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Exhibit 4.8    
    






 

K&F PARENT, INC.  


and  


U.S. BANK NATIONAL ASSOCIATION  


as Trustee  




INDENTURE  


Dated as of February 11, 2005  


111/2% Senior PIK Notes due 2015  






 






CROSS-REFERENCE TABLE*  



	Trust Indenture

Act Section
	 	Indenture Section

	310	(a)(1)	 	7.10
	 	(a)(2)	 	7.10
	 	(a)(3)	 	N.A.
	 	(a)(4)	 	N.A.
	 	(a)(5)	 	7.10
	 	(b)	 	7.10
	 	(c)	 	N.A.
	311	(a)	 	7.11
	 	(b)	 	7.11
	 	(c)	 	N.A.
	312	(a)	 	2.05
	 	(b)	 	11.03
	 	(c)	 	11.03
	313	(a)	 	7.06
	 	(b)(1)	 	11.03
	 	(b)(2)	 	7.06, 7.07
	 	(c)	 	7.06, 11.02
	 	(d)	 	7.06
	314	(a)	 	11.05
	 	(b)	 	N.A.
	 	(c)(1)	 	N.A.
	 	(c)(2)	 	N.A.
	 	(c)(3)	 	N.A.
	 	(d)	 	N.A.
	 	(e)	 	11.05
	 	(f)	 	NA
	315	(a)	 	7.01
	 	(b)	 	N.A.
	 	(c)	 	7.01
	 	(d)	 	7.01
	 	(e)	 	6.11
	316	(a)(last sentence)	 	2.09
	 	(a)(1)(A)	 	6.05
	 	(a)(1)(B)	 	6.04
	 	(a)(2)	 	N.A.
	 	(b)	 	6.07
	 	(c)	 	2.12
	317	(a)(1)	 	6.08
	 	(a)(2)	 	6.09
	 	(b)	 	2.04
	318	(a)	 	N.A.
	 	(b)	 	N.A.
	 	(c)	 	11.01







N.A.
means Not Applicable 


*This
Cross-Reference Table is not part of the Indenture 








   TABLE OF CONTENTS  



	 
	 	 
	 	 
	 	Page

	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	1
	 	 	SECTION 1.01.	 	Definitions	 	1
	 	 	SECTION 1.02.	 	Other Definitions	 	21
	 	 	SECTION 1.03.	 	Incorporation by Reference of TIA	 	21
	 	 	SECTION 1.04.	 	Rules of Construction	 	21
	ARTICLE 2 THE NOTES	 	22
	 	 	SECTION 2.01.	 	Form and Dating	 	22
	 	 	SECTION 2.02.	 	Denominations	 	25
	 	 	SECTION 2.03.	 	Execution and Authentication	 	25
	 	 	SECTION 2.04.	 	Registrar and Paying Agent	 	26
	 	 	SECTION 2.05.	 	Paying Agent to Hold Money in Trust	 	26
	 	 	SECTION 2.06.	 	Holder Lists	 	26
	 	 	SECTION 2.07.	 	Transfer and Exchange	 	26
	 	 	SECTION 2.08.	 	Mutilated, Destroyed, Lost or Stolen Notes	 	37
	 	 	SECTION 2.09.	 	Outstanding Notes	 	37
	 	 	SECTION 2.10.	 	Treasury Notes	 	37
	 	 	SECTION 2.11.	 	Temporary Notes	 	37
	 	 	SECTION 2.12.	 	Cancellation	 	38
	 	 	SECTION 2.13.	 	Defaulted Interest	 	38
	 	 	SECTION 2.14.	 	Computation and Payment of Interest	 	38
	 	 	SECTION 2.15.	 	Issuance of Additional PIK Notes	 	38
	 	 	SECTION 2.16.	 	Issuance of Additional Notes	 	39
	 	 	SECTION 2.17.	 	One Class of Notes	 	40
	 	 	SECTION 2.18.	 	CUSIP, ISIN or Other Similar Numbers	 	40
	ARTICLE 3 REDEMPTION AND PREPAYMENT	 	40
	 	 	SECTION 3.01.	 	Notices to Trustee	 	40
	 	 	SECTION 3.02.	 	Selection of Notes to Be Redeemed	 	40
	 	 	SECTION 3.03.	 	Notice of Redemption	 	40
	 	 	SECTION 3.04.	 	Effect of Notice of Redemption	 	41
	 	 	SECTION 3.05.	 	Deposit of Redemption Price	 	41
	 	 	SECTION 3.06.	 	Notes Redeemed in Part	 	42
	 	 	SECTION 3.07.	 	Optional Redemption	 	42
	 	 	SECTION 3.08.	 	Mandatory Redemption	 	42
	ARTICLE 4 COVENANTS	 	43
	 	 	SECTION 4.01.	 	Payment of Notes	 	43
	 	 	SECTION 4.02.	 	Maintenance of Office or Agency	 	43
	 	 	SECTION 4.03.	 	Reports	 	44
	 	 	SECTION 4.04.	 	Compliance Certificate	 	44
	 	 	SECTION 4.05.	 	Taxes	 	45
	 	 	SECTION 4.06.	 	Stay, Extension and Usury Laws	 	45
	 	 	SECTION 4.07.	 	Restricted Payments	 	45
	 	 	SECTION 4.08.	 	Dividend and Other Payment Restrictions Affecting Subsidiaries	 	48
	 	 	SECTION 4.09.	 	Incurrence of Indebtedness and Issuance of Preferred Stock	 	50
	 	 	SECTION 4.10.	 	Asset Sales	 	53
	 	 	SECTION 4.11.	 	Transactions with Affiliates	 	55
	 	 	SECTION 4.12.	 	Liens	 	57
	 	 	SECTION 4.13.	 	Business Activities	 	57
	 	 	 	 	 	 	 





