  2005,  the  FASB  issued   Interpretation  No.  47,  "Accounting  for
Conditional  Asset Retirement  Obligations - an interpretation of FASB Statement
No.  143,"  (FIN 47) which  clarifies  the term  "conditional  asset  retirement
obligation" used in SFAS No. 143, "Accounting for Asset Retirement Obligations,"
and specifically when an entity would have sufficient  information to reasonably
estimate the fair value of an asset retirement  obligation.  Corning is required
to adopt FIN 47 no later than  December  31,  2005.  Corning does not expect the
adoption  of FIN 47 to have a  material  impact on its  consolidated  results of
operations and financial condition.

2.   Restructuring, Impairment and Other Charges and (Credits)

2005 Actions

In the first quarter of 2005, we recorded a $19 million impairment charge for an
other  than  temporary  decline in the fair  value of our  investment  in Avanex
Corporation (Avanex) below its cost basis. Our investment in Avanex is accounted
for as an  available-for-sale  security  under  SFAS No.  115,  "Accounting  for
Certain Investments in Debt and Equity Securities." At March 31, 2005, shares of
Avanex stock were trading at $1.30 per share  compared to our average cost basis
of $2.40 per  share.  We intend to sell our  shares of Avanex  and,  subject  to
restrictions  and the trading volume in Avanex stock, we expect to complete this
activity  in early  2006.  As we do not expect  the  market  value of the Avanex
shares to recover in this  timeframe,  the  impairment  in the first quarter was
required.



The  following  table  illustrates  the  charges,  credits  and  balances of the
restructuring  reserves as of and for the three  months ended March 31, 2005 (in
millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Quarter                        Remaining
                                                                                        ended March        Cash          reserve at
                                                                       January 1,        31, 2005        payments         March 31,
                                                                          2005            charge          in 2005           2005
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              
Restructuring charges:
Employee related costs                                                  $   18                            $    5          $    13
Other charges                                                               77                                 4               73
                                                                        ---------------------------------------------------------
     Total restructuring charges                                        $   95                            $    9          $    86
                                                                        ---------------------------------------------------------

Other:
Impairment of available-for-sale securities                                              $    19
                                                                                         -------

Total restructuring, impairment and other charges and (credits)                          $    19
------------------------------------------------------------------------------------------------------------------------------------


Cash payments for employee related costs will be  substantially  complete by the
end of 2005, while payments for exit activities will be substantially  completed
by the end of 2008.






2004 Actions

In the first quarter of 2004, we recorded net charges of $34 million included in
restructuring,  impairment and other charges and  (credits).  A summary of these
charges and credits follow:

.    We recorded $39 million of accelerated  depreciation and $1 million of exit
     costs  relating  to  the  final  shutdown  of our  semiconductor  materials
     manufacturing facility in Charleston, South Carolina, which we announced in
     the fourth quarter of 2003.
.    We recorded credits of $6 million,  primarily related to proceeds in excess
     of assumed salvage values for assets that were previously impaired.



The  following  table  illustrates  the  charges,  credits  and  balances of the
restructuring  reserves as of and for the three  months ended March 31, 2004 (in
millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                               Quarter                                                   Remaining
                                                             ended March       Revisions        Net          Cash        reserve at
                                              January 1,      31, 2004        to existing    charges/      payments       March 31,
                                                 2004          charge            plans      (reversals)     in 2004         2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Restructuring charges:
Employee related costs                         $     78                                                    $    (28)      $    50
Other charges                                       108       $     1                        $      1            (6)          103
                                               ----------------------------------------------------------------------------------
     Total restructuring charges               $    186       $     1                        $      1      $    (34)      $   153
                                               ----------------------------------------------------------------------------------

Impairment of long-lived assets:
Assets to be disposed of by sale
  or abandonment                                                                $  (6)       $     (6)

Other:
Accelerated depreciation                                      $    39                        $     39 
                                                              ----------------------------------------

Total restructuring, impairment and
  other charges and (credits)                                 $    40           $  (6)       $     34
------------------------------------------------------------------------------------------------------------------------------------


3.   Commitments and Contingencies

Asbestos Settlement

On  March  28,  2003,  we  announced  that we had  reached  agreement  with  the
representatives  of  current  and  future  asbestos  claimants  on a  settlement
arrangement  that  was  thereafter  incorporated  into  the  Pittsburgh  Corning
Corporation (PCC) plan of reorganization (the PCC Plan). This settlement remains
subject  to a number of  contingencies,  including  approval  by the  bankruptcy
court.  If the PCC Plan is approved and becomes  effective,  our settlement will
require the  contribution  of our equity  interest in PCC, our  one-half  equity
interest in Pittsburgh  Corning Europe N.V. (PCE),  and 25 million shares of our
common stock. The common stock will be  marked-to-market  each quarter until the
PCC Plan is approved, thus resulting in adjustments to income and the settlement
liability  as  appropriate.  Corning  will also be making cash  payments of $146
million (net present value as of March 31, 2005) in six  installments  beginning
one year after the plan is  effective.  In  addition,  we will assign  insurance
policy proceeds from our primary insurance and a portion of our excess insurance
as part of the settlement.  Two of Corning's primary insurers and several excess
insurers  have  commenced  litigation  for  a  declaration  of  the  rights  and
obligations of the parties under insurance  policies,  including rights that may
be affected by the settlement arrangement described above. Corning is vigorously
contesting  these  cases.  Management  is unable to predict  the outcome of this
insurance litigation.






The PCC Plan received a favorable vote from creditors in March 2004. Hearings to
consider  objections  to the PCC Plan were held in the  Bankruptcy  Court in May
2004.  The parties  filed  post-hearing  briefs and made oral  arguments  to the
Bankruptcy  Court in November 2004.  The Bankruptcy  Court allowed an additional
round of briefing to address current case law  developments and heard additional
oral  arguments  on March 16,  2005.  At this  hearing,  the court  allowed  the
proponents  of the PCC  Plan 60 days to  consider  amendments  to the Plan or to
request rulings on the pending objections. The timing and outcome are uncertain.
If the  Bankruptcy  Court does not  confirm  the PCC Plan in its  current  form,
changes to the settlement  agreement are reasonably  possible.  Further judicial
review is also reasonably possible. Although the confirmation of the PCC Plan is
subject to a number of contingencies, apart from the quarterly adjustment in the
value of 25 million shares of Corning common stock, management believes that the
likelihood of a material  adverse  impact to Corning's  financial  statements is
remote.

The following summarizes the charges (credits) we have recorded to
mark-to-market the value of our common stock (in millions):
--------------------------------------------------------------------------------
                                           For the three months ended March 31,
                                           ------------------------------------
                                                2005               2004
--------------------------------------------------------------------------------

Asbestos settlement (credit) charge           $  (16)             $  19
--------------------------------------------------------------------------------

Since March 28,  2003,  we have  recorded  total net charges of $430  million to
reflect the initial settlement and subsequent  mark-to-market adjustment for the
change in the value of our common stock.

The  carrying  value of our  investment  in PCE and the fair value of 25 million
shares of our common stock (totaling $300 million at March 31, 2005) is recorded
in the other accrued liabilities  component in our consolidated  balance sheets.
As the timing of this  obligation's  settlement  will depend on future  judicial
rulings (i.e., controlled by a third party and not Corning), this portion of the
PCC  liability is  considered a "due on demand"  obligation.  Accordingly,  this
portion of the  obligation  has been  classified  as a current  liability,  even
though it is possible that the  contribution  could be made beyond one year. The
remaining  portion of the  settlement  liability,  representing  the net present
value of the cash payments,  is recorded in the other  liabilities  component in
our consolidated balance sheets.

Other Commitments and Contingencies

We provide financial guarantees and incur contingent  liabilities in the form of
purchase price adjustments related to attainment of milestones, stand-by letters
of credit and performance  bonds.  These guarantees have various terms, and none
of these guarantees are individually significant. We have also agreed to provide
a credit facility to Dow Corning  Corporation (Dow Corning) as discussed in Note
7 to the consolidated financial statements in our 2004 Form 10-K. The funding of
the Dow Corning $150 million credit  facility is subject to events  connected to
the Bankruptcy Plan. As of March 31, 2005, we were  contingently  liable for the
items  described  above  totaling  $364  million,  compared with $368 million at
December 31, 2004. We believe a  significant  majority of these  guarantees  and
contingent liabilities will expire without being funded.

From time to time, we are subject to  uncertainties  and  litigation and are not
always able to predict the outcome of these items with assurance.  Various legal
actions (including the PCC matter discussed previously),  claims and proceedings
are pending against us,  including those arising out of alleged product defects,
product warranties,  patents, asbestos and environmental matters. In the opinion
of  management,  the  ultimate  disposition  of  these  matters  will not have a
material adverse effect on Corning's consolidated financial position,  liquidity
or results of operations.







4.   Income Taxes

Our (provision) benefit for income taxes and the related tax rates follow (in
millions):
--------------------------------------------------------------------------------
                                           For the three months ended March 31,
                                           -------------------------------------
                                                2005                2004
--------------------------------------------------------------------------------

(Provision) benefit for income taxes         $    (19)            $     12
Effective (income tax) benefit rate            (18.4)%               18.8%
--------------------------------------------------------------------------------

For the three months  ended March 31,  2005,  the tax  provision  reflected  the
impact of maintaining a valuation  allowance on the majority of net deferred tax
assets. As a result, U.S. (federal,  state and local) and certain foreign income
taxes  attributable  to  pre-tax  income or losses  were not  provided.  The $19
million  income  tax  provision   included  income  taxes  for  certain  foreign
operations that were favorably  impacted by tax holiday  benefits and investment
tax  credits.  For the U.S.  and  certain  foreign  operations,  the  income tax
provision or benefit attributable to pre-tax income or losses was recorded as an
adjustment to the valuation allowance.

At March 31, 2005,  we had net deferred  tax assets of $535  million,  which are
primarily U.S. net deferred tax assets. We continue to believe it is more likely
than not that we could  realize  these U.S. net  deferred  tax assets  through a
tax-planning strategy involving the sale of a non-strategic appreciated asset.

We expect to  maintain a valuation  allowance  on future tax  benefits  until an
appropriate  level of  profitability,  primarily  in the U.S.  and  Germany,  is
sustained  or we are able to develop tax planning  strategies  that enable us to
conclude  that it is more likely than not that a larger  portion of our deferred
tax assets would be realizable,  or if the PCC  settlement is finalized  earlier
than we anticipate.  Until then, our tax provision will include only the net tax
expense  attributable to certain  foreign  operations and the expense or benefit
from U.S. and certain  foreign  operations  will be recorded as an adjustment to
the valuation allowance.

The  effective  benefit  rate for the three months ended March 31, 2004 is lower
than the U.S.  statutory income tax rate of 35%. Our effective  benefit rate was
impacted by restructuring,  impairment and other charges and (credits), asbestos
settlement charges and loss on repurchases and retirement of debt.

5.   Earnings Per Common Share



The  reconciliation  of the amounts  used in the basic and diluted  earnings per
common share computations follow (in millions, except per share amounts):
------------------------------------------------------------------------------------------------------------------------------------
                                                                        For the three months ended March 31,                      
                                                 -----------------------------------------------------------------------------------
                                                                  2005                                     2004                   
                                                 ----------------------------------------   ----------------------------------------
                                                    Net         Weighted-      Per Share      Net        Weighted-       Per Share
                                                  Income     Average Shares     Amount      Income    Average Shares      Amount
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Basic earnings per common share                   $   249       1,411          $  0.18      $   55         1,358          $  0.04
------------------------------------------------------------------------------------------------------------------------------------

Effect of dilutive securities:
   Stock options                                                   31                                         37
   7% mandatory convertible preferred stock                        32                                         42
   3.50% convertible debentures                         2          29
------------------------------------------------------------------------------------------------------------------------------------

Diluted earnings per common share                 $   251       1,503          $  0.17      $   55         1,437          $  0.04
------------------------------------------------------------------------------------------------------------------------------------







The following  potential  common shares were  excluded from the  calculation  of
diluted earnings per common share due to their  anti-dilutive  effect or, in the
case of stock options, because their exercise price was greater than the average
market price for periods presented (in millions):
--------------------------------------------------------------------------------
                                            For the three months ended March 31,
                                            ------------------------------------
                                                2005                    2004
--------------------------------------------------------------------------------

Potential common shares excluded from the 
  calculation of diluted earnings per
  common share:
     3.50% convertible debentures                                            57
     4.875% convertible notes                        6                        6
     Zero coupon convertible debentures              3                        4
                                              --------                 --------
     Total                                           9                       67
                                              ========                 ========

Stock options excluded from the calculation
  of diluted earnings (loss) per share 
  because the exercise price was
  greater than the average market 
  price of the common shares                        63                       55
--------------------------------------------------------------------------------

6.   Inventories

Inventories comprise the following (in millions):
--------------------------------------------------------------------------------
                                      March 31, 2005          December 31, 2004
--------------------------------------------------------------------------------
Finished goods                          $    157                 $    136
Work in process                              170                      172
Raw materials and accessories                137                      139
Supplies and packing materials                98                       88
--------------------------------------------------------------------------------
Total inventories                       $    562                 $    535
--------------------------------------------------------------------------------

7.   Investments



Investments comprise the following (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Ownership            March 31,         December 31,
                                                                       Interest               2005                2004     
                                                                       --------           -----------       ---------------
                                                                                                      
Associated companies at equity
     Samsung Corning Precision Glass Co., Ltd.                             50%              $   562            $    572
     Dow Corning                                                           50%                  373                 324
     All other                                                         25%-51% (a)              521                 527
                                                                                            -------            --------
                                                                                              1,456               1,423
Other investments (b)                                                                            29                  61
                                                                                            -------            --------
Total                                                                                       $ 1,485            $  1,484
------------------------------------------------------------------------------------------------------------------------------------


(a)  Amounts  reflect  Corning's  direct  ownership  interests in the respective
     associated companies. Corning does not control any such entities.
(b)  Amounts  reflect $22 million and $53 million at March 31, 2005 and December
     31, 2004, respectively,  of available-for-sale securities stated at market.
     During the first quarter of 2005,  Corning recorded an impairment charge of
     $19 million for an other than temporary decline in the fair value of shares
     of Avanex below their cost basis.  This included the reversal of previously
     unrecognized  gains on Avanex shares of $14 million included in accumulated
     other comprehensive income at December 31, 2004 on the consolidated balance
     sheet.  Refer to Note 2  (Restructuring,  Impairment  and Other Charges and
     (Credits)) for additional information.






Summarized results of operations for our two significant  investments  accounted
for by the equity method follow:



Samsung Corning Precision Glass Co., Ltd. (Samsung Corning Precision)
---------------------------------------------------------------------
Samsung Corning Precision is a South Korea-based  manufacturer of liquid crystal
display glass for flat panel displays.  Samsung Corning  Precision's  results of
operations follow (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       For the three months ended March 31,
                                                                                       ------------------------------------
                                                                                              2005                2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         
Statement of Operations:
     Net sales                                                                              $   317            $    235
     Gross profit                                                                           $   237            $    179
     Net income                                                                             $   165            $    126
     Corning's equity in earnings of Samsung Corning Precision                              $    80            $     65

Related Party Transactions:
     Corning sales of inventory to Samsung Corning Precision                                                   $      6
     Corning purchases from Samsung Corning Precision                                       $     9            $     22
     Corning sales of machinery and equipment to Samsung Corning Precision                  $    20            $     23
------------------------------------------------------------------------------------------------------------------------------------


Balances due to and from Samsung Corning  Precision were immaterial at March 31,
2005 and December 31, 2004.



Dow Corning
-----------  
Dow Corning is a U.S. based  manufacturer  of silicone  products.  Dow Corning's
results of operations follow (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       For the three months ended March 31,
                                                                                       ------------------------------------
                                                                                              2005                2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         
Statement of Operations:
     Net sales                                                                              $   983            $    814
     Gross profit                                                                           $   346            $    230
     Net income                                                                             $   136            $     52
     Corning's equity in earnings of Dow Corning                                            $    68            $     24
------------------------------------------------------------------------------------------------------------------------------------


8.   Goodwill and Other Intangible Assets



The changes in the carrying  amount of goodwill for the three months ended March
31, 2005 follow (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                 Telecom-               Display
                                                munications          Technologies          Other (1)            Total
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Balance at January 1, 2005                      $    123                $    9            $     150          $     282
Foreign currency translation & other                  (5)                                                           (5)
------------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2005                       $    118                $    9            $     150          $     277
------------------------------------------------------------------------------------------------------------------------------------


(1)  This balance relates to our Specialty Materials operating segment.








Other intangible assets follow (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                          March 31, 2005                             December 31, 2004          
                                                 -------------------------------------------------------------------------------
                                                           Accumulated                                 Accumulated
                                                  Gross    Amortization       Net            Gross     Amortization      Net
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Amortized intangible assets:
     Patents and trademarks                      $  146       $    81      $    65           $  148       $   79       $    69
     Non-competition agreements                     115           115                           118          116             2
     Other                                            4             1            3                4            1             3  
                                                 -----------------------------------         -----------------------------------
         Total amortized intangible assets          265           197           68              270          196            74  
                                                 -----------------------------------         -----------------------------------

Unamortized intangible assets:
     Intangible pension assets                       42                         42               42                         42  
                                                 -----------------------------------         -----------------------------------
Total                                            $  307       $   197      $   110           $  312       $  196       $   116
------------------------------------------------------------------------------------------------------------------------------------


Amortized  intangible  assets are  primarily  related to the  Telecommunications
segment.

Estimated amortization expense related to these intangible assets is $13 million
in 2006, $12 million in 2007, $11 million in 2008, and insignificant thereafter.

9.   Debt

In the first quarter of 2005, we completed the following debt transactions:
.    We obtained a loan of approximately $48 million,  bearing interest at 2.1%,
     from a Japanese bank. This loan is part of a 10-year loan agreement entered
     into in 2004 to fund certain capital expansion activities in Japan.
.    We redeemed $100 million of our outstanding 3.50%  convertible  debentures.
     The bondholders  affected by this redemption elected to convert $98 million
     of their  debentures  into Corning  common  stock at a conversion  ratio of
     103.3592 shares per $1,000 debenture,  with the remaining $2 million repaid
     in cash.  Separately,  bondholders  elected  to  convert  approximately  $6
     million of outstanding  debentures  into Corning common stock. In total, we
     issued 11 million shares upon the conversion of the  debentures,  resulting
     in an increase to equity of $105 million.  At March 31, 2005,  $191 million
     of our 3.50%  convertible  debentures  remained  outstanding.  We expect to
     redeem these debentures,  subject to market conditions, before December 31,
     2005.
.    We repaid a total of $192 million of notes in accordance  with their stated
     repayment schedule. This was primarily comprised of our 5.625% Euro notes.

In addition,  in the first  quarter of 2005,  we completed  negotiations  with a
group of banks on a new revolving credit facility.  The new facility provides us
access to a $975 million unsecured  multi-currency  revolving line of credit and
expires in March 2010. The facility includes two financial covenants,  including
a  leverage  test  (debt  to  capital  ratio)  and an  interest  coverage  ratio
(calculated on the most recent four quarters).  As of March 31, 2005, we were in
compliance  with these  covenants.  Concurrent  with the  closing of this credit
facility,  we terminated  our previous $2 billion  revolving line of credit that
was set to expire in August 2005.







10.  Customer Deposits

In 2005 and 2004,  Corning and several customers entered into long-term purchase
and supply  agreements  in which the Display  Technologies  segment  will supply
large-size glass substrates to the customers over periods of up to six years. As
part of the  agreements,  these  customers  have  agreed  to make  advance  cash
deposits  to Corning  for a portion  of the  contracted  glass to be  purchased.
During the current year, we received a total of $108 million of deposits against
orders, of which $20 million was received in the first quarter.  Upon receipt of
the cash  deposits made by customers,  we record a customer  deposit  liability,
which will be applied in the form of credits  against future  product  purchases
over the life of the  agreements.  As product is shipped to a customer,  Corning
will recognize revenue at the selling price and issue a credit memorandum for an
agreed amount of the customer deposit  liability.  The credit memorandum will be
applied against customer  receivables  resulting from the sale of product,  thus
reducing  operating  cash flows in later periods as credits are applied for cash
deposits received in earlier periods.



Customer deposits will be received in the following periods (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                       For the three
                                                        months ended            Remainder          Estimated 2006
                                         2004          March 31, 2005            of 2005             and Beyond          Total
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Customer deposits received (a)          $   204            $  20                $  463               $   295           $   982
------------------------------------------------------------------------------------------------------------------------------------


(a)  The majority of customer deposits will be received through 2006.

We had total  customer  deposit  liabilities of $228 million and $215 million at
March 31, 2005 and December 31, 2004, respectively, of which $40 million and $18
million were recorded in the current  liabilities  - other  accrued  liabilities
component of our consolidated balance sheets.

In the event the customers do not make all customer deposit installment payments
or elect not to purchase  the agreed  upon  quantities  of  product,  subject to
specific conditions outlined in the agreements, we may retain certain amounts of
the customer  deposits.  If we do not deliver  agreed upon  product  quantities,
subject to specific conditions outlined in the agreements, we may be required to
return certain amounts of the customer deposits.

11.  Employee Retirement Plans



The following table  summarizes the components of net periodic  benefit cost for
our defined  benefit pension and  postretirement  health care and life insurance
plans (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                         Pension benefits                    Postretirement benefits
                                                       For the three months                   For the three months
                                                          ended March 31,                        ended March 31,
------------------------------------------------------------------------------------------------------------------------------------
                                                   2005                  2004               2005                2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Service cost                                      $  16                 $  11             $    2              $    2
Interest cost                                        45                    38                 12                  13
Expected return on plan assets                      (52)                  (43)
Amortization of net loss                              1                     6                  1                   3
Amortization of prior service cost                   10                     3                 (2)                 (2)
------------------------------------------------------------------------------------------------------------------------------------
Total expense                                     $  20                 $  15             $   13              $   16
------------------------------------------------------------------------------------------------------------------------------------


For 2005,  we expect to contribute at least $100 million in cash or stock to our
domestic and international pension plans.







12.  Comprehensive Income



Components of  comprehensive  income,  on an after-tax  basis where  applicable,
follow (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       For the three months ended March 31,
                                                                                       ------------------------------------
                                                                                            2005                2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Net income                                                                                $   249             $    55
Other comprehensive income:
  Change in unrealized gain (loss) on investments, net                                        (33)                  2
  Reclassification adjustment relating to investments included in
    net income, net                                                                            19
  Change in unrealized gain (loss) on derivative instruments, net                              26                  (6)
  Reclassification adjustment relating to derivatives, net                                    (13)                  7
  Foreign currency translation adjustment, net (a)                                            (12)                  2
  Change in minimum pension liability                                                           2                  (3)
------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                $   238             $    57
------------------------------------------------------------------------------------------------------------------------------------


(a)  The  initial  implementation  of  our  Taiwan  subsidiary's  change  in its
     functional  currency  from  the  new  Taiwan  dollar  to the  Japanese  yen
     effective  January 1, 2005 had the  effect of  increasing  the U.S.  dollar
     value of its net  assets and  increasing  accumulated  other  comprehensive
     income by $23 million. The impact of this change is included in the foreign
     currency translation adjustment, net amount.

13.  Operating Segments

Our reportable operating segments follow:

.    Display  Technologies - manufactures  liquid crystal display glass for flat
     panel displays;
.    Telecommunications - manufactures optical fiber and cable, and hardware and
     equipment components for the telecommunications industry;
.    Environmental  Technologies - manufactures  ceramic  substrates and filters
     for automobile and diesel applications; and
.    Life Sciences - manufactures  glass and plastic  consumables for scientific
     applications.






All other  operating  segments that do not meet the  quantitative  threshold for
separate reporting (e.g., Specialty Materials, Ophthalmic and Conventional Video
Components),  certain  corporate  investments  (e.g.,  Dow  Corning  and Steuben
Glass),  discontinued  operations,  and unallocated  expenses  (including  other
corporate  items) have been  grouped as  "Unallocated  and  Other."  Unallocated
expenses include the following: gains or losses on repurchases and retirement of
debt; charges related to the asbestos litigation; restructuring,  impairment and
other charges and (credits) related to the corporate research and development or
staff  organizations;  and charges for increases in our tax valuation allowance.
Unallocated and Other also represents the reconciliation  between the totals for
the reportable segments and our consolidated operating results.



------------------------------------------------------------------------------------------------------------------------------------
Operating Segments                              Display       Telecom-       Environmental     Life      Unallocated    Consolidated
(in millions)                                Technologies    munications     Technologies    Sciences     and Other         Total
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
For the three months ended March 31, 2005
Net sales                                      $   320        $    427        $    148        $    74      $     81      $  1,050
Research, development and engineering
  expenses (1)                                 $    25        $     22        $     26        $    11      $     14      $     98
Restructuring, impairment and other charges
  and (credits)                                                                                            $     19      $     19
Interest expense (2)                           $    16        $     11        $      6        $     1      $      3      $     37
(Provision) benefit for income taxes           $   (17)       $     (2)                                                  $    (19)
Income (loss) before minority interests and
  equity earnings (3)                          $    80        $      9        $     (2)       $    (2)     $     (1)     $     84
Minority interests                                                                                               (1)           (1)
Equity in earnings of associated
   companies                                        81                                                           85           166
                                               -------        --------        --------        -------      --------      --------
Net income (loss)                              $   161        $      9        $     (2)       $    (2)     $     83      $    249
------------------------------------------------------------------------------------------------------------------------------------

For the three months ended March 31, 2004
Net sales                                      $   230        $    312        $    141        $    79      $     82      $    844
Research, development and engineering
  expenses (1)                                 $    16        $     25        $     20        $     9      $     14      $     84
Restructuring, impairment and other charges
  and (credits)                                               $     (4)                                    $     38      $     34
Interest expense (2)                           $    11        $     16        $      5        $     1      $      3      $     36
(Provision) benefit for income taxes           $   (26)       $     23        $     (3)       $    (3)     $     21      $     12
Income (loss) before minority interests and
  equity earnings (3)                          $    53        $    (47)       $      6        $     5      $    (69)     $    (52)
Minority interests                                                   1                                           (1)
Equity in earnings of associated
   companies                                        65               3                                           39           107
                                               -------        --------        --------        -------      --------      --------
Net income (loss)                              $   118        $    (43)       $      6        $     5      $    (31)     $     55
------------------------------------------------------------------------------------------------------------------------------------


(1)  Non-direct  research,  development and  engineering  expenses are allocated
     based upon direct project spending for each segment.
(2)  Interest  expense is allocated to segments based on a percentage of segment
     net operating assets.  Consolidated  subsidiaries with independent  capital
     structures do not receive additional allocations of interest expense.
(3)  Many of Corning's  administrative  and staff  functions  are performed on a
     centralized  basis.  Where  practicable,  Corning charges these expenses to
     segments  based upon the extent to which each  business  uses a centralized
     function. Other staff functions, such as corporate finance, human resources
     and legal are allocated to segments, primarily as a percentage of sales.







A  reconciliation  of reportable  segment net income to consolidated  net income
follows (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                    For the three months ended March 31,
                                                                    ------------------------------------
                                                                           2005              2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                    
Net income of reportable segments                                        $     166        $      86
Non-reportable operating segments net income (loss) (1)                         10              (18)
Unallocated amounts:
    Non-segment loss and other (2)                                              (2)              (3)
    Non-segment restructuring, impairment and
       other (charges) and credits (3)                                         (19)
    Asbestos settlement                                                         16              (19)
    Interest income                                                             10                6
    Loss on repurchases of debt                                                                 (23)
    Benefit for income taxes (4)                                                                  2
    Equity in earnings of associated companies (5)                              68               24
                                                                         ---------        ---------
Net income                                                               $     249        $      55
------------------------------------------------------------------------------------------------------------------------------------


(1)  Non-reportable operating segments net income (loss) includes the results of
     non-reportable operating segments.
(2)  Non-segment  loss and other includes the results of non-segment  operations
     and other corporate activities.
(3)  For the first quarter of 2005,  non-segment  restructuring,  impairment and
     other  (charges) and credits  includes an  impairment  charge for the other
     than temporary decline in the market value of Avanex shares.
(4)  Benefit  for  income  taxes  includes  taxes  associated  with  non-segment
     restructuring, impairment and other (charges) and credits.
(5)  Equity in earnings of associated  companies  includes  amounts derived from
     corporate investments, primarily Dow Corning.





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


OVERVIEW

Our key priorities for 2005 remain unchanged from the previous year: protect our
financial health,  improve our profitability,  and invest in the future.  During
the  first  quarter  of  2005,  we made the  following  progress  against  these
priorities:

Financial Health
Our balance sheet remains strong and we continue to generate positive cash flows
from operating  activities.  Significant  activities during the quarter included
the following:

.    We reduced  outstanding  debt by $279 million.  This included the scheduled
     repayment of $192 million of debt and the early  retirement of $106 million
     of long-term  debt, the majority of which was converted into Corning common
     stock.  As a  result  of these  transactions,  our  debt to  capital  ratio
     declined to 36%.
.    We entered into additional  multi-year  customer  supply  agreements in the
     Display Technologies segment, and received $108 million in deposits against
     orders, of which $20 million was received in the first quarter.
.    We completed  negotiations  with a group of banks on a new revolving credit
     facility.  The new facility  provides us access to a $975 million revolving
     line of credit and  expires  in March  2010.  This  facility  replaces  our
     previous  $2  billion  revolving  line of credit  facility  that was set to
     expire in August 2005.

We ended the first quarter of 2005 with $1.5 billion in cash,  cash  equivalents
and short-term  investments.  This represents a decrease of  approximately  $300
million from December 31, 2004,  primarily due to capital  spending in excess of
cash provided by operating activities and the net debt repayments.

Profitability
For the three  months  ended March 31,  2005,  we  generated  net income of $249
million or $0.17 per share.  This represents an improvement of $194 million over
the same period in 2004. This  improvement in net income was primarily driven by
the following:

.    Growth in our Display Technologies  segment,  which continued to experience
     strong market demand for LCD glass substrates. For 2005, net income for the
     Display  Technologies  segment,  including  equity  earnings  from  Samsung
     Corning  Precision Glass Co., Ltd.  (Samsung  Corning  Precision),  a South
     Korea-based manufacturer of LCD glass substrates, increased $43 million, or
     36%.
.    Improved  performance  in  the  Telecommunications  segment.  This  segment
     generated a modest profit of $9 million,  which  represented an improvement
     of $52 million compared to the first quarter of 2004 net loss.
.    Strong equity earnings from Dow Corning  Corporation (Dow Corning),  a U.S.
     based manufacturer of silicone products, of $68 million,  which represented
     a 183% increase over the amount recognized in the first quarter of 2004.

Investing in our Future
We continue to invest in a wide array of technologies,  with our focus being LCD
glass  substrates,  diesel  filters and  substrates  in  response to  tightening
emissions  control  standards,  and  optical  fiber and cable and  hardware  and
equipment to enable fiber-to-the-premises.

Our research,  development and  engineering  expenses have increased $14 million
compared  to the  first  quarter  of  2004,  but are  relatively  constant  as a
percentage of net sales. We believe our current  spending levels are adequate to
enable us to execute our growth strategies.






Our  capital  expenditures  are  primarily  focused on  expanding  manufacturing
capacity for LCD glass substrates in the Display Technologies segment and diesel
products in the Environmental  Technologies segment.  Total capital expenditures
for the first quarter of 2005 were $323  million,  of which $283 million and $34
million  was  directed  toward  our  Display   Technologies  and   Environmental
Technologies segments, respectively.

RESULTS OF OPERATIONS



Selected highlights for the first quarter were as follows (dollars in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      For the three months ended March 31,              % Change
                                                                      ------------------------------------              ---------
                                                                           2005                   2004                  05 vs. 04
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 
Net sales                                                                $   1,050             $     844                     24%

Gross margin                                                             $     429             $     300                     43%
  (gross margin %)                                                             41%                   36%

Selling, general and administrative expenses                             $     184             $     160                     15%
  (as a % of net sales)                                                        18%                   19%

Research, development and engineering expenses                           $      98             $      84                     17%
  (as a % of net sales)                                                         9%                   10%

Restructuring, impairment and other charges and (credits)                $      19             $      34                   (44)%
  (as a % of net sales)                                                         2%                    4%

Asbestos settlement                                                      $    (16)             $      19                  (184)%
  (as a % of net sales)                                                       (2)%                    2%

Income (loss) before income taxes                                        $     103             $    (64)                    261%
  (as a % of net sales)                                                        10%                  (8)%

(Provision) benefit for income taxes                                     $    (19)             $      12                  (258)%
  (as a % of net sales)                                                       (2)%                    1%

Equity in earnings of associated companies                               $     166             $     107                     55%
  (as a % of net sales)                                                        16%                   13%

Net income                                                               $     249             $      55                    353%
  (as a % of net sales)                                                        24%                    7%
------------------------------------------------------------------------------------------------------------------------------------


Net Sales
The net sales  increase  for the first  quarter of 2005 was the result of demand
for products in our Telecommunications segment to support  fiber-to-the-premises
projects and  continued  strong  demand for LCD glass  substrates in our Display
Technologies  segment.  The performance in all other segments of the company was
comparable  to the  year  ago  period.  Movements  in  foreign  exchange  rates,
primarily  the  Japanese  yen and Euro.  Movements  in foreign  exchange  rates,
primarily the Japanese yen and Euro, did not significantly impact the comparison
of net sales between 2005 and 2004.




Gross Margin
As a  percentage  of net  sales,  gross  margin  improved  5 points in the first
quarter of 2005. The  improvement in overall  dollars and as a percentage of net
sales was primarily  driven by increased  volume in our  Telecommunications  and
Display Technologies segments.

Selling, General and Administrative Expenses
The increase in selling, general and administrative expenses is primarily driven
by increases in  compensation  costs.  As a  percentage  of net sales,  selling,
general and  administrative  expenses have  remained  comparable to the year ago
period.

Research, Development and Engineering Expenses
Research,  development and engineering  expenses have increased $14 million over
2004,  but  have  remained   comparable  as  a  percentage  of  net  sales.  Our
expenditures are focused on our Environmental Technologies, Display Technologies
and Telecommunications segments as we strive to capitalize on the current market
opportunities in those segments.

Restructuring, Impairment and Other Charges and (Credits)
In the first quarter of 2005, we recorded a $19 million impairment charge for an
other  than  temporary  decline in the fair  value of our  investment  in Avanex
Corporation (Avanex) below its cost basis. Our investment in Avanex is accounted
for as an  available-for-sale  security  under  SFAS No.  115,  "Accounting  for
Certain Investments in Debt and Equity Securities." At March 31, 2005, shares of
Avanex stock were trading at $1.30 per share  compared to our average cost basis
of $2.40 per  share.  We intend to sell our  shares of Avanex  and,  subject  to
restrictions  and the trading volume in Avanex stock, we expect to complete this
activity  in early  2006.  As we do not expect  the  market  value of the Avanex
shares to recover in this  timeframe,  the  impairment  in the first quarter was
required. The charge in the first quarter of 2004 was primarily due to the final
shutdown  of our  semiconductor  manufacturing  facility  in  Charleston,  South
Carolina.

Asbestos Settlement
The asbestos settlement activity relates to the quarterly  mark-to-market of our
common stock that will be  contributed  to the  Pittsburgh  Corning  Corporation
(PCC) asbestos settlement  agreement if the PCC Plan of Reorganization  receives
judicial approval. For additional information on this matter, refer to Note 3 to
the consolidated  financial statements and Part II - Other Information,  Item 1.
Legal Proceedings.

Income (Loss) Before Income Taxes
In addition to the key  drivers  outlined  above,  the  comparability  of income
(loss)  before  income taxes  between 2005 and 2004 was impacted by movements in
foreign  exchange  rates.  In the first quarter of 2005, we incurred an exchange
rate loss of $26  million.  This  exchange  rate  loss was due to the  impact of
currency  movements on unhedged  balance  sheet  exposures,  most notably at our
Taiwan  subsidiary  which  changed its  functional  currency from the new Taiwan
dollar (its local  currency) to the  Japanese yen in the first  quarter of 2005.
Refer  to  Note  1 to  the  consolidated  financial  statements  for  additional
information.  Movements in exchange rates did not  significantly  impact results
for the first quarter of 2004.

(Provision) Benefit for Income Taxes
Our  (provision)  benefit for income  taxes and the related tax rates follow (in
millions):
--------------------------------------------------------------------------------
                                          For the three months ended March 31,
                                          ------------------------------------
                                            2005                      2004
--------------------------------------------------------------------------------
(Provision) benefit for income taxes     $    (19)                  $     12
Effective (income tax) benefit rate        (18.4)%                     18.8%
--------------------------------------------------------------------------------

For the three months  ended March 31,  2005,  the tax  provision  reflected  the
impact of maintaining a valuation  allowance on the majority of net deferred tax
assets. As a result, U.S. (federal,  state and local) and certain foreign income
taxes  attributable to pre-tax income were not provided.  The $19 million income
tax provision  included  income taxes for certain  foreign  operations that were
favorably  impacted by tax holiday benefits and investment tax credits.  For the
U.S.  and  certain  foreign  operations,  the  income tax  provision  or benefit
attributable  to pre-tax  income or losses was recorded as an  adjustment of the
valuation allowance.






At March 31, 2005,  we had net deferred  tax assets of $535  million,  which are
primarily U.S. net deferred tax assets. We continue to believe it is more likely
than not that we could  realize  these U.S. net  deferred  tax assets  through a
tax-planning strategy involving the sale of a non-strategic appreciated asset.

We expect to  maintain a valuation  allowance  on future tax  benefits  until an
appropriate  level of  profitability,  primarily  in the U.S.  and  Germany,  is
sustained  or we are able to develop tax planning  strategies  that enable us to
conclude  that it is more likely than not that a larger  portion of our deferred
tax  assets  would  be  realizable,  or if the  Pittsburgh  Corning  Corporation
settlement  is  finalized  earlier  than  we  anticipate.  Until  then,  our tax
provision will include only the net tax expense  attributable to certain foreign
operations and the expense or benefit from U.S. and certain  foreign  operations
will be recorded as an adjustment to the valuation allowance.

The  effective  benefit  rate for the three months ended March 31, 2004 is lower
than the U.S.  statutory income tax rate of 35%. Our effective  benefit rate was
impacted by restructuring,  impairment and other charges and (credits), asbestos
settlement charges and loss on repurchases and retirement of debt.

Equity in Earnings of Associated Companies
The following provides a summary of equity in earnings of associated  companies,
net of impairments (in millions):
--------------------------------------------------------------------------------
                                         For the three months ended March 31,
                                         -----------------------------------
                                           2005                     2004
--------------------------------------------------------------------------------
Samsung Corning Precision                 $  80                    $  65
Dow Corning                                  68                       24
All other                                    18                       18
                                          -----                    -----
Total equity earnings                       166                    $ 107
--------------------------------------------------------------------------------

The improvement in equity earnings  recognized from Samsung Corning Precision is
explained  in the  discussion  of the  performance  of our Display  Technologies
segment.  The  increase  in 2005  equity  earnings  recognized  from Dow Corning
compared to 2004 is largely  attributed  to record  sales  volumes and  improved
pricing for Dow Corning in 2005.

Refer  to  Note  7 to  the  consolidated  financial  statements  for  additional
information  relating to Samsung Corning  Precision and Dow Corning's  operating
results.

Net Income
As a result of the above, our net income and per share data follow (in millions,
except per share amounts):
--------------------------------------------------------------------------------
                                            For the three months ended March 31,
                                            ------------------------------------
                                               2005                      2004
--------------------------------------------------------------------------------

Net income                                   $   249                   $    55
Basic earnings per common share              $  0.18                   $  0.04
Diluted earnings per common share            $  0.17                   $  0.04
Shares used in computing per share amounts:
     Basic                                     1,411                     1,358
     Diluted                                   1,503                     1,437
--------------------------------------------------------------------------------







OPERATING SEGMENTS

Our reportable operating segments follow:

.    Display  Technologies - manufactures liquid crystal display (LCD) glass for
     flat panel displays;
.    Telecommunications - manufactures optical fiber and cable, and hardware and
     equipment components for the telecommunications industry;
.    Environmental  Technologies - manufactures  ceramic  substrates and filters
     for automobile and diesel applications; and
.    Life Sciences - manufactures  glass and plastic  consumables for scientific
     applications.

All other  operating  segments that do not meet the  quantitative  threshold for
separate reporting (e.g., Specialty Materials, Ophthalmic and Conventional Video
Components),  certain  corporate  investments  (e.g.,  Dow  Corning  and Steuben
Glass),  discontinued  operations,  and unallocated  expenses  (including  other
corporate  items) have been  grouped as  "Unallocated  and  Other."  Unallocated
expenses include the following: gains or losses on repurchases and retirement of
debt; charges related to the asbestos litigation; restructuring,  impairment and
other charges and (credits) related to the corporate research and development or
staff  organizations;  and charges for increases in our tax valuation allowance.
Unallocated and Other also represents the reconciliation  between the totals for
the reportable segments and our consolidated operating results.



Display Technologies
The  following  table  provides  net  sales  and  other  data  for  the  Display
Technologies segment (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      For the three months ended March 31,          % Change
                                                                      ------------------------------------          --------
                                                                              2005            2004                  05 vs. 04
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               
Net sales                                                                  $     320         $    230                   39%
Income before equity earnings                                              $      80         $     53                   51%
Equity earnings of associated companies                                    $      81         $     65                   25%
Net income                                                                 $     161         $    118                   36%
------------------------------------------------------------------------------------------------------------------------------------


The 2005 net sales  increase  is largely  reflective  of the  overall LCD market
growth.  During the first quarter of 2005, glass substrate  volumes (measured in
square feet of glass sold) increased approximately 35%. Weighted average selling
prices increased  modestly  compared to 2004.  Included in this weighted average
were  selling  price  declines  that were more than offset by  increases  in the
market demand for large-size  glass substrates  (generation 5 and above),  which
carry a higher  selling  price per square foot.  For the first  quarter of 2005,
large-size glass substrates  accounted for 58% of total sales volumes,  compared
to 34% for the first  quarter  of 2004.  The sales of the  Display  Technologies
segment  are  denominated  in  Japanese  yen and,  as  such,  our  revenues  are
susceptible to movements in the US dollar - Japanese yen exchange  rates.  Sales
growth  benefited  by  approximately  3% from a  weakening  of the  U.S.  dollar
compared to 2004.