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	 	 	SECTION 4.14.	 	Corporate Existence	 	57
	 	 	SECTION 4.15.	 	Offer to Repurchase upon Change of Control	 	57
	 	 	SECTION 4.16.	 	Future Subsidiary Guarantees	 	59
	 	 	SECTION 4.17.	 	Designation of Unrestricted Subsidiaries	 	59
	 	 	SECTION 4.18.	 	Payments for Consent	 	59
	ARTICLE 5 SUCCESSORS	 	59
	 	 	SECTION 5.01.	 	Merger, Consolidation or Sale of Assets	 	59
	 	 	SECTION 5.02.	 	Successor Corporation Substituted	 	60
	ARTICLE 6 DEFAULTS AND REMEDIES	 	61
	 	 	SECTION 6.01.	 	Events of Default	 	61
	 	 	SECTION 6.02.	 	Acceleration	 	62
	 	 	SECTION 6.03.	 	Other Remedies	 	63
	 	 	SECTION 6.04.	 	Waiver of Past Defaults	 	63
	 	 	SECTION 6.05.	 	Control by Majority	 	63
	 	 	SECTION 6.06.	 	Limitation on Suits	 	63
	 	 	SECTION 6.07.	 	Rights of Holders of Notes to Receive Payment	 	64
	 	 	SECTION 6.08.	 	Collection Suit by Trustee	 	64
	 	 	SECTION 6.09.	 	Trustee May File Proofs of Claim	 	64
	 	 	SECTION 6.10.	 	Priorities	 	64
	 	 	SECTION 6.11.	 	Undertaking for Costs	 	65
	ARTICLE 7 TRUSTEE	 	65
	 	 	SECTION 7.01.	 	Duties of Trustee	 	65
	 	 	SECTION 7.02.	 	Rights of Trustee	 	66
	 	 	SECTION 7.03.	 	Individual Rights of Trustee	 	67
	 	 	SECTION 7.04.	 	Trustee's Disclaimer	 	67
	 	 	SECTION 7.05.	 	Notice of Defaults	 	67
	 	 	SECTION 7.06.	 	Reports by Trustee to Holders of the Notes	 	68
	 	 	SECTION 7.07.	 	Compensation and Indemnity	 	68
	 	 	SECTION 7.08.	 	Replacement of Trustee	 	68
	 	 	SECTION 7.09.	 	Successor Trustee by Merger, etc.	 	69
	 	 	SECTION 7.10.	 	Eligibility; Disqualification	 	69
	 	 	SECTION 7.11.	 	Preferential Collection of Claims Against the Company	 	70
	ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	70
	 	 	SECTION 8.01.	 	Option to Effect Legal Defeasance or Covenant Defeasance	 	70
	 	 	SECTION 8.02.	 	Legal Defeasance and Discharge	 	70
	 	 	SECTION 8.03.	 	Covenant Defeasance	 	70
	 	 	SECTION 8.04.	 	Conditions to Legal or Covenant Defeasance	 	71
	 	 	SECTION 8.05.	 	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions	 	72
	 	 	SECTION 8.06.	 	Repayment to the Company	 	72
	 	 	SECTION 8.07.	 	Reinstatement	 	73
	ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER	 	73
	 	 	SECTION 9.01.	 	Without Consent of Holders of Notes	 	73
	 	 	SECTION 9.02.	 	With Consent of Holders of Notes	 	74
	 	 	SECTION 9.03.	 	Compliance with Trust Indenture Act	 	75
	 	 	SECTION 9.04.	 	Revocation and Effect of Consents	 	75
	 	 	SECTION 9.05.	 	Notice of Amendment; Notation on or Exchange of Notes	 	75
	 	 	SECTION 9.06.	 	Trustee to Sign Amendments, etc.	 	75
	ARTICLE 10 SUBSIDIARY GUARANTEES	 	75
	 	 	SECTION 10.01.	 	Guarantee	 	75
	 	 	 	 	 	 	 



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	 	 	SECTION 10.02.	 	Limitation on Guarantor Liability	 	76
	 	 	SECTION 10.03.	 	Guarantors May Consolidate, etc., on Certain Terms	 	77
	 	 	SECTION 10.04.	 	Releases of Subsidiary Guarantees	 	77
	ARTICLE 11 SATISFACTION AND DISCHARGE	 	78
	 	 	SECTION 11.01.	 	Satisfaction and Discharge	 	78
	 	 	SECTION 11.02.	 	Application of Trust Funds	 	78
	 	 	SECTION 11.03.	 	Repayment to Company	 	79
	 	 	SECTION 11.04.	 	Reinstatement	 	79
	ARTICLE 12 MISCELLANEOUS	 	79
	 	 	SECTION 12.01.	 	Trust Indenture Act Controls	 	79
	 	 	SECTION 12.02.	 	Notices	 	80
	 	 	SECTION 12.03.	 	Communication by Holders of Notes with Other Holders of Notes	 	80
	 	 	SECTION 12.04.	 	Certificate and Opinion as to Conditions Precedent	 	81
	 	 	SECTION 12.05.	 	Statements Required in Certificate or Opinion	 	81
	 	 	SECTION 12.06.	 	Rules by Trustee and Agents	 	82
	 	 	SECTION 12.07.	 	No Personal Liability of Directors, Officers, Employees and Stockholders	 	82
	 	 	SECTION 12.08.	 	Governing Law	 	82
	 	 	SECTION 12.09.	 	No Adverse Interpretation of Other Agreements	 	82
	 	 	SECTION 12.10.	 	Successors	 	82
	 	 	SECTION 12.11.	 	Severability	 	82
	 	 	SECTION 12.12.	 	Counterpart Originals	 	82
	 	 	SECTION 12.13.	 	Table of Contents, Headings, etc.	 	82
	 	 	SECTION 12.14.	 	Benefits of Indenture	 	82
	 	 	SECTION 12.15.	 	Legal Holidays	 	83





	EXHIBITS
 
	 	 

	Exhibit A	 	FORM OF NOTE
	Exhibit B	 	FORM OF CERTIFICATE OF TRANSFER
	Exhibit C	 	FORM OF CERTIFICATE OF EXCHANGE
	Exhibit D	 	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTORS
	Exhibit E	 	FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS




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        INDENTURE dated as of February 11, 2005 between K&F PARENT, INC., a Delaware corporation (the "Company"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as trustee (the "Trustee"). 



        The
Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Initial Notes, any Additional PIK Notes, any
Additional Notes and the Exchange Notes (in each case as defined herein): 


ARTICLE 1
  DEFINITIONS AND INCORPORATION BY REFERENCE  


SECTION 1.01.    Definitions  



        "144A Global Note" means one or more Restricted Global Notes that shall represent the aggregate principal amount
of the Notes sold in reliance on Rule 144A. 


        "Acquired Debt" means, with respect to any specified Person: 



        (1)   Indebtedness
of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and 



        (2)   Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person. 