For 2005, the increase in income before equity earnings was the result of higher
volumes and  ongoing  improvements  in  manufacturing  efficiencies.  Net income
before equity earnings for the first quarter of 2005, includes approximately $20
million of exchange losses related to foreign currency denominated transactions.
The impact of this loss on the  comparability of results was largely offset by a
lower  effective  tax rate in 2005  than in 2004.  The  increase  in our  equity
earnings from Samsung Corning  Precision were largely driven by the same factors
identified for our wholly-owned business, excluding the foreign exchange loss.

The Display Technologies segment continues to have a concentrated  customer base
comprised of LCD panel makers  primarily  located in Japan and Taiwan.  The most
significant  customers  in  these  markets  are  AU  Optronics  Corp.,  Chi  Mei
Optoelectronics  Corp.,  Hannstar  Display  Corp.,  Quanta  Display Inc.,  Sharp
Corporation,  and Toppan CFI (Taiwan) Co., Ltd. For the three months ended March
31, 2005, these customers accounted for 79% of the Display  Technologies segment
sales.






We expect the LCD market to  continue  to grow  rapidly.  We  anticipate  higher
demand for LCD  televisions,  for which our customers  require  large-size glass
substrates.  During 2005 and 2004,  Corning held discussions with several of its
customers  to  discuss  how to meet  this  demand.  As part of its  discussions,
Corning has sought improved payment terms, including deposits against orders, to
provide a greater degree of assurance that we are effectively  building capacity
to meet the needs of a rapidly growing industry.

In 2005 and 2004,  Corning and several customers entered into long-term purchase
and supply  agreements  in which the Display  Technologies  segment  will supply
large-size glass substrates to the customers over periods of up to six years. As
part of the  agreements,  these  customers  have  agreed  to make  advance  cash
deposits to Corning for a portion of the  contracted  glass to be purchased.  We
now  have  customer  deposit  agreements  with  five  customers  of the  Display
Technologies segment.

In the event the customers do not make all customer deposit installment payments
or elect not to purchase  the agreed  upon  quantities  of  product,  subject to
specific  conditions  outlined in the  agreements,  Corning  may retain  certain
amounts of the  customer  deposits.  If Corning  does not  deliver  agreed  upon
product  quantities,  subject to specific conditions outlined in the agreements,
Corning may be required to return certain amounts of the customer deposits.

Outlook:
--------
We expect to see a  continuation  of the overall  industry  growth and the trend
toward  large size  substrates.  Full year 2005 volume  growth for the LCD glass
market  is  anticipated  to be  greater  than  50%,  and  we  anticipate  adding
sufficient  capacity to meet market  growth.  This market  growth is expected to
occur at varying rates in the principal LCD markets of Japan,  Taiwan, China and
Korea. Sales of our wholly-owned  business are primarily to panel  manufacturers
in Japan,  Taiwan,  and China with  customers in Korea being serviced by Samsung
Corning  Precision.  The actual  growth  rates in these  markets will impact our
sales and  earnings  performance.  For the  second  quarter  of 2005,  we expect
volumes for our  wholly-owned  business and Samsung  Corning  Precision may grow
between 10% and 20%, both  individually  and in the aggregate.  We expect second
quarter  pricing  pressures to be slightly  less than what occurred in the first
quarter, which experienced a sequential price decline of less than 4%. There can
be no assurance  that the  end-market  rates of growth will continue at the high
rates experienced in recent quarters,  that we will be able to pace our capacity
expansions to actual demand, or that the rate of cost declines will offset price
declines in any given  period.  While the industry has grown  rapidly,  consumer
preferences for panels of differing  sizes, or price or other factors,  may lead
to pauses in market growth, and it is possible that glass manufacturing capacity
may exceed  demand from time to time. In addition,  changes in foreign  exchange
rates,  principally the Japanese yen, will continue to impact the  profitability
of this segment.



Telecommunications
The following table provides net sales and other data for the Telecommunications
segment (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      For the three months ended March 31,          % Change
                                                                      ------------------------------------          --------
                                                                              2005            2004                  05 vs. 04
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              
Net sales:
   Optical fiber and cable                                                 $     212         $    149                   42%
   Hardware and equipment                                                        215              163                   32%
                                                                           ---------         --------
     Total net sales                                                       $     427         $    312                   37%
                                                                           =========         ========

Net income (loss)                                                          $       9         $    (43)                 121%
------------------------------------------------------------------------------------------------------------------------------------







For the first quarter of 2005, fiber volumes increased 52% while prices declined
7% compared to the first quarter of 2004. The 2005 increase in fiber volumes was
largely driven by sales in North America and Europe,  offset by lower volumes in
China.  The stronger North America volumes were primarily due to increased sales
to  Verizon  Communications  (Verizon)  to support  their  fiber-to-the-premises
project.  Sales to Verizon  also  accounted  for the majority of the increase in
hardware  and  equipment  product  sales.  In the  first  quarter  of 2004,  the
Telecommunications  segment  did not have any  significant  sales to Verizon for
their  fiber-to-the-premises  project.  The lower volume in China was due to the
overall  weakness in the market,  which  continues  to suffer over  capacity and
pricing  pressure.  Based on these  market  conditions,  we have been  unable to
regain  the  share  we lost  prior  to the  successful  resolution  of the  2004
anti-dumping  preliminary   determination.   The  comparison  of  sales  of  the
Telecommunications  segment between 2005 and 2004 was negatively affected by the
2004 sale of our frequency controls business.  During the first quarter of 2004,
the frequency  controls  business  recorded sales of $22 million.  Excluding the
impact  of  this  divestiture,  net  sales  for the  Telecommunications  segment
increased  47% for the first  quarter of 2005  compared  to the year ago period.
Movements in foreign  exchange  rates,  primarily the Euro and Japanese yen, did
not have a significant impact on sales for 2005 compared to 2004.

Although showing a modest profit,  the first quarter 2005 net income represented
a significant  improvement  over the loss incurred in the first quarter of 2004.
This improvement in performance is primarily driven by operational  efficiencies
from  the  increase  in sales  volumes.  Movements  in  exchange  rates  did not
significantly impact net income.

Outlook:
--------
For the second quarter of 2005, we expect net sales to increase approximately 5%
compared  to  those of the  first  quarter.  This  sales  performance  primarily
reflects  typical  seasonal  increases in North  America and Europe,  as well as
ongoing  demand  from  fiber-to-the-premises  projects.  For  China,  we do  not
anticipate any significant  recovery during the second quarter.  We expect fiber
volumes to be flat to up 10% and moderate  pricing  declines.  Segment net sales
continue to be impacted by Verizon's  fiber-to-the-premises  project.  We expect
the second  quarter  level of sales to Verizon to decline due to expected  price
declines as this program  enters its second year.  Second  quarter sales volumes
should   be    approximately    flat   with   the   first   quarter.    However,
fiber-to-the-premises  sales to Verizon could decline more  significantly in the
third and fourth quarters unless Verizon raises its announced  targets for homes
passed  and   connected.   Potential   changes   in   Verizon's   inventory   of
fiber-to-the-premises products could also affect the sales level.



Environmental Technologies
The  following  table  provides  net sales and other data for the  Environmental
Technologies segment (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      For the three months ended March 31,          % Change
                                                                      ------------------------------------          --------
                                                                              2005             2004                 05 vs. 04
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               
Net sales:
   Automotive                                                              $     127         $    125                    2%
   Diesel                                                                         21               16                   31%
                                                                           ---------         --------
     Total net sales                                                       $     148         $    141                    5%
                                                                           =========         ========

Net (loss) income                                                          $      (2)        $      6                (133)%
------------------------------------------------------------------------------------------------------------------------------------


The 2005 increase in net sales is primarily the result of demand for our ceramic
filters  and  substrates  for  diesel  emission  control  applications.  We have
received  several letters of intent from diesel engine  manufacturers  to supply
filters  for their 2007 model year  platforms,  but they have not yet  developed
into supply agreements. Negotiations with these diesel engine manufacturers will
continue through the next several  quarters.  For automotive  products,  volumes
were up slightly from 2004,  and sales  continue to benefit from a higher mix of
our thin-wall and ultra thin-wall  substrates,  which allow engine manufacturers
to meet  increasingly  tighter  emissions  control  requirements  in a more cost
effective manner.  Strong sales to Asian auto  manufacturers were largely offset
by  weaker  demand  from  U.S.  auto  manufacturers  due to  slowdowns  in their
production.  A portion of this segment's  sales are  susceptible to movements in
the U.S.  dollar-Euro  exchange rate. Movements in exchange rates did not have a
significant impact on sales for 2005 compared to 2004.






The 2005 decline in net income is primarily the result of increased  development
costs and plant start-up costs to support our emerging  diesel  products.  These
costs offset the gross margin  benefits of increased  volumes and the higher mix
of  premium   automotive   products.   Movements  in  exchange   rates  did  not
significantly impact net income.

Outlook:
--------
For the second quarter of 2005, we expect net sales to be comparable to those of
the first quarter. For automotive products, we expect to see stable demand based
on  anticipated  worldwide auto  production  and a continuation  of the shift to
premium products,  although at slightly slower rates than 2004. A portion of our
automotive  products  are  sold to U.S.  auto  manufacturers,  and as a  result,
further  slowdowns  in  automotive   production  by  these  manufacturers  could
adversely impact sales. Diesel product sales are expected to grow in the quarter
as the retrofit  market is anticipated to remain strong.  The retrofit market is
volatile, and any unanticipated declines in demand could adversely impact sales.



Life Sciences
The  following  table  provides  net sales and other data for the Life  Sciences
segment (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      For the three months ended March 31,          % Change
                                                                      ------------------------------------          --------
                                                                              2005             2004                 05 vs. 04
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
Net sales                                                                  $      74         $     79                   (6)%
Net (loss) income                                                          $      (2)        $      5                 (140)%
------------------------------------------------------------------------------------------------------------------------------------


The 2005 decrease in net sales is primarily due to volume  decreases as a result
of the  change in our  distribution  channel  previously  disclosed  in our 2004
Annual Report on Form 10-K.  Movements in foreign exchange rates,  primarily the
Euro, did not have a significant impact on the comparability of sales.

The 2005  decrease  in net income is largely  attributable  to the gross  margin
impact from the lower sales  volumes.  Additionally,  the Life  Science  segment
incurred  higher  operating  expenses to  implement  the change in  distribution
channels and to support new product development efforts.

Outlook:
--------
For the second  quarter of 2005, we expect to see a modest  decline in sales due
to the ongoing change in our  distribution  channel.  The second quarter of 2005
will be the first full  quarter of our  channel  migration  as the  distribution
agreement with one of our primary  distributors  expired in April.  While we are
encouraged by the early results of our efforts to migrate sales  previously made
through this  distributor to our other primary  distributor  and other channels,
the adverse impact to sales is likely to increase in the second quarter of 2005.
There can be no assurance  that we will be  successful in migrating the majority
of our 2004 sales made through this  distributor,  as end user  preferences  for
distribution  models,  price or other factors may adversely  impact sales in the
second half of 2005. For the full year,  sales may be negatively  impacted by as
much as 10% to 20% as a result of this change in our distribution channel.

LIQUIDITY AND CAPITAL RESOURCES

Customer Deposits
Certain  customers  of  our  Display  Technologies  segment  have  entered  into
long-term  supply  agreements and agreed to make advance cash deposits to secure
supply of large-size glass substrates.  The deposits will be applied in the form
of credits  against  future  product  purchases in later  periods as credits are
applied for cash deposits received in earlier periods.  For the current year, we
received  a total of $108  million  of  deposits  against  orders,  of which $20
million was received in the first quarter.







Customer deposits will be received in the following periods (in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                        For the three
                                                        months ended            Remainder          Estimated 2006
                                         2004          March 31, 2005            of 2005             and Beyond          Total
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Customer deposits received (a)          $   204            $  20                $  463               $   295           $   982
------------------------------------------------------------------------------------------------------------------------------------


(a)  The majority of customer deposits will be received through 2006.

Financing Structure
In the first quarter of 2005, we completed the following debt transactions:
.    We obtained a loan of approximately $48 million,  bearing interest at 2.1%,
     from a Japanese bank. This loan is part of a 10-year loan agreement entered
     into in 2004 to fund certain capital expansion activities in Japan.
.    We redeemed $100 million of our outstanding 3.50%  convertible  debentures.
     The bondholders  affected by this redemption elected to convert $98 million
     of their  debentures  into Corning  common  stock at a conversion  ratio of
     103.3592 shares per $1,000 debenture,  with the remaining $2 million repaid
     in cash.  Separately,  bondholders  elected  to  convert  approximately  $6
     million of outstanding  debentures  into Corning common stock. In total, we
     issued 11 million shares upon the conversion of the  debentures,  resulting
     in an increase to equity of $105 million.  At March 31, 2005,  $191 million
     of our 3.50%  convertible  debentures  remained  outstanding.  We expect to
     redeem these debentures,  subject to market conditions, before December 31,
     2005.
.    We repaid a total of $192 million of notes in accordance  with their stated
     repayment schedule. This was primarily comprised of our 5.625% Euro notes.

In addition, in the first quarter of 2005 we completed negotiations with a group
of banks on a new revolving credit facility. The new facility provides us access
to a $975 million unsecured  multi-currency revolving line of credit and expires
in March 2010. The facility  includes two financial  covenants,  a leverage test
(debt to capital ratio not greater than 50%) and an interest  coverage  ratio of
no less than 3.5 times  (calculated  on the most  recent four  quarters).  As of
March 31,  2005,  our  interest  coverage  ratio was 8.4 times,  and our debt to
capital ratio was 36%.  Concurrent with the closing of this credit facility,  we
terminated  our  previous  $2 billion  revolving  line of credit that was set to
expire in August 2005.

Capital Spending
Capital  spending  totaled $323 million  during the three months ended March 31,
2005. Our 2005 forecasted  consolidated capital spending remains at $1.2 billion
to $1.4  billion.  Of this  amount,  $900 million to $1 billion will be directed
toward expanding  manufacturing capacity for LCD glass substrates in the Display
Technologies  segment and approximately $150 million will be directed toward our
Environmental Technologies segment.

Restructuring
During the three  months ended March 31,  2005,  we made  payments of $5 million
related to employee severance and termination costs and $4 million in other exit
costs resulting from prior years'  restructuring  actions.  We expect additional
payments  to  approximate  $9 million in the second  quarter of 2005 for actions
taken from 2001 through 2004.







Key Balance Sheet Data
Balance sheet and working  capital  measures are provided in the following table
(dollars in millions):
------------------------------------------------------------------------------------------------------------------------------------
                                                                      As of March 31,       As of December 31,
                                                                      ---------------       ------------------
                                                                           2005                    2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                           
Working capital                                                          $  1,072                $    945
Working capital, excluding cash and short-term investments               $  (475)                $  (936)
Current ratio                                                               1.5:1                   1.4:1
Trade accounts receivable, net of allowances                             $    621                $    585
Days sales outstanding                                                         53                      52
Inventories                                                              $    562                $    535
Inventory turns                                                               4.8                     4.9
Days payable outstanding                                                       95                      67
Long-term debt                                                           $  2,125                $  2,214
Total debt to total capital                                                   36%                     41%
------------------------------------------------------------------------------------------------------------------------------------




Credit Rating
There has been no change in our credit ratings from those  disclosed in our 2004
Form 10-K:
------------------------------------------------------------------------------------------------------------------------------------
RATING AGENCY                                                             Rating                  Outlook
Last Update                                                           Long-Term Debt            Last Update
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       
Fitch                                                                       BB+                  Positive
    August 12, 2004                                                                           August 12, 2004

Standard & Poor's (a)                                                       BB+                   Stable
    July 29, 2002                                                                            January 16, 2004

Moody's                                                                     Ba2                  Positive
    July 29, 2002                                                                            January 14, 2005
------------------------------------------------------------------------------------------------------------------------------------


(a)  Standard  & Poor's  placed  Corning's  credit  rating on Credit  Watch with
     positive implications on February 8, 2005.

Management Assessment of Liquidity
Our major source of funding for 2005 and beyond will be our existing  balance of
cash,  cash  equivalents and short-term  investments.  From time to time, we may
also issue debt or equity securities for general corporate purposes.  We believe
we have  sufficient  liquidity  for the next several  years to fund  operations,
restructuring,  the  asbestos  settlement,  research  and  development,  capital
expenditures and scheduled debt repayments.

Contractual Obligations
There have been no material  changes  outside the ordinary course of business in
the  contractual  obligations  disclosed in our 2004 Annual  Report on Form 10-K
under the caption "Contractual Obligations."

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial  statements  requires  management to make estimates
and  assumptions  that affect  amounts  reported  therein.  The  estimates  that
required  management's  most  difficult,  subjective  or complex  judgments  are
described in our 2004 Annual  Report on Form 10-K and remain  unchanged  through
the first quarter of 2005.






ENVIRONMENT

We have been named by the  Environmental  Protection  Agency under the Superfund
Act,  or by  state  governments  under  similar  state  laws,  as a  potentially
responsible party for 11 active hazardous waste sites.  Under the Superfund Act,
all  parties  who may have  contributed  any waste to a  hazardous  waste  site,
identified  by such  Agency,  are jointly and  severally  liable for the cost of
cleanup unless the Agency agrees  otherwise.  It is our policy to accrue for the
estimated   liability  related  to  Superfund  sites  and  other   environmental
liabilities  related  to  property  owned  and  operated  by us based on  expert
analysis and continual monitoring by both internal and external consultants.  We
have accrued $14 million for the estimated  liability for environmental  cleanup
and related  litigation at March 31, 2005. Based upon the information  developed
to date,  we believe  that the accrued  amount is a  reasonable  estimate of our
liability and that the risk of an additional loss in an amount materially higher
than that accrued is remote.

FORWARD-LOOKING STATEMENTS

Many  statements  in this  Quarterly  Report  on Form  10-Q are  forward-looking
statements.  These  typically  contain  words  such  as  "believes,"  "expects,"
"anticipates,"   "estimates,"   "forecasts,"  or  similar   expressions.   These
forward-looking  statements  involve risks and uncertainties  that may cause the
actual outcome to be materially different. Such risks and uncertainties include,
but are not limited to the following:

-    global economic and political conditions;
-    tariffs, import duties and currency fluctuations;
-    product demand and industry capacity;
-    competitive products and pricing;
-    sufficiency of manufacturing capacity and efficiencies;
-    availability and costs of critical components and materials;
-    new product development and commercialization;
-    order activity and demand from major customers;
-    fluctuations in capital spending by customers;
-    possible  disruption in commercial  activities  due to terrorist  activity,
     armed conflict, political instability or major health concerns;
-    facility expansions and new plant start-up costs;
-    effect of regulatory and legal developments;
-    capital resource and cash flow activities;
-    ability to pace capital spending to anticipated  levels of customer demand,
     which may fluctuate;
-    interest costs;
-    credit rating and ability to obtain  financing and capital on  commercially
     reasonable terms;
-    adequacy and availability of insurance;
-    financial risk management;
-    capital spending;
-    acquisition and divestiture activities;
-    rate of technology change;
-    level of excess or obsolete inventory;
-    ability to enforce patents;
-    adverse litigation;
-    product and components performance issues;
-    stock price fluctuations;
-    rate of substitution by end-users  purchasing LCDs for notebook  computers,
     desktop monitors and televisions;
-    downturn in demand for LCD glass substrates;
-    customer  ability,  most notably in the Display  Technologies  segment,  to
     maintain   profitable   operations  and  obtain  financing  to  fund  their
     manufacturing expansions;
-    fluctuations in supply chain inventory levels;
-    equity  company  activities,  principally  at Dow Corning  Corporation  and
     Samsung Corning Co., Ltd.; and
-    other risks  detailed  in  Corning's  Securities  and  Exchange  Commission
     filings.







ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Disclosures

There have been no  material  changes to our market  risk  exposures  during the
first three  months of 2005.  For a  discussion  of our exposure to market risk,
refer to Item 7A,  Quantitative and Qualitative  Disclosures About Market Risks,
contained in our 2004 Annual Report on Form 10-K.


ITEM 4.  CONTROLS AND PROCEDURES

Corning  carried  out  an  evaluation,   under  the  supervision  and  with  the
participation  of Corning's  management,  including  Corning's  chief  executive
officer and its chief financial officer,  of the effectiveness of the design and
operation of Corning's  disclosure controls and procedures as of March 31, 2005,
the end of the period  covered by this report.  Based upon the  evaluation,  the
chief  executive  officer and chief financial  officer  concluded that Corning's
disclosure  controls and  procedures  are  effective to ensure that  information
required to be disclosed  by Corning in reports  that it files or submits  under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms.

During  the  quarter  ended  March 31,  2005,  there have been no changes in our
internal control over financial  reporting that have materially  affected or are
reasonably  likely to  materially  affect our internal  control  over  financial
reporting.






                           Part II - Other Information

ITEM 1.  LEGAL PROCEEDINGS

Environmental Litigation. Corning has been named by the Environmental Protection
Agency under the  Superfund  Act, or by state  governments  under  similar state
laws, as a potentially  responsible  party at 11 active  hazardous  waste sites.
Under the  Superfund  Act, all parties who may have  contributed  any waste to a
hazardous  waste site,  identified  by such  Agency,  are jointly and  severally
liable  for the cost of  cleanup  unless  the  Agency  agrees  otherwise.  It is
Corning's  policy to accrue for its  estimated  liability  related to  Superfund
sites and other  environmental  liabilities related to property owned by Corning
based on expert analysis and continual  monitoring by both internal and external
consultants.  Corning has accrued $14 million for its  estimated  liability  for
environmental  cleanup  and  litigation  at  March  31,  2005.  Based  upon  the
information developed to date, management believes that the accrued reserve is a
reasonable  estimate  of  the  Company's  liability  and  that  the  risk  of an
additional loss in an amount materially higher than that accrued is remote.

Schwinger and Stevens  Toxins  Lawsuits.  In April 2002,  Corning was named as a
defendant in two actions,  Schwinger  and  Stevens,  filed in the U.S.  District
Court for the Eastern  District of New York,  which  asserted  various  personal
injury and property  damage  claims  against a number of  corporate  defendants.
These  claims  allegedly  arise  from the  release  of toxic  substances  from a
Sylvania  nuclear  materials  processing  facility  near  Hicksville,  New York.
Amended  complaints  naming 205 plaintiffs  and seeking  damages in excess of $3
billion  were served in  September  2002.  The sole basis of  liability  against
Corning was plaintiffs' claim that Corning was the successor to Sylvania-Corning
Nuclear Corporation  (Sylvania-Corning),  a Delaware  corporation formed in 1957
and  dissolved  in 1960.  Management  intends to  vigorously  contest all claims
against   Corning  for  the  reason  that  Corning  is  not  the   successor  to
Sylvania-Corning.  Management will also defend on the grounds that almost all of
the wrongful  death  claims and personal  injury  claims are  time-barred.  At a
status  conference  in December  2002,  the Court  decided to  "administratively
close" the Schwinger and Stevens cases and ordered  plaintiffs' counsel to bring
new amended complaints with "bellwether" plaintiffs.  In these actions, known as
Schwinger II and Astuto,  the plaintiffs  have not named Corning as a defendant.
Although it appears that plaintiffs may proceed only against the other corporate
defendants,  the original  Schwinger  and Stevens cases remain  pending,  and no
order has been entered dismissing Corning.  Based upon the information developed
to date, and recognizing that the outcome of litigation is uncertain, management
believes  that the  likelihood  of a  materially  adverse  impact  to  Corning's
financial statements is remote.

Dow Corning Bankruptcy. Corning and The Dow Chemical Company (Dow Chemical) each
own  50%  of the  common  stock  of Dow  Corning,  which  was in  reorganization
proceedings  under Chapter 11 of the U.S.  Bankruptcy  Code between May 1995 and
June 2004.  Dow Corning filed for bankruptcy  protection to address  pending and
claimed liabilities arising from many thousand  breast-implant product lawsuits.
On  June  1,  2004,  Dow  Corning  emerged  from  Chapter  11  with  a  Plan  of
Reorganization  (the Plan) which provided for the settlement or other resolution
of implant  claims  and  includes  releases  for  Corning  and Dow  Chemical  as
shareholders in exchange for contributions to the Plan.

Under  the terms of the Plan,  Dow  Corning  has  established  and is  funding a
Settlement Trust and a Litigation Facility to provide a means for tort claimants
to settle or  litigate  their  claims.  Of the  approximately  $3.2  billion  of
required funding,  Dow Corning has paid approximately $1.6 billion (inclusive of
insurance)  and expects to pay up to an  additional  $1.6 billion  ($710 million
after-tax) over 16 years. Dow Corning has satisfied the claims of its commercial
creditors, except that certain commercial creditors continue to pursue an appeal
to the U.S.  Court of Appeals of the Sixth  Circuit  seeking from Dow Corning an
additional  sum of  approximately  $80 million for interest at default rates and
enforcement  costs.  Corning  believes  the risk of loss to Dow Corning  (net of
amounts reserved) is remote.

In addition,  Dow Corning has received a statutory notice of deficiency from the
United States  Internal  Revenue  Service  asserting tax  deficiencies  totaling
approximately  $65 million  relating  to its federal  income tax returns for the
1995 and 1996 calendar  years.  This matter is pending before the U.S.  District
Court in Michigan.  Dow Corning has also received a proposed adjustment from the
IRS (approximately  $117 million) with respect to its federal income tax returns
for the 1997, 1998 and 1999 calendar years. Dow Corning is vigorously contesting
these deficiencies and proposed adjustments which it believes are excessive.






In 1995,  Corning  fully  impaired its  investment in Dow Corning upon its entry
into  bankruptcy  proceedings and did not recognize net equity earnings from the
second quarter of 1995 through the end of 2002. Corning began recognizing equity
earnings  in the  first  quarter  of 2003  when  management  concluded  that its
emergence  from  bankruptcy  protection  was  probable.  Corning  considers  the
difference  between the carrying  value of its investment in Dow Corning and its
50% share of Dow  Corning's  equity to be  permanent.  This  difference  is $249
million. Subject to future rulings by the bankruptcy court and potential changes
in estimated bankruptcy-related liabilities, it is possible that Dow Corning may
record bankruptcy-related charges in the future.

Corning received no dividends from Dow Corning in the first quarter of 2005, but
anticipates that Dow Corning will begin to pay dividends later in 2005.

Federal  Securities  Cases.  From December 2001 through April 2002,  Corning and
three of its officers and directors were named  defendants in lawsuits  alleging
(a) violations of the U.S. securities laws in connection with Corning's November
2000 offering of 30 million  shares of common stock and $2.7 billion zero coupon
convertible  debentures,  due November 2015 and (b) misleading  disclosures  and
non-disclosures  that allegedly  inflated the price of Corning's common stock in
the period from October 2000 through July 9, 2001.  On April 12, 2004,  the U.S.
District Court of the Western  District of New York entered a decision and order
dismissing plaintiffs' complaint.  That dismissal was affirmed by the U.S. Court
of Appeals of the Second Circuit by an order entered on March 30, 2005. Although
it is possible that  plaintiffs  may seek further  judicial  review,  management
believes that the likelihood of a material adverse impact to Corning's financial
statements is remote.

Pittsburgh Corning  Corporation.  Corning and PPG Industries,  Inc. ("PPG") each
own 50% of the capital stock of PCC. Over a period of more than two decades, PCC
and several  other  defendants  have been named in numerous  lawsuits  involving
claims alleging  personal  injury from exposure to asbestos.  On April 16, 2000,
PCC filed for Chapter 11  reorganization  in the U.S.  Bankruptcy  Court for the
Western District of Pennsylvania. As of the bankruptcy filing, PCC had in excess
of 140,000 open claims and had  insufficient  remaining  insurance and assets to
deal  with its  alleged  current  and  future  liabilities.  More  than  100,000
additional  claims have been filed with PCC after its  bankruptcy  filing.  As a
result of PCC's bankruptcy  filing,  Corning recorded an after-tax charge of $36
million  in  2001  to  fully  impair  its  investment  in PCC  and  discontinued
recognition of equity earnings. At the time PCC filed for bankruptcy protection,
there were  approximately  12,400 claims pending  against Corning in state court
lawsuits  alleging  various  theories  of  liability  based on exposure to PCC's
asbestos  products and typically  requesting  monetary  damages in excess of one
million dollars per claim. Corning has defended those claims on the basis of the
separate  corporate status of PCC and the absence of any facts supporting claims
of direct  liability  arising  from  PCC's  asbestos  products.  Corning is also
currently  named in  approximately  11,400  other  cases  (approximately  43,400
claims) alleging  injuries from asbestos and similar amounts of monetary damages
per claim. Those cases have been covered by insurance without material impact to
Corning to date. Asbestos litigation is inherently difficult, and past trends in
resolving these claims may not be indicators of future outcomes.

In the  bankruptcy  court,  PCC in April 2000 obtained a preliminary  injunction
against the prosecution of asbestos  actions arising from PCC's products against
its two  shareholders  to  afford  the  parties  a  period  of time in  which to
negotiate a plan of reorganization for PCC ("PCC Plan").

On May 14, 2002,  PPG announced that it had agreed with certain of its insurance
carriers and  representatives  of current and future  asbestos  claimants on the
terms of a  settlement  arrangement  applicable  to claims  arising  from  PCC's
products.






On March 28, 2003,  Corning  announced  that it had also reached  agreement with
representatives  of  current  and  future  asbestos  claimants  on a  settlement
arrangement that was thereafter  incorporated into the PCC Plan. This settlement
remains  subject  to a  number  of  contingencies,  including  approval  by  the
bankruptcy court.  Corning's  settlement will require the  contribution,  if the
Plan is  approved  and becomes  effective,  of its equity  interest in PCC,  its
one-half  equity interest in PCE, and 25 million shares of Corning common stock.
The settlement also requires  Corning to make cash payments of $146 million (net
present value as of March 31, 2005) in six installments beginning one year after
the Plan is  effective.  In  addition,  Corning  will  assign  policy  rights or
proceeds  under primary  insurance  from 1962 through 1984, as well as rights to
proceeds under certain excess  insurance,  most of which falls within the period
from 1962 through 1973. In return for these  contributions,  Corning  expects to
receive a release and an injunction channeling asbestos claims against it into a
settlement trust under the PCC Plan.

Corning  recorded an initial  charge of $298 million in the period  ending March
31, 2003 to reflect the settlement terms.  However, the amount of the charge for
this  settlement  requires  adjustment  each  quarter  based  upon  movement  in
Corning's  common stock price prior to  contribution of the shares to the trust.
During the first  quarter of 2005,  Corning  recorded a credit of $16 million to
reflect the  mark-to-market  of Corning  common stock.  Beginning with the first
quarter of 2003 and through March 31, 2005,  Corning  recorded total net charges
of $430 million to reflect the initial settlement and subsequent  mark-to-market
adjustments for the change in the value of Corning common stock.

Two of Corning's  primary  insurers and several  excess  insurers have commenced
litigation for a declaration of the rights and  obligations of the parties under
insurance  policies,  including  rights that may be  affected by the  settlement
arrangement  described  above.  Corning is  vigorously  contesting  these cases.
Management is unable to predict the outcome of this insurance litigation.

The PCC Plan received a favorable vote from creditors in March 2004. Hearings to
consider  objections to the Plan were held in the Bankruptcy  Court in May 2004.
The  parties  filed  post-hearing  briefs and made final oral  arguments  to the
Bankruptcy  Court in November 2004.  The Bankruptcy  Court allowed an additional
round of briefing to address current case law  developments and heard additional
oral  arguments  on March 16,  2005.  At this  hearing,  the court  allowed  the
proponents  of the PCC  Plan 60 days to  consider  amendments  to the Plan or to
request rulings on the pending objections. The timing and outcome are uncertain.
If the  Bankruptcy  Court does not  confirm  the PCC Plan in its  current  form,
changes to the settlement  agreement are reasonably  possible.  Further judicial
review is also reasonably possible. Although the confirmation of the PCC Plan is
subject to a number of contingencies, apart from the quarterly adjustment in the
value of 25 million shares of Corning common stock, management believes that the
likelihood of a material  adverse  impact to Corning's  financial  statements is
remote.

Astrium. In December of 2000, Astrium,  SAS and Astrium,  Ltd. filed a complaint
for negligence in the U.S. District Court for the Central District of California
against TRW, Inc., Pilkington Optronics Inc., Corning NetOptix, Inc. (NetOptix),
OFC Corporation  and Optical Filter  Corporation  claiming  damages in excess of
$150 million.  The complaint alleges that certain cover glasses for solar arrays
used to generate  electricity  from solar energy on satellites sold by Astrium's
corporate  successor  were  negligently  coated by NetOptix or its  subsidiaries
(prior to  Corning's  acquisition  of NetOptix) in such a way that the amount of
electricity  the satellite can produce and their  effective life were materially
reduced.  NetOptix  has denied  that the  coatings  produced  by NetOptix or its
subsidiaries  caused the damage alleged in the complaint,  or that it is legally
liable for any damages that  Astrium may have  experienced.  In April 2002,  the
Court granted motions for summary  judgment by NetOptix and other  defendants to
dismiss  the  negligence  claims,  but  permitted  plaintiffs  to add  fraud and
negligent  misrepresentation  claims  against  all  defendants  and a breach  of
warranty claim against NetOptix and its subsidiaries. In October 2002, the Court
again  granted  defendants'  motions  for summary  judgment  and  dismissed  the
negligent misrepresentation and breach of warranty claims. The intentional fraud
claims were dismissed against all non-settling  defendants on February 25, 2003.
On March 19, 2003,  Astrium  appealed all of the Court's  rulings  regarding the
various  summary  judgment  motions to the Ninth Circuit  Court of Appeals.  The
period of  briefing  the appeal was  extended,  and oral  argument  has not been
scheduled.  Recognizing that the outcome of litigation is uncertain,  management
believes  that the  likelihood  of a  materially  adverse  impact  to  Corning's
financial statements is remote.







Furukawa  Electric  Company.  On February 3, 2003, The Furukawa Electric Company
(Furukawa) filed suit in the Tokyo District Court in Japan against Corning Cable
Systems International  Corporation (CCS International)  alleging infringement of
Furukawa's Japanese Patent No. 2,023,966 which relates to separable fiber ribbon
units used in optical  cable.  Furukawa's  complaint  requests  slightly  over 6
billion  Japanese yen in damages  (approximately  $56 million) and an injunction
against  further sales in Japan of these fiber ribbon units.  CCS  International
has denied the allegation of infringement,  asserted that the patent is invalid,
and is defending vigorously against this lawsuit. On October 29, 2004, the Tokyo
District  Court issued its ruling in favor of CCS on both  non-infringement  and
patent  invalidity.  Furukawa  has filed an appeal from this ruling to the Tokyo
Court of  Appeals.  Management  believes  that the  likelihood  of a  materially
adverse impact to Corning's financial statements is remote.

PicVue  Electronics  Ltd.,  PicVue  OptoElectronics   International,   Inc.  and
Eglasstrek Gmbh. In June 2002, Corning brought an action seeking to restrain the
use of its trade  secrets  and for  copyright  infringement  relating to certain
aspects  of the  fusion  draw  machine  used for liquid  crystal  display  glass
melting.  This  action is pending  in the U.S.  District  Court for the  Western
District of New York against these three named defendants. The District Court in
July  2003  denied  the  PicVue  motion to  dismiss  and  granted a  preliminary
injunction  in favor of  Corning,  subject  to posting a bond in an amount to be
determined.   PicVue,  a  Taiwanese  company,   filed  a  counterclaim  alleging
violations of the antitrust laws and claiming  damages of more than $120 million
as well as  requesting  trebled  damages.  On PicVue's  appeal from the District
Court's grant of the preliminary  injunction,  the Court of Appeals affirmed but
remanded the case for the District  Court to clarify the scope of the injunction
and to consider what, if any, bond should be posted.  The parties have submitted
papers to the District Court  addressing the issues  remanded.  Recognizing that
the outcome of  litigation  is  uncertain,  management  believes that the PicVue
counterclaim  is without merit and that the  likelihood of a materially  adverse
impact to Corning's financial statements is remote.

Tyco Electronics  Corporation and Tyco Technology Resources,  Inc. On August 13,
2003, CCS Holdings Inc. (CCS), a Corning subsidiary, filed an action in the U.S.
District  Court  for  the  Middle  District  of  North  Carolina   against  Tyco
Electronics  Corporation and Tyco Technology Resources,  Inc. (Tyco), asking the
court to declare a Tyco patent  invalid  and not  infringed  by CCS.  The patent
generally  relates to a type of connector  for optical  fiber  cables.  Tyco has
responded with a motion to dismiss the action for lack of jurisdiction, but that
motion has been withdrawn.  Tyco has filed an answer and  counterclaims to CCS's
complaint.  Tyco's  counterclaims  allege patent  infringement  by CCS and seeks
unspecified monetary damages and an injunction.  Recognizing that the outcome of
litigation is uncertain,  management believes that the risk of a material impact
on Corning's financial statements is remote.

Grand Jury Investigation of Conventional  Cathode Ray Television Glass Business.
In August 2003,  Corning  Asahi Video  Products  Company (CAV) was served with a
federal grand jury document  subpoena  related to pricing,  bidding and customer
practices  involving  conventional  cathode ray  television  glass  picture tube
components.  A number of employees or former  employees  have received a related
subpoena.  CAV is a general  partnership,  51% owned by Corning and 49% owned by
Asahi Glass America,  Inc. CAV's only  manufacturing  facility in State College,
Pennsylvania  closed in the first half of 2003 due to  declining  sales.  CAV is
cooperating  with  the  government  investigation.  Management  is not  able  to
estimate  the  likelihood  that any  charges  will be  filed as a result  of the
investigation.







ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This table provides  information  about our purchases of our common stock during
the fiscal first quarter of 2005:

Issuer Purchases of Equity Securities (a)



------------------------------------------------------------------------------------------------------------------------------------
                                          Total              Average             Total Number of              Approximate Dollar
                                         Number               Price            Shares Purchased as           Value of Shares that
                                        of Shares           Paid per            Part of Publicly             May Yet Be Purchased
Period                                Purchased (b)         Share (b)          Announced Plan (a)             Under the Plan (a)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
January 1-31, 2005                             0                 $0                    0                              $0
February 1-28, 2005                      118,161             $11.43                    0                              $0
March 1-31, 2005                          10,801             $11.81                    0                              $0
------------------------------------------------------------------------------------------------------------------------------------
Total                                    128,962             $11.46                    0                              $0
------------------------------------------------------------------------------------------------------------------------------------


(a)  During  the  quarter  ended  March  31,  2005,  we did not have a  publicly
     announced  program for repurchase of shares of our common stock and did not
     repurchase our common stock in open-market  transactions  outside of such a
     program.

(b)  These columns reflect the following  transactions  during the first quarter
     of 2005: (i) the deemed surrender to us of 58,921 shares of common stock to
     pay the  exercise  price and to  satisfy  tax  withholding  obligations  in
     connection  with the  exercise  of  employee  stock  options,  and (ii) the
     surrender to us of 70,041 shares of common stock to satisfy tax withholding
     obligations  in connection  with the vesting of restricted  stock issued to
     employees.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

We will include voting results of our annual meeting of  shareholders to be held
on April 28, 2005 as part of our  Quarterly  Report on Form 10-Q for the quarter
ended June 30, 2005,  which we expect to file with the  Securities  and Exchange
Commission on or about July 26, 2005.