        "Acquisition" shall have the meaning specified in the Offering Memorandum. 


        "Acquisition Transactions" shall have the meaning specified in the Offering Memorandum. 


        "Additional Interest" means all additional interest then owing pursuant to the Registration Rights Agreement. 



        "Additional Notes" means 111/2% Senior PIK Notes due 2015 of the Company issued in compliance with and under this Indenture
after the Issue Date (other than Additional PIK Notes) and having identical terms to the Initial Notes or the Exchange Notes. 


        "Additional PIK Notes" means the additional 111/2% Senior PIK Notes due 2015 issued in compliance with and under this
Indenture as payment for accrued interest on the Notes in lieu of the payment of cash interest or Additional Interest. 



        "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" have correlative meanings. 


        "Agent" means any Registrar, co-registrar, Paying Agent or additional paying agent. 



        "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear or Clearstream, as the case may be, that apply to such transfer or exchange. 


        "Asset Sale" means: 



        (1)   the
sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole shall be governed by the provisions of Section 4.15 and/or the
provisions of Section 5.01 and not by the provisions of Section 4.10; and 








 

        (2)   the
issuance of Equity Interests in any of the Company's Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries. 




        Notwithstanding
the preceding, the following items shall not be deemed to be Asset Sales: 



        (1)   any
single transaction or series of related transactions that involves assets having a fair market value of less than $5.0 million; 


        (2)   a
transfer of assets between or among the Company and its Restricted Subsidiaries; 


        (3)   an
issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; 


        (4)   the
sale or lease of equipment, inventory, accounts receivable or other assets in the ordinary course of business; 


        (5)   the
sale or other disposition of cash or Cash Equivalents; and 


        (6)   a
Restricted Payment or Permitted Investment that is permitted by Section 4.07 hereof. 




        "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or
may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with
GAAP. 


        "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 


        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to
have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition. 


        "Board of Directors" means: 



        (1)   with
respect to a corporation, the board of directors of the corporation; 


        (2)   with
respect to a partnership, the board of directors of the general partner of the partnership; and 


        (3)   with
respect to any other Person, the board of directors or committee of such Person serving a similar function. 




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



        "Broker-Dealer" means any broker or dealer registered under the Exchange Act. 


        "Business Day" means each day that is not a Legal Holiday. 


        "Capital Lease Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in accordance with GAAP. 


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        "Capital Stock" means: 



        (1)   in
the case of a corporation, corporate stock; 


        (2)   in
the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; 



        (3)   in
the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and 


        (4)   any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person. 




        "Cash Equivalents" means: 



        (1)   United
States dollars; 


        (2)   securities
issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government
(provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than twelve
months from the date of acquisition; 


        (3)   (i) demand
deposits, (ii) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition,
(iii) bankers' acceptances with maturities not exceeding one year and (iv) overnight bank deposits and other similar types of investments routinely offered by commercial banks, in each
case, with any lender party to the Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $250.0 million and a Thomson Bank Watch Rating of "B" or better; 


        (4)   repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into
with any financial institution meeting the qualifications specified in clause (3) above; 


        (5)   commercial
paper having a rating of at least A-3 from Moody's Investors Service, Inc. or P-3 from Standard & Poor's Rating Services
and in each case maturing within 270 days after the date of acquisition; 



        (6)   securities
with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state, commonwealth or territory, the securities of which state, commonwealth, territory, political subdivision or taxing authority (as the
case may be) are rated at least A by Moody's Investors Service, Inc. or A by Standard & Poor's Rating Services; and 


        (7)   money
market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (6) of this definition. 




        "Change of Control" means the occurrence of any of the following: 



        (1)   the
direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange
Act) other than a Permitted Holder; 


        (2)   the
adoption of a plan relating to the liquidation or dissolution of the Company; 



        (3)   the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as that term is used in
Section 13(d)(3) of the Exchange Act) other than a Permitted Holder becomes the Beneficial Owner, directly or 



3







 




indirectly,
of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares; 



        (4)   the
first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors; or 


        (5)   if
any Senior Preferred Stock is outstanding, a Senior Preferred Change of Control. 




        "Change of Control Escrow Account" means the escrow account established by the Company for the benefit of the Holders of the Notes upon a
Senior Preferred Change of Control. If any proceeds remain in the Change of Control Escrow Account after the repurchase of all Notes tendered pursuant
to a Change of Control Offer, such excess proceeds shall be released to the Company and the Company may use such excess proceeds for any purpose not otherwise prohibited by this Indenture. 


        "Clearstream" means Clearstream Banking, société anonyme. 


        "Code" means the Internal Revenue Code of 1986, as amended. 


        "Commission" means the United States Securities and Exchange Commission. 


        "Company Order" means a written order of the Company signed by two Officers of the Company. 


        "Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such
period plus: 



        (1)   provision
for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted
in computing such Consolidated Net Income; plus


        (2)   consolidated
interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without
limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit
or bankers' acceptance financings, and net of the effect of all payments made or received (if any) pursuant to Hedging Obligations), in each such case to the extent that any of the foregoing was
deducted in computing such Consolidated Net Income; plus


        (3)   depreciation,
amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period, in each such case to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such Consolidated Net Income; plus


        (4)   management
fees and related expenses to Aurora Management Partners LLC and its Affiliates not to exceed $2.0 million for such fees in any twelve month period, in
each case, to the extent deducted in computing such Consolidated Net Income; plus


        (5)   without
duplication for periods prior to the date of this Indenture, all items added back to "EBITDA" for purposes of calculating "Adjusted EBITDA" in footnote
(d) under "Summary Historical and Pro Forma Consolidated Financial Information" in the Offering Memorandum; minus


        (6)   non-cash
items increasing such Consolidated Net Income for such period, other than (i) the accrual of revenue in the ordinary course of business and
(ii) any non-cash items reversing 



4







 




an
accrual or reserve that was excluded from the determination of Consolidated Cash Flow pursuant to the preceding clause (3)); minus


        (7)   but
solely for the purposes of determining Cumulative Operating Cash Flow, upon and following the election of the Company to capitalize Program Investments on its
balance sheet, the amount of Program Investments capitalized for such period. 




in
each case, on a consolidated basis and determined in accordance with GAAP. 


        Notwithstanding
the preceding sentence, clauses (1) through (7) relating to amounts of a Restricted Subsidiary of a Person will be added to (or subtracted from)
Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person. 


        "Consolidated Interest Expense" means, with respect to any specified Person for any period, the sum, without duplication, of: 



        (1) the
consolidated interest expense (other than Specified PIK Interest) of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers'
acceptance financings, and net of the effect of all payments made or received (if any) pursuant to Hedging Obligations); plus


        (2)   the
consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period. 




        For
the avoidance of doubt, any expense or charge related to the tender offers for, and the redemption of, K&F Industries' 91/4% senior subordinated notes due 2007 and
95/8% senior subordinated notes due 2010 shall not be deemed to constitute interest expense for purposes of this definition. 


        "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: 



        (1)   the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof; 


        (2)   the
Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of
that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders (other than with respect to restrictions
applicable to K&F Intermediate Holdco and K&F Industries and permitted by Section 4.08); 


        (3)   the
cumulative effect of a change in accounting principles shall be excluded; 


        (4)   any
non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of the
Company or any Restricted 



5







 




Subsidiary
shall be excluded, provided that such shares, options or other rights can be redeemed at the option of the holder only for Equity Interests
of the Company (other than Disqualified Stock); 


        (5)   any
step-up in cost of sales for inventory arising out of the application of purchase accounting treatment in connection with the Acquisition Transactions
shall be excluded; and 


        (6)   to
the extent deducted in determining Net Income, (a) the fees, expenses and other costs incurred in connection with the consummation of the Acquisition
Transactions and (b) any increase in amortization or write-off of goodwill or other intangible assets or increased depreciation or amortization expense arising solely from such
Acquisition Transactions shall be excluded. 




        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who: 



        (1)   was
a member of such Board of Directors on the date of this Indenture; or 


        (2)   was
nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time
of such nomination or election. 




        "Corporate Trust Office of the Trustee" means the office of the Trustee located at 225 Asylum Street, Hartford, Connecticut or such other
office as it shall notify the Company in writing. 