ITEM 6.  EXHIBITS

    Exhibits

    Exhibit Number  Exhibit Name
    --------------  ------------
         10         Five-Year  Revolving Credit  Agreement with Citibank,  N.A.;
                    J.P. Morgan Chase Bank, N.A.; Bank of America, N.A.; Bank of
                    Tokyo  -   Mitsubishi,   Ltd.;   Wachovia   Bank,   National
                    Association;  Barclays  Bank PLC; and Deutsche Bank A.G. New
                    York branch Dated March 17, 2005

         12         Computation of Ratio of Earnings to Fixed Charges

        31.1        Certification  Pursuant to Rule 13a-15(e) and 15d-15(e),  As
                    adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002

        31.2        Certification  Pursuant to Rule 13a-15(e) and 15d-15(e),  As
                    adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002

         32         Certification Pursuant to 18 U.S.C. Section 1350, As adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002







                                   SIGNATURES



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








                                       CORNING INCORPORATED
                                           (Registrant)






 April 26, 2005                         /s/ JAMES B. FLAWS              
----------------            --------------------------------------------
      Date                                James B. Flaws
                             Vice Chairman and Chief Financial Officer
                                   (Principal Financial Officer)




 April 26, 2005                       /s/ KATHERINE A. ASBECK           
----------------            --------------------------------------------
      Date                              Katherine A. Asbeck
                               Senior Vice President and Controller
                                  (Principal Accounting Officer)






                                  EXHIBIT INDEX
                                  -------------



Exhibit Number Exhibit Name
-------------- ------------

     10        Five-Year  Revolving Credit  Agreement with Citibank,  N.A.; J.P.
               Morgan Chase Bank,  N.A.; Bank of America,  N.A.; Bank of Tokyo -
               Mitsubishi,  Ltd.; Wachovia Bank, National Association;  Barclays
               Bank PLC; and Deutsche  Bank A.G. New York branch Dated March 17,
               2005

     12        Computation of Ratio of Earnings to Fixed Charges

    31.1       Certification  of  Chief  Executive   Officer  Pursuant  to  Rule
               13a-15(e) and  15d-15(e),  As adopted  Pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002

    31.2       Certification  of  Chief  Financial   Officer  Pursuant  to  Rule
               13a-15(e) and  15d-15(e),  As adopted  Pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002

     32        Certification  Pursuant  to 18 U.S.C.  Section  1350,  As adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002







                                                                                                            Exhibit 10

                                TABLE OF CONTENTS

                                                                                                           
ARTICLE I
    SECTION 1.01.     Certain Defined Terms                                                                      42
    SECTION 1.02.     Computation of Time Periods                                                                51
    SECTION 1.03.     Accounting Terms                                                                           51
ARTICLE II
    SECTION 2.01.     The Advances and Letters of Credit                                                         52
    SECTION 2.02.     Making the Advances                                                                        52
    SECTION 2.03.     Issuance of and Drawings and Reimbursement Under Letters of Credit                         53
    SECTION 2.04.     Fees                                                                                       54
    SECTION 2.05.     Termination or Reduction of the Commitments                                                54
    SECTION 2.06.     Repayment of Advances and Letter of Credit Drawings                                        54
    SECTION 2.07.     Interest on Advances                                                                       55
    SECTION 2.08.     Interest Rate Determination                                                                55
    SECTION 2.09.     Optional Conversion of Advances                                                            56
    SECTION 2.10.     Prepayments of Advances                                                                    57
    SECTION 2.11.     Increased Costs                                                                            57
    SECTION 2.12.     Illegality                                                                                 57
    SECTION 2.13.     Payments and Computations                                                                  58
    SECTION 2.14.     Taxes                                                                                      59
    SECTION 2.15.     Sharing of Payments, Etc.                                                                  60
    SECTION 2.16.     Evidence of Debt                                                                           60
    SECTION 2.17.     Use of Proceeds                                                                            60
    SECTION 2.18.     Increase in the Aggregate Commitments                                                      60
ARTICLE III
    SECTION 3.01.     Conditions Precedent to Effectiveness of Section 2.01                                      62
    SECTION 3.02.     Initial Advance to Each Designated Subsidiary                                              63
    SECTION 3.03.     Conditions Precedent to Each Borrowing, Issuance and Commitment Increase                   63
    SECTION 3.04.     Determinations Under Section 3.01                                                          63
ARTICLE IV
    SECTION 4.01.     Representations and Warranties of the Company                                              64
ARTICLE V
    SECTION 5.01.     Affirmative Covenants                                                                      65
    SECTION 5.02.     Negative Covenants                                                                         66
    SECTION 5.03.     Financial Covenants                                                                        68
ARTICLE VI
    SECTION 6.01.     Events of Default                                                                          69
    SECTION 6.02.     Actions in Respect of the Letters of Credit upon Default                                   70
ARTICLE VII
    SECTION 7.01.     Unconditional Guaranty                                                                     71
    SECTION 7.02.     Guaranty Absolute                                                                          71
    SECTION 7.03.     Waivers and Acknowledgements                                                               72
    SECTION 7.04.     Subrogation                                                                                72
    SECTION 7.05.     Subordination                                                                              72
    SECTION 7.06.     Continuing Guaranty; Assignments                                                           73
ARTICLE VIII
    SECTION 8.01.     Authorization and Action                                                                   73
    SECTION 8.02.     Agent's Reliance, Etc.                                                                     73
    SECTION 8.03.     Citibank and Affiliates                                                                    74
    SECTION 8.04.     Lender Credit Decision                                                                     74
    SECTION 8.05.     Indemnification                                                                            74
    SECTION 8.06.     Successor Agent                                                                            75
    SECTION 8.07.     Sub-Agent                                                                                  75
    SECTION 8.08.     Other Agents                                                                               75






                                                                                                           
ARTICLE IX
    SECTION 9.01.     Amendments, Etc.                                                                           75
    SECTION 9.02.     Notices, Etc.                                                                              75
    SECTION 9.03.     No Waiver; Remedies                                                                        76
    SECTION 9.04.     Costs and Expenses                                                                         76
    SECTION 9.05.     Right of Set-off                                                                           77
    SECTION 9.06.     Binding Effect                                                                             77
    SECTION 9.07.     Assignments and Participations                                                             77
    SECTION 9.08.     Confidentiality                                                                            79
    SECTION 9.09.     Designated Subsidiaries                                                                    79
    SECTION 9.10.     Governing Law                                                                              79
    SECTION 9.11.     Execution in Counterparts                                                                  79
    SECTION 9.12.     Judgment                                                                                   79
    SECTION 9.13.     Jurisdiction, Etc.                                                                         80
    SECTION 9.14.     Substitution of Currency                                                                   80
    SECTION 9.15.     No Liability of the Issuing Banks                                                          80
    SECTION 9.16.     Patriot Act Notice                                                                         80
    SECTION 9.17.     Power of Attorney                                                                          80
    SECTION 9.18.     Waiver of Jury Trial                                                                       81






Schedules
---------

Schedule I - List of Applicable Lending Offices

Schedule 2.01(b) - Existing Letters of Credit

Schedule 3.01(b) - Disclosed Litigation

Schedule 5.02(d) - Existing Debt


Exhibits
--------

Exhibit A        -   Form of Note

Exhibit B        -   Form of Notice of Borrowing

Exhibit C        -   Form of Assignment and Acceptance

Exhibit D        -   Form of Designation Agreement

Exhibit E        -   Form of Opinion of Counsel for the Borrower










                                CREDIT AGREEMENT

                           Dated as of March 17, 2005

               CORNING INCORPORATED, a New York corporation (the "Company"), the
                                                                  -------
banks,  financial  institutions  and other  institutional  lenders (the "Initial
                                                                         -------
Lenders") and issuers of letters of credit  ("Initial  Issuing Banks") listed on
-------                                       ----------------------
the signature  pages hereof,  JPMORGAN CHASE BANK,  N.A., as syndication  agent,
BANK OF  AMERICA,  N.A.,  THE BANK OF  TOKYO-MITSUBISHI,  LTD.,  WACHOVIA  BANK,
NATIONAL  ASSOCIATION,  BARCLAYS BANK PLC and DEUTSCHE BANK SECURITIES  INC., as
documentation  agents,  CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN SECURITIES
INC.,  as joint  lead  arrangers  and  joint  bookrunners,  and  CITIBANK,  N.A.
("Citibank"),  as  administrative  agent  (the  "Agent")  for  the  Lenders  (as
  --------                                       -----
hereinafter defined), agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

               SECTION 1.01.  Certain  Defined Terms. As used in this Agreement,
                              ----------------------
the  following  terms shall have the  following  meanings  (such  meanings to be
equally applicable to both the singular and plural forms of the terms defined):

               "Adjusted Consolidated EBITDA" means Consolidated EBITDA plus any
                ----------------------------
          net cash received from Equity  Affiliates,  minus any net cash paid to
          Equity  Affiliates,  minus any income from Equity  Affiliates plus any
          income to Equity Affiliates.

               "Advance" means an advance by a Lender to any Borrower as part of
                -------
          a Borrowing and refers to a Base Rate Advance or a  Eurocurrency  Rate
          Advance (each of which shall be a "Type" of Advance).
                                             ----

               "Affiliate"  means,  as to any  Person,  any other  Person  that,
                ---------
          directly or indirectly,  controls, is controlled by or is under common
          control  with such Person or is a director or officer of such  Person.
          For purposes of this  definition,  the term  "control"  (including the
          terms "controlling",  "controlled by" and "under common control with")
          of a Person means the possession,  direct or indirect, of the power to
          vote 5% or more of the  Voting  Stock of such  Person  or to direct or
          cause the  direction  of the  management  and policies of such Person,
          whether  through  the  ownership  of  Voting  Stock,  by  contract  or
          otherwise.

               "Agent's  Account" means (a) in the case of Advances  denominated
                ----------------
          in  Dollars,  the  account  of the  Agent  maintained  by the Agent at
          Citibank at its office at 388  Greenwich  Street,  New York,  New York
          10013, Account No. 36852248, Attention: Bank Loan Syndications, (b) in
          the  case of  Advances  denominated  in any  Committed  Currency,  the
          account of the  Sub-Agent  designated  in writing from time to time by
          the Agent to the Company  and the Lenders for such  purpose and (c) in
          any such case,  such other  account of the Agent as is  designated  in
          writing  from time to time by the Agent to the Company and the Lenders
          for such purpose.

               "Applicable  Lending Office" means,  with respect to each Lender,
                --------------------------
          such  Lender's  Domestic  Lending  Office  in the case of a Base  Rate
          Advance and such Lender's Eurocurrency Lending Office in the case of a
          Eurocurrency Rate Advance.

               "Applicable Margin" means, as of any date, a percentage per annum
                -----------------
          determined  by  reference  to the Public Debt Rating in effect on such
          date as set forth below:






------------------  ---------------------  --------------------------
Public Debt Rating  Applicable Margin for    Applicable Margin for
   S&P/Moody's       Base Rate Advances    Eurocurrency Rate Advances
------------------  ---------------------  --------------------------
Level 1
-------
A- or A3 or above          0.000%                     0.410%
------------------  ---------------------  --------------------------
Level 2
-------
BBB+ or Baa1               0.000%                     0.500%
------------------  ---------------------  --------------------------
Level 3
-------
BBB or Baa2                0.000%                     0.600%
------------------  ---------------------  --------------------------
Level 4
-------
BBB- or Baa3               0.000%                     0.825%
------------------  ---------------------  --------------------------
Level 5
-------
BB+ or Ba1                 0.050%                     1.050%
------------------  ---------------------  --------------------------
Level 6
-------
BB or Ba2                  0.250%                     1.250%
------------------  ---------------------  --------------------------
Level 7
-------
Lower than Level 6         0.700%                     1.700%
------------------  ---------------------  --------------------------

               "Applicable  Percentage"  means, as of any date, a percentage per
                ----------------------
          annum  determined  by reference to the Public Debt Rating in effect on
          such date as set forth below:

                -------------------------  -----------------
                   Public Debt Rating        Applicable
                       S&P/Moody's           Percentage
                -------------------------  -----------------
                Level 1
                -------
                A- or A3 or above              0.090%
                -------------------------  -----------------
                Level 2
                -------
                BBB+ or Baa1                   0.125%
                -------------------------  -----------------
                Level 3
                -------
                BBB or Baa2                    0.150%
                -------------------------  -----------------
                Level 4
                -------
                BBB- or Baa3                   0.175%
                -------------------------  -----------------
                Level 5
                -------
                BB+ or Ba1                     0.200%
                -------------------------  -----------------
                Level 6
                -------
                BB or Ba2                      0.250%
                -------------------------  -----------------
                Level 7
                -------
                Lower than Level 6             0.300%
                -------------------------  -----------------

               "Assignment  and  Acceptance"  means an assignment and acceptance
                ---------------------------
          entered into by a Lender and an Eligible Assignee, and accepted by the
          Agent, in substantially the form of Exhibit C hereto.

               "Assuming Lender" has the meaning specified in Section 2.18(d).
                ---------------

               "Assumption  Agreement"  has the  meaning  specified  in  Section
                ---------------------
          2.18(d)(ii).

               "Available  Amount" of any Letter of Credit  means,  at any time,
                -----------------
          the maximum  amount  available to be drawn under such Letter of Credit
          at such time (assuming  compliance at such time with all conditions to
          drawing).

               "Bankruptcy  Law" means any proceeding of the type referred to in
                ---------------
          Section  6.01(f)  or Title 11,  U.S.  Code,  or any  similar  foreign,
          federal or state law for the relief of debtors.

               "Base Rate" means a fluctuating interest rate per annum in effect
                ---------
          from time to time, which rate per annum shall at all times be equal to
          the higher of:

                    (a) the rate of interest  announced  publicly by Citibank in
               New York, New York, from time to time, as Citibank's base rate;

                    (b) 1/2 of one percent  per annum  above the  Federal  Funds
               Rate.

               "Base Rate Advance" means an Advance  denominated in Dollars that
                -----------------
          bears interest as provided in Section 2.07(a)(i).

               "Borrowers" means,  collectively,  the Company and the Designated
                ---------
          Subsidiaries from time to time.

               "Borrowing" means a borrowing consisting of simultaneous Advances
                ---------
          of the same  Type  made by each of the  Lenders  pursuant  to  Section
          2.01(a).

               "Borrowing Minimum" means, in respect of Advances  denominated in
                -----------------
          Dollars,  $10,000,000, in respect of Advances denominated in Sterling,
          (pound)10,000,000,   in  respect  of  Advances   denominated  in  Yen,
          (Y)100,000,000  and,  in respect  of  Advances  denominated  in Euros,
          (euro)10,000,000.

               "Borrowing Multiple" means, in respect of Advances denominated in
                ------------------
          Dollars,  $1,000,000 in respect of Advances  denominated  in Sterling,
          (pound)1,000,000,   in  respect  of  Advances   denominated   in  Yen,
          (Y)10,000,000  and,  in  respect  of  Advances  denominated  in Euros,
          (euro)1,000,000.

               "Business  Day"  means a day of the year on which  banks  are not
                -------------
          required  or  authorized  by law to close in New York City and, if the
          applicable Business Day relates to any Eurocurrency Rate Advances,  on
          which dealings are carried on in the London interbank market and banks
          are open for  business  in London  and in the  country of issue of the
          currency  of such  Eurocurrency  Rate  Advance  (or, in the case of an
          Advance  denominated  in Euro, on which the  Trans-European  Automated
          Real-Time Gross Settlement Express Transfer (TARGET) System is open).

               "Commitment"  means a Revolving Credit  Commitment or a Letter of
                ----------
          Credit Commitment.

               "Commitment Date" has the meaning specified in Section 2.18(b).
                ---------------

               "Commitment  Increase"  has  the  meaning  specified  in  Section
                --------------------
          2.18(a).

               "Committed  Currencies"  means  lawful  currency  of  the  United
                ---------------------
          Kingdom of Great  Britain and  Northern  Ireland,  lawful  currency of
          Japan and Euros.

               "Company Information" has the meaning specified in Section 9.08.
                -------------------

               "Consolidated"   refers  to  the  consolidation  of  accounts  in
                ------------
          accordance with GAAP.

               "Consolidated  Debt for  Borrowed  Money" of any Person means all
                ---------------------------------------
          items  that,  in  accordance   with  GAAP,   would  be  classified  as
          indebtedness on a Consolidated balance sheet of such Person.

               "Consolidated  EBITDA" means,  with respect to any Person for any
                --------------------
          period,  an  amount  equal  to (a)  Consolidated  Net  Income  (before
          discontinued  operations)  of such Person for such period plus (b) the
          sum of, in each case to the extent included in the calculation of such
          Consolidated  Net Income of such Person for such period in  accordance
          with GAAP,  but  without  duplication,  (i) any  provision  for income
          taxes,   (ii)   Consolidated   Interest   Expense,   (iii)  loss  from
          extraordinary items, (iv) depreciation,  depletion and amortization of
          intangibles  or  financing  or  acquisition  costs,  and (v) all other
          non-cash charges and non-cash losses for such period  (including,  but
          not limited to, stock option expense and  restructuring and impairment
          charges), minus (c) the sum of, in each case to the extent included in
          the  calculation  of  Consolidated  Net Income of such Person for such
          period in  accordance  with GAAP,  but  without  duplication,  (i) any
          credit for income tax,  (ii) gains from  extraordinary  items for such
          period,  (iii) any aggregate net gain from the sale, exchange or other
          disposition of capital  assets by such Person,  (iv) cash payments for
          previously  reserved  charges and (v) any other  non-cash  gains which
          have been added in determining Consolidated Net Income.

               "Consolidated  Interest  Expense"  means,  for any period for any
                -------------------------------
          Person,  all items that, in accordance with GAAP,  would be classified
          as  interest  expense on a  Consolidated  statement  of income of such
          Person for such period.

               "Consolidated  Net Income" means,  for any Person for any period,
                ------------------------
          the net income (or loss) of such Person and its  Subsidiaries for such
          period, determined on a Consolidated basis in conformity with GAAP.

               "Consolidated Net Worth" means, at any time, stockholders' equity
                ----------------------
          as set forth or  reflected  on the most  recent  Consolidated  balance
          sheet of the  Company and its  Subsidiaries,  plus the sum of minority
                                                        ----
          interests,  convertible preferred securities, and preferred stock, all
          determined in accordance with GAAP and consistently applied.

               "Consolidated  Total Capital"  means, at any time, the sum of (i)
                ---------------------------
          Consolidated Net Worth, and (ii) Consolidated Debt for Borrowed Money.

               "Convert",   "Conversion"   and  "Converted"  each  refers  to  a
                -------      ----------          ---------
          conversion  of  Advances  of one Type into  Advances of the other Type
          pursuant to Section 2.08 or 2.09.

               "Debt"  of  any  Person  means,  without  duplication,   (a)  all
                ----
          indebtedness of such Person for borrowed money, (b) all obligations of
          such Person for the  deferred  purchase  price of property or services
          (other than trade  payables not overdue by more than 90 days  incurred
          in the ordinary course of such Person's business), (c) all obligations
          of such Person evidenced by notes, bonds,  debentures or other similar
          instruments,  (d) all  obligations  of such Person  created or arising
          under any  conditional  sale or other title  retention  agreement with
          respect to property  acquired by such Person  (even  though the rights
          and remedies of the seller or lender under such agreement in the event
          of default are limited to repossession or sale of such property),  (e)
          all  obligations  of such Person as lessee under leases that have been
          or should be, in accordance with GAAP, recorded as capital leases, (f)
          all obligations, contingent or otherwise, of such Person in respect of
          acceptances,  letters of credit or similar  extensions of credit,  (g)
          all net obligations of such Person in respect of Hedge Agreements, (h)
          all Debt of others  referred  to in clauses  (a)  through (g) above or
          clause (i) below (collectively, "Guaranteed Debt") guaranteed directly
                                           ---------------
          or  indirectly in any manner by such Person,  or in effect  guaranteed
          directly or indirectly by such Person  through an agreement (1) to pay
          or purchase such Guaranteed Debt or to advance or supply funds for the
          payment or purchase of such Guaranteed Debt, (2) to purchase,  sell or
          lease (as lessee or lessor) property, or to purchase or sell services,
          primarily  for the purpose of enabling  the debtor to make  payment of
          such  Guaranteed  Debt or to assure the holder of such Guaranteed Debt
          against loss,  (3) to supply funds to or in any other manner invest in
          the debtor  (including  any  agreement to pay for property or services
          irrespective of whether such property is received or such services are
          rendered) or (4) otherwise to assure a creditor  against loss, and (i)
          all Debt  referred  to in clauses  (a)  through  (h) above  (including
          Guaranteed  Debt) secured by (or for which the holder of such Debt has
          an existing right, contingent or otherwise, to be secured by) any Lien
          on property  (including,  without  limitation,  accounts  and contract
          rights) owned by such Person,  even though such Person has not assumed
          or become liable for the payment of such Debt.

               "Default"  means any Event of  Default  or any event  that  would
                -------
          constitute an Event of Default but for the requirement  that notice be
          given or time elapse or both.

               "Designated Subsidiary" means any direct or indirect wholly-owned
                ---------------------
          Subsidiary of the Company  designated for borrowing  privileges  under
          this Agreement pursuant to Section 9.09.

               "Designation  Agreement"  means,  with respect to any  Designated
                ----------------------
          Subsidiary,  an  agreement  in the form of Exhibit D hereto  signed by
          such Designated Subsidiary and the Company.

               "Disclosed  Litigation"  has the  meaning  specified  in  Section
                ---------------------
          3.01(b).

               "Dollars"  and the "$" sign each  means  lawful  currency  of the
                -------            -
          United States of America.

               "Domestic Lending Office" means, with respect to any Lender,  the
                -----------------------
          office of such  Lender  specified  as its  "Domestic  Lending  Office"
          opposite its name on Schedule I hereto or in the Assumption  Agreement
          or the Assignment and Acceptance pursuant to which it became a Lender,
          or such other  office of such  Lender as such  Lender may from time to
          time specify to the Company and the Agent.

               "Effective Date" has the meaning specified in Section 3.01.
                --------------

               "Eligible  Assignee"  means (i) a Lender;  (ii) an Affiliate of a
                ------------------
          Lender;  and (iii) any other Person  approved by the Agent and, unless
          an Event of Default has  occurred  and is  continuing  at the time any
          assignment is effected in accordance  with Section 9.07,  the Company,
          in  each  case,  such  approval  not to be  unreasonably  withheld  or
          delayed; provided,  however, that neither the Company nor an Affiliate
                   --------   -------
          of the Company shall qualify as an Eligible Assignee.

               "Environmental  Action" means any action,  suit,  demand,  demand
                ---------------------
          letter,  claim,  notice  of  non-compliance  or  violation,  notice of
          liability or potential liability,  investigation,  proceeding, consent
          order or consent  agreement  relating in any way to any  Environmental
          Law,  Environmental  Permit or  Hazardous  Materials  or arising  from
          alleged  injury  or  threat  of  injury  to  health,   safety  or  the
          environment, including, without limitation, (a) by any governmental or
          regulatory  authority for  enforcement,  cleanup,  removal,  response,
          remedial or other  actions or damages and (b) by any  governmental  or
          regulatory  authority  or any third party for  damages,  contribution,
          indemnification, cost recovery, compensation or injunctive relief.

               "Environmental  Law" means any federal,  state,  local or foreign
                ------------------
          statute,  law, ordinance,  rule,  regulation,  code, order,  judgment,
          decree or  judicial  or  agency  interpretation,  policy  or  guidance
          relating to pollution or protection of the environment, health, safety
          or natural resources, including, without limitation, those relating to
          the  use,  handling,  transportation,  treatment,  storage,  disposal,
          release or discharge of Hazardous Materials.

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

               "Equity  Affiliate"  means any Person which the Company  accounts
                -----------------
          for  in its  Consolidated  financial  statements  on an  equity  basis
          pursuant to GAAP.

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

               "ERISA"  means the  Employee  Retirement  Income  Security Act of
                -----
          1974, as amended from time to time,  and the  regulations  promulgated
          and rulings issued thereunder.

               "ERISA  Affiliate" means any Person that for purposes of Title IV
                ----------------
          of ERISA is a  member  of the  Company's  controlled  group,  or under
          common control with the Company,  within the meaning of Section 414 of
          the Internal Revenue Code.

               "ERISA Event" means (a) (i) the occurrence of a reportable event,
                -----------
          within the meaning of Section 4043 of ERISA,  with respect to any Plan
          unless the 30-day  notice  requirement  with respect to such event has
          been waived by the PBGC, or (ii) the requirements of subsection (1) of
          Section  4043(b) of ERISA  (without  regard to subsection  (2) of such
          Section) are met with respect to a contributing sponsor, as defined in
          Section  4001(a)(13) of ERISA,  of a Plan,  and an event  described in
          paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
          reasonably  expected  to occur with  respect  to such Plan  within the
          following 30 days,  unless the 30-day notice  requirement with respect
          to such event has been waived by the PBGC; (b) the  application  for a
          minimum  funding  waiver with respect to a Plan;  (c) the provision by
          the  administrator of any Plan of a notice of intent to terminate such
          Plan  pursuant  to Section  4041(a)(2)  of ERISA  (including  any such
          notice with respect to a plan amendment referred to in Section 4041(e)
          of ERISA);  (d) the  cessation  of  operations  at a  facility  of the
          Company  or any ERISA  Affiliate  in the  circumstances  described  in
          Section  4062(e) of ERISA;  (e) the  withdrawal  by the Company or any
          ERISA  Affiliate from a Multiple  Employer Plan during a plan year for
          which it was a substantial  employer, as defined in Section 4001(a)(2)
          of  ERISA;  (f) the  conditions  for the  imposition  of a lien  under
          Section  302(f) of ERISA shall have been met with respect to any Plan;
          (g) the adoption of an amendment to a Plan  requiring the provision of
          security to such Plan  pursuant  to Section  307 of ERISA;  or (h) the
          institution by the PBGC of proceedings to terminate a Plan pursuant to
          Section  4042 of ERISA,  or the  occurrence  of any event or condition
          described  in Section 4042 of ERISA that  constitutes  grounds for the
          termination of, or the appointment of a trustee to administer, a Plan.

               "EURIBO Rate" means, for any Interest Period,  the rate appearing
                -----------
          on Page 248 of the Moneyline  Telerate Service (or on any successor or
          substitute page of such Service, or any successor to or substitute for
          such Service,  providing rate quotations comparable to those currently
          provided on such page of such Service, as determined by the Agent from
          time to time for purposes of providing  quotations  of interest  rates
          applicable to deposits in Euro by reference to the Banking  Federation
          of the  European  Union  Settlement  Rates  for  deposits  in Euro) at
          approximately  10:00 a.m., London time, two Business Days prior to the
          commencement of such Interest Period, as the rate for deposits in Euro
          with a  maturity  comparable  to such  Interest  Period or, if for any
          reason such rate is not available,  the average (rounded upward to the
          nearest whole multiple of 1/16 of 1% per annum, if such average is not
          such a multiple) of the  respective  rates per annum at which deposits
          in Euros are offered by the principal  office of each of the Reference
          Banks in London, England to prime banks in the London interbank market
          at 11:00 A.M.  (London time) two Business Days before the first day of
          such  Interest  Period  in  an  amount  substantially  equal  to  such
          Reference  Bank's  Eurocurrency  Rate Advance  comprising part of such
          Borrowing  to be  outstanding  during such  Interest  Period and for a
          period  equal  to  such  Interest  Period  (subject,  however,  to the
          provisions of Section 2.08).

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

               "Eurocurrency  Lending Office" means, with respect to any Lender,
                ----------------------------
          the  office of such  Lender  specified  as its  "Eurocurrency  Lending
          Office"  opposite  its name on Schedule I hereto or in the  Assumption
          Agreement or the Assignment and Acceptance pursuant to which it became
          a Lender (or, if no such office is  specified,  its  Domestic  Lending
          Office),  or such other  office of such Lender as such Lender may from
          time to time specify to the Company and the Agent.

               "Eurocurrency  Liabilities" has the meaning assigned to that term
                -------------------------
          in  Regulation  D of the Board of  Governors  of the  Federal  Reserve
          System, as in effect from time to time.

               "Eurocurrency  Rate"  means,  for any  Interest  Period  for each
                ------------------
          Eurocurrency  Rate Advance  comprising part of the same Borrowing,  an
          interest  rate per  annum  equal to the rate  per  annum  obtained  by
          dividing  (a)(i) in the case of any Advance  denominated in Dollars or
          any Committed  Currency  other than Euro,  the rate per annum (rounded
          upward  to the  nearest  whole  multiple  of  1/16  of 1%  per  annum)
          appearing on Moneyline  Telerate  Markets Page 3750 (or any  successor
          page) as the London interbank  offered rate for deposits in Dollars or
          the applicable  Committed Currency at approximately 11:00 A.M. (London
          time) two Business Days prior to the first day of such Interest Period
          for a term  comparable to such  Interest  Period or, if for any reason
          such rate is not available, the average (rounded upward to the nearest
          whole multiple of 1/16 of 1% per annum,  if such average is not such a
          multiple)  of the rate per annum at which  deposits  in Dollars or the
          applicable  Committed  Currency is offered by the principal  office of
          each of the Reference  Banks in London,  England to prime banks in the
          London  interbank market at 11:00 A.M. (London time) two Business Days
          before   the  first  day  of  such   Interest   Period  in  an  amount
          substantially equal to such Reference Bank's Eurocurrency Rate Advance
          comprising  part of  such  Borrowing  to be  outstanding  during  such
          Interest  Period and for a period  equal to such  Interest  Period or,
          (ii) in the case of any Advance  denominated in Euros, the EURIBO Rate
          by (b) a percentage equal to 100% minus the Eurocurrency  Rate Reserve
          Percentage for such Interest Period. If the Moneyline Telerate Markets
          Page 3750 (or any successor  page) is  unavailable,  the  Eurocurrency
          Rate for any  Interest  Period  for  each  Eurocurrency  Rate  Advance
          comprising part of the same Borrowing shall be determined by the Agent
          on the basis of  applicable  rates  furnished  to and  received by the
          Agent from the Reference  Banks two Business Days before the first day
          of such  Interest  Period,  subject,  however,  to the  provisions  of
                                      -------   -------
          Section 2.08.

               "Eurocurrency  Rate  Advance"  means an  Advance  denominated  in
                ---------------------------
          Dollars or a  Committed  Currency  that bears  interest as provided in
          Section 2.07(a)(ii).

               "Eurocurrency  Rate Reserve  Percentage"  for any Interest Period
                --------------------------------------
          for  all  Eurocurrency  Rate  Advances  comprising  part  of the  same
          Borrowing  means the reserve  percentage  applicable two Business Days
          before the first day of such Interest Period under regulations  issued
          from time to time by the Board of  Governors  of the  Federal  Reserve
          System  (or  any  successor)  for   determining  the  maximum  reserve
          requirement   (including,    without   limitation,    any   emergency,
          supplemental or other marginal reserve  requirement) for a member bank
          of the  Federal  Reserve  System  in New York  City  with  respect  to
          liabilities  or  assets   consisting  of  or  including   Eurocurrency
          Liabilities (or with respect to any other category of liabilities that
          includes   deposits  by  reference  to  which  the  interest  rate  on
          Eurocurrency Rate Advances is determined)  having a term equal to such
          Interest Period.

               "Events of Default" has the meaning specified in Section 6.01.
                -----------------

               "Federal  Funds  Rate"  means,  for  any  period,  a  fluctuating
                --------------------
          interest  rate per annum  equal for each day during such period to the
          weighted average of the rates on overnight Federal funds  transactions
          with members of the Federal  Reserve System  arranged by Federal funds
          brokers,  as published for such day (or, if such day is not a Business
          Day, for the next preceding  Business Day) by the Federal Reserve Bank
          of New York,  or, if such rate is not so published for any day that is
          a Business  Day,  the average of the  quotations  for such day on such
          transactions received by the Agent from three Federal funds brokers of
          recognized standing selected by it.

               "GAAP" has the meaning specified in Section 1.03.
                ----

               "Guaranteed  Obligations"  has the meaning  specified  in Section
                -----------------------
          7.01.

               "Hazardous Materials" means (a) petroleum and petroleum products,
                -------------------
          byproducts    or   breakdown    products,    radioactive    materials,
          asbestos-containing materials, polychlorinated biphenyls and radon gas
          and (b) any  other  chemicals,  materials  or  substances  designated,
          classified  or  regulated  as  hazardous or toxic or as a pollutant or
          contaminant under any Environmental Law.

               "Hedge  Agreements"  means  interest  rate  swap,  cap or  collar
                -----------------
          agreements,  interest rate future or option  contracts,  currency swap
          agreements,  currency  future or option  contracts  and other  similar
          agreements.

               "Increase Date" has the meaning specified in Section 2.18(a).
                -------------

               "Increasing Lender" has the meaning specified in Section 2.18(b).
                -----------------

               "Information  Memorandum" means the information  memorandum dated
                -----------------------
          February 15, 2005 used by the Agent in connection with the syndication
          of the Commitments.

               "Interest  Period"  means,  for each  Eurocurrency  Rate  Advance
                ----------------
          comprising  part of the same Borrowing,  the period  commencing on the
          date of such  Eurocurrency  Rate Advance or the date of the Conversion
          of any Base Rate  Advance  into such  Eurocurrency  Rate  Advance  and
          ending  on the  last  day  of  the  period  selected  by the  Borrower
          requesting  such  Borrowing  pursuant  to the  provisions  below  and,
          thereafter,  each subsequent  period commencing on the last day of the
          immediately  preceding  Interest  Period and ending on the last day of
          the period selected by such Borrower pursuant to the provisions below.
          The duration of each such Interest  Period shall be one, two, three or
          six  months,  and  subject to clause (c) of this  definition,  nine or
          twelve months, as such Borrower may, upon notice received by the Agent
          not later than 11:00 A.M.  (New York City time) on the third  Business
          Day prior to the first day of such Interest Period, select;  provided,
                                                                       --------
          however, that:
          -------

                    (a) such  Borrower may not select any  Interest  Period that
               ends after the Termination Date;

                    (b)  Interest  Periods  commencing  on  the  same  date  for
               Eurocurrency Rate Advances  comprising part of the same Borrowing
               shall be of the same duration;

                    (c) in the case of any such  Borrowing,  such Borrower shall
               not be entitled to select an Interest  Period having  duration of
               nine or twelve months  unless,  by 2:00 P.M. (New York City time)
               on the third Business Day prior to the first day of such Interest
               Period,  each Lender  notifies the Agent that such Lender will be
               providing  funding for such Borrowing  with such Interest  Period
               (the  failure  of any  Lender to so  respond  by such time  being
               deemed for all purposes of this Agreement as an objection by such
               Lender  to the  requested  duration  of  such  Interest  Period);
               provided  that,  if  any or all  of  the  Lenders  object  to the
               requested  duration of such Interest Period,  the duration of the
               Interest  Period for such  Borrowing  shall be one, two, three or
               six months,  as  specified  by such  Borrower  in the  applicable
               Notice of  Borrowing  as the desired  alternative  to an Interest
               Period of nine or twelve months;

                    (d)  whenever  the last  day of any  Interest  Period  would
               otherwise  occur on a day other than a Business Day, the last day
               of such  Interest  Period  shall be extended to occur on the next
               succeeding  Business  Day,  provided,   however,  that,  if  such
                                           --------    -------
               extension  would  cause the last day of such  Interest  Period to
               occur in the next following  calendar month, the last day of such
               Interest  Period shall occur on the next preceding  Business Day;
               and

                    (e) whenever the first day of any Interest  Period occurs on
               a day  of  an  initial  calendar  month  for  which  there  is no
               numerically corresponding day in the calendar month that succeeds
               such initial  calendar month by the number of months equal to the
               number of months in such Interest  Period,  such Interest  Period
               shall end on the last  Business Day of such  succeeding  calendar
               month.

               "Internal  Revenue Code" means the Internal Revenue Code of 1986,
                ----------------------
          as amended  from time to time,  and the  regulations  promulgated  and
          rulings issued thereunder.

               "Investment  Grade  Rating  Date"  means the first date after the
                -------------------------------
          date  hereof  date on which the Public  Debt  Rating is BBB- or better
          from S&P and Baa3 or better from Moody's.

               "Issuance"  with  respect  to any  Letter  of  Credit  means  the
                --------
          issuance, amendment, renewal or extension of such Letter of Credit.

               "Issuing  Bank"  means an Initial  Issuing  Bank or any  Eligible
                -------------
          Assignee  to  which a  portion  of the  Letter  of  Credit  Commitment
          hereunder has been  assigned  pursuant to Section 9.07 so long as such
          Eligible Assignee expressly agrees to perform in accordance with their
          terms all of the  obligations  that by the terms of this Agreement are
          required to be  performed  by it as an Issuing  Bank and  notifies the
          Agent of its  Applicable  Lending Office (which  information  shall be
          recorded by the Agent in the  Register),  for so long as such  Initial
          Issuing  Bank or Eligible  Assignee,  as the case may be, shall have a
          Letter of Credit Commitment.

               "L/C Cash Deposit Account" means an interest bearing cash deposit
                ------------------------
          account to be established and maintained by the Agent,  over which the
          Agent  shall  have sole  dominion  and  control,  upon terms as may be
          satisfactory to the Agent and the Company.

               "L/C  Related  Documents"  has the meaning  specified  in Section
                -----------------------
          2.06(b)(i).

               "Lenders"  means each Initial  Lender,  each Issuing  Bank,  each
                -------
          Assuming  Lender that shall become a party hereto  pursuant to Section
          2.18 and each  Person  that shall  become a party  hereto  pursuant to
          Section 9.07.

               "Letter of Credit" has the meaning specified in Section 2.01(b).
                ----------------

               "Letter of Credit Agreement" has the meaning specified in Section
                --------------------------
          2.03(a).

               "Letter of Credit Commitment" means, with respect to each Issuing
                ---------------------------
          Bank,  the  obligation of such Issuing Bank to issue Letters of Credit
          for the account of the Borrowers and their  specified  Subsidiaries in
          (a) the Dollar  amount set forth  opposite the Issuing  Bank's name on
          the  signature  pages  hereto  under  the  caption  "Letter  of Credit
          Commitment"  or (b) if such  Issuing Bank has entered into one or more
          Assignment  and  Acceptances,  the  Dollar  amount  set forth for such
          Issuing  Bank in the  Register  maintained  by the Agent  pursuant  to
          Section 9.07(d) as such Issuing Bank's "Letter of Credit  Commitment",
          in each case as such amount may be reduced prior to such time pursuant
          to Section 2.05.

               "Letter of Credit  Facility"  means, at any time, an amount equal
                --------------------------
          to the least of (a) the aggregate  amount of the Issuing Banks' Letter
          of Credit  Commitments  at such  time,  (b)  $200,000,000  and (c) the
          aggregate amount of the Revolving Credit  Commitments,  as such amount
          may be reduced at or prior to such time pursuant to Section 2.05.

               "Lien"  means  any lien,  security  interest  or other  charge or
                ----
          encumbrance   of  any  kind,   or  any  other  type  of   preferential
          arrangement,  including,  without  limitation,  the  lien or  retained
          security title of a conditional vendor and any easement,  right of way
          or other encumbrance on title to real property.

               "Material  Adverse  Change" means any material  adverse change in
                -------------------------
          the  business,  condition  (financial  or  otherwise),  operations  or
          prospects of the Company and its Subsidiaries taken as a whole.

               "Material  Adverse Effect" means a material adverse effect on (a)
                ------------------------
          the business,  condition (financial or otherwise) or operations of the
          Company  and its  Subsidiaries  taken as a whole,  (b) the  rights and
          remedies of the Agent or any Lender  under this  Agreement or any Note
          or (c) the ability of any  Borrower to perform its  obligations  under
          this Agreement or any Note.

               "Moody's" means Moody's Investors Service, Inc.
                -------

               "Multiemployer  Plan" means a  multiemployer  plan, as defined in
                -------------------
          Section  4001(a)(3)  of  ERISA,  to which  the  Company  or any  ERISA
          Affiliate is making or accruing an obligation  to make  contributions,
          or has within any of the preceding  five plan years made or accrued an
          obligation to make contributions.

               "Multiple Employer Plan" means a single employer plan, as defined
                ----------------------
          in Section  4001(a)(15) of ERISA, that (a) is maintained for employees
          of the Company or any ERISA  Affiliate  and at least one Person  other
          than the Company and the ERISA Affiliates or (b) was so maintained and
          in respect  of which the  Company  or any ERISA  Affiliate  could have
          liability  under  Section 4064 or 4069 of ERISA in the event such plan
          has been or were to be terminated.

               "Note"  means a promissory  note of any  Borrower  payable to the
                ----
          order of any  Lender,  delivered  pursuant  to a  request  made  under
          Section 2.16 in substantially the form of Exhibit A hereto, evidencing
          the aggregate  indebtedness of such Borrower to such Lender  resulting
          from the Advances made by such Lender to such Borrower.

               "Notice  of  Borrowing"  has the  meaning  specified  in  Section
                ---------------------
          2.02(a).

               "Notice  of  Issuance"  has  the  meaning  specified  in  Section
                --------------------
          2.03(a).

               "Patriot  Act" means the  Uniting  and  Strengthening  America by
                ------------
          Providing   Appropriate  Tools  Required  to  Intercept  and  Obstruct
          Terrorism  Act of 2001,  Pub. L.  107-56,  signed into law October 26,
          2001.

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

               "PBGC" means the Pension  Benefit  Guaranty  Corporation  (or any
                ----
          successor).

               "Permitted  Liens"  means  such of the  following  as to which no
                ----------------
          enforcement,  collection,  execution,  levy or foreclosure  proceeding
          shall  have  been  commenced:  (a) Liens for  taxes,  assessments  and
          governmental  charges or levies to the extent not  required to be paid
          under  Section  5.01(b)  hereof;  (b) Liens  imposed  by law,  such as
          materialmen's,  mechanics', carriers', workmen's and repairmen's Liens
          and other  similar  Liens  arising in the ordinary  course of business
          securing obligations that are not overdue for a period of more than 30
          days or  which  are  being  contested  in good  faith  by  appropriate
          proceedings and as to which appropriate  reserves are being maintained
          in  accordance  with  generally  accepted  accounting  practices;  (c)
          pledges or deposits to secure obligations under workers'  compensation
          laws  or  similar   legislation  or  to  secure  public  or  statutory
          obligations,  performance  bids,  surety bonds,  performance bonds and
          other  obligations of a like nature incurred in the ordinary course of
          business; (d) easements, rights of way and other encumbrances on title
          to real property  that do not render title to the property  encumbered
          thereby  unmarketable or materially  adversely  affect the use of such
          property for its present  purposes;  (e) judgment bonds so long as the
          enforcement of such liens is effectively stayed and the claims secured
          thereby are being  contested in good faith by appropriate  proceedings
          and  as  to  which  appropriate   reserves  are  being  maintained  in
          accordance with generally accepted accounting practices;  (f) liens of
          a lessor or  sublessor  with  respect to property  under an  operating
          lease and any  restriction  or  encumbrance  to which the  interest or
          title of such lessor or sublessor  may be subject;  and (g) so long as
          such liens do not secure Debt, liens arising under standard custodial,
          bailee or depositary  arrangements  (including  deposit  accounts with
          banks or other financial institutions).

               "Person" means an individual, partnership, corporation (including
                ------
          a  business  trust),  joint  stock  company,   trust,   unincorporated
          association, joint venture, limited liability company or other entity,
          or a government or any political subdivision or agency thereof.

               "Plan" means a Single Employer Plan or a Multiple  Employer Plan.
               ----

               "Post-Petition  Interest"  has the meaning  specified  in Section
                -----------------------
          7.05.

               "Public Debt Rating"  means,  as of any date, the rating that has
                ------------------
          been most recently announced by either S&P or Moody's, as the case may
          be, for any class of non-credit  enhanced  long-term  senior unsecured
          debt issued by the Company  or, if any such rating  agency  shall have
          issued more than one such  rating,  the lowest  such rating  issued by
          such rating agency. For purposes of the foregoing,  (a) if only one of
          S&P and  Moody's  shall  have in  effect a  Public  Debt  Rating,  the
          Applicable Margin and the Applicable Percentage shall be determined by
          reference  to the  available  rating;  (b) if neither  S&P nor Moody's
          shall have in effect a Public Debt Rating,  the Applicable  Margin and
          the Applicable Percentage will be set in accordance with Level 7 under
          the definition of "Applicable Margin" or "Applicable  Percentage",  as
                             -----------------      ----------------------
          the case may be; (c) if the  ratings  established  by S&P and  Moody's
          shall fall within  different  levels,  the  Applicable  Margin and the
          Applicable Percentage shall be based upon the higher rating unless the
          such  ratings  differ  by  two or  more  levels,  in  which  case  the
          applicable  level  will be deemed  to be one level  above the lower of
          such levels;  (d) if any rating established by S&P or Moody's shall be
          changed,  such change  shall be effective as of the date on which such
          change is first  announced  publicly by the rating  agency making such
          change;  and (e) if S&P or  Moody's  shall  change  the basis on which
          ratings  are  established,  each  reference  to the Public Debt Rating
          announced  by S&P or Moody's,  as the case may be,  shall refer to the
          then equivalent rating by S&P or Moody's, as the case may be.