        "Credit Agreement" means that certain Credit Agreement among K&F Industries, the lenders parties thereto, Lehman Brothers Inc. and
J.P.Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, J.P. Morgan Securities Inc., as Syndication Agent, Goldman, Sachs & Co. and Citigroup Global
Markets Inc., as Co-Documentation Agents and Lehman Commercial Paper Inc., as Administrative Agent, including any related notes, guarantees, collateral documents, instruments
and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time (whether with the original agents and lenders or
other agents and lenders or otherwise, and whether provided under the original credit agreement or other credit agreements). 


        "Credit Facilities" means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper
facilities or indentures, in each case with banks or other institutional lenders or investors providing for revolving credit loans, term loans, debt securities, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit and any agreement or agreements
governing Indebtedness incurred to refinance, replace, restructure or refund such agreements in whole or in part from time to time (whether with the original agent and lenders or other agents and
lenders or otherwise). 


        "Cumulative Operating Cash Flow" means, for the period beginning October 1, 2004 through and including the end of the last fiscal
quarter (taken as one accounting period) preceding the date of any proposed Restricted Payment, Consolidated Cash Flow for the Company and its consolidated Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP. 


        "Cumulative Total Interest Expense" means, for the period beginning October 1, 2004 through and including the end of the last
fiscal quarter (taken as one accounting period) preceding the date of any proposed Restricted Payment, Consolidated Interest Expense for the Company and its consolidated Restricted Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP. 


        "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. 


        "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.01
hereof, in the form of Exhibit A hereto except that such Note 


6







 



shall
not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. 


        "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in
Section 2.01 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision
of this Indenture. 


        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant contained in Section 4.07. 


        "Distribution Compliance Period" means the 40-day distribution compliance period as defined in Regulation S. 


        "Domestic Subsidiary" means any Restricted Subsidiary of the Company that (x) was formed under the laws of the United States or any
state of the United States or the District of Columbia or (y) guarantees or otherwise provides direct credit support for any Indebtedness of the Company. 


        "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock). 


        "Equity Offering" means any public or private sale of Capital Stock (other than Disqualified Stock) made for cash on a primary basis by
the Company after the date of this Indenture (but excluding in any event any issuance pursuant to employee benefit plans or otherwise in compensation to officers, directors or employees). 


        "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear system, or any successor securities electing agency. 


        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        "Exchange Notes" means the 111/2% Senior PIK Notes due 2015 to be issued by the Company upon the expiration of an Exchange
Offer pursuant to the terms of a Registration Rights Agreement containing terms substantially identical to the Initial Notes (except that (i) the transfer restrictions thereon shall be
eliminated (other than as may be imposed by state securities laws) and (ii) there will be no provision for the payment of Additional Interest). 


        "Exchange Offer" means, subject to the terms of a Registration Rights Agreement, the offer by the Company to the Holders of the
opportunity to exchange their Initial Notes, Additional Notes and/or Additional PIK Notes for Exchange Notes pursuant to a registration statement filed with the Commission. 



        "Exchange Offer Registration Statement" has the meaning set forth for such term in the Registration Rights Agreement. 


        "Existing Indebtedness" means Indebtedness of the Company and its Restricted Subsidiaries in existence on the date of this Indenture,
until such amounts are repaid. 


7







 



        "Existing Notes" means the 73/4% Senior Subordinated Notes due 2014 issued by K&F Industries and guaranteed by its domestic
subsidiaries and any non-cash interest with respect thereto paid in the form of additional notes of such series. 


        "Fixed Charge Coverage Ratio" means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays,
repurchases or redeems any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period. 


        In
addition, for purposes of calculating the Fixed Charge Coverage Ratio: 



        (1)   acquisitions
that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, consolidations or otherwise (including
acquisitions of assets used in a Permitted Business) and including any related financing transactions (including any repayments of Indebtedness), during the four-quarter reference period
or subsequent to such reference period and on or prior to the Calculation Date shall be given pro forma effect as if they had occurred on the first day of the four-quarter reference
period, including any Consolidated Cash Flow (including interest income reasonably anticipated by such Person to be received from cash or Cash Equivalents held by such Person or any of its Restricted
Subsidiaries) and any pro forma expense and cost reductions that have occurred or are reasonably expected to occur within the twelve month period following the transaction, in the reasonable judgment
of the chief financial officer or chief accounting officer of the Company (regardless of whether those cost savings or operating improvements could then be reflected in pro forma financial statements
in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the Commission related thereto) or any other regulation or policy of the
Commission related thereto); provided that such adjustments are set forth in an Officer's Certificate signed by the Company's chief financial officer
which states (i) the amount of such adjustment or adjustments, (ii) that such adjustment or adjustments are based on the reasonable good faith belief of the Company at the time of such
execution and (iii) that any related incurrence of Indebtedness is permitted pursuant to this Indenture; 


        (2)   the
Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded; and 


        (3)   the
Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges shall not be obligations of the specified Person or any of its Restricted Subsidiaries following the
Calculation Date. 