               "Ratable  Share" of any amount means,  with respect to any Lender
                --------------
          at any time, the product of such amount times a fraction the numerator
          of which is the amount of such Lender's Revolving Credit Commitment at
          such time (or, if the  Revolving  Credit  Commitments  shall have been
          terminated  pursuant to Section 2.07 or 6.01, such Lender's  Revolving
          Credit Commitment as in effect  immediately prior to such termination)
          and the denominator of which is the aggregate  amount of all Revolving
          Credit   Commitments  at  such  time  (or,  if  the  Revolving  Credit
          Commitments  shall have been  terminated  pursuant to Section  2.07 or
          6.01, the aggregate amount of all Revolving  Credit  Commitments as in
          effect immediately prior to such termination).

               "Reference  Banks" means Citibank,  JPMorgan Chase Bank, N.A. and
                ----------------
          The Bank of Tokyo-Mitsubishi, Ltd.

               "Register" has the meaning specified in Section 9.07(d).
                --------

               "Required  Lenders"  means  at any time  Lenders  owed at least a
                -----------------
          majority in interest of the then  aggregate  unpaid  principal  amount
          (based on the  Equivalent  in Dollars  at such  time) of the  Advances
          owing to Lenders, or, if no such principal amount is then outstanding,
          Lenders having at least a majority in interest of the Revolving Credit
          Commitments.

               "Revolving  Credit  Commitment"  means as to any  Lender  (a) the
                -----------------------------
          Dollar  amount set forth  opposite such Lender's name on the signature
          pages hereof as such Lender's  "Revolving Credit  Commitment",  (b) if
          such Lender has become a Lender  hereunder  pursuant to an  Assumption
          Agreement, the Dollar amount set forth in such Assumption Agreement or
          (c) if such Lender has entered into an Assignment and Acceptance,  the
          Dollar amount set forth for such Lender in the Register  maintained by
          the Agent pursuant to Section  9.07(d),  as such amount may be reduced
          pursuant to Section 2.05 or increased pursuant to Section 2.18.

               "S&P"  means  Standard & Poor's,  a division  of The  McGraw-Hill
                ---
          Companies, Inc.

               "Single  Employer Plan" means a single  employer plan, as defined
                ---------------------
          in Section  4001(a)(15) of ERISA, that (a) is maintained for employees
          of the  Company or any ERISA  Affiliate  and no Person  other than the
          Company  and the  ERISA  Affiliates  or (b) was so  maintained  and in
          respect  of which  the  Company  or any  ERISA  Affiliate  could  have
          liability  under Section 4069 of ERISA in the event such plan has been
          or were to be terminated.

               "Solvent" and  "Solvency"  mean,  with respect to any Person on a
                -------        --------
          particular  date, that on such date (a) the fair value of the property
          of such  Person  is  greater  than the total  amount  of  liabilities,
          including, without limitation, contingent liabilities, of such Person,
          (b) the present fair salable value of the assets of such Person is not
          less  than  the  amount  that  will be  required  to pay the  probable
          liability  of such  Person on its debts as they  become  absolute  and
          matured, (c) such Person does not intend to, and does not believe that
          it will,  incur debts or liabilities  beyond such Person's  ability to
          pay such debts and  liabilities  as they mature and (d) such Person is
          not engaged in business or a  transaction,  and is not about to engage
          in business or a transaction,  for which such Person's  property would
          constitute an  unreasonably  small  capital.  The amount of contingent
          liabilities  at any time shall be computed as the amount that,  in the
          light  of all the  facts  and  circumstances  existing  at such  time,
          represents  the amount  that can  reasonably  be expected to become an
          actual or matured liability.

               "Sub-Agent" means Citibank International plc.
                ---------

               "Subordinated  Obligations" has the meaning  specified in Section
                -------------------------
          7.05.

               "Subsidiary"  of any Person means any  corporation,  partnership,
                ----------
          joint venture or limited liability company of which (or in which) more
          than  50% of (a) the  issued  and  outstanding  capital  stock  having
          ordinary voting power to elect a majority of the Board of Directors of
          such corporation (irrespective of whether at the time capital stock of
          any other  class or  classes of such  corporation  shall or might have
          voting  power  upon  the  occurrence  of any  contingency)  or (b) the
          interest in the capital or profits of such limited liability  company,
          partnership  or joint  venture is at the time  directly or  indirectly
          owned or controlled by such Person,  by such Person and one or more of
          its  other  Subsidiaries  or by one or  more of  such  Person's  other
          Subsidiaries.

               "Termination  Date"  means the  earlier of March 17, 2010 and the
                -----------------
          date of  termination in whole of the  Commitments  pursuant to Section
          2.05 or 6.01.

               "Unissued Letter of Credit Commitment" means, with respect to any
                ------------------------------------
          Issuing Bank,  the obligation of such Issuing Bank to issue Letters of
          Credit  for  the  account  of  the   Borrowers   or  their   specified
          Subsidiaries in an amount equal to the excess of (a) the amount of its
          Letter of Credit Commitment over (b) the aggregate Available Amount of
          all Letters of Credit issued by such Issuing Bank.

               "Unused  Commitment"  means,  with  respect to each Lender at any
                ------------------
          time, (a) such Lender's Revolving Credit Commitment at such time minus
                                                                           -----
          (b) the sum of (i) the aggregate principal amount of all Advances made
          by such Lender (in its capacity as a Lender) and  outstanding  at such
          time,  plus  (ii) such  Lender's  Ratable  Share of (A) the  aggregate
                 ----
          Available Amount of all the Letters of Credit outstanding at such time
          and (B) the  aggregate  principal  amount of all Advances made by each
          Issuing  Bank  pursuant to Section  2.03(c) that have not been ratably
          funded by such Lender and outstanding at such time.

               "Voting  Stock" means capital stock issued by a  corporation,  or
                -------------
          equivalent  interests  in any other  Person,  the holders of which are
          ordinarily, in the absence of contingencies,  entitled to vote for the
          election of directors  (or persons  performing  similar  functions) of
          such  Person,  even if the right so to vote has been  suspended by the
          happening of such a contingency.

               SECTION 1.02.  Computation of Time Periods.  In this Agreement in
                              ---------------------------
the  computation of periods of time from a specified  date to a later  specified
date,  the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

               SECTION  1.03.   Accounting   Terms.  All  accounting  terms  not
                                ------------------
specifically  defined  herein shall be construed in  accordance  with  generally
accepted accounting  principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
                                                             ----


                                 ARTICLE II

             AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT

               SECTION  2.01.  The  Advances  and  Letters  of  Credit.  (a) The
                               ---------------------------------------       ---
Advances.  Each Lender severally agrees, on the terms and conditions hereinafter
--------
set forth,  to make  Advances to any Borrower  from time to time on any Business
Day during the period from the Effective Date until the  Termination  Date in an
aggregate  amount  (based in  respect of any  Advances  to be  denominated  in a
Committed  Currency by reference to the Equivalent thereof in Dollars determined
on the date of delivery of the  applicable  Notice of  Borrowing)  not to exceed
such Lender's Unused  Commitment.  Each Borrowing shall be in an amount not less
than the Borrowing Minimum or the Borrowing Multiple in excess thereof and shall
consist of Advances of the same Type and in the same  currency  made on the same
day by the  Lenders  ratably  according  to their  respective  Revolving  Credit
Commitments.  Within the limits of each Lender's  Commitment,  the Borrowers may
borrow under this Section 2.01(a),  prepay pursuant to Section 2.10 and reborrow
under this Section 2.01(a).

               (b) Letters of Credit. Each Issuing Bank agrees, on the terms and
                   -----------------
conditions  hereinafter  set forth, in reliance upon the agreements of the other
Lenders set forth in this Agreement, to issue letters of credit (each, a "Letter
                                                                          ------
of  Credit")  denominated  in Dollars for the  account of any  Borrower  and its
----------
specified  Subsidiaries  from time to time on any Business Day during the period
from  the  Effective  Date  until  30 days  before  the  Termination  Date in an
aggregate  Available Amount (i) for all Letters of Credit issued by each Issuing
Bank not to exceed at any time the lesser of (x) the  Letter of Credit  Facility
at such time and (y) such Issuing  Bank's  Letter of Credit  Commitment  at such
time and (ii) for each such  Letter of Credit  not to exceed an amount  equal to
the Unused  Commitments  of the Lenders at such time.  No Letter of Credit shall
have an expiration date (including all rights of the applicable  Borrower or the
beneficiary  to  require  renewal)  later  than  10  Business  Days  before  the
Termination  Date.  Within the limits referred to above,  the Borrowers may from
time to time  request  the  Issuance  of  Letters of Credit  under this  Section
2.01(b).  Each letter of credit  listed on Schedule  2.01(b)  shall be deemed to
constitute  a Letter of Credit  issued  hereunder,  and each  Lender  that is an
issuer of such a Letter of Credit shall, for purposes of Section 2.03, be deemed
to be an Issuing Bank for each such letter of credit,  provided than any renewal
                                                       --------
or  replacement  of any such letter of credit shall be issued by an Issuing Bank
pursuant to the terms of this Agreement.

               SECTION  2.02.  Making  the  Advances.  (a)  Except as  otherwise
                               ---------------------
provided in Section 2.03(c),  each Borrowing shall be made on notice,  given not
later than (x) 11:00 A.M.  (New York City time) on the third  Business Day prior
to the date of the proposed  Borrowing in the case of a Borrowing  consisting of
Eurocurrency Rate Advances  denominated in Dollars,  (y) 4:00 P.M. (London time)
on the third  Business  Day prior to the date of the  proposed  Borrowing in the
case of a Borrowing  consisting of Eurocurrency Rate Advances denominated in any
Committed  Currency,  or (z) 11:00 A.M.  (New York City time) on the date of the
proposed Borrowing in the case of a Borrowing  consisting of Base Rate Advances,
by any  Borrower to the Agent (and,  in the case of a  Borrowing  consisting  of
Eurocurrency Rate Advances,  simultaneously to the Sub-Agent),  which shall give
to each  Lender  prompt  notice  thereof by  telecopier.  Each such  notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately
              -------------------
in  writing,  or  telecopier  in  substantially  the form of  Exhibit  B hereto,
specifying  therein  the  requested  (i) date of such  Borrowing,  (ii)  Type of
Advances  comprising such Borrowing,  (iii) aggregate  amount of such Borrowing,
and (iv) in the case of a Borrowing  consisting of  Eurocurrency  Rate Advances,
initial  Interest Period and currency for each such Advance.  Each Lender shall,
before 2:00 P.M. (New York City time) on the date of such Borrowing, in the case
of a Borrowing  consisting of Advances  denominated in Dollars, and before 11:00
A.M.  (London  time) on the date of such  Borrowing,  in the case of a Borrowing
consisting of Eurocurrency Rate Advances  denominated in any Committed Currency,
make available for the account of its Applicable  Lending Office to the Agent at
the applicable Agent's Account, in same day funds, such Lender's ratable portion
of such Borrowing.  After the Agent's receipt of such funds and upon fulfillment
of the applicable  conditions set forth in Article III, the Agent will make such
funds available to the Borrower  requesting the Borrowing at the Agent's address
referred to in Section 9.02 or at the applicable Payment Office, as the case may
be.

               (b)   Anything   in   subsection   (a)  above  to  the   contrary
notwithstanding,  (i) no Borrower may select  Eurocurrency Rate Advances for any
Borrowing if the aggregate  amount of such  Borrowing is less than the Borrowing
Minimum or if the obligation of the Lenders to make  Eurocurrency  Rate Advances
shall  then  be  suspended  pursuant  to  Section  2.08  or 2.12  and  (ii)  the
Eurocurrency  Rate  Advances  may not be  outstanding  as part of more  than six
separate Borrowings.

               (c) Each Notice of Borrowing  shall be irrevocable and binding on
the Borrower  requesting  the  Borrowing.  In the case of any Borrowing that the
related Notice of Borrowing  specifies is to be comprised of  Eurocurrency  Rate
Advances,  the Borrower  requesting  the Borrowing  shall  indemnify each Lender
against  any loss,  cost or expense  incurred  by such Lender as a result of any
failure to fulfill on or before the date  specified  in such Notice of Borrowing
for  such  Borrowing  the  applicable  conditions  set  forth  in  Article  III,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or  expense  incurred  by  reason of the  liquidation  or  reemployment  of
deposits or other  funds  acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance,  as a result of such
failure, is not made on such date.

               (d) Unless the Agent  shall have  received  notice  from a Lender
prior to the time of any Borrowing  that such Lender will not make  available to
the Agent such Lender's ratable portion of such Borrowing,  the Agent may assume
that such  Lender has made such  portion  available  to the Agent on the date of
such  Borrowing in accordance  with  subsection (a) of this Section 2.02 and the
Agent may, in reliance  upon such  assumption,  make  available  to the Borrower
requesting  the  Borrowing on such date a  corresponding  amount.  If and to the
extent that such Lender shall not have so made such ratable portion available to
the Agent,  such Lender and such Borrower  severally agree to repay to the Agent
forthwith on demand such  corresponding  amount together with interest  thereon,
for each day from the date such amount is made  available to such Borrower until
the  date  such  amount  is  repaid  to the  Agent,  at (i) in the  case of such
Borrower, the higher of (A) the interest rate applicable at the time to Advances
comprising  such  Borrowing  and (B) the cost of funds  incurred by the Agent in
respect of such  amount  and (ii) in the case of such  Lender,  (A) the  Federal
Funds  Rate in the case of  Advances  denominated  in Dollars or (B) the cost of
funds  incurred  by the Agent in respect of such  amount in the case of Advances
denominated  in  Committed  Currencies.  If such Lender shall repay to the Agent
such corresponding  amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.

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

               SECTION 2.03.  Issuance of and Drawings and  Reimbursement  Under
                              --------------------------------------------------
Letters of Credit. (a) Request for Issuance.  (i) Each Letter of Credit shall be
-----------------
issued upon notice,  given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed  Issuance of such Letter of
Credit (or on such shorter notice as the applicable  Issuing Bank may agree), by
any  Borrower to any Issuing  Bank,  and such Issuing Bank shall give the Agent,
prompt notice thereof. Each such notice by a Borrower of Issuance of a Letter of
Credit (a "Notice of Issuance")  shall be by telecopier or telephone,  confirmed
           ------------------
immediately  in  writing,  specifying  therein  the  requested  (A) date of such
Issuance (which shall be a Business Day), (B) Available Amount of such Letter of
Credit,  (C) expiration  date of such Letter of Credit (which shall not be later
than 10 Business Days before the Termination  Date), (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, such
Letter of Credit shall be issued pursuant to such  application and agreement for
letter of credit as such Issuing Bank and the  applicable  Borrower  shall agree
for use in connection with such requested  Letter of Credit (a "Letter of Credit
                                                                ----------------
Agreement").  If the  requested  form of such Letter of Credit is  acceptable to
---------
such Issuing Bank in its  reasonable  discretion (it being  understood  that any
such form shall have only explicit documentary  conditions to draw and shall not
include discretionary  conditions),  such Issuing Bank will, upon fulfillment of
the applicable  conditions set forth in Section 3.03, make such Letter of Credit
available to the applicable  Borrower at its office  referred to in Section 9.02
or as otherwise  agreed with such Borrower in connection with such Issuance.  In
the  event  and to the  extent  that the  provisions  of any  Letter  of  Credit
Agreement shall conflict with this  Agreement,  the provisions of this Agreement
shall govern.

               (b) Participations.  By the Issuance of a Letter of Credit (or an
                   --------------
amendment to a Letter of Credit increasing or decreasing the amount thereof) and
without any further  action on the part of the  applicable  Issuing  Bank or the
Lenders,  such Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Bank, a participation  in such Letter of Credit equal
to such Lender's Ratable Share of the Available Amount of such Letter of Credit.
Each Borrower hereby agrees to each such participation.  In consideration and in
furtherance of the foregoing,  each Lender hereby absolutely and unconditionally
agrees to pay to the Agent,  for the account of such Issuing Bank, such Lender's
Ratable  Share of each  drawing  made  under a Letter of  Credit  funded by such
Issuing Bank and not reimbursed by the applicable  Borrower on the date made, or
of any  reimbursement  payment  required to be refunded to such Borrower for any
reason,  which  amount  will be  advanced,  and  deemed to be an Advance to such
Borrower  hereunder,  regardless of the satisfaction of the conditions set forth
in Section  3.03.  Each Lender  acknowledges  and agrees that its  obligation to
acquire  participations  pursuant  to this  paragraph  in  respect of Letters of
Credit  is  absolute  and  unconditional  and  shall  not  be  affected  by  any
circumstance  whatsoever,  including any amendment,  renewal or extension of any
Letter of Credit or the occurrence and  continuance of a Default or reduction or
termination  of the  Revolving  Credit  Commitments,  and that each such payment
shall  be  made  without  any  offset,   abatement,   withholding  or  reduction
whatsoever.  Each Lender further  acknowledges and agrees that its participation
in each Letter of Credit will be automatically adjusted to reflect such Lender's
Ratable Share of the Available Amount of such Letter of Credit at each time such
Lender's  Revolving  Credit  Commitment is amended  pursuant to an assignment in
accordance with Section 9.07 or otherwise pursuant to this Agreement.

               (c) Drawing and Reimbursement.  The payment by an Issuing Bank of
                   -------------------------
a draft  drawn  under  any  Letter  of  Credit  which is not  reimbursed  by the
applicable  Borrower on the date made shall  constitute for all purposes of this
Agreement  the making by any such Issuing  Bank of an Advance,  which shall be a
Base Rate Advance,  in the amount of such draft,  without  regard to whether the
making of such an Advance would exceed such Issuing  Bank's  Unused  Commitment.
Each Issuing Bank shall give prompt  notice of each drawing  under any Letter of
Credit  issued by it to the  applicable  Borrower  and the Agent.  Upon  written
demand by such  Issuing  Bank,  with a copy of such  demand to the Agent and the
applicable  Borrower,  each Lender shall pay to the Agent such Lender's  Ratable
Share of such  outstanding  Advance  pursuant  to Section  2.03(b).  Each Lender
acknowledges  and agrees that its  obligation to make Advances  pursuant to this
paragraph  in respect of Letters of Credit is  absolute  and  unconditional  and
shall not be affected by any circumstance  whatsoever,  including any amendment,
renewal or extension of any Letter of Credit or the occurrence  and  continuance
of a Default or reduction or  termination of the Revolving  Credit  Commitments,
and  that  each  such  payment  shall be made  without  any  offset,  abatement,
withholding or reduction  whatsoever.  Promptly after receipt thereof, the Agent
shall  transfer such funds to such Issuing Bank.  Each Lender agrees to fund its
Ratable Share of an outstanding  Advance on (i) the Business Day on which demand
therefor is made by such Issuing  Bank,  provided  that notice of such demand is
                                         --------
given not later than 11:00 A.M.  (New York City time) on such  Business  Day, or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. If and to the extent that any Lender shall not have so
made the amount of such Advance  available to the Agent,  such Lender  agrees to
pay to the Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand  by any such  Issuing  Bank  until the date
such amount is paid to the Agent,  at the Federal  Funds Rate for its account or
the account of such Issuing Bank, as applicable. If such Lender shall pay to the
Agent such amount for the account of any such Issuing Bank on any Business  Day,
such amount so paid in respect of principal shall  constitute an Advance made by
such  Lender  on such  Business  Day for  purposes  of this  Agreement,  and the
outstanding  principal  amount of the Advance made by such Issuing Bank shall be
reduced by such amount on such Business Day.

               (d) Letter of Credit Reports. Each Issuing Bank shall furnish (A)
                   ------------------------
to the Agent and each Lender (with a copy to the Company) on the first  Business
Day of each month a written report summarizing  Issuance and expiration dates of
Letters of Credit  issued by such  Issuing Bank during the  preceding  month and
drawings  during such month under all Letters of Credit and (B) to the Agent and
each  Lender  (with a copy to the  Company)  on the first  Business  Day of each
calendar  quarter a written  report  setting forth the average  daily  aggregate
Available Amount during the preceding  calendar quarter of all Letters of Credit
issued by such Issuing Bank.

               (e) Failure to Make  Advances.  The failure of any Lender to make
                   -------------------------
the Advance to be made by it on the date specified in Section  2.03(c) shall not
relieve any other Lender of its obligation hereunder to make its Advance on such
date, but no Lender shall be responsible  for the failure of any other Lender to
make the Advance to be made by such other Lender on such date.

               SECTION 2.04.  Fees.  (a) Facility Fee. The Company agrees to pay
                              ----       ------------
to the Agent for the  account  of each  Lender a facility  fee on the  aggregate
amount of such Lender's  Revolving Credit  Commitment from the Effective Date in
the case of each Initial  Lender and from the  effective  date  specified in the
Assumption  Agreement or in the Assignment  and Acceptance  pursuant to which it
became a Lender in the case of each other Lender until the Termination Date at a
rate per annum equal to the  Applicable  Percentage in effect from time to time,
payable in arrears quarterly on the last day of each March, June,  September and
December, commencing March 31, 2005, and on the Termination Date.

               (b) Letter of Credit  Fees.  (i) Each  Borrower  shall pay to the
                   ----------------------
Agent for the account of each Lender a commission on such Lender's Ratable Share
of the average daily aggregate  Available Amount of all Letters of Credit issued
for the account of such Borrower and outstanding from time to time at a rate per
annum equal to the Applicable  Margin for  Eurocurrency  Rate Advances in effect
from time to time during such calendar quarter,  payable in arrears quarterly on
the last day of each March,  June,  September and December,  commencing with the
quarter ended March 31, 2005,  and on the  Termination  Date;  provided that the
                                                               --------
Applicable  Margin  shall be 1% above the  Applicable  Margin in effect upon the
occurrence and during the  continuation  of an Event of Default if such Borrower
is required to pay default interest pursuant to Section 2.07(b).

               (ii) Each Borrower  shall pay to each Issuing  Bank,  for its own
          account,  a fronting  fee equal to 0.125%  per annum of the  Available
          Amount of each Letter of Credit issued by such Issuing  Bank,  payable
          in arrears  quarterly on the last day of each March,  June,  September
          and December, and such other commissions, issuance fees, transfer fees
          and  other  fees  and  charges  in  connection  with the  Issuance  or
          administration  of each  Letter of Credit  as such  Borrower  and such
          Issuing Bank shall agree.

               (c) Agent's Fees.  The Company shall pay to the Agent for its own
                   ------------
account such fees as may from time to time be agreed between the Company and the
Agent.

               SECTION   2.05.   Optional   Termination   or  Reduction  of  the
                                 -----------------------------------------------
Commitments.  The Company  shall have the right,  upon at least  three  Business
-----------
Days' notice to the Agent,  to terminate in whole or permanently  reduce ratably
in part the Unused  Commitments or the Unissued Letter of Credit  Commitments of
the Lenders,  provided  that each partial  reduction  shall be in the  aggregate
              --------
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

               SECTION 2.06. Repayment of Advances and Letter of Credit Drawings
                             ---------------------------------------------------
(a) Each  Borrower  shall  repay to the Agent  for the  ratable  account  of the
Lenders on the Termination  Date the aggregate  principal amount of the Advances
made to such Borrower then outstanding.

               (b) The  obligations  of each Borrower under any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of Credit
issued for the account of such Borrower shall be unconditional  and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement,  such
Letter of Credit  Agreement  and such other  agreement or  instrument  under all
circumstances,  including,  without limitation,  the following circumstances (it
being understood that any such payment by such Borrower is without prejudice to,
and does not  constitute  a waiver of, any rights  such  Borrower  might have or
might  acquire  as a result  of the  payment  by any  Lender of any draft or the
reimbursement by such Borrower thereof):

               (i) any lack of validity or enforceability of this Agreement, any
          Note,  any  Letter of Credit  Agreement,  any  Letter of Credit or any
          other agreement or instrument  relating  thereto (all of the foregoing
          being, collectively, the "L/C Related Documents");
                                    ---------------------

               (ii) any change in the time, manner or place of payment of, or in
          any other term of, all or any of the  obligations  of such Borrower in
          respect of any L/C Related  Document or any other  amendment or waiver
          of or any  consent  to  departure  from all or any of the L/C  Related
          Documents;

               (iii) the existence of any claim, set-off, defense or other right
          that such Borrower may have at any time against any beneficiary or any
          transferee  of a Letter of Credit (or any  Persons  for which any such
          beneficiary or any such  transferee may be acting),  any Issuing Bank,
          the Agent, any Lender or any other Person,  whether in connection with
          the  transactions  contemplated  by the L/C Related  Documents  or any
          unrelated transaction;

               (iv) any statement or any other document presented under a Letter
          of Credit proving to be forged, fraudulent, invalid or insufficient in
          any respect or any statement therein being untrue or inaccurate in any
          respect;

               (v) payment by any Issuing Bank under a Letter of Credit  against
          presentation  of a draft or certificate  that does not strictly comply
          with the terms of such Letter of Credit;

               (vi) any exchange,  release or  non-perfection of any collateral,
          or any release or amendment or waiver of or consent to departure  from
          any guarantee,  for all or any of the  obligations of such Borrower in
          respect of the L/C Related Documents; or

               (vii) any other circumstance or happening whatsoever,  whether or
          not similar to any of the foregoing,  including,  without  limitation,
          any other  circumstance  that  might  otherwise  constitute  a defense
          available to, or a discharge of, such Borrower or a guarantor.

               SECTION 2.07. Interest on Advances. (a) Scheduled Interest.  Each
                             --------------------      ------------------
Borrower shall pay interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such  principal  amount shall
be paid in full, at the following rates per annum:

               (i) Base Rate Advances.  During such periods as such Advance is a
                   ------------------
          Base Rate  Advance,  a rate per annum equal at all times to the sum of
          (x) the Base Rate in effect from time to time plus (y) the  Applicable
                                                        ----
          Margin in effect from time to time,  payable in arrears  quarterly  on
          the last day of each March,  June,  September and December during such
          periods and on the date such Base Rate  Advance  shall be Converted or
          paid in full.

               (ii)  Eurocurrency  Rate  Advances.  During such  periods as such
                     ----------------------------
          Advance is a Eurocurrency Rate Advance,  a rate per annum equal at all
          times during each  Interest  Period for such Advance to the sum of (x)
          the  Eurocurrency  Rate for such Interest Period for such Advance plus
                                                                            ----
          (y) the  Applicable  Margin in effect  from time to time,  payable  in
          arrears on the last day of such Interest  Period and, if such Interest
          Period has a  duration  of more than  three  months,  on each day that
          occurs during such  Interest  Period every three months from the first
          day of such  Interest  Period and on the date such  Eurocurrency  Rate
          Advance shall be Converted or paid in full.

               (b)  Default  Interest.   Upon  the  occurrence  and  during  the
                    -----------------
continuance  of an Event of Default,  the Agent may with the consent,  and shall
upon the request, of the Required Lenders, require the Borrowers to pay interest
("Default Interest") on (i) the unpaid principal amount of each Advance owing to
  ----------------
each  Lender,  payable in arrears on the dates  referred to in clause  (a)(i) or
(a)(ii) above,  at a rate per annum equal at all times to 1% per annum above the
rate per annum required to be paid on such Advance  pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest,  fee or other amount payable hereunder that is not paid when due, from
the date such  amount  shall be due  until  such  amount  shall be paid in full,
payable in arrears on the date such amount  shall be paid in full and on demand,
at a rate per annum  equal at all times to 1% per annum above the rate per annum
required  to be paid on Base Rate  Advances  pursuant  to clause  (a)(i)  above;
provided,  however,  that  following  acceleration  of the Advances  pursuant to
--------   -------
Section 6.01,  Default Interest shall accrue and be payable hereunder whether or
not previously required by the Agent.

               SECTION 2.08.  Interest Rate  Determination.  (a) Each  Reference
                              ----------------------------
Bank  agrees,  if  requested  by the  Agent,  to  furnish  to the  Agent  timely
information for the purpose of determining each Eurocurrency Rate. If any one or
more of the  Reference  Banks shall not furnish such timely  information  to the
Agent for the purpose of  determining  any such interest  rate,  the Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks. The Agent shall give prompt notice to the Company and
the Lenders of the applicable interest rate determined by the Agent for purposes
of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference
Bank for the purpose of determining the interest rate under Section 2.07(a)(ii).

               (b) If,  with  respect to any  Eurocurrency  Rate  Advances,  the
Required  Lenders  notify the Agent that (i) they are unable to obtain  matching
deposits in the London inter-bank market at or about 11:00 A.M. (London time) on
the second  Business Day before the making of a Borrowing in sufficient  amounts
to  fund  their  respective  Advances  as a part of such  Borrowing  during  its
Interest Period or (ii) the  Eurocurrency  Rate for any Interest Period for such
Advances  will not  adequately  reflect  the cost to such  Required  Lenders  of
making,  funding or maintaining their respective  Eurocurrency Rate Advances for
such Interest  Period,  the Agent shall  forthwith so notify the Company and the
Lenders,  whereupon (A) the Borrower of such Eurocurrency  Advances will, on the
last day of the then existing Interest Period therefor, (1) if such Eurocurrency
Rate Advances are denominated in Dollars, either (x) prepay such Advances or (y)
Convert such Advances into Base Rate Advances and (2) if such  Eurocurrency Rate
Advances  are  denominated  in any  Committed  Currency,  either (x) prepay such
Advances or (y) exchange such Advances into an Equivalent  amount of Dollars and
Convert such  Advances  into Base Rate  Advances and (B) the  obligation  of the
Lenders to make, or to Convert Advances into,  Eurocurrency  Rate Advances shall
be  suspended  until the Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist.

               (c) If any  Borrower  shall  fail to select the  duration  of any
Interest  Period for any  Eurocurrency  Rate  Advances  in  accordance  with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will  forthwith so notify such  Borrower and the Lenders and such Advances
will  automatically,  on the  last  day of the  then  existing  Interest  Period
therefor,  (i) if such  Eurocurrency  Rate Advances are  denominated in Dollars,
Convert into Base Rate Advances and (ii) if such  Eurocurrency Rate Advances are
denominated in a Committed  Currency,  be exchanged for an Equivalent  amount of
Dollars and Convert into Base Rate Advances.

               (d) On the date on which the aggregate unpaid principal amount of
Eurocurrency Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise,  to less than the Borrowing  Minimum,  such Advances
shall  automatically  (i) if such  Eurocurrency Rate Advances are denominated in
Dollars,  Convert  into Base Rate  Advances and (ii) if such  Eurocurrency  Rate
Advances are denominated in a Committed Currency, be exchanged for an Equivalent
amount of Dollars and Convert into Base Rate Advances.

               (e) Upon the occurrence  and during the  continuance of any Event
of Default,  (i) each Eurocurrency Rate Advance will automatically,  on the last
day of the then existing Interest Period therefor, (A) if such Eurocurrency Rate
Advances are  denominated  in Dollars,  be Converted into Base Rate Advances and
(B) if  such  Eurocurrency  Rate  Advances  are  denominated  in  any  Committed
Currency, be exchanged for an Equivalent amount of Dollars and be Converted into
Base Rate Advances and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurocurrency Rate Advances shall be suspended.

               (f) If Moneyline  Telerate  Markets Page 3750 is unavailable  and
fewer than two  Reference  Banks  furnish  timely  information  to the Agent for
determining the Eurocurrency  Rate for any Eurocurrency  Rate Advances after the
Agent has requested such information,

               (i) the Agent shall forthwith notify the applicable  Borrower and
          the  Lenders  that the  interest  rate cannot be  determined  for such
          Eurocurrency Rate Advances,

               (ii) each such Advance will automatically, on the last day of the
          then existing Interest Period therefor,  (A) if such Eurocurrency Rate
          Advance is  denominated  in Dollars,  Convert into a Base Rate Advance
          and  (B) if such  Eurocurrency  Rate  Advance  is  denominated  in any
          Committed  Currency,  be  prepaid  by the  applicable  Borrower  or be
          automatically  exchanged  for an  Equivalent  amount of Dollars and be
          Converted  into a Base Rate Advance (or if such Advance is then a Base
          Rate Advance, will continue as a Base Rate Advance), and

               (iii) the  obligation  of the Lenders to make  Eurocurrency  Rate
          Advances or to Convert Advances into  Eurocurrency Rate Advances shall
          be suspended  until the Agent shall notify the Company and the Lenders
          that the circumstances causing such suspension no longer exist.

               SECTION 2.09.  Optional  Conversion of Advances.  The Borrower of
                              --------------------------------
any Advance may on any  Business  Day,  upon notice given to the Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed  Conversion  and subject to the  provisions of Sections 2.08 and
2.12,  Convert all Advances  denominated  in Dollars of one Type  comprising the
same Borrowing into Advances denominated in Dollars of the other Type; provided,
                                                                       --------
however,  that any  Conversion  of  Eurocurrency  Rate  Advances  into Base Rate
-------
Advances  shall  be made  only on the last day of an  Interest  Period  for such
Eurocurrency   Rate  Advances,   any  Conversion  of  Base  Rate  Advances  into
Eurocurrency  Rate  Advances  shall be in an amount  not less  than the  minimum
amount  specified in Section  2.02(b) and no  Conversion  of any Advances  shall
result in more separate  Borrowings than permitted under Section  2.02(b).  Each
such notice of a Conversion  shall,  within the  restrictions  specified  above,
specify (i) the date of such Conversion, (ii) the Dollar denominated Advances to
be Converted,  and (iii) if such Conversion is into  Eurocurrency Rate Advances,
the duration of the initial  Interest Period for each such Advance.  Each notice
of  Conversion  shall be  irrevocable  and binding on the  Borrower  giving such
notice.

               SECTION  2.10.  Prepayments  of  Advances.  (a)  Optional.   Each
                               -------------------------        --------
Borrower may, upon notice at least two Business  Days' prior to the date of such
prepayment,  in the case of Eurocurrency Rate Advances, and not later than 11:00
A.M.  (New York City time) on the date of such  prepayment,  in the case of Base
Rate  Advances,  to the Agent stating the proposed date and aggregate  principal
amount of the  prepayment,  and if such notice is given,  such  Borrower  shall,
prepay the outstanding  principal amount of the Advances  comprising part of the
same  Borrowing in whole or ratably in part,  together with accrued  interest to
the date of such prepayment on the principal amount prepaid; provided,  however,
                                                             --------   -------
that (x) each partial  prepayment  shall be in an aggregate  principal amount of
not less than the Borrowing  Minimum or a Borrowing  Multiple in excess  thereof
and (y) in the event of any such prepayment of a Eurocurrency Rate Advance, such
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 9.04(c).

               (b)  Mandatory.  (i) If, on any  date,  the  Agent  notifies  the
                    ---------
Company  that,  on any  interest  payment  date,  the sum of (A)  the  aggregate
principal  amount of all  Advances  denominated  in Dollars  plus the  aggregate
Available  Amount  of all  Letters  of  Credit  then  outstanding  plus  (B) the
Equivalent  in  Dollars  (determined  on the  third  Business  Day prior to such
interest  payment  date)  of the  aggregate  principal  amount  of all  Advances
denominated  in  Committed  Currencies  then  outstanding  exceeds  103%  of the
aggregate  Commitments of the Lenders on such date, the Borrowers shall, as soon
as  practicable  and in any event within two Business Days after receipt of such
notice,  prepay the  outstanding  principal  amount of any Advances owing by the
Borrowers in an aggregate amount  sufficient to reduce such sum to an amount not
to exceed 100% of the aggregate Commitments of the Lenders on such date.

               (ii) Each  prepayment made pursuant to this Section 2.10(b) shall
be made together with any interest accrued to the date of such prepayment on the
principal  amounts  prepaid and, in the case of any prepayment of a Eurocurrency
Rate  Advance on a date other than the last day of an Interest  Period or at its
maturity,  any  additional  amounts  which the  Borrowers  shall be obligated to
reimburse to the Lenders in respect  thereof  pursuant to Section  9.04(c).  The
Agent shall give prompt  notice of any  prepayment  required  under this Section
2.10(b) to the Company and the Lenders.

               SECTION  2.11.  Increased  Costs.  (a) If,  due to either (i) the
                               ----------------
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority including,  without limitation,  any agency
of the European Union or similar monetary or multinational authority (whether or
not having the force of law),  there  shall be any  increase  in the cost to any
Lender of agreeing to make or making,  funding or maintaining  Eurocurrency Rate
Advances or of agreeing to issue or of issuing or maintaining  or  participating
in Letters of Credit  (excluding  for  purposes  of this  Section  2.11 any such
increased  costs  resulting  from (i) Taxes or Other Taxes (as to which  Section
2.14 shall  govern)  and (ii)  changes in the basis of  taxation  of overall net
income  or  overall  gross  income  by  the  United  States  or by  the  foreign
jurisdiction  or state under the laws of which such Lender is  organized  or has
its Applicable Lending Office or any political  subdivision  thereof),  then the
Company shall from time to time, upon demand by such Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost;  provided,
                                                                       --------
however,  that  before  making  any  such  demand,  each  Lender  agrees  to use
-------
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different  Applicable  Lending Office if the making
of such  designation  would  avoid the need for,  or reduce the amount of,  such
increased  cost and would not, in the  reasonable  judgment of such  Lender,  be
otherwise disadvantageous to such Lender. A certificate as to the amount of such
increased cost,  submitted to the Company and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.

               (b) If any  Lender  determines  that  compliance  with any law or
regulation  or  any  guideline  or  request  from  any  central  bank  or  other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital  required  or  expected  to be  maintained  by such
Lender or any  corporation  controlling  such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's  commitment
to lend or to issue or  participate  in  Letters of Credit  hereunder  and other
commitments of such type or the Issuance or maintenance of or  participation  in
the Letters of Credit (or similar contingent obligations),  then, upon demand by
such Lender (with a copy of such demand to the Agent),  the Company shall pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender,  additional  amounts  sufficient  to  compensate  such  Lender  or  such
corporation in the light of such  circumstances,  to the extent that such Lender
reasonably  determines such increase in capital to be allocable to the existence
of such  Lender's  commitment to lend or to issue or  participate  in Letters of
Credit  hereunder or to the Issuance or maintenance of or  participation  in any
Letters of Credit. A certificate as to such amounts submitted to the Company and
the Agent by such Lender  shall be  conclusive  and  binding  for all  purposes,
absent manifest error.

               SECTION 2.12. Illegality.  Notwithstanding any other provision of
                             ----------
this Agreement, if any Lender shall notify the Agent that the introduction of or
any  change  in or in the  interpretation  of any  law or  regulation  makes  it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful,  for any Lender or its  Eurocurrency  Lending  Office to  perform  its
obligations  hereunder  to make  Eurocurrency  Rate  Advances  in Dollars or any
Committed Currency or to fund or maintain  Eurocurrency Rate Advances in Dollars
or any Committed  Currency  hereunder,  (a) each  Eurocurrency Rate Advance will
automatically,  upon  such  demand  (i) if such  Eurocurrency  Rate  Advance  is
denominated  in Dollars,  be Converted into a Base Rate Advance and (ii) if such
Eurocurrency Rate Advance is denominated in any Committed Currency, be exchanged
into an Equivalent  amount of Dollars and be Converted  into a Base Rate Advance
and (b) the obligation of the Lenders to make  Eurocurrency  Rate Advances or to
Convert  Advances into  Eurocurrency  Rate Advances shall be suspended until the
Agent shall  notify the Company and the Lenders that the  circumstances  causing
such suspension no longer exist; provided,  however, that before making any such
                                 --------   -------
demand,  each  Lender  agrees to use  reasonable  efforts  (consistent  with its
internal policy and legal and regulatory  restrictions) to designate a different
Eurocurrency  Lending Office if the making of such designation  would allow such
Lender or its Eurocurrency Lending Office to continue to perform its obligations
to  make  Eurocurrency  Rate  Advances  or  to  continue  to  fund  or  maintain
Eurocurrency  Rate  Advances and would not, in the  judgment of such Lender,  be
otherwise disadvantageous to such Lender.

               SECTION 2.13. Payments and Computations.  (a) Each Borrower shall
                             -------------------------
make each payment  hereunder  (except with respect to principal of, interest on,
and other amounts  relating to, Advances  denominated in a Committed  Currency),
not later than 11:00 A.M. (New York City time) on the day when due in Dollars to
the Agent at the applicable  Agent's Account in same day funds and  irrespective
of any right of counterclaim  or set-off.  Each Borrower shall make each payment
hereunder with respect to principal of, interest on, and other amounts  relating
to, Advances denominated in a Committed Currency,  not later than 11:00 A.M. (at
the  Payment  Office for such  Committed  Currency)  on the day when due in such
Committed  Currency  to the Agent,  by  deposit of such funds to the  applicable
Agent's Account in same day funds and  irrespective of any right of counterclaim
or set-off.  The Agent will promptly  thereafter  cause to be  distributed  like
funds  relating  to  the  payment  of  principal,  interest,  facility  fees  or
commissions  ratably (other than amounts payable pursuant to Section 2.03, 2.11,
2.14 or 9.04(c)) to the Lenders for the account of their  respective  Applicable
Lending  Offices,  and like funds  relating to the  payment of any other  amount
payable to any Lender to such Lender for the account of its  Applicable  Lending
Office,  in each  case to be  applied  in  accordance  with  the  terms  of this
Agreement. Upon any Assuming Lender becoming a Lender hereunder as a result of a
Commitment  Increase  pursuant to Section 2.18, and upon the Agent's  receipt of
such Lender's  Assumption  Agreement and recording of the information  contained
therein in the Register,  from and after the applicable Increase Date, the Agent
shall  make all  payments  hereunder  and under any Notes  issued in  connection
therewith in respect of the  interest  assumed  thereby to the Assuming  Lender.
Upon its  acceptance  of an  Assignment  and  Acceptance  and  recording  of the
information  contained therein in the Register pursuant to Section 9.07(c), from
and after the effective date specified in such  Assignment and  Acceptance,  the
Agent shall make all  payments  hereunder  and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder,  and the parties to
such Assignment and Acceptance  shall make all  appropriate  adjustments in such
payments for periods prior to such effective date directly between themselves.

               (b) Each Borrower hereby  authorizes  each Lender,  if and to the
extent  payment owed to such Lender is not made when due  hereunder or under the
Note held by such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender any amount so due.

               (c) All  computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
all computations of interest based on the Eurocurrency Rate or the Federal Funds
Rate and of facility fees and Letter of Credit  commissions shall be made by the
Agent  on the  basis  of a year  of 360  days  (or,  in each  case  of  Advances
denominated in Committed Currencies where market practice differs, in accordance
with market practice), in each case for the actual number of days (including the
first day but  excluding  the last day)  occurring  in the period for which such
interest,  facility fees or commissions are payable.  Each  determination by the
Agent of an interest  rate  hereunder  shall be  conclusive  and binding for all
purposes, absent manifest error.

               (d)  Whenever  any payment  hereunder or under the Notes shall be
stated to be due on a day other than a Business  Day, such payment shall be made
on the next  succeeding  Business Day, and such  extension of time shall in such
case be included in the  computation  of payment of  interest,  facility  fee or
commission, as the case may be; provided, however, that, if such extension would
                                --------  -------
cause  payment of interest on or principal of  Eurocurrency  Rate Advances to be
made in the next  following  calendar  month,  such payment shall be made on the
next preceding Business Day.

               (e) Unless the Agent shall have received notice from any Borrower
prior to the date on which any payment is due to the Lenders hereunder that such
Borrower  will not make such  payment in full,  the Agent may  assume  that such
Borrower  has made such  payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender.  If and to the
extent such  Borrower  shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest  thereon,  for each day from the date such
amount is  distributed  to such Lender  until the date such  Lender  repays such
amount to the  Agent,  at (i) the  Federal  Funds  Rate in the case of  Advances
denominated  in  Dollars  or (ii)  the cost of funds  incurred  by the  Agent in
respect  of  such  amount  in the  case of  Advances  denominated  in  Committed
Currencies.

               (f) To the extent that the Agent receives  funds for  application
to the amounts  owing by any Borrower  under or in respect of this  Agreement or
any Note in currencies other than the currency or currencies  required to enable
the Agent to  distribute  funds to the Lenders in  accordance  with the terms of
this Section 2.13, the Agent shall be entitled to convert or exchange such funds
into  Dollars  or into a  Committed  Currency  or from  Dollars  to a  Committed
Currency  or from a Committed  Currency  to Dollars,  as the case may be, to the
extent necessary to enable the Agent to distribute such funds in accordance with
the terms of this  Section  2.13;  provided  that each  Borrower and each of the
Lenders hereby agree that the Agent shall not be liable or  responsible  for any
loss,  cost or expense  suffered by such  Borrower or such Lender as a result of
any  conversion  or exchange of  currencies  affected  pursuant to this  Section
2.13(f) or as a result of the failure of the Agent to effect any such conversion
or exchange;  and provided  further that each  Borrower  agrees to indemnify the
Agent and each Lender, and hold the Agent and each Lender harmless,  for any and
all  losses,  costs and  expenses  incurred  by the Agent or any  Lender for any
conversion or exchange of currencies  (or the failure to convert or exchange any
currencies) in accordance with this Section 2.13(f).

               SECTION 2.14. Taxes. (a) Any and all payments by each Borrower to
                             -----
or for the  account of any Lender or the Agent  hereunder  or under the Notes or
any other documents to be delivered  hereunder shall be made, in accordance with
Section 2.13 or the  applicable  provisions  of such other  documents,  free and
clear of and without deduction for any and all present or future taxes,  levies,
imposts, deductions,  charges or withholdings,  and all liabilities with respect
thereto,  excluding,  in the case of each Lender and the Agent, taxes imposed on
          ---------
its overall net income,  and franchise taxes imposed on it in lieu of net income
taxes, by the jurisdiction  under the laws of which such Lender or the Agent (as
the case may be) is organized or any political  subdivision  thereof and, in the
case of each  Lender,  taxes  imposed on its overall net income,  and  franchise
taxes imposed on it in lieu of net income  taxes,  by the  jurisdiction  of such
Lender's  Applicable  Lending Office or any political  subdivision  thereof (all
such non-excluded taxes, levies, imposts, deductions,  charges, withholdings and
liabilities  in  respect  of  payments   hereunder  or  under  the  Notes  being
hereinafter referred to as "Taxes"). If any Borrower shall be required by law to
                            -----
deduct any Taxes from or in respect of any sum  payable  hereunder  or under any
Note or any other  documents  to be  delivered  hereunder  to any  Lender or the
Agent,  (i) the sum payable shall be increased as may be necessary so that after
making all required deductions  (including  deductions  applicable to additional
sums payable  under this Section 2.14) such Lender or the Agent (as the case may
be)  receives  an amount  equal to the sum it would  have  received  had no such
deductions  been made,  (ii) such Borrower shall make such  deductions and (iii)
such  Borrower  shall pay the full  amount  deducted  to the  relevant  taxation
authority or other authority in accordance with applicable law.

               (b) In  addition,  the  Company  shall pay any  present or future
stamp or  documentary  taxes or any other excise or property  taxes,  charges or
similar levies that arise from any payment made hereunder or under the Notes any
other  documents to be delivered  hereunder or from the  execution,  delivery or
registration of,  performing under, or otherwise with respect to, this Agreement
or the Notes or any  other  documents  to be  delivered  hereunder  (hereinafter
referred to as "Other Taxes").
                -----------

               (c) Each Borrower  shall  indemnify each Lender and the Agent for
and hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed or asserted by any jurisdiction on
amounts  payable  under this Section  2.14) imposed on or paid by such Lender or
the Agent (as the case may be) and any liability (including penalties,  interest
and expenses)  arising therefrom or with respect thereto.  This  indemnification
shall be made within 30 days from the date such Lender or the Agent (as the case
may be) makes written demand therefor.

               (d) Within 30 days after the date of any  payment of Taxes,  each
Borrower shall furnish to the Agent, at its address referred to in Section 9.02,
the  original or a certified  copy of a receipt  evidencing  such payment to the
extent  such a receipt is issued  therefor,  or other  written  proof of payment
thereof that is reasonably satisfactory to the Agent. In the case of any payment
hereunder or under the Notes or any other documents to be delivered hereunder by
or on behalf of such  Borrower  through an account or branch  outside the United
States  or by or on  behalf  of such  Borrower  by a payor  that is not a United
States person, if such Borrower  determines that no Taxes are payable in respect
thereof,  such Borrower shall furnish,  or shall cause such payor to furnish, to
the Agent,  at such  address,  an opinion  of  counsel  acceptable  to the Agent
stating that such payment is exempt from Taxes.  For purposes of this subsection
(d) and  subsection  (e), the terms "United  States" and "United  States person"
                                     --------------       ---------------------
shall have the meanings specified in Section 7701 of the Internal Revenue Code.

               (e)  Each  Lender  organized  under  the  laws of a  jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this  Agreement  in the case of each  Initial  Lender  and on the date of the
Assumption  Agreement  or the  Assignment  and  Acceptance  pursuant to which it
becomes  a  Lender  in the case of each  other  Lender,  and  from  time to time
thereafter as  reasonably  requested in writing by the Company (but only so long
as such Lender remains  lawfully able to do so), shall provide each of the Agent
and the Company  with two  original  Internal  Revenue  Service  Forms W-8BEN or
W-8ECI,  as  appropriate,  or any  successor  or other  form  prescribed  by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States  withholding tax on payments pursuant to this
Agreement or the Notes. If the form provided by a Lender at the time such Lender
first  becomes a party to this  Agreement  indicates  a United  States  interest
withholding  tax rate in excess of zero,  withholding  tax at such rate shall be
considered  excluded  from  Taxes  unless  and until such  Lender  provides  the
appropriate forms certifying that a lesser rate applies,  whereupon  withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the Assignment
                       --------  -------
and  Acceptance  pursuant  to which a Lender  assignee  becomes  a party to this
Agreement,  the Lender assignor was entitled to payments under subsection (a) in
respect of United States  withholding  tax with respect to interest paid at such
date,  then,  to such  extent,  the term Taxes  shall  include  (in  addition to
withholding  taxes that may be imposed in the future or other amounts  otherwise
includable in Taxes)  United States  withholding  tax, if any,  applicable  with
respect to the Lender assignee on such date. If any form or document referred to
in this  subsection  (e)  requires the  disclosure  of  information,  other than
information necessary to compute the tax payable and information required on the
date hereof by Internal  Revenue Service Form W-8BEN or W-8ECI,  that the Lender
reasonably considers to be confidential, the Lender shall give notice thereof to
the Company and shall not be obligated to include in such form or document  such
confidential information.

               (f) For any period  with  respect to which a Lender has failed to
provide the Company with the  appropriate  form,  certificate  or other document
described in Section  2.14(e)  (other than if such failure is due to a change in
                                ----- ----
law, or in the interpretation or application  thereof,  occurring  subsequent to
the date on which a form,  certificate or other document originally was required
to be provided, or if such form,  certificate or other document otherwise is not
required  under  subsection  (e) above),  such  Lender  shall not be entitled to
indemnification  under  Section  2.14(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure;  provided,  however,  that should a
                                              --------   -------
Lender  become  subject  to Taxes  because  of its  failure  to  deliver a form,
certificate or other document  required  hereunder,  the Company shall take such
steps as the  Lender  shall  reasonably  request to assist the Lender to recover
such Taxes.

               (g) Any Lender claiming any additional  amounts payable  pursuant
to this  Section  2.14 agrees to use  reasonable  efforts  (consistent  with its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its  Eurocurrency  Lending  Office if the making of such change
would avoid the need for, or reduce the amount of, any such  additional  amounts
that may  thereafter  accrue and would not, in the  reasonable  judgment of such
Lender, be otherwise disadvantageous to such Lender.

               SECTION  2.15.  Sharing of  Payments,  Etc.  If any Lender  shall
                               --------------------------
obtain any payment (whether voluntary,  involuntary, through the exercise of any
right of set-off,  or otherwise)  on account of the Advances  owing to it (other
than as payment of an Advance  made by an  Issuing  Bank  pursuant  to the first
sentence of Section  2.03(c) or pursuant  to Section  2.11,  2.14 or 9.04(c)) in
excess of its ratable  share of payments on account of the Advances  obtained by
all the Lenders,  such Lender shall  forthwith  purchase  from the other Lenders
such participations in the Advances owing to them as shall be necessary to cause
such  purchasing  Lender to share the excess payment  ratably with each of them;
provided,  however,  that  if all or any  portion  of  such  excess  payment  is
--------   -------
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be  rescinded  and such Lender  shall repay to the  purchasing  Lender the
purchase  price to the extent of such recovery  together with an amount equal to
such Lender's  ratable share  (according to the  proportion of (i) the amount of
such Lender's required  repayment to (ii) the total amount so recovered from the
purchasing  Lender)  of any  interest  or other  amount  paid or  payable by the
purchasing  Lender in respect of the total amount so  recovered.  Each  Borrower
agrees  that any  Lender so  purchasing  a  participation  from  another  Lender
pursuant  to this  Section  2.15 may, to the fullest  extent  permitted  by law,
exercise all its rights of payment (including the right of set-off) with respect
to such  participation  as fully as if such Lender  were the direct  creditor of
such Borrower in the amount of such participation.

               SECTION 2.16.  Evidence of Debt (a) Each Lender shall maintain in
                              ----------------
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness  of each Borrower to such Lender  resulting from each Advance owing
to such  Lender  from time to time,  including  the  amounts  of  principal  and
interest  payable and paid to such Lender from time to time hereunder in respect
of  Advances.  Each  Borrower  agrees  that upon  notice  by any  Lender to such
Borrower  (with a copy of such notice to the Agent) to the effect that a Note is
required  or  appropriate  in order for such  Lender to  evidence  (whether  for
purposes of pledge,  enforcement  or otherwise)  the Advances owing to, or to be
made by, such Lender,  such Borrower shall promptly  execute and deliver to such
Lender a Note  payable to the order of such Lender in a  principal  amount up to
the Revolving Credit Commitment of such Lender.

               (b) The  Register  maintained  by the Agent  pursuant  to Section
9.07(d)  shall  include a control  account,  and a  subsidiary  account for each
Lender,  in which accounts  (taken  together) shall be recorded (i) the date and
amount of each Borrowing made  hereunder,  the Type of Advances  comprising such
Borrowing and, if appropriate,  the Interest Period applicable thereto, (ii) the
terms of each Assumption  Agreement and each Assignment and Acceptance delivered
to and  accepted by it,  (iii) the amount of any  principal  or interest due and
payable or to become due and payable from each Borrower to each Lender hereunder
and  (iv) the  amount  of any sum  received  by the  Agent  from  such  Borrower
hereunder and each Lender's share thereof.

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

               SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall
                             ---------------
be available (and each Borrower  agrees that it shall use such proceeds)  solely
for general corporate purposes of such Borrower and its Subsidiaries,  including
commercial paper backstop.

               SECTION  2.18.  Increase in the  Aggregate  Commitments.  (a) The
                               ---------------------------------------
Company  may,  at any time but in any event not more than twice in any  calendar
year prior to the  Termination  Date,  by notice to the Agent,  request that the
aggregate  amount of the  Commitment  be  increased  in  minimum  increments  of
$25,000,000 (each a "Commitment  Increase") to be effective as of a date that is
                     --------------------
at least 90 days prior to the  scheduled  Termination  Date then in effect  (the
"Increase  Date") as  specified  in the related  notice to the Agent;  provided,
 --------------                                                        --------
however that (i) in no event shall the aggregate  amount of the  Commitments  at
-------
any  time  exceed  $1,250,000,000  and (ii) on the  date of any  request  by the
Company  for a  Commitment  Increase  and  on  the  related  Increase  Date  the
applicable conditions set forth in Article III shall be satisfied.

               (b) The Agent shall  promptly  notify the Lenders of a request by
the  Company for a  Commitment  Increase,  which  notice  shall  include (i) the
proposed  amount  of such  requested  Commitment  Increase,  (ii)  the  proposed
Increase Date and (iii) the date by which Lenders  wishing to participate in the
Commitment Increase must commit to an increase in the amount of their respective
Commitments (the "Commitment  Date"). Each Lender that is willing to participate
                  ----------------
in such requested  Commitment  Increase (each an "Increasing  Lender") shall, in
                                                  ------------------
its  sole  discretion,  give  written  notice  to the  Agent  on or prior to the
Commitment Date of the amount by which it is willing to increase its Commitment.
If the Lenders  notify the Agent that they are willing to increase the amount of
their  respective  Commitments by an aggregate amount that exceeds the amount of
the requested  Commitment  Increase,  the requested Commitment Increase shall be
allocated  among the Lenders  willing to participate  therein in such amounts as
are agreed between the Company and the Agent.

               (c) Promptly  following  each  Commitment  Date,  the Agent shall
notify the Company as to the amount, if any, by which the Lenders are willing to
participate in the requested  Commitment  Increase.  If the aggregate  amount by
which the  Lenders  are  willing  to  participate  in any  requested  Commitment
Increase  on any such  Commitment  Date is less  than the  requested  Commitment
Increase,  then the Company may extend offers to one or more Eligible  Assignees
to participate in any portion of the requested  Commitment Increase that has not
been committed to by the Lenders as of the applicable Commitment Date; provided,
                                                                       --------
however,  that the  Commitment  of each  such  Eligible  Assignee  shall be in a
-------
minimum amount of $10,000,000.

               (d) On each Increase Date, each Eligible Assignee that accepts an
offer to  participate  in a requested  Commitment  Increase in  accordance  with
Section 2.18(b) (each such Eligible Assignee, an "Assuming Lender") shall become
                                                  ---------------
a Lender party to this  Agreement as of such Increase Date and the Commitment of
each  Increasing  Lender  for such  requested  Commitment  Increase  shall be so
increased by such amount (or by the amount  allocated to such Lender pursuant to
the last  sentence  of Section  2.18(b))  as of such  Increase  Date;  provided,
                                                                       --------
however,  that the Agent shall have received on or before such Increase Date the
-------
following, each dated such date:

               (i) (A) certified copies of resolutions of the Board of Directors
          of the Company or the Executive  Committee of such Board approving the
          Commitment  Increase  and  the  corresponding  modifications  to  this
          Agreement and (B) an opinion of counsel for the Company  (which may be
          in-house counsel), in substantially the form of Exhibit E hereto;

               (ii) an assumption  agreement from each Assuming Lender,  if any,
          in form and substance  satisfactory to the Company and the Agent (each
          an "Assumption  Agreement"),  duly executed by such Eligible Assignee,
              ---------------------
          the Agent and the Company; and

               (iii) confirmation from each Increasing Lender of the increase in
          the amount of its Commitment in a writing  satisfactory to the Company
          and the Agent.

On each Increase  Date,  upon  fulfillment  of the  conditions  set forth in the
immediately  preceding sentence of this Section 2.18(d),  the Agent shall notify
the  Lenders  (including,  without  limitation,  each  Assuming  Lender) and the
Company,  on or before 1:00 P.M.  (New York City time),  by  telecopier,  of the
occurrence of the  Commitment  Increase to be effected on such Increase Date and
shall  record in the  Register  the  relevant  information  with respect to each
Increasing  Lender and each Assuming Lender on such date. Each Increasing Lender
and each  Assuming  Lender  shall,  before 2:00 P.M. (New York City time) on the
Increase Date,  make available for the account of its Applicable  Lending Office
to the Agent at the  Agent's  Account,  in same day  funds,  in the case of such
Assuming  Lender,  an amount equal to such Assuming  Lender's ratable portion of
the  Borrowings  then  outstanding  (calculated  based on its  Revolving  Credit
Commitment  as a  percentage  of  the  aggregate  Revolving  Credit  Commitments
outstanding after giving effect to the relevant Commitment Increase) and, in the
case of such  Increasing  Lender,  an  amount  equal to the  excess  of (i) such
Increasing   Lender's   ratable  portion  of  the  Borrowings  then  outstanding
(calculated  based on its  Revolving  Credit  Commitment  as a percentage of the
aggregate  Revolving Credit  Commitments  outstanding after giving effect to the
relevant  Commitment  Increase  ) over (ii)  such  Increasing  Lender's  ratable
portion of the Borrowings then  outstanding  (calculated  based on its Revolving
Credit Commitment (without giving effect to the relevant Commitment Increase) as
a percentage of the  aggregate  Revolving  Credit  Commitments  (without  giving
effect to the relevant Commitment  Increase).  After the Agent's receipt of such
funds from each such Increasing Lender and each such Assuming Lender,  the Agent
will promptly thereafter cause to be distributed like funds to the other Lenders
for the account of their respective  Applicable  Lending Offices in an amount to
each other Lender such that the  aggregate  amount of the  outstanding  Advances
owing to each  Lender  after  giving  effect to such  distribution  equals  such
Lender's ratable portion of the Borrowings then outstanding (calculated based on
its Revolving  Credit  Commitment  as a percentage  of the  aggregate  Revolving
Credit  Commitments  outstanding after giving effect to the relevant  Commitment
Increase),  and the Company  shall pay such  Lender any amounts due  pursuant to
Section 9.04.


                                   ARTICLE III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

               SECTION 3.01.  Conditions  Precedent to  Effectiveness of Section
                              --------------------------------------------------
2.01.  Section 2.01 of this  Agreement  shall become  effective on and as of the
----
first date (the "Effective  Date") on which the following  conditions  precedent
                 ---------------
have been satisfied:

               (a) There shall have  occurred no Material  Adverse  Change since
          December 31, 2004.

               (b) There shall exist no action, suit, investigation,  litigation
          or proceeding affecting the Company or any of its Subsidiaries pending
          or, to the  knowledge  of the  Company,  threatened  before any court,
          governmental  agency or arbitrator that (i) could be reasonably likely
          to have a Material Adverse Effect other than the matters  described on
          Schedule 3.01(b) hereto (the "Disclosed  Litigation") or (ii) purports
                                        ---------------------
          to affect the legality,  validity or  enforceability of this Agreement
          or any  Note  or the  consummation  of the  transactions  contemplated
          hereby,  and there shall have been no adverse change in the status, or
          financial  effect on the  Company or any of its  Subsidiaries,  of the
          Disclosed Litigation from that described on Schedule 3.01(b) hereto.

               (c) All  governmental  and third  party  consents  and  approvals
          necessary in  connection  with the  transactions  contemplated  hereby
          shall have been obtained  (without the  imposition  of any  conditions
          that are not  acceptable  to the  Lenders) and shall remain in effect,
          and  no  law or  regulation  shall  be  applicable  in the  reasonable
          judgment of the Lenders that restrains, prevents or imposes materially
          adverse conditions upon the transactions contemplated hereby.

               (d) The Company  shall have notified each Lender and the Agent in
          writing as to the proposed Effective Date.

               (e) The Company shall have paid all accrued and invoiced fees and
          expenses  of the Agent and the  Lenders  (including  the  accrued  and
          invoiced fees and expenses of counsel to the Agent).

               (f) On the Effective Date, the following statements shall be true
          and the Agent  shall have  received  for the  account of each Lender a
          certificate signed by a duly authorized officer of the Company,  dated
          the Effective Date, stating that:

                    (i) The representations and warranties  contained in Section
               4.01 are correct on and as of the Effective Date, and

                    (ii)  No  event  has   occurred  and  is   continuing   that
               constitutes a Default.

               (g) The Agent shall have received on or before the Effective Date
          the following, each dated such day, in form and substance satisfactory
          to the Agent and (except for the Notes) in sufficient  copies for each
          Lender:

                    (i) The  Notes to the  order of the  Lenders  to the  extent
               requested by any Lender pursuant to Section 2.16.

                    (ii)  Certified  copies of the  resolutions  of the Board of
               Directors of the Company  approving this Agreement and the Notes,
               and of all documents  evidencing other necessary corporate action
               and  governmental   approvals,  if  any,  with  respect  to  this
               Agreement and the Notes.

                    (iii)  A  certificate  of  the  Secretary  or  an  Assistant
               Secretary of the Company certifying the names and true signatures
               of the officers of the Company  authorized to sign this Agreement
               and the Notes and the other documents to be delivered hereunder.

                    (iv) A favorable  opinion of William D. Eggers,  Senior Vice
               President and General  Counsel of the Company,  substantially  in
               the form of Exhibit E hereto.

                    (v) A favorable  opinion of Shearman & Sterling LLP, counsel
               for the Agent, in form and substance satisfactory to the Agent.

               (h)  Simultaneously  with the Effective  Date,  the Company shall
          have  terminated the  commitments of the lenders and repaid or prepaid
          all of the obligations  under, the Credit Agreement dated as of August
          17, 2000 among the Company,  the lenders parties thereto and Citibank,
          N.A., as administrative agent, and each of the Lenders that is a party
          to  such  credit  facility  hereby  waives,  upon  execution  of  this
          Agreement,  any notice required by said Credit  Agreement  relating to
          the termination of commitments thereunder.

               SECTION 3.02. Initial Advance to Each Designated Subsidiary.  The
                             ---------------------------------------------
obligation  of each  Lender  to  make  an  initial  Advance  to each  Designated
Subsidiary following any designation of such Designated Subsidiary as a Borrower
hereunder  pursuant  to Section  9.08 is subject  to the  Agent's  receipt on or
before the date of such initial  Advance of each of the  following,  in form and
substance  satisfactory  to the Agent and dated such date,  and  (except for the
Notes) in sufficient copies for each Lender:

               (a) The Notes of such  Designated  Subsidiary to the order of the
          Lenders to the extent  requested  by any  Lender  pursuant  to Section
          2.16.

               (b) Certified copies of the resolutions of the Board of Directors
          of such Designated Subsidiary (with a certified English translation if
          the original  thereof is not in English)  approving this Agreement and
          the Notes to be delivered by it, and of all documents evidencing other
          necessary  corporate action and governmental  approvals,  if any, with
          respect to this Agreement.

               (c)  A  certificate  of  a  proper  officer  of  such  Designated
          Subsidiary certifying the names and true signatures of the officers of
          such  Designated   Subsidiary   authorized  to  sign  its  Designation
          Agreement and the Notes to be delivered by it and the other  documents
          to be delivered by it hereunder.

               (d) A  certificate  signed by a duly  authorized  officer  of the
          Company,  certifying that such Designated  Subsidiary has obtained all
          governmental  and  third  party  authorizations,  consents,  approvals
          (including  exchange  control  approvals) and licenses  required under
          applicable  laws  and   regulations   necessary  for  such  Designated
          Subsidiary  to execute and deliver its  Designation  Agreement and the
          Notes to be delivered by it and to perform its  obligations  hereunder
          and thereunder.

               (e) A  Designation  Agreement  duly  executed by such  Designated
          Subsidiary and the Company.

               (f) A  favorable  opinion  of  counsel  (which  may  be  in-house
          counsel) to such Designated  Subsidiary  substantially  in the form of
          Exhibit E hereto,  and as to such other matters as any Lender  through
          the Agent may reasonably request.

               (g) Such other  approvals,  opinions or  documents  as any Lender
          through the Agent may reasonably request.

               SECTION 3.03.  Conditions  Precedent to Each Borrowing,  Issuance
                              --------------------------------------------------
and Commitment Increase. The obligation of each Lender to make an Advance (other
-----------------------
than an  Advance  made by any  Issuing  Bank or any Lender  pursuant  to Section
2.03(c)) on the occasion of each Borrowing,  the obligation of each Issuing Bank
to issue a Letter of Credit and each Commitment Increase shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date
of such  Borrowing,  such Issuance or the applicable  Increase Date (as the case
may be) the  following  statements  shall be true (and each of the giving of the
applicable  Notice of  Borrowing,  Notice of Issuance or request for  Commitment
Increase and the  acceptance by any Borrower of the proceeds of such  Borrowing,
such  Issuance or such  Increase  Date shall  constitute  a  representation  and
warranty by such Borrower that on the date of such  Borrowing,  such Issuance or
such Increase Date such statements are true):

               (a) the representations and warranties  contained in Section 4.01
          (except, in the case of Borrowings and Issuances,  the representations
          set  forth in the last  sentence  of  subsection  (e)  thereof  and in
          subsection  (f)(i)  thereof  and, if the Public Debt Rating is BBB- or
          higher  by  S&P  or  Baa3  or  higher   from   Moody's,   except   the
          representation set forth in subsection (n) thereof) are correct on and
          as of such date,  before and after  giving  effect to such  Borrowing,
          such Issuance or such  Commitment  Increase and to the  application of
          the  proceeds  therefrom,  as though made on and as of such date,  and
          additionally,  if such Borrowing or Issuance shall have been requested
          by a Designated Subsidiary, the representations and warranties of such
          Designated  Subsidiary  contained  in its  Designation  Agreement  are
          correct  on and as of the  date of such  Borrowing  or such  Issuance,
          before and after giving  effect to such  Borrowing,  such  Issuance or
          such  Commitment  Increase  and to  the  application  of the  proceeds
          therefrom, as though made on and as of such date, and

               (b) no event has occurred and is continuing, or would result from
          such Borrowing,  such Issuance or such Commitment Increase or from the
          application of the proceeds therefrom, that constitutes a Default.

               SECTION 3.04.  Determinations Under Section 3.01. For purposes of
                              ---------------------------------
determining  compliance  with the  conditions  specified in Section  3.01,  each
Lender  shall be deemed to have  consented  to,  approved  or  accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent  responsible  for the  transactions  contemplated by this Agreement
shall have received  notice from such Lender prior to the date that the Company,
by notice to the Lenders,  designates as the proposed Effective Date or the date
of the initial Advance to the applicable Designated Subsidiary,  as the case may
be,  specifying  its  objection  thereto.  The Agent shall  promptly  notify the
Lenders of the occurrence of the Effective Date and each date of initial Advance
to a Designated Subsidiary, as applicable.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

               SECTION 4.01.  Representations and Warranties of the Company. The
                              ---------------------------------------------
Company represents and warrants as follows:

               (a) The Company is a corporation duly organized, validly existing
          and in good standing under the laws of the State of New York.

               (b) The  execution,  delivery and  performance  by the Company of
          this  Agreement  and  the  Notes  to  be  delivered  by  it,  and  the
          consummation of the transactions  contemplated  hereby, are within the
          Company's corporate powers, have been duly authorized by all necessary
          corporate  action,  and do not contravene (i) the Company's charter or
          by-laws  or (ii)  law or any  contractual  restriction  binding  on or
          affecting the Company.

               (c) No  authorization  or  approval  or other  action  by, and no
          notice to or filing with,  any  governmental  authority or  regulatory
          body or any  other  third  party is  required  for the due  execution,
          delivery and performance by the Company of this Agreement or the Notes
          to be delivered by it.

               (d)  This  Agreement  has  been,  and  each  of the  Notes  to be
          delivered by it when delivered hereunder will have been, duly executed
          and delivered by the Company. This Agreement is, and each of the Notes
          when  delivered  hereunder  will be,  the  legal,  valid  and  binding
          obligation  of  the  Company   enforceable   against  the  Company  in
          accordance with their respective terms.

               (e)  The  Consolidated  balance  sheet  of the  Company  and  its
          Subsidiaries  as at December  31, 2004,  and the related  Consolidated
          statements   of  income  and  cash  flows  of  the   Company  and  its
          Subsidiaries for the fiscal year then ended, accompanied by an opinion
          of  PricewaterhouseCoopers   LLP,  an  independent  registered  public
          accounting  firm,  copies of which have been furnished to each Lender,
          fairly present the Consolidated financial condition of the Company and
          its Subsidiaries as at such date and the  Consolidated  results of the
          operations of the Company and its Subsidiaries for the period ended on
          such  date  all  in  accordance  with  generally  accepted  accounting
          principles  consistently  applied.  Since December 31, 2004, there has
          been no Material Adverse Change.

               (f) There is no  pending  or, to the  knowledge  of the  Company,
          threatened  action,  suit,  investigation,  litigation or  proceeding,
          including, without limitation, any Environmental Action, affecting the
          Company or any of its  Subsidiaries  before  any  court,  governmental
          agency or  arbitrator  that (i) could be  reasonably  likely to have a
          Material Adverse Effect (other than the Disclosed  Litigation) or (ii)
          purports to affect the legality,  validity or  enforceability  of this
          Agreement  or  any  Note  or  the  consummation  of  the  transactions
          contemplated hereby.

               (g) The  Company is not  engaged  in the  business  of  extending
          credit for the purpose of purchasing or carrying  margin stock (within
          the meaning of  Regulation  U issued by the Board of  Governors of the
          Federal Reserve  System),  and no proceeds of any Advance will be used
          to  purchase or carry any margin  stock or to extend  credit to others
          for the purpose of purchasing or carrying any margin stock.

               (h) The  Company  is not an  "investment  company",  or a company
          "controlled"  by an  "investment  company",  within the meaning of the
          Investment Company Act of 1940, as amended.

               (i) No ERISA Event exists or is reasonably expected to occur with
          respect to any Plan that could  reasonably  be expected to result in a
          material liability to the Company.

               (j)  The  operations  and  properties  of  the  Company  and  its
          Subsidiaries taken as a whole comply in all material respects with all
          applicable  Environmental  Laws and  Environmental  Permits,  all past
          non-compliance with such Environmental Laws and Environmental  Permits
          has been resolved or is being  contested in good faith by  appropriate
          proceedings,  and no  circumstances  exist  that  would be  reasonably
          likely  to form  the  basis of an  Environmental  Action  against  the
          Company or any of its  Subsidiaries  or any of their  properties  that
          could reasonably be expected to have a Material Adverse Effect.

               (k) With such  exceptions  as are not  material,  the Company has
          filed,  has caused to be filed or has been included in all tax returns
          (federal,  State, local and foreign) required to be filed and has paid
          all taxes shown thereon to be due,  together with applicable  interest
          and penalties.

               (l) The Company has title to its  properties  sufficient  for the
          conduct of business,  and none of such property is subject to any Lien
          except for Liens permitted by Section 5.02(a) hereof.

               (m) Neither the Information Memorandum nor any other information,
          exhibit  or report  furnished  by or on behalf of the  Company  to the
          Agent or any Lender in connection with the negotiation and syndication
          of this Agreement or pursuant to the terms of this Agreement, taken as
          a whole,  contained any untrue statement of a material fact or omitted
          to state a material fact necessary to make the statements  therein, in
          light of the circumstances under which they were made, when taken as a
          whole,  not  misleading;  provided  that  with  respect  to  projected
                                    --------
          financial   information,   the  Company   represents  only  that  such
          information was prepared in good faith based upon assumptions believed
          to be reasonable at the time and does not omit  information that would
          render such projections misleading in any material respect.

               (n) The Borrowers and their respective  Subsidiaries,  taken as a
          whole, are Solvent.


                                    ARTICLE V

                            COVENANTS OF THE COMPANY

               SECTION 5.01. Affirmative Covenants. So long as any Advance shall
                             ---------------------
remain unpaid,  and Letter of Credit is outstanding or any Lender shall have any
Commitment hereunder, the Company will:

               (a)  Compliance  with Laws,  Etc.  Comply,  and cause each of its
                    ---------------------------
          Subsidiaries to comply,  with all applicable laws, rules,  regulations
          and orders, such compliance to include, without limitation, compliance
          with ERISA, Environmental Laws and the Patriot Act except in each case
          to the extent that the failure to so comply  would not  reasonably  be
          expected to have a Material Adverse Effect.

               (b) Payment of Taxes,  Etc. Pay and discharge,  and cause each of
                   ----------------------
          its  Subsidiaries  to pay and discharge,  before the same shall become
          delinquent,  (i) all taxes,  assessments and  governmental  charges or
          levies imposed upon it or upon its property and (ii) all lawful claims
          that,  if  unpaid,  might  by law  become a Lien  upon  its  property;
          provided,   however,   that   neither  the  Company  nor  any  of  its
          --------    -------
          Subsidiaries  shall be  required  to pay or  discharge  (A) any taxes,
          assessments,  reassessments,  charges,  levies or claims that,  either
          individually  or in the  aggregate,  do not exceed  $5,000,000 (or the
          equivalent  thereof in one or more foreign  currencies) at any time or
          (B) any such tax, assessment,  charge or claim that is being contested
          in good faith and by proper  proceedings  and as to which  appropriate
          reserves  are being  maintained,  unless and until any Lien  resulting
          therefrom attaches to its property and becomes enforceable against its
          other creditors.

               (c)  Maintenance  of Insurance.  Maintain,  and cause each of its
                    -------------------------
          Subsidiaries  to maintain,  insurance with  responsible  and reputable
          insurance  companies or associations in such amounts and covering such
          risks as is usually carried by companies engaged in similar businesses
          and owning  similar  properties in the same general areas in which the
          Company or such Subsidiary operates.

               (d)  Preservation  of  Corporate  Existence,  Etc.  Preserve  and
                    --------------------------------------------
          maintain, and cause each of its Subsidiaries to preserve and maintain,
          its  corporate   existence,   rights   (charter  and   statutory)  and
          franchises;  provided,  however, that the Company and its Subsidiaries
                       --------   -------
          may consummate  any merger or  consolidation  permitted  under Section
          5.02(b) and  provided  further that neither the Company nor any of its
                       --------  -------
          Subsidiaries  shall be required to preserve  any right or franchise or
          the  existence of any  Subsidiary  if the  preservation  thereof is no
          longer  material to the conduct of the business of the Company and its
          Subsidiaries, taken as a whole.

               (e) Visitation  Rights.  At any reasonable  time, upon reasonable
                   ------------------
          notice and from time to time,  permit the Agent or any of the  Lenders
          or any  agents or  representatives  thereof  (at  their  sole cost and
          expense), to examine and make copies of and abstracts from the records
          and books of account of, and visit the  properties of, the Company and
          any of its  Subsidiaries,  and to discuss the  affairs,  finances  and
          accounts of the Company and any of its Subsidiaries  with any of their
          officers or  directors  and with their  independent  certified  public
          accountants.

               (f) Keeping of Books. Keep, and cause each of its Subsidiaries to
                   ----------------
          keep,  proper books of record and  account,  in which full and correct
          entries shall be made of all financial transactions and the assets and
          business of the Company and each such  Subsidiary in accordance  with,
          and  to  the  extent  required  by,  generally   accepted   accounting
          principles in effect from time to time.

               (g) Maintenance of Properties,  Etc.  Maintain and preserve,  and
                   -------------------------------
          cause each of its  Subsidiaries  to maintain and preserve,  all of its
          properties  that are used or useful in the conduct of its  business in
          good working order and  condition,  ordinary  wear and tear  excepted,
          except to the extent that the failure to do so would not reasonably be
          expected to have a Material Adverse Effect.

               (h) Transactions with Affiliates.  Conduct, and cause each of its
                   ----------------------------
          Subsidiaries to conduct,  all transactions  otherwise  permitted under
          this Agreement with any of their Affiliates on terms that are fair and
          reasonable and no less favorable to the Company or such  Subsidiary in
          any material respect than it would obtain in a comparable arm's-length
          transaction with a Person not an Affiliate.

               (i) Reporting Requirements. Furnish to the Lenders:
                   ----------------------

                    (i) as soon as  available  and in any  event  within 45 days
               after the end of each of the first three  quarters of each fiscal
               year  of the  Company,  the  Consolidated  balance  sheet  of the
               Company and its  Subsidiaries  as of the end of such  quarter and
               Consolidated  statements  of income and cash flows of the Company
               and its Subsidiaries for the period  commencing at the end of the
               previous  fiscal  year and ending  with the end of such  quarter,
               duly  certified  (subject to year-end audit  adjustments)  by the
               chief financial officer of the Company as having been prepared in
               accordance  with  generally  accepted  accounting  principles and
               certificates of the chief financial  officer of the Company as to
               compliance  with the terms of this Agreement and setting forth in
               reasonable  detail  the  calculations  necessary  to  demonstrate
               compliance  with Section 5.03,  provided that in the event of any
                                               --------
               change in generally  accepted  accounting  principles used in the
               preparation of such financial statements,  the Company shall also
               provide,  if necessary for the  determination  of compliance with
               Section  5.03,  a statement  of  reconciliation  conforming  such
               financial statements to GAAP;

                    (ii) as soon as  available  and in any event  within 90 days
               after the end of each fiscal year of the  Company,  a copy of the
               annual  audit  report  for  such  year  for the  Company  and its
               Subsidiaries,  containing the  Consolidated  balance sheet of the
               Company  and its  Subsidiaries  as of the end of such fiscal year
               and  Consolidated  statements  of  income  and cash  flows of the
               Company and its  Subsidiaries  for such fiscal year, in each case
               accompanied by an opinion  reasonably  acceptable to the Required
               Lenders by PricewaterhouseCoopers LLP or other independent public
               accountants  reasonably  acceptable  to the Required  Lenders and
               certificates of the chief financial  officer of the Company as to
               compliance  with the terms of this Agreement and setting forth in
               reasonable  detail  the  calculations  necessary  to  demonstrate
               compliance  with Section 5.03,  provided that in the event of any
                                               --------
               change in generally  accepted  accounting  principles used in the
               preparation of such financial statements,  the Company shall also
               provide,  if necessary for the  determination  of compliance with
               Section  5.03,  a statement  of  reconciliation  conforming  such
               financial statements to GAAP;

                    (iii) as soon as possible  and in any event within five days
               after the  occurrence  of each Default  continuing on the date of
               such statement, a statement of the chief financial officer of the
               Company setting forth details of such Default and the action that
               the Company has taken and proposes to take with respect thereto;

                    (iv) promptly after the sending or filing thereof, copies of
               all quarterly and annual reports and proxy solicitations that the
               Company  sends to its public  securityholders,  and copies of all
               reports  on Form  8-K (or  their  equivalents)  and  registration
               statements for the public offering of securities that the Company
               or  any  Subsidiary   files  with  the  Securities  and  Exchange
               Commission (the "SEC") or any national securities exchange;
                                ---

                    (v) promptly after the commencement  thereof,  notice of all
               actions and proceedings before any court,  governmental agency or
               arbitrator  affecting the Company or any of its  Subsidiaries  of
               the type described in Section 4.01(f); and

                    (vi) such other information respecting the Company or any of
               its Subsidiaries as any Lender through the Agent may from time to
               time reasonably request.

                    Financial  reports  required  to be  delivered  pursuant  to
               clauses  (i),  (ii) and (iv)  above  shall be deemed to have been
               delivered on the date on which such report is posted on the SEC's
               website  at  www.sec.gov,  and such  posting  shall be  deemed to
               satisfy the financial reporting requirements of clauses (i), (ii)
               and (iv) above,  provided,  that,  in each  instance  the Company
               shall provide all other reports and  certificates  required to be
               delivered  under this Section  5.01(i) in the manner set forth in
               Section 9.02.

               SECTION 5.02.  Negative  Covenants.  So long as any Advance shall
                              -------------------
remain unpaid,  and Letter of Credit is outstanding or any Lender shall have any
Commitment hereunder, the Company will not:

               (a) Liens,  Etc.  Create or suffer to exist, or permit any of its
                   -----------
          Subsidiaries to create or suffer to exist, any Lien on or with respect
          to any of its properties,  whether now owned or hereafter acquired, or
          assign,  or permit any of its  Subsidiaries  to  assign,  any right to
          receive income, other than:

                    (i) Permitted Liens,

                    (ii) purchase money Liens upon or in any assets  acquired or
               held by the  Company or any  Subsidiary  to secure  the  purchase
               price of such  assets or to secure Debt  incurred  solely for the
               purpose of financing the acquisition, improvement or construction
               of such assets  (including any Liens placed on such assets within
               180 days  after the  latest  of the  acquisition,  completion  of
               construction or improvement of such assets), or Liens existing on
               such assets at the time of its  acquisition  (other than any such
               Liens created in  contemplation of such acquisition that were not
               incurred  to  finance  the   acquisition   of  such   assets)  or
               extensions,  renewals or replacements of any of the foregoing for
               the same or a lesser amount, provided, however, that no such Lien
                                            --------  -------
               shall extend to or cover any assets of any  character  other than
               the assets being  acquired,  improved or constructed  and no such
               extension,  renewal or  replacement  shall extend to or cover any
               assets  not  theretofore  subject  to the  Lien  being  extended,
               renewed  or  replaced,   provided   further  that  the  aggregate
                                        --------   -------
               principal  amount  of  the  indebtedness  secured  by  the  Liens
               referred to in this clause (ii) shall not exceed  $50,000,000  at
               any time  outstanding  prior to the Investment  Grade Rating Date
               and shall not exceed  $100,000,000 at any time  outstanding on or
               after the Investment Grade Rating Date,

                    (iii) the Liens existing on the Effective Date securing Debt
               outstanding  on the  Effective  Date in an  aggregate  amount not
               exceeding $50,000,000,

                    (iv) Liens on property of a Person existing at the time such
               Person is  acquired  by,  merged  into or  consolidated  with the
               Company or any  Subsidiary of the Company or becomes a Subsidiary
               of the  Company;  provided  that such Liens  were not  created in
                                 --------
               contemplation of such merger, consolidation or acquisition and do
               not extend to any assets other than those of the Person so merged
               into or  consolidated  with the  Company  or such  Subsidiary  or
               acquired by the Company or such Subsidiary,

                    (v)  Liens  securing  Debt  owing by any  Subsidiary  of the
               Company to the Company,

                    (vi) Liens  securing  Debt of  Subsidiaries  of the  Company
               organized  under the laws of any  country  other  than the United
               States of America or a State thereof,

                    (vii) Liens  created  under any capital  lease on the assets
               that are the subject of such lease,

                    (viii) Liens arising out of the L/C Cash Deposit  Account or
               any Liens securing obligations under this Agreement,

                    (ix) other Liens  securing  Debt in an  aggregate  principal
               amount  not to exceed the amount  specified  therefor  in Section
               5.02(d)(viii) at any time outstanding,

                    (x)  assignments  of the right to  receive  income and Liens
               that arise in connection  with limited  recourse or  non-recourse
               sales,  transfers or other  dispositions  of accounts  receivable
               (together   with   related   rights  of   collection   or  credit
               enhancements  thereof)  having a face  amount  of not  more  than
               $75,000,000 in any calendar year, and

                    (xi)  the  replacement,  extension  or  renewal  of any Lien
               permitted  by  clause  (iii)  or (iv)  above  upon or in the same
               property  theretofore  subject thereto,  so long as the principal
               amount  of Debt  secured  by any such  Lien is not  increased  in
               connection with any such replacement, extension or renewal of the
               Debt secured thereby.

               (b) Mergers,  Etc. Merge or consolidate  with or into, or convey,
                   -------------
          transfer, lease or otherwise dispose of (whether in one transaction or
          in a series of transactions)  all or  substantially  all of its assets
          (whether now owned or hereafter  acquired)  to, any Person,  or permit
          any of its  Subsidiaries  to do so, except that (i) any  Subsidiary of
          the  Company  may merge or  consolidate  with or into,  or  dispose of
          assets to, any other Subsidiary of the Company, (ii) any Subsidiary of
          the  Company  may merge into or dispose of assets to the  Company  and
          (iii)  the  Company  may merge  with any  other  Person so long as the
          Company is the surviving corporation,  provided, in each case, that no
                                                 --------
          Default  shall have  occurred  and be  continuing  at the time of such
          proposed transaction or would result therefrom.

               (c)  Accounting  Changes.  Make or  permit,  or permit any of its
                    -------------------
          Subsidiaries to make or permit,  any change in accounting  policies or
          reporting  practices,  except as required or  permitted  by  generally
          accepted accounting principles.

               (d) Subsidiary Debt.  Permit any of its Subsidiaries to create or
                   ---------------
          suffer to exist, any Debt other than:

                    (i) Debt owed to the Company or to a wholly owned Subsidiary
               of the Company or Debt owed under this Agreement,

                    (ii) Debt existing on the  Effective  Date that is described
               on Schedule  5.02(d)  hereto or the  principal  or face amount of
               which does not exceed $10,000,000  individually or $25,000,000 in
               the aggregate (the "Existing  Debt"),  and any Debt extending the
                                   --------------
               maturity of, or refunding  or  refinancing,  in whole or in part,
               the Existing  Debt,  provided that the  principal  amount of such
                                    --------
               Existing Debt shall not be increased  above the principal  amount
               thereof   outstanding   immediately   prior  to  such  extension,
               refunding or  refinancing,  as a result of or in connection  with
               such extension, refunding or refinancing,

                    (iii) Debt incurred by Subsidiaries of the Company organized
               under the laws of any  country  other than the  United  States of
               America or a State thereof  aggregating for all such Subsidiaries
               of not more than  $300,000,000 at any one time outstanding  prior
               to  the  Investment  Grade  Rating  Date  and  shall  not  exceed
               $500,000,000  at  any  one  time  outstanding  on  or  after  the
               Investment Grade Rating Date,

                    (iv)  guarantees  of  Debt  of  the  Company  or  any  other
               Subsidiary of the Company,

                    (v) guarantees of Debt of any Person (other than the Company
               or  any  of  its  Subsidiaries),   provided  that  the  aggregate
                                                  --------
               principal amount of such Debt shall not exceed $25,000,000 at any
               one time outstanding,

                    (vi) obligations of any Subsidiary of the Company  organized
               under the laws of any  country  other than the  United  States of
               America or a State  thereof  under any Hedge  Agreements  entered
               into in the  ordinary  course of  business to protect the Company
               and its Subsidiaries against fluctuations in interest or exchange
               rates;

                    (vii)  endorsement of negotiable  instruments for deposit or
               collection  or similar  transactions  in the  ordinary  course of
               business, and

                    (viii)  other  Debt  aggregating  for  all of the  Company's
               Subsidiaries, together with Debt secured by Liens permitted under
               Section 5.02(a)(ix),  an amount not to exceed $100,000,000 at any
               one time  outstanding  prior to the Investment  Grade Rating Date
               and shall not exceed  $150,000,000 at any one time outstanding on
               or after the Investment Grade Rating Date.

               (e) Change in Nature of Business. Make any material change in the
                   ----------------------------
          nature of the business of the Company and its Subsidiaries, taken as a
          whole, as carried on at the date hereof.

               (f)  Dividends,  Etc.  Declare  any  dividend  payment  or  other
                    ---------------
          distribution  of assets,  properties,  cash,  rights,  obligations  or
          securities  on account of any shares of any class of capital  stock of
          the Company,  or purchase,  redeem or otherwise  acquire for value (or
          permit  any of its  Subsidiaries  to do so) any shares of any class of
          capital  stock of the  Company or any  warrants,  rights or options to
          acquire  any such  shares,  now or  hereafter  outstanding,  unless no
          Default under  Section 5.03 or Event of Default under Section  6.01(a)
          shall have  occurred and be  continuing at the time of any such action
          described above or would result therefrom.

               SECTION 5.03. Financial  Covenants.  So long as any Advance shall
                             --------------------
remain unpaid,  and Letter of Credit is outstanding or any Lender shall have any
Commitment hereunder, the Company will:

               (a)  Leverage  Ratio.  Maintain,  as at the  end of  each  fiscal
                    ---------------
          quarter,   a  ratio  of  Consolidated   Debt  for  Borrowed  Money  to
          Consolidated Total Capital of not greater than 0.50 to 1.00.

               (b)  Interest  Coverage  Ratio.  Maintain,  as at the end of each
                    -------------------------
          fiscal quarter, a ratio of Consolidated Adjusted EBITDA for the period
          of four fiscal quarters then ended of the Company and its Subsidiaries
          to Consolidated  Interest  Expense of the Company and its Subsidiaries
          during such period of not less than 3.50:1.00.


                                   ARTICLE VI

                                EVENTS OF DEFAULT

               SECTION 6.01.  Events of Default.  If any of the following events
                              ----------------- 
("Events of Default") shall occur and be continuing:
  -----------------

               (a) The  Company  or any  other  Borrower  shall  fail to pay any
          principal of any Advance when the same becomes due and payable; or the
          Company or any other  Borrower  shall fail to pay any  interest on any
          Advance  or make any other  payment of fees or other  amounts  payable
          under  this  Agreement  or any Note  within  five days  after the same
          becomes due and payable; or

               (b) Any representation or warranty made by any Borrower herein or
          by any  Borrower  (or any of its  officers)  in  connection  with this
          Agreement or by any Designated Subsidiary in the Designation Agreement
          pursuant  to  which  such  Designated  Subsidiary  became  a  Borrower
          hereunder  shall prove to have been incorrect in any material  respect
          when made; or

               (c) (i) The  Company  shall fail to perform or observe  any term,
          covenant or agreement  contained in Section 5.01(d),  (e), (h) or (i),
          5.02 or 5.03, or (ii) the Company shall fail to perform or observe any
          other term,  covenant or agreement  contained in this Agreement on its
          part  to be  performed  or  observed  if  such  failure  shall  remain
          unremedied  for 30 days after written  notice  thereof shall have been
          given to the Company by the Agent or any Lender; or

               (d) The Company or any of its Subsidiaries  shall fail to pay any
          principal of or premium or interest on any Debt that is outstanding in
          a principal  or net amount of at least  $50,000,000  in the  aggregate
          (but  excluding  Debt  outstanding  hereunder)  of the Company or such
          Subsidiary (as the case may be), when the same becomes due and payable
          (whether by scheduled  maturity,  required  prepayment,  acceleration,
          demand  or  otherwise),  and such  failure  shall  continue  after the
          applicable  grace  period,  if  any,  specified  in the  agreement  or
          instrument  relating  to such Debt;  or any other event shall occur or
          condition  shall exist under any agreement or  instrument  relating to
          any such Debt and shall continue after the applicable grace period, if
          any, specified in such agreement or instrument,  if the effect of such
          event or condition is to accelerate, or to permit the acceleration of,
          the  maturity  of such Debt;  or any such Debt shall be declared to be
          due and payable,  or required to be prepaid or redeemed (other than by
          a regularly scheduled required prepayment or redemption), purchased or
          defeased, or an offer to prepay, redeem, purchase or defease such Debt
          shall  be  required  to be made,  in each  case  prior  to the  stated
          maturity thereof; or

               (e) The Company or any of its  Subsidiaries  shall  generally not
          pay its debts as such debts  become due, or shall admit in writing its
          inability  to pay  its  debts  generally,  or  shall  make  a  general
          assignment for the benefit of creditors;  or any  proceeding  shall be
          instituted  by or  against  the  Company  or any  of its  Subsidiaries
          seeking  to  adjudicate  it  a  bankrupt  or  insolvent,   or  seeking
          liquidation,  winding  up,  reorganization,  arrangement,  adjustment,
          protection,  relief,  or  composition of it or its debts under any law
          relating to  bankruptcy,  insolvency  or  reorganization  or relief of
          debtors,  or  seeking  the  entry  of  an  order  for  relief  or  the
          appointment  of  a  receiver,  trustee,  custodian  or  other  similar
          official for it or for any  substantial  part of its property  and, in
          the  case of any  such  proceeding  instituted  against  it  (but  not
          instituted by it), either such proceeding shall remain  undismissed or
          unstayed for a period of 60 days, or any of the actions sought in such
          proceeding (including,  without limitation,  the entry of an order for
          relief against, or the appointment of a receiver,  trustee,  custodian
          or other similar  official for, it or for any substantial  part of its
          property) shall occur; or the Company or any of its Subsidiaries shall
          take any  corporate  action to authorize  any of the actions set forth
          above in this subsection (e); or

               (f)  Judgments  or orders  for the  payment of money in excess of
          $50,000,000 in the aggregate shall be rendered  against the Company or
          any of its Subsidiaries and either (i) enforcement  proceedings  shall
          have been  commenced  by any creditor  upon such  judgment or order or
          (ii) there shall be any period of 10  consecutive  days during which a
          stay of enforcement of such judgment or order,  by reason of a pending
          appeal or otherwise,  shall not be in effect; provided,  however, that
                                                        --------   -------
          any such judgment or order shall not be an Event of Default under this
          Section  6.01(f) if and for so long as (i) the amount of such judgment
          or order is covered by a valid and binding policy of insurance between
          the defendant and the insurer  covering  payment thereof and (ii) such
          insurer,  which shall be rated at least "A-" by A.M. Best Company, has
          been  notified of, and has not disputed the claim made for payment of,
          the amount of such judgment or order; or

               (g) (i) Any Person or two or more Persons acting in concert shall
          have acquired  beneficial  ownership (within the meaning of Rule 13d-3
          of  the  Securities  and  Exchange  Commission  under  the  Securities
          Exchange Act of 1934), directly or indirectly,  of Voting Stock of the
          Company  (or other  securities  convertible  into such  Voting  Stock)
          representing  30% or more of the  combined  voting power of all Voting
          Stock  of  the  Company;  or  (ii)  during  any  period  of  up  to 24
          consecutive  months,  commencing  after  the  date of this  Agreement,
          individuals  who  at  the  beginning  of  such  24-month  period  were
          directors of the Company shall cease for any reason (other than due to
          death  or  disability)  to  constitute  a  majority  of the  board  of
          directors of the Company (except to the extent that individuals who at
          the beginning of such 24-month period were replaced by individuals (x)
          elected  by a  majority  of the  remaining  members  of the  board  of
          directors of the Company or (y)  nominated  for election by a majority
          of the remaining  members of the board of directors of the Company and
          thereafter  elected as directors by the shareholders of the Borrower);
          or

               (h) The Company or any of its ERISA  Affiliates  shall incur,  or
          shall be reasonably likely to incur liability in excess of $75,000,000
          in the aggregate as a result of one or more of the following:  (i) the
          occurrence of any ERISA Event; (ii) the partial or complete withdrawal
          of the  Company or any of its ERISA  Affiliates  from a  Multiemployer
          Plan; or (iii) the  reorganization  or termination of a  Multiemployer
          Plan; or

               (j) so long as any  Subsidiary  of the  Company  is a  Designated
          Subsidiary, any provision of Article VII shall for any reason cease to
          be valid and binding on or  enforceable  against the  Company,  or the
          Company shall so state in writing;  then,  and in any such event,  the
          Agent  (i)  shall at the  request,  or may with  the  consent,  of the
          Required Lenders,  by notice to the Borrowers,  declare the obligation
          of each Lender to make  Advances  (other  than  Advances by an Issuing
          Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks
          to issue Letters of Credit to be terminated,  whereupon the same shall
          forthwith  terminate,  and (ii) shall at the request,  or may with the
          consent, of the Required Lenders, by notice to the Borrowers,  declare
          the Advances, all interest thereon and all other amounts payable under
          this  Agreement  to  be  forthwith  due  and  payable,  whereupon  the
          Advances,  all such  interest and all such amounts shall become and be
          forthwith due and payable,  without  presentment,  demand,  protest or
          further notice of any kind, all of which are hereby  expressly  waived
          by each Borrower; provided, however, that in the event of an actual or
                            --------  -------
          deemed entry of an order for relief with respect to the Company or any
          other Borrower under the Federal  Bankruptcy  Code, (A) the obligation
          of each Lender to make  Advances  (other  than  Advances by an Issuing
          Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks
          to issue Letters of Credit shall  automatically  be terminated and (B)
          the   Advances,   all  such   interest  and  all  such  amounts  shall
          automatically  become  and be due and  payable,  without  presentment,
          demand,  protest  or any  notice of any kind,  all of which are hereby
          expressly waived by each Borrower.

               SECTION  6.02.  Actions in Respect of the  Letters of Credit upon
                               -------------------------------------------------
Default.  If any Event of Default  shall have  occurred and be  continuing,  the
-------
Agent may with the consent,  or shall at the request,  of the Required  Lenders,
irrespective  of whether it is taking any of the  actions  described  in Section
6.01 or otherwise,  make demand upon the  Borrowers to, and forthwith  upon such
demand the Borrowers will, (a) pay to the Agent on behalf of the Lenders in same
day funds at the Agent's  office  designated in such demand,  for deposit in the
L/C Cash Deposit Account,  an amount equal to the aggregate  Available Amount of
all Letters of Credit then  outstanding or (b) make such other  arrangements  in
respect  of the  outstanding  Letters  of Credit as shall be  acceptable  to the
Required Lenders and not more  disadvantageous to the Borrowers than clause (a);
provided,  however,  that in the event of an actual or deemed  entry of an order
--------   -------
for relief with respect to any Borrower  under the Federal  Bankruptcy  Code, an
amount equal to the aggregate  Available  Amount of all  outstanding  Letters of
Credit shall be immediately  due and payable to the Agent for the account of the
Lenders  without  notice to or demand upon the  Borrowers,  which are  expressly
waived by each Borrower,  to be held in the L/C Cash Deposit Account.  If at any
time an Event of Default is continuing the Agent  determines that any funds held
in the L/C Cash Deposit  Account are subject to any right or claim of any Person
other than the Agent and the  Lenders or that the total  amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Borrowers
will,  forthwith upon demand by the Agent, pay to the Agent, as additional funds
to be deposited and held in the L/C Cash Deposit Account, an amount equal to the
excess of (a) such  aggregate  Available  Amount  over (b) the  total  amount of
funds,  if any,  then  held in the L/C  Cash  Deposit  Account  that  the  Agent
determines to be free and clear of any such right and claim. Upon the drawing of
any Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit
Account,  such funds  shall be applied to  reimburse  the  Issuing  Banks to the
extent  permitted by applicable law. After all such Letters of Credit shall have
expired or been  fully  drawn upon and all other  obligations  of the  Borrowers
hereunder and under the Notes shall have been paid in full, the balance, if any,
in such LC Cash Deposit Account shall be returned to the Borrowers.


                                   ARTICLE VII

                                    GUARANTY

               SECTION  7.01.   Unconditional   Guaranty.   The  Company  hereby
                                ------------------------
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all obligations of each other Borrower now
or  hereafter  existing  under or in  respect  of this  Agreement  and the Notes
(including,  without limitation, any extensions,  modifications,  substitutions,
amendments  or renewals  of any or all of the  foregoing  obligations),  whether
direct or indirect, absolute or contingent, and whether for principal, interest,
premiums,  fees,  indemnities,  contract  causes of action,  costs,  expenses or
otherwise (such obligations being the "Guaranteed  Obligations"),  and agrees to
                                       -----------------------
pay any and all expenses  (including,  without limitation,  fees and expenses of
counsel)  incurred by the Agent or any Lender in enforcing any rights under this
Agreement.  Without  limiting the  generality  of the  foregoing,  the Company's
liability  shall extend to all amounts that  constitute  part of the  Guaranteed
Obligations  and would be owed by such Borrower to the Agent or any Lender under
or in  respect  of this  Agreement  and the Notes but for the fact that they are
unenforceable   or  not   allowable  due  to  the  existence  of  a  bankruptcy,
reorganization or similar proceeding involving such Borrower.

               SECTION 7.02. Guaranty Absolute.  (a) The Company guarantees that
                             -----------------
the Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the Notes,  regardless of any law, regulation or order now or
hereafter  in  effect in any  jurisdiction  affecting  any of such  terms or the
rights of the Agent or any Lender with respect  thereto.  The obligations of the
Company under or in respect of this Guaranty are  independent  of the Guaranteed
Obligations  or any other  obligations of any other Borrower under or in respect
of this Agreement and the Notes, and a separate action or actions may be brought
and  prosecuted  against the Company to enforce this Guaranty,  irrespective  of
whether any action is brought  against any  Borrower or whether any  Borrower is
joined in any such action or actions.  The  liability of the Company  under this
Guaranty shall be irrevocable,  absolute and unconditional  irrespective of, and
the Company hereby  irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:

               (a) any lack of validity or enforceability of this Agreement, any
          Note or any agreement or instrument relating thereto;

               (b) any change in the time,  manner or place of payment of, or in
          any other term of,  all or any of the  Guaranteed  Obligations  or any
          other  obligations  of  any  Borrower  under  or in  respect  of  this
          Agreement  and the Notes,  or any other  amendment or waiver of or any
          consent  to  departure  from this  Agreement  or any Note,  including,
          without  limitation,   any  increase  in  the  Guaranteed  Obligations
          resulting  from the extension of additional  credit to any Borrower or
          any of its Subsidiaries or otherwise;

               (c)  any  taking,  exchange,  release  or  non-perfection  of any
          collateral,  or any  taking,  release  or  amendment  or waiver of, or
          consent to departure from, any other  guaranty,  for all or any of the
          Guaranteed Obligations;

               (d) any manner of  application  of any  collateral,  or  proceeds
          thereof, to all or any of the Guaranteed Obligations, or any manner of
          sale or  other  disposition  of any  collateral  for all or any of the
          Guaranteed  Obligations or any other obligations of any Borrower under
          this  Agreement  and the Notes or any other  assets of any Borrower or
          any of its Subsidiaries;

               (e) any change,  restructuring  or  termination  of the corporate
          structure or existence of any Borrower or any of its Subsidiaries;

               (f) any  failure  of the Agent or any Lender to  disclose  to the
          Company any information relating to the business, condition (financial
          or otherwise), operations, performance, properties or prospects of any
          Borrower  now or  hereafter  known to the  Agent or such  Lender  (the
          Company  waiving  any duty on the part of the Agent and the Lenders to
          disclose such information);

               (g) the  failure of any other  Person to execute or deliver  this
          Guaranty  or  any  other  guaranty  or  agreement  or the  release  or
          reduction  of  liability  of the Company or other  guarantor or surety
          with respect to the Guaranteed Obligations; or

               (h) any other circumstance  (including,  without limitation,  any
          statute  of  limitations)  or  any  existence  of or  reliance  on any
          representation  by  the  Agent  or any  Lender  that  might  otherwise
          constitute a defense  available to, or a discharge of, any Borrower or
          any other guarantor or surety.

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must  otherwise  be returned  by the Agent or any Lender or any other  Person
upon the insolvency,  bankruptcy or reorganization of any Borrower or otherwise,
all as though such payment had not been made.

               SECTION 7.03. Waivers and Acknowledgments. (a) The Company hereby
                             ---------------------------
unconditionally  and  irrevocably  waives  promptness,   diligence,   notice  of
acceptance,  presentment,  demand  for  performance,  notice of  nonperformance,
default, acceleration,  protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any Lender protect,  secure, perfect or insure any Lien or any property
subject  thereto or exhaust any right or take any action against any Borrower or
any other Person or any collateral.

               (b) The Company hereby unconditionally and irrevocably waives any
          right to revoke this Guaranty and  acknowledges  that this Guaranty is
          continuing  in  nature  and  applies  to all  Guaranteed  Obligations,
          whether existing now or in the future.

               (c) The Company hereby unconditionally and irrevocably waives (i)
          any  defense  arising by reason of any claim or defense  based upon an
          election  of  remedies  by the Agent or any Lender  that in any manner
          impairs,   reduces,   releases  or  otherwise  adversely  affects  the
          subrogation,     reimbursement,     exoneration,    contribution    or
          indemnification  rights of the Company or other  rights of the Company
          to proceed  against any  Borrower,  any other  guarantor  or any other
          Person or any  collateral  and (ii) any defense  based on any right of
          set-off or  counterclaim  against or in respect of the  obligations of
          the Company hereunder.

               (d) The Company hereby unconditionally and irrevocably waives any
          duty on the part of the Agent or any Lender to disclose to the Company
          any  matter,  fact  or  thing  relating  to  the  business,  condition
          (financial  or  otherwise),  operations,  performance,  properties  or
          prospects of any Borrower or any of its  Subsidiaries now or hereafter
          known by the Agent or such Lender.

               (e) The Company  acknowledges  that it will  receive  substantial
          direct  and  indirect   benefits  from  the   financing   arrangements
          contemplated  by this Agreement and the Notes and that the waivers set
          forth in Section  7.02 and this  Section  7.03 are  knowingly  made in
          contemplation of such benefits.

               SECTION 7.04. Subrogation. The Company hereby unconditionally and
                             -----------
irrevocably  agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower or any other insider  guarantor that arise from the
existence,  payment,  performance or  enforcement  of the Company's  obligations
under or in respect of this Guaranty,  including,  without limitation, any right
of subrogation, reimbursement,  exoneration, contribution or indemnification and
any right to  participate  in any  claim or  remedy  of the Agent or any  Lender
against any Borrower or any other insider  guarantor or any collateral,  whether
or not such claim,  remedy or right arises in equity or under contract,  statute
or common law, including,  without limitation, the right to take or receive from
any Borrower or any other insider guarantor,  directly or indirectly, in cash or
other  property  or by set-off or in any other  manner,  payment or  security on
account of such claim,  remedy or right,  unless and until all of the Guaranteed
Obligations  and all other amounts  payable under this Guaranty  shall have been
paid  in full in  cash,  all  Letters  of  Credit  shall  have  expired  or been
terminated and the  Commitments  shall have expired or been  terminated.  If any
amount shall be paid to the Company in violation  of the  immediately  preceding
sentence  at any time prior to the latest of (a) the  payment in full in cash of
the Guaranteed  Obligations  and all other amounts  payable under this Guaranty,
(b) the Termination Date and (c) the latest date of expiration or termination of
all Letters of Credit,  such amount  shall be received and held in trust for the
benefit of the Agent and the Lenders,  shall be segregated  from other  property
and funds of the Company and shall  forthwith  be paid or delivered to the Agent
in the same form as so received  (with any necessary  endorsement or assignment)
to be credited and applied to the Guaranteed  Obligations  and all other amounts
payable under this Guaranty,  whether  matured or unmatured,  in accordance with
the terms of this  Agreement and the Notes,  or to be held as collateral for any
Guaranteed  Obligations or other amounts payable under this Guaranty  thereafter
arising. If (i) the Company shall make payment to the Agent or any Lender of all
or  any  part  of  the  Guaranteed  Obligations,  (ii)  all  of  the  Guaranteed
Obligations  and all other amounts  payable under this Guaranty  shall have been
paid in full in cash,  (iii) the  Termination  Date shall have occurred and (iv)
all Letters of Credit shall have expired or been  terminated,  the Agent and the
Lenders will, at the Company's  request and expense,  execute and deliver to the
Company appropriate  documents,  without recourse and without  representation or
warranty, necessary to evidence the transfer by subrogation to the Company of an
interest in the Guaranteed  Obligations  resulting from such payment made by the
Company pursuant to this Guaranty.

               SECTION 7.05. Subordination.  The Company hereby subordinates any
                             -------------
and all debts,  liabilities  and other  obligations  owed to the  Company by any
Borrower (the "Subordinated  Obligations") to the Guaranteed  Obligations to the
               -------------------------
extent and in the manner hereinafter set forth in this Section 7.05:

               (a) Prohibited Payments, Etc. Except during the continuance of an
                   ------------------------
          Event  of  Default  under  Section   6.01(a)  or  (e)  (including  the
          commencement  and  continuation of any proceeding under any Bankruptcy
          Law  relating to such  Borrower),  the  Company may receive  regularly
          scheduled  payments from such Borrower on account of the  Subordinated
          Obligations.  After the occurrence  and during the  continuance of any
          Event  of  Default  under  Section   6.01(a)  or  (e)  (including  the
          commencement  and  continuation of any proceeding under any Bankruptcy
          Law relating to such Borrower),  however,  unless the Required Lenders
          otherwise  agree,  the Company  shall not  demand,  accept or take any
          action  to  collect  any  payment  on  account  of  the   Subordinated
          Obligations.

               (b) Prior Payment of Guaranteed  Obligations.  In any  proceeding
                   ----------------------------------------
          under any Bankruptcy Law relating to such Borrower, the Company agrees
          that the Agent and the Lenders shall be entitled to receive payment in
          full in cash of all Guaranteed Obligations (including all interest and
          expenses  accruing after the  commencement  of a proceeding  under any
          Bankruptcy Law,  whether or not  constituting an allowed claim in such
          proceeding  ("Post Petition  Interest"))  before the Company  receives
                        -----------------------
          payment of any Subordinated Obligations.

               (c) Turn-Over. After the occurrence and during the continuance of
                   ---------
          any Event of  Default  under  Section  6.01(a) or (e)  (including  the
          commencement  and  continuation of any proceeding under any Bankruptcy
          Law relating to such  Borrower),  the Company  shall,  if the Agent so
          requests,  collect,  enforce  and  receive  payments on account of the
          Subordinated  Obligations as trustee for the Agent and the Lenders and
          deliver  such  payments  to the  Agent on  account  of the  Guaranteed
          Obligations (including all Post Petition Interest),  together with any
          necessary  endorsements or other instruments of transfer,  but without
          reducing or affecting in any manner the liability of the Company under
          the other provisions of this Guaranty.

               (d) Agent  Authorization.  After the  occurrence  and  during the
                   --------------------
          continuance  of any Event of  Default  under  Section  6.01(a)  or (e)
          (including the  commencement  and continuation of any proceeding under
          any Bankruptcy Law relating to such Borrower), the Agent is authorized
          and  empowered   (but  without  any  obligation  to  so  do),  in  its
          discretion,  (i) in the name of the  Company,  to collect and enforce,
          and to submit claims in respect of,  Subordinated  Obligations  and to
          apply any  amounts  received  thereon  to the  Guaranteed  Obligations
          (including  any and all Post Petition  Interest),  and (ii) to require
          the  Company  (A) to  collect  and  enforce,  and to submit  claims in
          respect  of,  Subordinated  Obligations  and  (B) to pay  any  amounts
          received  on such  obligations  to the  Agent for  application  to the
          Guaranteed Obligations (including any and all Post Petition Interest).

               SECTION 7.06. Continuing Guaranty;  Assignments. This Guaranty is
                             ---------------------------------
a  continuing  guaranty  and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of the Guaranteed  Obligations and all
other amounts payable under this Guaranty,  (ii) the Termination  Date and (iii)
the latest date of expiration or  termination  of all Letters of Credit,  (b) be
binding  upon the  Company,  its  successors  and  assigns  and (c) inure to the
benefit of and be enforceable by the Agent and the Lenders and their successors,
transferees  and assigns.  Without  limiting the generality of clause (c) of the
immediately preceding sentence,  the Agent or any Lender may assign or otherwise
transfer all or any portion of its rights and  obligations  under this Agreement
(including,  without  limitation,  all or any  portion of its  Commitments,  the
Advances owing to it and the Note or Notes held by it) to any other Person,  and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to the Agent or such Lender herein or otherwise, in each case as
and to the extent provided in Section 9.07.


                                  ARTICLE VIII

                                    THE AGENT

               SECTION  8.01.  Authorization  and  Action.  Each  Lender (in its
                               --------------------------
capacities  as a Lender and Issuing  Bank, as  applicable)  hereby  appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms  hereof,  together with such powers and  discretion as are  reasonably
incidental  thereto.  As to any  matters  not  expressly  provided  for by  this
Agreement  (including,  without  limitation,  enforcement  or  collection of the
Notes),  the Agent shall not be required to exercise any  discretion or take any
action,  but shall be  required  to act or to refrain  from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders,  and such  instructions  shall be binding upon all Lenders
and all  holders  of  Notes;  provided,  however,  that the  Agent  shall not be
                              --------   -------
required to take any action that exposes the Agent to personal liability or that
is contrary to this  Agreement  or  applicable  law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Company or any other
Borrower pursuant to the terms of this Agreement.

               SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
                             ---------------------
its  directors,  officers,  agents or  employees  shall be liable for any action
taken or  omitted  to be taken by it or them  under or in  connection  with this
Agreement,  except for its or their own gross negligence or willful  misconduct.
Without limitation of the generality of the foregoing,  the Agent: (i) may treat
the Lender that made any Advance as the holder of the Debt  resulting  therefrom
until the Agent receives and accepts an Assumption  Agreement entered into by an
Assuming  Lender as provided in Section  2.18 or an  Assignment  and  Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section  9.07;  (ii) may consult  with legal  counsel  (including
counsel for the  Company),  independent  public  accountants  and other  experts
selected  by it and shall not be liable  for any  action  taken or omitted to be
taken  in good  faith  by it in  accordance  with the  advice  of such  counsel,
accountants or experts;  (iii) makes no warranty or representation to any Lender
and shall not be  responsible  to any Lender for any  statements,  warranties or
representations  (whether  written or oral) made in or in  connection  with this
Agreement;  (iv)  shall not have any duty to  ascertain  or to inquire as to the
performance,  observance  or  satisfaction  of any of the  terms,  covenants  or
conditions of this Agreement on the part of any Borrower or the existence at any
time of any Default or to inspect the property (including the books and records)
of the Company or any other Borrower; (v) shall not be responsible to any Lender
for  the  due  execution,  legality,  validity,   enforceability,   genuineness,
sufficiency  or value of, or the  perfection or priority of any lien or security
interest  created or purported to be created under or in connection  with,  this
Agreement or any other instrument or document  furnished  pursuant  hereto;  and
(vi) shall incur no  liability  under or in respect of this  Agreement by acting
upon any notice, consent,  certificate or other instrument or writing (which may
be by telecopier or telegram) believed by it to be genuine and signed or sent by
the proper party or parties.

               SECTION  8.03.  Citibank  and  Affiliates.  With  respect  to its
                               -------------------------
Commitments,  the Advances made by it and the Note issued to it,  Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise  the same as though it were not the  Agent;  and the term  "Lender"  or
"Lenders" shall, unless otherwise expressly  indicated,  include Citibank in its
individual capacity.  Citibank and its Affiliates may accept deposits from, lend
money  to,  act as  trustee  under  indentures  of,  accept  investment  banking
engagements from and generally engage in any kind of business with, the Company,
any  of its  Subsidiaries  and  any  Person  who  may do  business  with  or own
securities  of the Company or any such  Subsidiary,  all as if Citibank were not
the Agent and without any duty to account  therefor  to the  Lenders.  The Agent
shall have no duty to disclose any information obtained or received by it or any
of its  Affiliates  relating  to the Company or any of its  Subsidiaries  to the
extent such  information  was obtained or received in any capacity other than as
Agent.

               SECTION 8.04.  Lender Credit Decision.  Each Lender  acknowledges
                              ----------------------
that it has,  independently  and  without  reliance  upon the Agent or any other
Lender and based on the  financial  statements  referred to in Section  4.01 and
such other documents and information as it has deemed appropriate,  made its own
credit  analysis  and  decision to enter into this  Agreement.  Each Lender also
acknowledges that it will,  independently and without reliance upon the Agent or
any other Lender and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this Agreement.

               SECTION 8.05.  Indemnification.  (a) Each Lender severally agrees
                              ---------------
to indemnify  the Agent (to the extent not  reimbursed  by the Company) from and
against such  Lender's  Ratable Share of any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature  whatsoever that may be imposed on, incurred
by, or asserted  against the Agent in any way relating to or arising out of this
Agreement  or any  action  taken or omitted  by the Agent  under this  Agreement
(collectively, the "Indemnified Costs"), provided that no Lender shall be liable
                    -----------------    --------
for any  portion of the  Indemnified  Costs  resulting  from the  Agent's  gross
negligence or willful  misconduct.  Without  limitation of the  foregoing,  each
Lender agrees to reimburse the Agent  promptly upon demand for its ratable share
of any out-of-pocket  expenses (including counsel fees) incurred by the Agent in
connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities  under,  this  Agreement,  to the extent  that the Agent is not
reimbursed for such expenses by the Company.  In the case of any  investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 8.05
applies whether any such  investigation,  litigation or proceeding is brought by
the Agent, any Lender or a third party.

               (b) Each Lender  severally  agrees to indemnify the Issuing Banks
          (to the  extent  not  promptly  reimbursed  by the  Company)  from and
          against  such  Lender's  Ratable  Share  of any and  all  liabilities,
          obligations,  losses, damages,  penalties,  actions, judgments, suits,
          costs, expenses or disbursements of any kind or nature whatsoever that
          may be imposed on,  incurred by, or asserted  against any such Issuing
          Bank in any way  relating to or arising out of the Loan  Documents  or
          any action  taken or  omitted by such  Issuing  Bank  hereunder  or in
          connection herewith; provided, however, that no Lender shall be liable
                               --------  -------
          for any portion of such  liabilities,  obligations,  losses,  damages,
          penalties, actions, judgments, suits, costs, expenses or disbursements
          resulting  from  such  Issuing  Bank's  gross  negligence  or  willful
          misconduct. Without limitation of the foregoing, each Lender agrees to
          reimburse  any such Issuing Bank  promptly upon demand for its Ratable
          Share of any costs and expenses (including,  without limitation,  fees
          and expenses of counsel) payable by the Company under Section 9.04, to
          the extent that such Issuing Bank is not promptly  reimbursed for such
          costs and expenses by the Company.

               (c) The  failure  of any  Lender  to  reimburse  the Agent or any
          Issuing Bank  promptly upon demand for its Ratable Share of any amount
          required  to be paid by the  Lenders to the Agent as  provided  herein
          shall not  relieve any other  Lender of its  obligation  hereunder  to
          reimburse  the Agent or any Issuing Bank for its Ratable Share of such
          amount,  but no Lender  shall be  responsible  for the  failure of any
          other Lender to reimburse the Agent or any Issuing Bank for such other
          Lender's  Ratable  Share  of such  amount.  Without  prejudice  to the
          survival of any other agreement of any Lender hereunder, the agreement
          and  obligations  of each Lender  contained in this Section 9.05 shall
          survive  the  payment  in full of  principal,  interest  and all other
          amounts payable  hereunder and under the Notes.  Each of the Agent and
          each  Issuing  Bank agrees to return to the Lenders  their  respective
          Ratable  Shares of any amounts  paid under this  Section 9.05 that are
          subsequently reimbursed by the Company.

               SECTION 8.06.  Successor  Agent. The Agent may resign at any time
                              ----------------
by giving  written  notice  thereof to the  Lenders  and the  Company and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor  Agent.  If no  successor  Agent shall have been so  appointed  by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring  Agent's giving of notice of  resignation or the Required  Lenders'
removal of the retiring  Agent,  then the  retiring  Agent may, on behalf of the
Lenders,  appoint a successor Agent,  which shall be a commercial bank organized
under the laws of the  United  States of  America  or of any State  thereof  and
having  a  combined  capital  and  surplus  of at least  $500,000,000.  Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

               SECTION 8.07. Sub-Agent.  The Sub-Agent has been designated under
                             ---------
this Agreement to carry out duties of the Agent.  The Sub-Agent shall be subject
to each of the  obligations  in this Agreement to be performed by the Sub-Agent,
and each of the Company,  each other  Borrower  and the Lenders  agrees that the
Sub-Agent shall be entitled to exercise each of the rights and shall be entitled
to each of the  benefits  of the Agent  under  this  Agreement  as relate to the
performance of its obligations hereunder.

               SECTION 8.08. Other Agents.  Each Lender hereby acknowledges that
                             ------------
none of the arrangers,  syndication  agent,  documentation  agents nor any other
Lender  designated as any "Agent" (other than the Agent) on the signature  pages
or the cover page hereof has any liability  hereunder other than in its capacity
as a Lender.


                                   ARTICLE IX

                                  MISCELLANEOUS

               SECTION  9.01.  Amendments,  Etc. No  amendment  or waiver of any
                               ----------------
provision of this  Agreement or the Notes,  nor consent to any  departure by any
Borrower therefrom,  shall in any event be effective unless the same shall be in
writing  and signed by the  Required  Lenders,  and then such  waiver or consent
shall be effective  only in the specific  instance and for the specific  purpose
for which given; provided,  however, that no amendment, waiver or consent shall,
                 --------   -------
unless in writing and signed by all the Lenders,  do any of the  following:  (a)
waive  any of the  conditions  specified  in  Section  3.01,  (b)  increase  the
Commitments  of the Lenders  other than in  accordance  with Section  2.18,  (c)
reduce the  principal  of, or  interest  on, the  Advances  or any fees or other
amounts  payable  hereunder,  (d)  postpone  any date  fixed for any  payment of
principal of, or interest on, the Advances or any fees or other amounts  payable
hereunder,  (e) change the  percentage  of the  Commitments  or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, that shall be
required  for the  Lenders  or any of them to take  any  action  hereunder,  (f)
release the Company from any of its  obligations  under Article VII or (g) amend
this Section 9.01; and provided further that (x) no amendment, waiver or consent
                       -------- -------
shall,  unless in writing  and signed by the Agent in  addition  to the  Lenders
required  above to take such  action,  affect  the rights or duties of the Agent
under this Agreement or any Note and (y) no amendment,  waiver or consent shall,
unless in writing  and signed by the  Issuing  Banks in  addition to the Lenders
required above to take such action,  adversely  affect the rights or obligations
of the Issuing Banks in their capacities as such under this Agreement.

               SECTION   9.02.   Notices,   Etc.   (a)  All  notices  and  other
                                 --------------
communications  provided for hereunder shall be either (x) in writing (including
telecopier or telegraphic communication) and mailed, telecopied,  telegraphed or
delivered  or (y) as and to the extent set forth in Section  9.02(b)  and in the
proviso  to  this  Section  9.02(a),  if to the  Company  or to  any  Designated
Subsidiary at the Company's address at One Riverfront Plaza,  Corning, NY 14831,
Facsimile  number (607)  974-6686,  Telephone  number (607) 974-9000  Attention:
Secretary;  if to any Initial Lender,  at its Domestic  Lending Office specified
opposite its name on Schedule I hereto;  if to any other Lender, at its Domestic
Lending  Office  specified in the  Assumption  Agreement or the  Assignment  and
Acceptance  pursuant  to which it became a Lender;  and if to the Agent,  at its
address at Two Penns Way,  New  Castle,  Delaware  19720,  Attention:  Bank Loan
Syndications  Department;  or, as to any  Borrower  or the Agent,  at such other
address as shall be  designated  by such party in a written  notice to the other
parties  and,  as to each  other  party,  at such  other  address  as  shall  be
designated  by such  party in a written  notice to the  Company  and the  Agent,
provided that materials required to be delivered pursuant to Section 5.01(i)(i),
--------
(ii) or (iv) shall be delivered to the Agent as specified in Section  9.02(b) or
as  otherwise  specified  to the  Company by the  Agent.  All such  notices  and
communications  shall,  when mailed,  telecopied,  telegraphed  or e-mailed,  be
effective  when deposited in the mails,  telecopied,  delivered to the telegraph
company  or  confirmed  by  e-mail,   respectively,   except  that  notices  and
communications  to the Agent  pursuant  to Article  II, III or VIII shall not be
effective  until  received by the Agent.  Delivery by  telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered  hereunder  shall be
effective as delivery of a manually executed counterpart thereof.

               (b) So long as Citibank or any of its Affiliates is the Agent and
          except as otherwise provided in Section 5.01(i), materials required to
          be delivered  pursuant to Section  5.01(i)(i),  (ii) and (iv) shall be
          delivered to the Agent in an electronic  medium in a format acceptable
          to    the     Agent     and    the     Lenders     by     e-mail    at
          oploanswebadmin@citigroup.com.  The Company  agrees that the Agent may
          make  such  materials,  as  well  as any  other  written  information,
          documents, instruments and other material relating to the Company, any
          of its Subsidiaries or any other materials or matters relating to this
          Agreement,  the Notes or any of the transactions  contemplated  hereby
          (other than notices  delivered  under Article II)  (collectively,  the
          "Communications")  available to the Lenders by posting such notices on
           --------------
          Intralinks  or  a  substantially   similar   electronic   system  (the
          "Platform"),  provided  that the  Lenders and any other  Person  given
           --------
          access to the  Platform  by the Agent  shall have agreed in writing to
          the provisions of Section 9.08. The Company  acknowledges that (i) the
          distribution  of  material   through  an  electronic   medium  is  not
          necessarily secure and that there are  confidentiality and other risks
          associated with such  distribution,  (ii) the Platform is provided "as
          is" and "as  available"  and  (iii)  neither  the Agent nor any of its
          Affiliates  warrants the  accuracy,  adequacy or  completeness  of the
          Communications or the Platform and each expressly  disclaims liability
          for errors or  omissions in the  Communications  or the  Platform.  No
          warranty  of any  kind,  express,  implied  or  statutory,  including,
          without  limitation,  any warranty of  merchantability,  fitness for a
          particular purpose,  non-infringement of third party rights or freedom
          from viruses or other code defects, is made by the Agent or any of its
          Affiliates in connection with the Platform.

               (c) Each Lender agrees that notice to it (as provided in the next
          sentence) (a "Notice")  specifying that any  Communications  have been
                        ------
          posted to the Platform  shall  constitute  effective  delivery of such
          information,  documents or other materials to such Lender for purposes
          of this Agreement;  provided that if requested by any Lender the Agent
                              --------
          shall deliver a copy of the  Communications to such Lender by email or
          telecopier.  Each Lender  agrees (i) to notify the Agent in writing of
          such  Lender's  e-mail  address  to  which  a  Notice  may be  sent by
          electronic transmission (including by electronic  communication) on or
          before the date such  Lender  becomes a party to this  Agreement  (and
          from time to time thereafter to ensure that the Agent has on record an
          effective e-mail address for such Lender) and (ii) that any Notice may
          be sent to such e-mail address.

               SECTION 9.03. No Waiver;  Remedies. No failure on the part of any
                             --------------------
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note  shall  operate as a waiver  thereof;  nor shall any single or
partial  exercise  of any such  right  preclude  any other or  further  exercise
thereof or the exercise of any other right.  The  remedies  herein  provided are
cumulative and not exclusive of any remedies provided by law.

               SECTION 9.04.  Costs and Expenses.  (a) The Company agrees to pay
                              ------------------
on demand all reasonable  costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration,  modification and amendment of
this  Agreement,  the Notes and the other  documents to be delivered  hereunder,
including,  without limitation,  (A) all due diligence,  syndication  (including
printing,   distribution   and   bank   meetings),   transportation,   computer,
duplication,  appraisal,  consultant,  and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to  advising  the  Agent  as to  its  rights  and  responsibilities  under  this
Agreement.  The Company  further agrees to pay on demand all out of pocket costs
and  expenses  of  the  Agent  and  the  Lenders,  if  any  (including,  without
limitation,  reasonable  counsel  fees and  expenses),  in  connection  with the
enforcement  (whether through  negotiations,  legal proceedings or otherwise) of
this  Agreement,  the Notes and the other  documents to be delivered  hereunder,
including,  without limitation,  reasonable fees and expenses of counsel for the
Agent and each Lender in connection  with the  enforcement  of rights under this
Section 9.04(a).

               (b) The Company  agrees to indemnify  and hold harmless the Agent
          and each  Lender  and each of their  Affiliates  and  their  officers,
          directors,  employees,  agents and  advisors  (each,  an  "Indemnified
                                                                     -----------
          Party")  from  and  against  any  and  all  claims,  damages,  losses,
          -----
          liabilities and expenses  (including,  without limitation,  reasonable
          fees and  expenses  of  counsel)  incurred  by or  asserted or awarded
          against  any  Indemnified  Party,  in each case  arising  out of or in
          connection  with or by reason of (including,  without  limitation,  in
          connection  with  any  investigation,   litigation  or  proceeding  or
          preparation of a defense in connection  therewith) (i) the Notes, this
          Agreement,  any of the transactions  contemplated herein or the actual
          or proposed  use of the proceeds of the Advances or (ii) the actual or
          alleged presence of Hazardous Materials on any property of the Company
          or any of its Subsidiaries or any Environmental Action relating in any
          way to the  Company or any of its  Subsidiaries,  except to the extent
          such claim,  damage,  loss,  liability or expense is found in a final,
          non-appealable  judgment by a court of competent  jurisdiction to have
          resulted from such  Indemnified  Party's  gross  negligence or willful
          misconduct.  In the  case of an  investigation,  litigation  or  other
          proceeding  to which the  indemnity in this Section  9.04(b)  applies,
          such indemnity shall be effective  whether or not such  investigation,
          litigation  or proceeding  is brought by the Company,  its  directors,
          equityholders  or  creditors  or an  Indemnified  Party  or any  other
          Person,  whether or not any  Indemnified  Party is  otherwise  a party
          thereto and whether or not the  transactions  contemplated  hereby are
          consummated.  The  Company  also  agrees  not to assert  any claim for
          special,  indirect,  consequential  or  punitive  damages  against the
          Agent, any Lender, any of their Affiliates, or any of their respective
          directors, officers, employees, attorneys and agents, on any theory of
          liability,  arising out of or  otherwise  relating to the Notes,  this
          Agreement,  any of the transactions  contemplated herein or the actual
          or proposed use of the proceeds of the Advances. In furtherance of the
          foregoing,  the  Company  agrees  to pay  any  civil  penalty  or fine
          assessed by the U.S.  Department of the  Treasury's  Office of Foreign
          Assets Control ("OFAC") against, and all reasonable costs and expenses
                           ----
          (including  reasonable  counsel  fees and  disbursements)  incurred in
          connection with the defense thereof by, the Agent or any Lender solely
          as a result of conduct of the Company or any of its Subsidiaries  that
          violates a sanction enforced by OFAC.

               (c) If any  payment  of  principal  of,  or  Conversion  of,  any
          Eurocurrency  Rate  Advance  is  made  by any  Borrower  to or for the
          account  of a Lender  (i) other  than on the last day of the  Interest
          Period  for such  Advance,  as a result  of a  payment  or  Conversion
          pursuant to Section  2.08,  2.10,  2.12 or 2.18,  acceleration  of the
          maturity  of the  Notes  pursuant  to  Section  6.01 or for any  other
          reason,  or by an Eligible Assignee to a Lender other than on the last
          day of the  Interest  Period for such Advance  upon an  assignment  of
          rights and obligations  under this Agreement  pursuant to Section 9.07
          as a result of a demand by the Company  pursuant to Section 9.07(a) or
          (ii) as a result of a payment or Conversion  pursuant to Section 2.08,
          2.10 or 2.12,  the  applicable  Borrower  shall,  upon  demand by such
          Lender (with a copy of such demand to the Agent), pay to the Agent for
          the  account of such Lender any amounts  required to  compensate  such
          Lender  for any  additional  losses,  costs  or  expenses  that it may
          reasonably incur as a result of such payment or Conversion, including,
          without limitation,  any loss (excluding loss of anticipated profits),
          cost or expense  incurred by reason of the liquidation or reemployment
          of deposits or other funds  acquired by any Lender to fund or maintain
          such Advance. If the amount of the Committed Currency purchased by any
          Lender in the case of a Conversion or exchange of Advances in the case
          of Section  2.08 or 2.12  exceeds  the sum  required  to satisfy  such
          Lender's liability in respect of such Advances,  such Lender agrees to
          remit to the Company such excess.

               (d) Without  prejudice to the survival of any other  agreement of
          the  Borrowers  hereunder,  the  agreements  and  obligations  of  the
          Borrowers  contained in Sections 2.11, 2.14 and 9.04 shall survive the
          payment in full of principal,  interest and all other amounts  payable
          hereunder and under the Notes.

               SECTION  9.05.  Right of  Set-off.  Upon (i) the  occurrence  and
                               -----------------
during  the  continuance  of any  Event of  Default  and (ii) the  making of the
request or the  granting of the consent  specified  by Section 6.01 to authorize
the Agent to declare the Advances due and payable  pursuant to the provisions of
Section 6.01, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest  extent  permitted by law, to set off
and apply any and all deposits (general or special, time or demand,  provisional
or  final) at any time held and  other  indebtedness  at any time  owing by such
Lender or such  Affiliate  to or for the credit or the account of the Company or
any  Borrower  against  any and all of the  obligations  of the  Company  or any
Borrower now or hereafter  existing  under this  Agreement  and the Note held by
such  Lender,  whether or not such Lender  shall have made any demand under this
Agreement or such Note and although  such  obligations  may be  unmatured.  Each
Lender agrees promptly to notify the appropriate Borrower after any such set-off
and application,  provided that the failure to give such notice shall not affect
                  --------
the validity of such set-off and application.  The rights of each Lender and its
Affiliates  under this  Section  are in addition  to other  rights and  remedies
(including,  without  limitation,  other rights of set-off) that such Lender and
its Affiliates may have.

               SECTION  9.06.  Binding  Effect.   This  Agreement  shall  become
                               ---------------
effective  (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been  executed  by the Company and the Agent and when the Agent shall
have been notified by each Initial  Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the Company,
the Agent and each Lender and their  respective  successors and assigns,  except
that neither the Company nor any other  Borrower  shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lenders.

               SECTION 9.07. Assignments and Participations. (a) Each Lender may
                             ------------------------------
with the consent of each Issuing Bank (which  consent shall not be  unreasonably
withheld  or  delayed)  and,  if  demanded by the Company (so long as no Default
shall have  occurred  and be  continuing  and  following a demand by such Lender
pursuant to Section  2.11 or 2.14) upon at least five  Business  Days' notice to
such Lender and the Agent,  will assign to one or more  Persons all or a portion
of  its  rights  and  obligations  under  this  Agreement  (including,   without
limitation,  all or a portion of its Revolving Credit  Commitment,  its Unissued
Letter of Credit  Commitment,  the Advances owing to it, its  participations  in
Letters of Credit and the Note or Notes held by it); provided, however, that (i)
                                                     --------  -------
each such assignment  shall be of a constant,  and not a varying,  percentage of
all rights and obligations  under this Agreement,  (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment,  was a Lender
or an  assignment  of  all of a  Lender's  rights  and  obligations  under  this
Agreement,  the amount of (x) the Revolving  Credit  Commitment of the assigning
Lender being  assigned  pursuant to each such  assignment  (determined as of the
date of the Assignment and Acceptance with respect to such assignment)  shall in
no event be less than  $10,000,000  or an  integral  multiple of  $1,000,000  in
excess thereof and (y) the Unissued Letter of Credit Commitment of the assigning
Lender being  assigned  pursuant to each such  assignment  (determined as of the
date of the Assignment and Acceptance with respect to such assignment)  shall in
no event be less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof,  in each case,  unless the Company and the Agent  otherwise agree (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the  Company  pursuant to this  Section  9.07(a)
shall be arranged by the Company after  consultation with the Agent and shall be
either an  assignment  of all of the rights  and  obligations  of the  assigning
Lender  under this  Agreement or an  assignment  of a portion of such rights and
obligations  made  concurrently  with  another  such  assignment  or other  such
assignments  that  together  cover  all of the  rights  and  obligations  of the
assigning Lender under this Agreement,  (v) no Lender shall be obligated to make
any such  assignment  as a result of a demand by the  Company  pursuant  to this
Section  9.07(a)  unless and until such Lender  shall have  received one or more
payments  from either the  Borrowers  or one or more  Eligible  Assignees  in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal  amount and all other amounts  payable to such
Lender under this Agreement,  and (vi) the parties to each such assignment shall
execute  and  deliver to the Agent,  for its  acceptance  and  recording  in the
Register,  an Assignment and Acceptance,  together with any Note subject to such
assignment and a processing and recordation fee of $3,500 payable by the parties
to each such assignment,  provided, however, that in the case of each assignment
                          --------  -------
made as a result  of a demand  by the  Company,  such  recordation  fee shall be
payable by the Company except that no such  recordation  fee shall be payable in
the case of an  assignment  made at the  request of the  Company to an  Eligible
Assignee that is an existing Lender. Upon such execution,  delivery,  acceptance
and recording,  from and after the effective  date specified in each  Assignment
and Acceptance,  (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and  obligations  hereunder have been assigned to it pursuant
to such Assignment and  Acceptance,  have the rights and obligations of a Lender
hereunder  and (y) the Lender  assignor  thereunder  shall,  to the extent  that
rights and  obligations  hereunder  have been  assigned  by it  pursuant to such
Assignment  and  Acceptance,  relinquish its rights (other than its rights under
Sections 2.11,  2.14 and 9.04 to the extent any claim  thereunder  relates to an
event arising  prior to such  assignment)  and be released from its  obligations
(other  than  its  obligations  under  Section  8.04  to the  extent  any  claim
thereunder  relates to an event  arising  prior to such  assignment)  under this
Agreement (and, in the case of an Assignment and Acceptance  covering all or the
remaining  portion of an assigning  Lender's rights and  obligations  under this
Agreement, such Lender shall cease to be a party hereto).

               (b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties  hereto as follows:  (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or  warranty  and  assumes no  responsibility  with  respect to any  statements,
warranties or  representations  made in or in connection  with this Agreement or
the execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection  with,  this  Agreement or any
other  instrument or document  furnished  pursuant  hereto;  (ii) such assigning
Lender makes no representation  or warranty and assumes no  responsibility  with
respect to the financial  condition of the Company or any other  Borrower or the
performance  or  observance  by the Company or any other  Borrower of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant  hereto;  (iii) such  assignee  confirms that it has received a copy of
this Agreement,  together with copies of the financial statements referred to in
Section  4.01  and  such  other  documents  and  information  as it  has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and Acceptance;  (iv) such assignee will,  independently  and without
reliance upon the Agent,  such assigning Lender or any other Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee  appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and  discretion  under this  Agreement as
are  delegated to the Agent by the terms  hereof,  together with such powers and
discretion as are reasonably  incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations  that
by the terms of this Agreement are required to be performed by it as a Lender.

               (c) Upon its receipt of an Assignment and Acceptance  executed by
an  assigning  Lender  and  an  assignee  representing  that  it is an  Eligible
Assignee,  together with any Note or Notes subject to such assignment, the Agent
shall,  if  such  Assignment  and  Acceptance  has  been  completed  and  is  in
substantially  the form of Exhibit C hereto,  (i)  accept  such  Assignment  and
Acceptance,  (ii) record the information  contained  therein in the Register and
(iii) give prompt notice thereof to the Company.

               (d) The  Agent  shall  maintain  at its  address  referred  to in
Section  9.02 a copy  of each  Assumption  Agreement  and  each  Assignment  and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and  addresses  of the Lenders and the  Commitment  of, and  principal
amount of the Advances owing to, each Lender from time to time (the "Register").
                                                                     --------
The entries in the Register  shall be  conclusive  and binding for all purposes,
absent  manifest error,  and the Borrowers,  the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this  Agreement.  The Register  shall be available for inspection by
the  Company  or any  Lender at any  reasonable  time and from time to time upon
reasonable prior notice.

               (e) Each Lender may sell  participations  to one or more banks or
other entities (other than the Company or any of its Affiliates) in or to all or
a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and any
Note or Notes held by it); provided, however, that (i) such Lender's obligations
                           --------  -------
under this  Agreement  (including,  without  limitation,  its  Commitment to the
Borrowers  hereunder)  shall  remain  unchanged,  (ii) such Lender  shall remain
solely  responsible  to the other  parties  hereto for the  performance  of such
obligations,  (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Company, the other Borrowers, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's  rights and  obligations  under this Agreement and
(v) no participant under any such participation  shall have any right to approve
any amendment or waiver of any  provision of this  Agreement or any Note, or any
consent to any departure by the Company or any other Borrower therefrom,  except
to the extent that such amendment,  waiver or consent would reduce the principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent  subject to such  participation,  or  postpone  any date
fixed for any payment of principal  of, or interest on, the Notes or any fees or
other  amounts  payable  hereunder,  in each case to the extent  subject to such
participation.

               (f)  Any  Lender  may,  in  connection  with  any  assignment  or
participation or proposed  assignment or participation  pursuant to this Section
9.07,   disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant,  any information  relating to any Borrower furnished to such Lender
by or on behalf of such Borrower;  provided that,  prior to any such disclosure,
                                   --------
the assignee or participant or proposed  assignee or participant  shall agree to
preserve the confidentiality of any Company Information relating to any Borrower
received by it from such Lender.

               (g)  Notwithstanding  any  other  provision  set  forth  in  this
Agreement,  any Lender may at any time create a security  interest in all or any
portion of its rights under this Agreement (including,  without limitation,  the
Advances  owing to it and any Note or Notes held by it) in favor of any  Federal
Reserve Bank in  accordance  with  Regulation A of the Board of Governors of the
Federal Reserve System.

               SECTION 9.08.  Confidentiality.  Neither the Agent nor any Lender
                              ---------------
may  disclose  to  any  Person  any  confidential,   proprietary  or  non-public
information of the Company  furnished to the Agent or the Lenders by the Company
(such  information  being  referred  to  collectively  herein  as  the  "Company
                                                                         -------
Information"),  except  that  each of the  Agent  and  each of the  Lenders  may
-----------
disclose Company Information (i) to its and its affiliates' employees, officers,
directors,  agents and  advisors (it being  understood  that the Persons to whom
such  disclosure  is made will be  informed of the  confidential  nature of such
Company  Information  and such  person  shall have  agreed to keep such  Company
Information  confidential on substantially  the same terms as provided  herein),
(ii) to the extent  requested by any regulatory  authority,  (iii) to the extent
required by applicable  laws or  regulations or by any subpoena or similar legal
process or requested by any  self-regulatory  authority,  provided  that, to the
                                                          --------
extent  practicable,  the  Company  is  given  prompt  written  notice  of  such
requirement  or request prior to such  disclosure and assistance in obtaining an
order  protecting such  information  from public  disclosure,  (iv) to any other
party to this  Agreement,  (v) in  connection  with the exercise of any remedies
hereunder or any suit,  action or proceeding  relating to this  Agreement or the
enforcement  of  rights  hereunder,  (vi)  subject  to an  agreement  containing
provisions substantially the same as those of this Section 9.08, to any assignee
or participant or prospective assignee or participant,  (vii) to the extent such
Company  Information  (A) is or becomes  generally  available to the public on a
non-confidential  basis other than as a result of a breach of this  Section 9.08
by the Agent or such Lender, or (B) is or becomes available to the Agent or such
Lender on a nonconfidential  basis from a source other than the Company and not,
to the  knowledge of the Agent or such Lender,  in breach of such third  party's
obligations of confidentiality and (viii) with the consent of the Company.

               SECTION  9.09.  Designated  Subsidiaries.  (a)  Designation.  The
                               ------------------------        -----------
Company  may at any time,  and from time to time,  by delivery to the Agent of a
Designation Agreement duly executed by the Company and the respective Subsidiary
and substantially in the form of Exhibit D hereto,  designate such Subsidiary as
a "Designated  Subsidiary"  for purposes of this  Agreement and such  Subsidiary
shall thereupon become a "Designated  Subsidiary" for purposes of this Agreement
and,  as such,  shall  have all of the  rights  and  obligations  of a  Borrower
hereunder.  The Agent shall promptly notify each Lender of each such designation
by the Company and the identity of the respective Subsidiary.

               (b) Termination. Upon the indefeasible payment and performance in
                   -----------
full  of  all  of the  indebtedness,  liabilities  and  obligations  under  this
Agreement of any Designated Subsidiary then, so long as at the time no Notice of
Borrowing  in  respect  of  such  Designated  Subsidiary  is  outstanding,  such
Subsidiary's status as a "Designated  Subsidiary" shall terminate upon notice to
such  effect from the Agent to the  Lenders  (which  notice the Agent shall give
promptly,  and only upon its receipt of a request  therefor  from the  Company).
Thereafter, the Lenders shall be under no further obligation to make any Advance
hereunder to such Designated Subsidiary.

               SECTION 9.10.  Governing  Law. This Agreement and the Notes shall
                              --------------
be governed by, and construed in accordance  with,  the laws of the State of New
York.

               SECTION 9.11.  Execution in  Counterparts.  This Agreement may be
                              --------------------------
executed  in any  number of  counterparts  and by  different  parties  hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original  and all of which  taken  together  shall  constitute  one and the same
agreement.  Delivery of an  executed  counterpart  of a  signature  page to this
Agreement by  telecopier  shall be effective as delivery of a manually  executed
counterpart of this Agreement.

               SECTION  9.12.  Judgment  (a) If for the  purposes  of  obtaining
                               --------
judgment in any court it is necessary to convert a sum due  hereunder in Dollars
into another currency, the parties hereto agree, to the fullest extent that they
may  effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking  procedures the Agent could purchase Dollars with
such  other  currency  at  Citibank's  principal  office in London at 11:00 A.M.
(London  time) on the Business  Day  preceding  that on which final  judgment is
given.

               (b) If for the purposes of obtaining  judgment in any court it is
necessary to convert a sum due  hereunder in a Committed  Currency into Dollars,
the parties agree to the fullest  extent that they may  effectively  do so, that
the rate of  exchange  used  shall be that at which in  accordance  with  normal
banking procedures the Agent could purchase such Committed Currency with Dollars
at  Citibank's  principal  office in London at 11:00 A.M.  (London  time) on the
Business Day preceding that on which final judgment is given.

               (c) The obligation of any Borrower in respect of any sum due from
it in any currency (the "Primary Currency") to any Lender or the Agent hereunder
                         ----------------
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent  that on the  Business  Day  following  receipt by such Lender or the
Agent  (as the case  may be),  of any sum  adjudged  to be so due in such  other
currency,  such Lender or the Agent (as the case may be) may in accordance  with
normal banking  procedures  purchase the applicable  Primary  Currency with such
other currency; if the amount of the applicable Primary Currency so purchased is
less than  such sum due to such  Lender or the Agent (as the case may be) in the
applicable Primary Currency,  each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Agent (as the
case may be)  against  such loss,  and if the amount of the  applicable  Primary
Currency so  purchased  exceeds  such sum due to any Lender or the Agent (as the
case may be) in the applicable  Primary  Currency,  such Lender or the Agent (as
the case may be) agrees to remit to such Borrower such excess.

               SECTION 9.13.  Jurisdiction,  Etc. (a) Each of the parties hereto
                              ------------------
hereby irrevocably and unconditionally  submits, for itself and its property, to
the  nonexclusive  jurisdiction  of any New York State court or federal court of
the United States of America  sitting in New York City, and any appellate  court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for  recognition or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and
determined in any such New York State court or, to the extent  permitted by law,
in such federal court. Each Designated  Subsidiary hereby agrees that service of
process in any such action or proceeding  brought in the any such New York State
court or in such federal court may be made upon the Company and each  Designated
Subsidiary  hereby  irrevocably  appoints  the Company its  authorized  agent to
accept such  service of  process,  and agrees that the failure of the Company to
give any notice of any such  service  shall not impair or affect the validity of
such  service or of any  judgment  rendered  in any action or  proceeding  based
thereon.  The Company and each Designated  Subsidiary hereby further irrevocably
consent to the service of process in any action or  proceeding in such courts by
the mailing  thereof by any parties  hereto by  registered  or  certified  mail,
postage  prepaid,  to the Company at its address  specified  pursuant to Section
9.02. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other  jurisdictions by
suit on the  judgment or in any other  manner  provided by law.  Nothing in this
Agreement  shall affect any right that any party may otherwise have to bring any
action or  proceeding  relating to this  Agreement or the Notes in the courts of
any jurisdiction. To the extent that each Designated Subsidiary has or hereafter
may  acquire  any  immunity  from  jurisdiction  of any  court or from any legal
process  (whether  through  service or  notice,  attachment  prior to  judgment,
attachment in aid of execution,  execution or otherwise)  with respect to itself
or its property,  each  Designated  Subsidiary  hereby  irrevocably  waives such
immunity in respect of its obligations under this Agreement.

               (b) Each of the parties hereto  irrevocably  and  unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection  that it may now or hereafter have to the laying of venue of any suit,
action or proceeding  arising out of or relating to this  Agreement or the Notes
in any New York  State or  federal  court.  Each of the  parties  hereto  hereby
irrevocably  waives,  to the fullest extent  permitted by law, the defense of an
inconvenient  forum to the  maintenance of such action or proceeding in any such
court.

               SECTION  9.14.  Substitution  of  Currency.  If a  change  in any
                               --------------------------
Committed  Currency occurs pursuant to any applicable law, rule or regulation of
any  governmental,   monetary  or  multi-national   authority,   this  Agreement
(including,  without  limitation,  the definition of Eurocurrency  Rate) will be
amended  to  the  extent  determined  by the  Agent  (acting  reasonably  and in
consultation with the Company) to be necessary to reflect the change in currency
and to put the  Lenders  and  the  Borrowers  in the  same  position,  so far as
possible,  that they would have been in if no change in such Committed  Currency
had occurred.

               SECTION  9.15. No Liability of the Issuing  Banks.  The Borrowers
                              ----------------------------------
assume all risks of the acts or omissions of any  beneficiary  or  transferee of
any Letter of Credit with  respect to its use of such Letter of Credit.  Neither
an  Issuing  Bank  nor any of its  officers  or  directors  shall be  liable  or
responsible  for:  (a) the use that may be made of any  Letter  of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;  (b)
the validity,  sufficiency or genuineness  of documents,  or of any  endorsement
thereon,  even if  such  documents  should  prove  to be in any or all  respects
invalid,  insufficient,  fraudulent  or forged;  or (c) any other  circumstances
whatsoever  in making or  failing  to make  payment  under any Letter of Credit,
except that the  applicable  Borrower  shall have a claim  against  such Issuing
Bank, and such Issuing Bank shall be liable to such  Borrower,  to the extent of
any direct, but not  consequential,  damages suffered by such Borrower that such
Borrower  proves were caused by such Issuing Bank's willful  misconduct or gross
negligence when determining whether drafts and other documents presented under a
Letter of  Credit  comply  with the terms  thereof.  In  furtherance  and not in
limitation of the foregoing,  such Issuing Bank may accept documents that appear
on their face to be in order, without  responsibility for further investigation,
regardless of any notice or information  to the contrary;  provided that nothing
                                                           --------
herein  shall be deemed  to  excuse  such  Issuing  Bank if it acts  with  gross
negligence or willful misconduct in accepting such documents.

               SECTION 9.16. Patriot Act Notice.  Each Lender and the Agent (for
                             ------------------
itself and not on behalf of any  Lender)  hereby  notifies  each  Borrower  that
pursuant  to the  requirements  of the  Patriot  Act,  it is required to obtain,
verify and record  information that identifies each Borrower,  which information
includes the name and address of each Borrower and other  information  that will
allow such Lender or the Agent,  as  applicable,  to identify  each  Borrower in
accordance  with the Patriot Act. Each Borrower  shall provide such  information
and take such actions as are reasonably requested by the Agent or any Lenders in
order to assist the Agent and the  Lenders in  maintaining  compliance  with the
Patriot Act.

               SECTION 9.17.  Power of Attorney.  Each Subsidiary of the Company
                              -----------------
may from time to time authorize and appoint the Company as its  attorney-in-fact
to execute and deliver (a) any amendment,  waiver or consent in accordance  with
Section 9.01 on behalf of and in the name of such  Subsidiary and (b) any notice
or  other  communication  hereunder,  on  behalf  of  and in the  name  of  such
Subsidiary.  Such  authorization  shall become effective as of the date on which
such  Subsidiary  delivers  to the Agent a power of attorney  enforceable  under
applicable law and any additional  information to the Agent as necessary to make
such  power  of  attorney  the  legal,  valid  and  binding  obligation  of such
Subsidiary.

               SECTION  9.18.  Waiver of Jury  Trial Each of the  Company,  each
                               ---------------------
other Borrower, the Agent and the Lenders hereby irrevocably waives all right to
trial  by jury in any  action,  proceeding  or  counterclaim  (whether  based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
Notes  or  the  actions  of  the  Agent  or  any  Lender  in  the   negotiation,
administration, performance or enforcement thereof.

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.


                                 CORNING INCORPORATED

                                 By /s/   Mark S. Rogus                    
                                          ---------------------------------
                                 Title:  Senior Vice President and Treasurer

                                 CITIBANK, N.A.,
                                    as Agent

                                 By /s/   Maureen Maroney                  
                                          ---------------------------------
                                 Title: Director

                                     Lenders
                                     -------

Letter of Credit Commitment
---------------------------

$100,000,000                     CITIBANK, N.A.

                                 By /s/   Maureen Maroney                  
                                          ---------------------------------
                                 Title: Director

$100,000,000                     JPMORGAN CHASE BANK, N.A.

                                 By /s/   Joan M. Fitzgibbon               
                                          ---------------------------------
                                 Title:  Managing Director

$200,000,000               Total of the Letter of Credit Commitments

Revolving Credit Commitment
---------------------------

$125,000,000                     CITIBANK, N.A.

                                 By /s/   Maureen Maroney                  
                                          ---------------------------------
                                 Title: Director

$125,000,000                     JPMORGAN CHASE BANK, N.A.

                                 By /s/   Joan M. Fitzgibbon               
                                          ---------------------------------
                                 Title:  Managing Director

                                     Agents
                                     ------

$100,000,000                     BANK OF AMERICA, N.A.

                                 By /s/   Kevin McMahon                    
                                          ---------------------------------
                                 Title:  Senior Vice President

$100,000,000                     THE BANK OF TOKYO-MITSUBISHI, LTD.

                                 By /s/   Andrew Bernstein                 
                                          ---------------------------------
                                 Title:  Authorized Signatory

$100,000,000                     WACHOVIA BANK, NATIONAL ASSOCIATION

                                 By /s/   James F. Heatwole                
                                          ---------------------------------
                                 Title: Director

$100,000,000                     BARCLAYS BANK PLC

                                 By /s/   Nicholas Bell                    
                                          ---------------------------------
                                 Title: Director

$100,000,000                     DEUTSCHE BANK AG NEW YORK BRANCH

                                 By /s/   Andreas Neumeier                 
                                          ---------------------------------
                                 Title: Director

                                 By /s/   David Dickinson Jr.              
                                 Title: Director

                                     Lenders
                                     -------

$75,000,000                      MIZUHO CORPORATE BANK, LTD.

                                 By /s/   Bertram H. Tang                  
                                          ---------------------------------
                                 Title:  Vice President & Team Leader

$50,000,000                      GOLDMAN SACHS CREDIT PARTNERS LP

                                 By /s/   Walter A. Jackson                
                                          ---------------------------------
                                 Title:  Authorized Signatory

$50,000,000                      STANDARD CHARTERED BANK

                                 By /s/   Richard L. Van de Berghe, Jr.    
                                          ---------------------------------
                                 Title:  Senior Vice President

                                 By /s/   Robert K. Reddington             
                                          ---------------------------------
                                 Title:  AVP/Credit Documentation

$50,000,000                      SUMITOMO MITSUI BANKING CORPORATION

                                 By /s/   Edward McColly                   
                                          ---------------------------------
                                 Title:  Vice President & Department Head

$975,000,000      Total of the Revolving Credit Commitments





                                                                      SCHEDULE I
                                                            CORNING INCORPORATED
                                                      FIVE YEAR CREDIT AGREEMENT
                                                      APPLICABLE LENDING OFFICES





Name of Initial Lender    Domestic Lending Office    Eurocurrency Lending Office
----------------------    -----------------------    ---------------------------






                                                                SCHEDULE 2.01(d)
                           Existing Letters of Credit


                                      None






                                                                SCHEDULE 3.01(b)
                              Disclosed Litigation

Environmental Litigation. Corning has been named by the Environmental Protection
Agency under the  Superfund  Act, or by state  governments  under  similar state
laws, as a potentially  responsible  party at 11 active  hazardous  waste sites.
Under the  Superfund  Act, all parties who may have  contributed  any waste to a
hazardous  waste site,  identified  by such  Agency,  are jointly and  severally
liable  for the cost of  cleanup  unless  the  Agency  agrees  otherwise.  It is
Corning's  policy to accrue for its  estimated  liability  related to  Superfund
sites and other  environmental  liabilities related to property owned by Corning
based on expert analysis and continual  monitoring by both internal and external
consultants.  Corning has accrued  approximately  $14 million for its  estimated
liability for environmental cleanup and litigation at December 31, 2004.

Schwinger and Stevens  Toxins  Lawsuits.  In April 2002,  Corning was named as a
defendant in two actions,  Schwinger  and  Stevens,  filed in the U.S.  District
Court for the Eastern  District of New York,  which  asserted  various  personal
injury and property  damage  claims  against a number of  corporate  defendants.
These  claims  allegedly  arise  from the  release  of toxic  substances  from a
Sylvania  nuclear  materials  processing  facility  near  Hicksville,  New York.
Amended  complaints  naming 205 plaintiffs  and seeking  damages in excess of $3
billion  were served in  September  2002.  The sole basis of  liability  against
Corning was plaintiffs' claim that Corning was the successor to Sylvania-Corning
Nuclear  Corporation,  a Delaware  corporation  formed in 1957 and  dissolved in
1960.  Management  intends to vigorously  contest all claims against Corning for
the reason that  Corning is not the  successor to  Sylvania-Corning.  Management
will also defend on the grounds that almost all of the wrongful death claims and
personal injury claims are time-barred. At a status conference in December 2002,
the Court  decided to  "administratively  close" the Schwinger and Stevens cases
and  ordered   plaintiffs'   counsel  to  bring  new  amended   complaints  with
"bellwether" plaintiffs. In these actions, known as Schwinger II and Astuto, the
plaintiffs  have not named  Corning as a  defendant.  Although  it appears  that
plaintiffs may proceed only against the other corporate defendants, the original
Schwinger  and  Stevens  cases  remain  pending  and no order  has been  entered
dismissing Corning.

Dow  Corning  Bankruptcy.  Corning and Dow  Chemical  each own 50% of the common
stock of Dow Corning,  which was in reorganization  proceedings under Chapter 11
of the U.S.  Bankruptcy  Code between May 1995 and June 2004.  Dow Corning filed
for bankruptcy  protection to address  pending and claimed  liabilities  arising
from many  thousand  breast-implant  product  lawsuits  each of which  typically
sought  damages in excess of one  million  dollars.  On  November  8, 1998,  Dow
Corning  and the  Tort  Claimants  Committee  jointly  filed a  revised  Plan of
Reorganization   (Joint  Plan)  which  provided  for  the  settlement  or  other
resolution of implant claims. After review and approvals by the Bankruptcy Court
and the U.S. District Court of the Eastern District of Michigan,  and an appeal,
the District Court on April 2, 2004 entered an order  establishing  June 1, 2004
as the effective date of the Joint Plan.

Under the terms of the Joint Plan, Dow Corning has  established and is funding a
Settlement Trust and a Litigation Facility to provide a means for tort claimants
to settle or  litigate  their  claims.  Of the  approximately  $3.2  billion  of
required funding,  Dow Corning has paid approximately $1.6 billion (inclusive of
insurance)  and expects to pay up to an  additional  $1.6 billion  ($710 million
after-tax and net of expected insurance  recoveries) over 16 years.  Corning and
Dow Chemical have each agreed to provide a credit  facility to Dow Corning of up
to $150  million  ($300  million  in the  aggregate),  subject  to the terms and
conditions  stated in the Joint Plan. As required by the Joint Plan, Dow Corning
has fully satisfied (or reserved for) the claims of its commercial  creditors in
accordance  with a March 31, 2004 ruling of the District Court  determining  the
amount of pendency  interest  allowed on the $810 million in principal  owing on
such claims.  In the second quarter of 2004, Dow Corning  recorded a $47 million
pre-tax adjustment to its interest liabilities relating to this matter;  Corning
recognized $14 million in its second  quarter equity  earnings for its after tax
share of this adjustment. Certain commercial creditors have appealed that ruling
to the U.S.  Court of Appeals of the Sixth  Circuit  seeking from Dow Corning an
additional  sum of  approximately  $80 million for interest at default rates and
enforcement costs.

In addition,  Dow Corning has received a statutory notice of deficiency from the
United States  Internal  Revenue  Service  asserting tax  deficiencies  totaling
approximately  $65.3 million  relating to its federal income tax returns for the
1995 and 1996 calendar  years.  This matter is pending before the U.S.  District
Court in Michigan.  Dow Corning has also received a proposed adjustment from the
IRS  (approximately  $116.9  million)  with  respect to its  federal  income tax
returns for the 1997,  1998 and 1999 calendar  years.  Dow Corning is vigorously
contesting  these  deficiencies and proposed  adjustments  which it believes are
excessive.

Subject  to future  rulings by the  bankruptcy  court and  potential  changes in
estimated  bankruptcy-related  liabilities,  it is possible that Dow Corning may
record bankruptcy-related charges in the future.

The Joint Plan includes releases for Corning and Dow Chemical as shareholders in
exchange  for  contributions  to the Joint  Plan.  Although  claims  against the
shareholders  were included in several thousand state and federal lawsuits filed
pre-bankruptcy,  alleging  injuries arising from Dow Corning's implant products,
Corning  was awarded  summary  judgment  in federal  court and in several  state
jurisdictions.  The remaining  claims  against  Corning will be channeled by the
Joint Plan into facilities established by the Joint Plan.

Federal  Securities  Cases.  From December 2001 through April 2002,  Corning and
three of its officers and directors were named  defendants in lawsuits  alleging
violations of the U.S.  securities  laws in connection  with Corning's  November
2000 offering of 30 million  shares of common stock and $2.7 billion zero coupon
convertible debentures, due November 2015. In addition, the Company and the same
three  officers  and  directors  were  named  in  lawsuits  alleging  misleading
disclosures and  non-disclosures  that allegedly inflated the price of Corning's
common  stock  in the  period  from  October  2000  through  July 9,  2001.  The
plaintiffs in these actions seek to represent classes of purchasers of Corning's
stock in all or part of the  period  indicated.  On  August  2,  2002,  the U.S.
District   Court  of  the  Western   District  of  New  York  entered  an  order
consolidating  these actions for all purposes,  designating  lead plaintiffs and
lead  counsel,   and  directing  service  of  a  consolidated   complaint.   The
consolidated  amended complaint requests  substantial  damages in an unspecified
amount to be proved at trial.  In February  2003,  defendants  filed a motion to
dismiss the complaint for failure to allege the requisite elements of the claims
with particularity.  The Court heard arguments on May 29 and June 9, 2003 and on
April 9, 2004 entered a Decision and Order dismissing the complaint.  Plaintiffs
appealed to the U.S. Court of Appeals of the Second  Circuit.  Oral argument was
held on February 2, 2005, and the Court reserved decision.

Pittsburgh Corning  Corporation.  Corning and PPG Industries,  Inc. ("PPG") each
own 50% of the capital stock of PCC. Over a period of more than two decades, PCC
and several  other  defendants  have been named in numerous  lawsuits  involving
claims alleging  personal  injury from exposure to asbestos.  On April 16, 2000,
PCC filed for Chapter 11  reorganization  in the U.S.  Bankruptcy  Court for the
Western District of Pennsylvania. As of the bankruptcy filing, PCC had in excess
of 140,000 open claims and had  insufficient  remaining  insurance and assets to
deal  with its  alleged  current  and  future  liabilities.  More  than  100,000
additional  claims have been filed with PCC after its bankruptcy  filing. At the
time PCC filed for bankruptcy protection, there were approximately 12,400 claims
pending against  Corning in state court lawsuits  alleging  various  theories of
liability based on exposure to PCC's asbestos products and typically  requesting
monetary  damages  in excess of one  million  dollars  per  claim.  Corning  has
defended those claims on the basis of the separate  corporate  status of PCC and
the absence of any facts  supporting  claims of direct  liability  arising  from
PCC's asbestos products. Corning is also currently named in approximately 11,400
other cases  (approximately  43,400 claims) alleging  injuries from asbestos and
similar amounts of monetary damages per claim.

In the  bankruptcy  court,  PCC in April 2000 obtained a preliminary  injunction
against the prosecution of asbestos  actions arising from PCC's products against
its two  shareholders  to afford  the  parties a period of time (the  Injunction
Period) in which to negotiate a plan of reorganization for PCC ("PCC Plan").

On May 14, 2002,  PPG announced that it had agreed with certain of its insurance
carriers and  representatives  of current and future  asbestos  claimants on the
terms of a  settlement  arrangement  applicable  to claims  arising  from  PCC's
products.

On March 28, 2003,  Corning  announced  that it had also reached  agreement with
representatives  of  current  and  future  asbestos  claimants  on a  settlement
arrangement that was thereafter  incorporated into the PCC Plan. This settlement
remains  subject  to a  number  of  contingencies,  including  approval  by  the
bankruptcy court.  Corning's  settlement will require the  contribution,  if the
Plan is  approved  and becomes  effective,  of its equity  interest in PCC,  its
one-half  equity interest in PCE, and 25 million shares of Corning common stock.
The settlement also requires  Corning to make cash payments of $144 million (net
present  value as of December 31, 2004) in six  installments  beginning one year
after the Plan is effective.  In addition,  Corning will assign policy rights or
proceeds  under primary  insurance  from 1962 through 1984, as well as rights to
proceeds under certain excess  insurance,  most of which falls within the period
from 1962  through  1973.  In return  for these  contributions,  and  subject to
receiving  court approval of the PCC Plan,  Corning expects to receive a release
and an injunction  channeling asbestos claims against it into a settlement trust
under the PCC Plan.

Corning  recorded an initial  charge of $298 million in the period  ending March
31, 2003 to reflect the settlement terms.  However, the amount of the charge for
this  settlement  requires  adjustment  each  quarter  based  upon  movement  in
Corning's  common stock price prior to  contribution of the shares to the trust.
During  2004,   Corning  recorded  a  charge  of  $33  million  to  reflect  the
mark-to-market of Corning common stock. Beginning with the first quarter of 2003
and  through  December  31,  2004,  Corning  recorded  total net charges of $446
million  to reflect  the  initial  settlement  and  mark-to-market  the value of
Corning common stock.

Two of Corning's  primary  insurers and several  excess  insurers have commenced
litigation for a declaration of the rights and  obligations of the parties under
insurance  policies,  including  rights that may be  affected by the  settlement
arrangement described above. Corning is vigorously contesting these cases.

The PCC Plan received a favorable vote from creditors in March 2004. Hearings to
consider  objections to the Plan were held in the Bankruptcy  Court in May 2004.
The  parties  filed  post-hearing  briefs and made final oral  arguments  to the
Bankruptcy  Court  in  November  2004.  The  Bankruptcy  Court  has  allowed  an
additional round of briefing to address current case law developments, and heard
additional  oral arguments at a hearing on March 16, 2005. At this hearing,  the
court allowed the  proponents of the PCC Plan 60 days to consider  amendments to
the Plan or to request rulings on the pending objections. The timing and outcome
are  uncertain.  If the  Bankruptcy  Court does not  confirm the PCC Plan in its
current  form,  changes to the  settlement  agreement are  reasonably  possible.
Further judicial review is also reasonably possible.

Astrium. In December of 2000, Astrium,  SAS and Astrium,  Ltd. filed a complaint
for negligence in the U.S. District Court for the Central District of California
against TRW,  Inc.,  Pilkington  Optronics  Inc.,  Corning  NetOptix,  Inc., OFC
Corporation and Optical Filter  Corporation  claiming  damages in excess of $150
million.  The complaint alleges that certain cover glasses for solar arrays used
to  generate  electricity  from solar  energy on  satellites  sold by  Astrium's
corporate  successor  were  negligently  coated by NetOptix or its  subsidiaries
(prior to  Corning's  acquisition  of NetOptix) in such a way that the amount of
electricity  the satellite can produce and their  effective life were materially
reduced.  NetOptix  has denied  that the  coatings  produced  by NetOptix or its
subsidiaries  caused the damage alleged in the complaint,  or that it is legally
liable for any damages that  Astrium may have  experienced.  In April 2002,  the
Court granted motions for summary  judgment by NetOptix and other  defendants to
dismiss  the  negligence  claims,  but  permitted  plaintiffs  to add  fraud and
negligent  misrepresentation  claims  against  all  defendants  and a breach  of
warranty claim against NetOptix and its subsidiaries. In October 2002, the Court
again  granted  defendants'  motions  for summary  judgment  and  dismissed  the
negligent misrepresentation and breach of warranty claims. The intentional fraud
claims were dismissed against all non-settling  defendants on February 25, 2003.
On March 19, 2003,  Astrium  appealed all of the Court's  Rulings  regarding the
various  summary  judgment  motions to the Ninth Circuit  Court of Appeals.  The
period of  briefing  the appeal was  extended,  and oral  argument  has not been
scheduled.

Furukawa  Electric  Company.  On February 3, 2003, The Furukawa Electric Company
filed suit in the Tokyo  District  Court in Japan against  Corning Cable Systems
International   Corporation  ("CCS  International")   alleging  infringement  of
Furukawa's Japanese Patent No. 2,023,966 which relates to separable fiber ribbon
units used in optical cable.  Furukawa's  complaint  requests slightly over (Y)6
billion in damages (approximately $56 million) and an injunction against further
sales in Japan of these fiber ribbon  units.  CCS  International  has denied the
allegation  of  infringement,  asserted  that  the  patent  is  invalid,  and is
defending  vigorously  against  this  lawsuit.  On October 29,  2004,  the Tokyo
District Court issued it's ruling in favor of CCS on both  non-infringement  and
patent invalidity. Furukawa has filed an appeal from this ruling.

PicVue  Electronics  Ltd.,  PicVue  OptoElectronics   International,   Inc.  and
Eglasstrek Gmbh. In June 2002, Corning brought an action seeking to restrain the
use of its trade  secrets  and for  copyright  infringement  relating to certain
aspects  of the  fusion  draw  machine  used for liquid  crystal  display  glass
melting.  This  action is pending  in the U.S.  District  Court for the  Western
District of New York against these three named defendants. The District Court in
July  2003  denied  the  PicVue  motion to  dismiss  and  granted a  preliminary
injunction  in favor of  Corning,  subject  to posting a bond in an amount to be
determined.  PicVue,  a  Taiwanese  company,  responded  in  July  2003  with  a
counterclaim  alleging  violations of the antitrust laws and claiming damages of
more than  $120  million  as well as  requesting  trebled  damages.  PicVue  has
appealed the District  Court's ruling and the District Court has deferred ruling
on the bond amount until the  completion  of such appeal.  The  appellate  court
affirmed the grant of the preliminary injunction,  but remanded the case for the
District  Court to clarify the scope of the  injunction and to consider what, if
any, bond should be posted.  The parties have  submitted  papers to the District
Court  addressing the issues  remanded.  Additional  proceedings in the District
Court are expected in the first half of 2005.

Tyco Electronics  Corporation and Tyco Technology Resources,  Inc. On August 13,
2003, CCS Holdings Inc. ("CCS"),  a Corning  subsidiary,  filed an action in the
U.S.  District  Court for the Middle  District of North  Carolina  against  Tyco
Electronics Corporation and Tyco Technology Resources, Inc. ("Tyco"), asking the
court to declare a Tyco patent  invalid  and not  infringed  by CCS.  The patent
generally  relates to a type of connector  for optical  fiber  cables.  Tyco has
responded with a motion to dismiss the action for lack of jurisdiction, but that
motion has been withdrawn.  Tyco has filed an answer and  counterclaims to CCS's
complaint.  Tyco's  counterclaims  allege  patent  infringement  by CCS and seek
unspecified monetary damages and an injunction.

Grand Jury Investigation of Conventional  Cathode Ray Television Glass Business.
In August  2003,  CAV was served  with a federal  grand jury  document  subpoena
related to  pricing,  bidding  and  customer  practices  involving  conventional
cathode ray television  glass picture tube  components.  Seventeen  employees or
former  employees  have  each  received  a  related  subpoena.  CAV is a general
partnership,  51% owned by Corning  and 49% owned by Asahi Glass  America,  Inc.
CAV's only manufacturing  facility in State College,  Pennsylvania closed in the
first half of 2003 due to declining sales.





                                                                SCHEDULE 5.02(d)
                            Existing Subsidiary Debt

Borrower                   Maturity            BV @2/28/05
-----------------------------------------------------------
Corning Japan KK          6/25/2013            $11,966,924
Corning Japan KK          10/5/2013             11,581,356
Corning Japan KK           9/5/2014             33,095,035
Corning Japan KK           6/5/2015             31,131,447
Corning Japan KK           1/5/2015             47,659,900
Corning Japan KK           7/9/2014             47,659,900
-----------------------------------------------------------
TOTAL                                         $183,094,561
===========================================================
                                       






                                                             EXHIBIT A - FORM OF
                                                                 PROMISSORY NOTE



U.S.$_______________                       Dated:  _______________, 200_

               FOR  VALUE  RECEIVED,  the  undersigned,  [NAME OF  BORROWER],  a
_________________________  corporation (the "Borrower"),  HEREBY PROMISES TO PAY
                                             --------
to the order of _________________________  (the "Lender") for the account of its
                                                 ------
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement  referred to below) the principal sum of  U.S.$[amount of the Lender's
Commitment  in  figures]  or, if less,  the  aggregate  principal  amount of the
Advances  made by the Lender to the  Borrower  pursuant to the Credit  Agreement
dated as of March 17,  2005  among the  Borrower,  [Corning  Incorporated,]  the
Lender and certain other lenders parties  thereto,  and Citibank,  N.A. as Agent
for the Lender and such other lenders (as amended or modified from time to time,
the "Credit  Agreement";  the terms defined therein being used herein as therein
     -----------------
defined) outstanding on such date.

               The  Borrower  promises to pay  interest on the unpaid  principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full,  at such  interest  rates,  and payable at such  times,  as are
specified in the Credit Agreement.

               Both  principal  and  interest in respect of each  Advance (i) in
Dollars are payable in lawful money of the United States of America to the Agent
at its account  maintained at 388 Greenwich Street, New York, New York 10013, in
same day funds and (ii) in any  Committed  Currency are payable in such currency
at the applicable  Payment  Office in same day funds.  Each Advance owing to the
Lender by the Borrower pursuant to the Credit  Agreement,  and all payments made
on account of principal  thereof,  shall be recorded by the Lender and, prior to
any transfer hereof,  endorsed on the grid attached hereto which is part of this
Promissory Note.

               This  Promissory  Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement.  The Credit Agreement,  among
other  things,  (i)  provides  for the making of  Advances  by the Lender to the
Borrower  from  time to time in an  aggregate  amount  not to exceed at any time
outstanding the U.S. dollar amount first above  mentioned,  the  indebtedness of
the Borrower resulting from each such Advance being evidenced by this Promissory
Note, (ii) contains provisions for determining the Dollar Equivalent of Advances
denominated  in  Committed   Currencies   and  (iii)  contains   provisions  for
acceleration  of the maturity hereof upon the happening of certain stated events
and also for  prepayments  on account of principal  hereof prior to the maturity
hereof upon the terms and conditions therein specified.

               The  Borrower  hereby  waives  presentment,  demand,  protest and
notice of any kind.  No failure to  exercise,  and no delay in  exercising,  any
rights  hereunder on the part of the holder  hereof shall operate as a waiver of
such rights.

               This  Promissory  Note shall be  governed  by, and  construed  in
accordance with, the laws of the State of New York.

                                 [NAME OF BORROWER]



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







                       ADVANCES AND PAYMENTS OF PRINCIPAL




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                                                            Amount of
           Date                    Amount of             Principal Paid           Unpaid Principal             Notation
                                    Advance                or Prepaid                 Balance                   Made By
--------------------------- ------------------------ ------------------------ ------------------------- ------------------------

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                                                   EXHIBIT B - FORM OF NOTICE OF
                                                                       BORROWING
Citibank, N.A., as Agent
  for the Lenders parties
  to the Credit Agreement
  referred to below
  Two Penns Way
  New Castle, Delaware 19720

                                     [Date]

               Attention: Bank Loan Syndications Department

Ladies and Gentlemen:

               The  undersigned,  [Name  of  Borrower],  refers  to  the  Credit
Agreement, dated as of March 17, 2005 (as amended or modified from time to time,
the "Credit  Agreement",  the terms defined therein being used herein as therein
     -----------------
defined), among the undersigned, [Corning Incorporated,] certain Lenders parties
thereto and  Citibank,  N.A.,  as Agent for said  Lenders,  and hereby gives you
notice,  irrevocably,  pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement,  and in that
connection  sets forth below the  information  relating to such  Borrowing  (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
 ------------------

               (i)   The   Business   Day   of   the   Proposed   Borrowing   is
          _______________, 200_.

               (ii) The Type of Advances  comprising  the Proposed  Borrowing is
          [Base Rate Advances] [Eurocurrency Rate Advances].

               (iii)  The  aggregate   amount  of  the  Proposed   Borrowing  is
          $_______________][for  a  Borrowing  in  a  Committed  Currency,  list
          currency and amount of Borrowing].

               [(iv) The  initial  Interest  Period for each  Eurocurrency  Rate
          Advance made as part of the Proposed Borrowing is _____ month[s].]

               The undersigned  hereby  certifies that the following  statements
are  true on the  date  hereof,  and  will be true on the  date of the  Proposed
Borrowing:

               (A) the representations and warranties  contained in Section 4.01
          of the Credit Agreement (except the  representations  set forth in the
          last  sentence of  subsection  (e) thereof  and in  subsection  (f)(i)
          thereof  and,  if the Public  Debt  Rating is BBB- or higher by S&P or
          Baa3  or  higher  from  Moody's,   the  representation  set  forth  in
          subsection (n) thereof) are correct, before and after giving effect to
          the  Proposed  Borrowing  and  to  the  application  of  the  proceeds
          therefrom, as though made on and as of such date, and additionally, if
          the undersigned is a Designated  Subsidiary,  the  representations and
          warranties contained in its Designation Agreement are correct,  before
          and  after  giving  effect  to  the  Proposed  Borrowing  and  to  the
          application  of the  proceeds  therefrom,  as though made on and as of
          such date; and

               (B) no event has occurred and is continuing, or would result from
          such  Proposed  Borrowing  or from  the  application  of the  proceeds
          therefrom, that constitutes a Default.

                               Very truly yours,

                               [NAME OF BORROWER]



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







                                                             EXHIBIT C - FORM OF



                                                       ASSIGNMENT AND ACCEPTANCE


               Reference is made to the Credit  Agreement  dated as of March 17,
2005 (as amended or modified from time to time,  the "Credit  Agreement")  among
                                                      -----------------
Corning  Incorporated,  a New York corporation (the "Company"),  the Lenders (as
                                                     -------
defined in the Credit  Agreement)  and Citibank,  N.A., as agent for the Lenders
(the  "Agent").  Terms defined in the Credit  Agreement are used herein with the
       -----
same meaning.

               The  "Assignor"  and the  "Assignee"  referred  to on  Schedule I
hereto agree as follows:

               1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby  purchases and assumes from the Assignor,  an interest in and to
the Assignor's rights and obligations under the [Credit Agreement as of the date
hereof]  [the  Letter  of  Credit  Facility]  equal to the  percentage  interest
specified on Schedule 1 hereto of [all outstanding  rights and obligations under
the Credit Agreement  together with  participations in Letters of Credit held by
the  Assignor on the date hereof]  [such  Assignor's  Unissued  Letter of Credit
Commitment].  After giving effect to such sale and  assignment,  the  Assignee's
[Revolving  Credit  Commitment  and the  amount  of the  Advances  owing  to the
Assignee]  [Letter  of Credit  Commitment]  will be as set forth on  Schedule  1
hereto.

               2. The Assignor (i)  represents and warrants that it is the legal
and  beneficial  owner of the interest  being  assigned by it hereunder and that
such  interest  is  free  and  clear  of  any  adverse  claim;   (ii)  makes  no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in  connection  with the
Credit  Agreement  or  the  execution,   legality,   validity,   enforceability,
genuineness,  sufficiency or value of, or the perfection or priority of any lien
or security  interest  created or purported to be created under or in connection
with,  the  Credit  Agreement  or any other  instrument  or  document  furnished
pursuant  thereto;  (iii) makes no  representation  or  warranty  and assumes no
responsibility  with  respect to the  financial  condition of the Company or any
other  Borrower or the  performance  or  observance  by the Company or any other
Borrower  of any of its  obligations  under the  Credit  Agreement  or any other
instrument or document furnished pursuant thereto;  and (iv) attaches the Note[,
if any,] held by the Assignor [and  requests  that the Agent  exchange such Note
for a new Note  payable to the order of [the  Assignee in an amount equal to the
Revolving Credit Commitment assumed by the Assignee pursuant hereto or new Notes
payable to the order of the Assignee in an amount equal to the Revolving  Credit
Commitment  assumed by the  Assignee  pursuant  hereto  and] the  Assignor in an
amount equal to the Revolving Credit  Commitment  retained by the Assignor under
the Credit Agreement[, respectively,] as specified on Schedule 1 hereto].

               3. The Assignee  (i) confirms  that it has received a copy of the
Credit Agreement,  together with copies of the financial  statements referred to
in Section  4.01  thereof and such other  documents  and  information  as it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
this  Assignment and  Acceptance;  (ii) agrees that it will,  independently  and
without  reliance upon the Agent,  the Assignor or any other Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
the Credit  Agreement;  (iii)  confirms  that it is an Eligible  Assignee;  (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to  exercise  such  powers  and  discretion  under the Credit  Agreement  as are
delegated  to the Agent by the terms  thereof,  together  with such  powers  and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the  obligations  that by the terms of the
Credit  Agreement  are  required  to be  performed  by it as a Lender;  and (vi)
attaches any U.S.  Internal Revenue Service forms required under Section 2.14 of
the Credit Agreement.

               4. Following the execution of this Assignment and Acceptance,  it
will be delivered to the Agent for  acceptance  and recording by the Agent.  The
effective date for this Assignment and Acceptance  (the "Effective  Date") shall
                                                         ---------------
be the date of acceptance  hereof by the Agent,  unless  otherwise  specified on
Schedule 1 hereto.

               5. Upon such  acceptance  and  recording by the Agent,  as of the
Effective  Date, (i) the Assignee shall be a party to the Credit  Agreement and,
to the extent provided in this  Assignment and  Acceptance,  have the rights and
obligations of a Lender  thereunder and (ii) the Assignor  shall,  to the extent
provided  in this  Assignment  and  Acceptance,  relinquish  its  rights  and be
released from its obligations under the Credit Agreement.

               6. Upon such  acceptance  and  recording  by the Agent,  from and
after the  Effective  Date,  the Agent shall make all payments  under the Credit
Agreement and the Notes in respect of the interest  assigned hereby  (including,
without limitation,  all payments of principal,  interest and facility fees with
respect  thereto) to the  Assignee.  The Assignor  and  Assignee  shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.

               7. This  Assignment  and  Acceptance  shall be  governed  by, and
construed in accordance with, the laws of the State of New York.

               8. This  Assignment  and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate  counterparts,  each
of which when so  executed  shall be deemed to be an  original  and all of which
taken  together  shall  constitute  one and the same  agreement.  Delivery of an
executed  counterpart  of  Schedule  1 to  this  Assignment  and  Acceptance  by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Assignment and Acceptance.

               IN WITNESS  WHEREOF,  the Assignor  and the Assignee  have caused
Schedule 1 to this  Assignment  and  Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.





                                   Schedule 1
                                       to
                            Assignment and Acceptance


  Percentage interest assigned:                                       _____%

  [Assignee's Revolving Credit Commitment:                            $______

  Aggregate outstanding principal amount of Advances assigned:        $______

  Principal amount of Note payable to Assignee:                       $______

  Principal amount of Note payable to Assignor:                       $______]

  [Assignee's Letter of Credit Commitment:                            $______]

  Effective Date*:  _______________, 200_

                                 [NAME OF ASSIGNOR], as Assignor

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


                                 Dated:  _______________, 200_


                                 [NAME OF ASSIGNEE], as Assignee

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


                                 Dated:  _______________, 200_

                                 Domestic Lending Office:
                                          [Address]

                                 Eurocurrency Lending Office:
                                          [Address]

Accepted [and Approved]** this
__________ day of _______________, 200_

CITIBANK, N.A., as Agent

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


[Approved this __________ day
of _______________, 200_

CORNING INCORPORATED

By                                          ]*
  ------------------------------------------  
   Title:


*    This date should be no earlier than five  Business  Days after the delivery
     of this Assignment and Acceptance to the Agent.
**   Required if the Assignee is an Eligible Assignee solely by reason of clause
     (iii) of the definition of "Eligible Assignee".
*    Required if the Assignee is an Eligible Assignee solely by reason of clause
     (iii) of the definition of "Eligible Assignee".




                                                             EXHIBIT D - FORM OF
                                                           DESIGNATION AGREEMENT


                                              [DATE]

To each of the Lenders parties 
  to the Credit Agreement dated 
  as of March 17, 2005 
  among Corning Incorporated, 
  said Lenders and Citibank, N.A., 
  as Agent for said Lenders

Ladies and Gentlemen:

               Reference is made to the Credit  Agreement  dated as of March 17,
2005 (as amended or modified from time to time,  the "Credit  Agreement")  among
                                                      -----------------
Corning  Incorporated  (the  "Company"),  the  Lenders (as defined in the Credit
                              -------
Agreement)  and Citibank,  N.A., as agent for the Lenders (the  "Agent").  Terms
                                                                 -----
used  herein  and  defined  in the Credit  Agreement  shall have the  respective
meanings ascribed to such terms in the Credit Agreement.

               Please  be  advised  that  the  Company  hereby   designates  its
undersigned Subsidiary, ____________ ("Designated Subsidiary"), as a "Designated
                                       ---------------------
Subsidiary" under and for all purposes of the Credit Agreement.

               The  Designated  Subsidiary,  in  consideration  of each Lender's
agreement to extend credit to it under and on the terms and conditions set forth
in the Credit Agreement, does hereby assume each of the obligations imposed upon
a "Designated Subsidiary" and a "Borrower" under the Credit Agreement and agrees
to be bound by the terms and conditions of the Credit Agreement.  In furtherance
of the foregoing,  the Designated  Subsidiary  hereby represents and warrants to
each Lenders as follows:

               1. The  Designated  Subsidiary is a corporation  duly  organized,
          validly  existing and in good standing  under the laws of the State of
          _______________.

               2. The  execution,  delivery and  performance  by the  Designated
          Subsidiary of this Designation Agreement, the Credit Agreement and the
          Notes to be delivered by it, and the  consummation of the transactions
          contemplated hereby, are within the Designated  Subsidiary's corporate
          powers,  have been duly authorized by all necessary  corporate action,
          and do not  contravene  (i) the  Designated  Subsidiary's  charter  or
          by-laws  or (ii)  law or any  contractual  restriction  binding  on or
          affecting the Designated Subsidiary.

               3. No authorization or approval or other action by, and no notice
          to or filing with, any  governmental  authority or regulatory  body or
          any other third party is required for the due execution,  delivery and
          performance   by  the  Designated   Subsidiary  of  this   Designation
          Agreement,  the Credit Agreement or the Notes to be delivered by it or
          the consummation of the transactions contemplated thereby.

               4.  This  Designation  Agreement  and  each of the  Notes  of the
          Designated  Subsidiary,  when delivered,  will have been duly executed
          and delivered,  and this Designation  Agreement,  the Credit Agreement
          and each of the Notes of the Designated  Subsidiary,  when  delivered,
          will  constitute  the  legal,  valid  and  binding  obligation  of the
          Designated Subsidiary enforceable against the Designated Subsidiary in
          accordance with their respective terms.

               5. There is no pending  or, to the  knowledge  of the  Designated
          Subsidiary,  threatened  action,  suit,  investigation,  litigation or
          proceeding,  including,  without limitation, any Environmental Action,
          affecting the Designated  Subsidiary or any of its Subsidiaries before
          any  court,  governmental  agency  or  arbitrator  that  (i)  could be
          reasonably  likely to have a Material  Adverse Effect or (ii) purports
          to affect the legality, validity or enforceability of this Designation
          Agreement, the Credit Agreement, any Note of the Designated Subsidiary
          or the consummation of the transactions contemplated thereby.

               6. The  Designated  Subsidiary  is not engaged in the business of
          extending  credit for the purpose of  purchasing  or  carrying  margin
          stock  (within  the  meaning  of  Regulation  U issued by the Board of
          Governors  of the  Federal  Reserve  System),  and no  proceeds of any
          Advance  will be used to  purchase  or carry  any  margin  stock or to
          extend  credit to others for the purpose of purchasing or carrying any
          margin stock.

               7. The Designated Subsidiary is not an "investment company", or a
          company "controlled" by an "investment company", within the meaning of
          the Investment Company Act of 1940, as amended.

               8. The operations and properties of the Designated Subsidiary and
          each of its  Subsidiaries  comply in all  material  respects  with all
          applicable  Environmental  Laws and  Environmental  Permits,  all past
          non-compliance with such Environmental Laws and Environmental  Permits
          has  been  resolved  without  ongoing  obligations  or  costs,  and no
          circumstances  exist that would be reasonably likely to form the basis
          of an Environmental Action against the Designated Subsidiary or any of
          its Subsidiaries or any of their properties that could have a Material
          Adverse Effect.

               9. With  such  exceptions  as are not  material,  the  Designated
          Subsidiary and each of its  Subsidiaries  has filed,  has caused to be
          filed or has been included in all tax returns (federal,  State,  local
          and foreign) required to be filed and has paid all taxes shown thereon
          to be due, together with applicable interest and penalties.

               10. The Designated  Subsidiary and each of its  Subsidiaries  has
          title to its properties  sufficient  for the conduct of business,  and
          none  of such  property  is  subject  to any  Lien  except  for  Liens
          permitted under Section 5.02(a) of the Credit Agreement.

               The Designated  Subsidiary  hereby agrees that service of process
in any action or  proceeding  brought in any New York State  court or in federal
court may be made upon the  Company  at its  offices  at One  Riverfront  Plaza,
Corning,  New York 14831,  Attention:  Secretary  (the "Process  Agent") and the
                                                        --------------
Designated  Subsidiary hereby irrevocably appoints the Process Agent to give any
notice of any such  service  of  process,  and  agrees  that the  failure of the
Process  Agent to give any notice of any such service shall not impair or affect
the  validity  of such  service  or of any  judgment  rendered  in any action or
proceeding based thereon.

               The Company hereby accepts such  appointment as Process Agent and
agrees with you that (i) the  Company  will  maintain an office in Corning,  New
York through the  Termination  Date and will give the Agent prompt notice of any
change of address of the  Company,  (ii) the Company  will perform its duties as
Process Agent to receive on behalf of the Designated Subsidiary and its property
service of copies of the summons and  complaint  and any other process which may
be served in any action or  proceeding  in any New York  State or federal  court
sitting in New York City arising out of or relating to the Credit  Agreement and
(iii) the Company will forward  forthwith to the  Designated  Subsidiary  at its
address at  ___________________  or, if  different,  its then  current  address,
copies of any summons, complaint and other process which the Company received in
connection with its appointment as Process Agent.

                                 Very truly yours,

                                 CORNING INCORPORATED

                                 By _________________________
                                      Name:
                                     Title:

                                 [THE DESIGNATED SUBSIDIARY]

                                 By__________________________
                                      Name:
                                     Title:






                                                             EXHIBIT E - FORM OF
                                                              OPINION OF COUNSEL
                                                                 FOR THE COMPANY


                                 March 17, 2005


To each of the Lenders parties
  to the Credit Agreement dated
  as of March 17, 2005
  among Corning Incorporated,
  said Lenders and Citibank, N.A.,
  as Agent for said Lenders, and
  to Citibank, N.A., as Agent

Ladies and Gentlemen:

     I am Senior Vice President and General Counsel of Corning  Incorporated,  a
New York corporation (the  "Company"),  and am familiar with the  authorization,
execution  and  delivery  of the Credit  Agreement,  dated  March 17,  2005 (the
"Credit  Agreement"),  between the Company and the Lenders  parties  thereto and
Citibank,  N.A., as Agent, for said Lenders.  This opinion is being furnished to
you pursuant to Section  3.01(g) (iv) of the Credit  Agreement.  All capitalized
and undefined terms used herein shall have the meanings  assigned to them in the
Credit Agreement.

     I have  examined  executed  copies of the Credit  Agreement,  the documents
furnished by the Company  pursuant to Article III of the Credit  Agreement,  the
Restated  Certificate of Incorporation of the Company and all amendments thereto
(the  "Charter"),  the Bylaws of the Company  and all  amendments  thereto  (the
"Bylaws"),  a  certificate  of  the  Secretary  of  State  of  New  York,  dated
__________,  2005,  attesting  to the  continued  corporate  existence  and good
standing of the Company in the State of New York, and such other documents as I,
in my professional judgment,  deemed necessary or appropriate as a basis for the
opinions  set forth  below.  I have  also  examined  the  originals  or  copies,
certified or otherwise  identified  to my  satisfaction,  of such  documents and
records of the Company and such  public  documents  and records as I have deemed
necessary as a basis for the opinions hereinafter expressed.

     In rendering the opinions set forth below, I have assumed the  authenticity
of all documents submitted to me as originals, the genuineness of all signatures
and the  conformity to authentic  originals of all documents  submitted to me as
copies. I have also assumed the legal capacity for all purposes  relevant hereto
of all  natural  persons  and,  with  respect to all  parties to  agreements  or
instruments  relevant thereto other than the Company,  that such parties had the
requisite power and authority  (corporate or otherwise) to execute,  deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise),  executed
and delivered by such parties and that such  agreements or  instruments  are the
valid, binding and enforceable obligations of such parties.

     Based upon the foregoing and having regard for such legal considerations as
I have deemed relevant, it is my opinion that:

1.   The Company is a corporation  duly  incorporated,  validly  existing and in
     good standing under the laws of the State of New York.

2.   The  execution,  delivery  and  performance  by the  Company  of the Credit
     Agreement  and  the  Notes,   and  the  consummation  of  the  transactions
     contemplated  thereby, are within the Company's corporate powers, have been
     duly authorized by all necessary  corporate  action,  and do not contravene
     (i)  the  Charter  or the  By-laws  or (ii)  any  law,  rule or  regulation
     applicable to the Company (including,  without limitation,  Regulation X of
     the  Board of  Governors  of the  Federal  Reserve  System)  or  (iii)  any
     contractual or legal  restriction  contained in any document,  known to me,
     including,  without limitation, any indentures, loans or credit agreements,
     leases, guarantees,  mortgages, security agreements, bonds, notes and other
     agreements or  instruments,  that affect or purport to affect the Company's
     right to  borrow  money  or the  Company's  obligations  under  the  Credit
     Agreement or the Notes.

3.   No  authorization,  approval or other action by, and no notice to or filing
     with,  any  governmental  authority or  regulatory  body or any other third
     party is required for the due  execution,  delivery and  performance by the
     Company of the Credit Agreement and the Notes.

4.   The Credit Agreement is, and after giving effect to the initial  Borrowing,
     the Notes when  delivered  will be,  valid and binding  obligations  of the
     Company enforceable against the Company in accordance with their respective
     terms.

5.   To the best of my knowledge and other than as set forth in Schedule 3.01(b)
     of the Credit Agreement, there are no pending or overtly threatened actions
     or proceedings  against the Company or any of its  Subsidiaries  before any
     court,  governmental  agency or  arbitrator  that  purport  to  affect  the
     validity,  binding effect or  enforceability of the Credit Agreement or any
     of the Notes or the consummation of the transactions  contemplated  thereby
     or that are likely to have a material  adverse  effect  upon the  financial
     condition  or  operations  of the Company and its  Subsidiaries  taken as a
     whole.

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

     (i) My  opinion  in  paragraph  4 above is  subject  to the  effect  of any
applicable   bankruptcy,    insolvency,    reorganization,    moratorium,   bank
conservatorship  or  receivership  or other similar laws of general  application
affecting creditors' rights.

     (ii) My opinion in  paragraphs  4 above is subject to the effect of general
principles of equity,  including (without  limitation)  concepts of materiality,
reasonableness,  good  faith  and  fair  dealing  and  other  similar  equitable
doctrines  affecting the enforceability of agreements  generally  (regardless of
whether considered in a proceeding in equity or at law).

     (iii) I express  no opinion  as to  Section  2.14 of the  Credit  Agreement
insofar as it provides that any Lender  purchasing a participation  from another
Lender pursuant  thereto may exercise  set-off or similar rights with respect to
such participation.

     This  opinion is limited to the United  States  federal law and the laws of
the state of New York and I express  no  opinion  as to the effect of the law of
any other jurisdiction  wherein any Lender may be located or wherein enforcement
of the  Credit  Agreement  or the Notes may be sought  that  limits the rates of
interest legally chargeable or collectible.

     The foregoing opinion is being furnished to you solely for your benefit and
may not be relied  upon by, nor may  copies be  delivered  to, any other  person
without my prior written consent.


                                 Very truly yours,






                                                             EXHIBIT F - FORM OF
                                                              OPINION OF COUNSEL
                                                      TO A DESIGNATED SUBSIDIARY



                                     [Date]

To each of the Lenders parties 
  to the Credit Agreement dated 
  as of March __, 2005 
  among Corning Incorporated, 
  said Lenders and Citibank, N.A., 
  as Agent for said Lenders
               
                     [Name of the Designated Subsidiary]
                      ---------------------------------


Ladies and Gentlemen:

          This opinion is  furnished  to you pursuant to Section  3.02(g) of the
Credit  Agreement,  dated as of March __, 2005 (the "Credit  Agreement"),  among
                                                     -----------------
Corning Incorporated (the "Company"),  the Lenders parties thereto and Citibank,
                           -------
N.A., as Agent for said Lenders.  Terms defined in the Credit Agreement are used
herein as therein defined.

               We  have  acted  as  counsel  to  ____________  (the  "Designated
                                                                      ----------
Subsidiary") in connection with the  preparation,  execution and delivery of the
----------
Designation  Agreement  (as  defined in the Credit  Agreement)  executed  by the
Designated Subsidiary.

               In that connection, we have examined:

               (1)  The  Designation   Agreement   executed  by  the  Designated
          Subsidiary.

               (2) The Credit Agreement.

               (3) The documents furnished by the Designated Subsidiary pursuant
          to Article III of the Credit Agreement.

               (4)  The  [Articles]   [Certificate]   of  Incorporation  of  the
          Designated  Subsidiary  and all  amendments  thereto (the  "Charter").
                                                                      -------

               (5) The by-laws of the  Designated  Subsidiary and all amendments
          thereto (the "By-laws").
                        -------

               (6) A certificate  of the Secretary of State of  _______________,
          dated __________, 2005, attesting to the continued corporate existence
          and good standing of the Designated Subsidiary in that State.

In  addition,  we have  examined  the  originals,  or  copies  certified  to our
satisfaction,  of such other  corporate  records of the  Designated  Subsidiary,
certificates of public  officials and of officers of the Designated  Subsidiary,
and agreements,  instruments and other documents, as we have deemed necessary as
a basis for the opinions  expressed  below.  As to questions of fact material to
such opinions,  we have, when relevant facts were not independently  established
by us, relied upon certificates of the Designated  Subsidiary or its officers or
of public officials. We have assumed the due execution and delivery, pursuant to
due authorization, of the Credit Agreement by the Initial Lenders and the Agent.

               Our opinions  expressed below are limited to the law of the State
of New York,  [the General  Corporation  Law of the State of  Delaware]  and the
Federal law of the United States.

               Based upon the foregoing and upon such  investigation  as we have
          deemed necessary, we are of the following opinion:

               1. The  Designated  Subsidiary is a corporation  duly  organized,
          validly   existing   and  in  good   standing   under   the   laws  of
          _______________.

               2. The  execution,  delivery and  performance  by the  Designated
          Subsidiary of the Credit Agreement,  its Designation Agreement and the
          Notes, and the consummation of the transactions  contemplated thereby,
          are within the Designated  Subsidiary's  corporate  powers,  have been
          duly  authorized  by  all  necessary  corporate  action,  and  do  not
          contravene  (i) the  Charter or the  By-laws or (ii) any law,  rule or
          regulation applicable to the Designated Subsidiary (including, without
          limitation,  Regulation  X of the Board of  Governors  of the  Federal
          Reserve  System)  or  (iii)  any  contractual  or  legal   restriction
          contained  in  any  document,   including,   without  limitation,  the
          indentures, loan or credit agreements, leases, guarantees,  mortgages,
          security agreements, bonds, notes and other agreements or instruments,
          and all of the  orders,  writs,  judgments,  awards,  injunctions  and
          decrees, that affect or purport to affect the Designated  Subsidiary's
          right to borrow money or the Designated Subsidiary's obligations under
          the Credit  Agreement,  its  Designation  Agreement or the Notes.  The
          Credit  Agreement,  the Designation  Agreement and the Notes have been
          duly executed and delivered on behalf of the Designated Subsidiary.

               3. No  authorization,  approval or other action by, and no notice
          to or filing with, any  governmental  authority or regulatory  body or
          any other third party is required for the due execution,  delivery and
          performance by the Designated Subsidiary of the Credit Agreement,  the
          Designation Agreement and the Notes.

               4. The Credit  Agreement and the  Designation  Agreement are, and
          after  giving  effect  to the  initial  Borrowing  of  the  Designated
          Subsidiary, the Notes will be, legal, valid and binding obligations of
          the   Designated   Subsidiary   enforceable   against  the  Designated
          Subsidiary in accordance with their respective terms.

               5. To the best of our knowledge,  there are no pending or overtly
          threatened actions or proceedings against the Designated Subsidiary or
          any of its  Subsidiaries  before  any  court,  governmental  agency or
          arbitrator  that  purport to affect the  legality,  validity,  binding
          effect or  enforceability  of the Credit  Agreement,  the  Designation
          Agreement or any of the Notes or the  consummation of the transactions
          contemplated  thereby or, that are likely to have a materially adverse
          effect upon the financial  condition or  operations of the  Designated
          Subsidiary or any of its Subsidiaries.

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

               (a) Our  opinion in  paragraph  4 above as to  enforceability  is
          subject  to  the  effect  of  any  applicable  bankruptcy,  insolvency
          (including,  without  limitation,  all  laws  relating  to  fraudulent
          transfers),  reorganization,   moratorium  or  similar  law  affecting
          creditors' rights generally.

               (b) Our  opinion in  paragraph  4 above as to  enforceability  is
          subject  to the  effect of general  principles  of equity,  including,
          without  limitation,  concepts of  materiality,  reasonableness,  good
          faith  and  fair  dealing  (regardless  of  whether  considered  in  a
          proceeding in equity or at law).

               (c) We express no  opinion as to (i)  Section  2.14 of the Credit
          Agreement  insofar  as  it  provides  that  any  Lender  purchasing  a
          participation  from  another  Lender  pursuant  thereto  may  exercise
          set-off or similar rights with respect to such participation, and (ii)
          the effect of the law of any jurisdiction  other than the State of New
          York wherein any Lender may be located or wherein  enforcement  of the
          Credit  Agreement  or the Notes may be sought that limits the rates of
          interest legally chargeable or collectible.

                                Very truly yours






                                                                  EXECUTION COPY



                                U.S. $975,000,000


                                CREDIT AGREEMENT

                           Dated as of March 17, 2005

                                      Among

                              CORNING INCORPORATED

                                   as Borrower
                                   -- --------
                                       and

                        THE INITIAL LENDERS NAMED HEREIN
                               as Initial Lenders
                               -- ------- -------

                                       and

                                 CITIBANK, N.A.
                             as Administrative Agent
                             -- -------------- -----

                                       and

                            JPMORGAN CHASE BANK, N.A.
                              as Syndication Agent
                              -- ----------- -----

                                       and

                              BANK OF AMERICA, N.A.
                       THE BANK OF TOKYO-MITSUBISHI, LTD.
                       WACHOVIA BANK, NATIONAL ASSOCIATION

                                       and

                                BARCLAYS BANK PLC
                          DEUTSCHE BANK SECURITIES INC.
                             as Documentation Agents
                             -- ------------- ------

                                       and

                          CITIGROUP GLOBAL MARKETS INC.
                                       and
                           J.P. MORGAN SECURITIES INC.
                  as Joint Lead Arrangers and Joint Bookrunners
                  -- ------------------------------------------





                                                                      Exhibit 12
CORNING INCORPORATED AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)

                                                      For the three months ended
                                                            March 31, 2005     
                                                      --------------------------

Income before income taxes                                    $       103
Adjustments:
    Distributed income of equity investees                            143
    Fixed charges net of capitalized interest                          43
                                                              -----------

Income before taxes and fixed charges, as adjusted            $       289
                                                              ===========

Fixed charges:
   Interest expense (a)                                       $        37
   Portion of rent expense which represents an 
     appropriate interest factor (b)                                    6
   Capitalized interest                                                 4
                                                              -----------

Total fixed charges                                                    47
Capitalized interest                                                   (4)
                                                              -----------

Total fixed charges, net of capitalized interest              $        43
                                                              ===========

Ratio of earnings to fixed charges                                   6.1x
                                                              ===========

(a)  Interest expense includes amortization expense for capitalized interest and
     debt costs.
(b)  One-third of net rent expense is the portion deemed  representative  of the
     interest factor.





                                                                    Exhibit 31.1
                      CHIEF EXECUTIVE OFFICER CERTIFICATION

I,  James  R.  Houghton,   Chairman  and  Chief  Executive  Officer  of  Corning
Incorporated, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Corning  Incorporated
     (the registrant);

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

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

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

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

April 26, 2005


/s/                 James R. Houghton                
     ------------------------------------------------
     James R. Houghton
     Chairman and Chief Executive Officer
     (Principal Executive Officer)





                                                                    Exhibit 31.2
                      CHIEF FINANCIAL OFFICER CERTIFICATION

I, James B. Flaws, Vice Chairman and Chief Financial Officer, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Corning  Incorporated
     (the registrant);

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

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

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent function):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

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

April 26, 2005


/s/                  James B. Flaws                  
     ------------------------------------------------
     James B. Flaws
     Vice Chairman and Chief Financial Officer
     (Principal Financial Officer)






                                                                      Exhibit 32



CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Corning Incorporated (the Company) on
Form 10-Q for the period ended March 31, 2005 as filed with the  Securities  and
Exchange  Commission  on the date hereof (the  Report),  we, James R.  Houghton,
Chairman and Chief  Executive  Officer,  and James B. Flaws,  Vice  Chairman and
Chief Financial Officer, of the Company, certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934, as amended; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.


Dated:  April 26, 2005


/s/  James R. Houghton                           
     --------------------------------------------
     James R. Houghton
     Chairman and Chief Executive Officer


/s/  James B. Flaws                              
     --------------------------------------------
     James B. Flaws
     Vice Chairman and Chief Financial Officer