        "Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of: 



        (1)   the
consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments (other than Specified PIK Interest), the 



8







 

interest
component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received (if any) pursuant to
Hedging Obligations); plus


        (2)   the
consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus


        (3)   any
interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such
Person or one of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon); plus



        (4)   the
product of (a) all dividends paid (whether or not in cash) on any series of preferred stock, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. 




For
the avoidance of doubt, any expense or charge related to the tender offers for, and the redemption of, K&F Industries' 91/4% senior subordinated notes due 2007 and
95/8% senior subordinated notes due 2010 shall not be deemed to constitute interest expense for purposes of this definition. 


        "Foreign Subsidiary" means any Restricted Subsidiary that is not a Domestic Subsidiary. 


        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in effect from time to time. 



        "Global Note Legend" means the legend set forth in Section 2.01(c)(ii), which is required to be placed on all Global Notes issued
under this Indenture. 


        "Global Notes" means one or more global notes deposited with or on behalf of, and registered in the name of, the Depositary or its nominee
and issued in accordance with Sections 2.01 and 2.07 hereof. 


        "Government Securities" means securities that are (i) direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely
payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America which, in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a) (2) of the Securities Act), as custodian, with respect to any such Governmental
Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt;  provided that (except as
required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by
such depository receipt. 


        "Guarantor" means any Person that guarantees the Notes; provided that upon the release or discharge of such Person from its Subsidiary
Guarantee in accordance with the provisions of this Indenture, such Person shall cease to be a Guarantor. 


9







 



        "Hedging Obligations" means, with respect to any specified Person, the obligations of such Person incurred in the normal course of
business and not for speculative purposes under: 



        (1)   interest
rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; 


        (2)   foreign
exchange contracts and currency protection agreements entered into with one or more financial institutions and designed to protect the person or entity entering
into the agreement against fluctuations in currency exchange rates with respect to Indebtedness incurred; 


        (3)   any
commodity futures contract, commodity option or other similar agreement or arrangement designed to protect against fluctuations in the price of commodities used by
that entity at the time; and 


        (4)   other
agreements or arrangements designed to protect such person against fluctuations in interest rates or currency exchange rates. 




        "Holder" means any Person (which may include the Depositary or its nominee) in whose name a Note is registered on the Registrar's books. 


        "IAI Global Note" means a Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that shall be issued in a denomination equal to the outstanding principal amount of the Notes sold
to Institutional Accredited Investors. 


        "Indebtedness" means (without duplication), with respect to any specified Person, any indebtedness of such Person, whether or not
contingent: 



        (1)   in
respect of borrowed money; 


        (2)   evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); 



        (3)   in
respect of banker's acceptances; 


        (4)   representing
Capital Lease Obligations; 


        (5)   representing
the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; 


        (6)   all
obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary, any preferred
stock (but excluding, in each case, any accrued dividends); or 


        (7)   representing
any Hedging Obligations, 




        if
and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. 


        In
addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the
specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any indebtedness of any other Person. 


        The
amount of any Indebtedness outstanding as of any date shall be: 



        (1)   the
accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; 



10







 

        (2)   in
the case of any Disqualified Stock or preferred stock, the repurchase price calculated in accordance with the terms of such Disqualified Stock or preferred stock as
if such Disqualified Stock or preferred stock were repurchased on the date on which Indebtedness is required to be determined pursuant to this Indenture;  provided that if such Disqualified Stock or
preferred stock is not then permitted to be repurchased, the book value of Disqualified Stock or preferred
stock; 


        (3)   in
the case Indebtedness of others secured by a Lien on any asset of the specified Person, the lesser of (A) the fair market value of such asset on the date on
which Indebtedness is required to be determined pursuant to this Indenture and (B) the amount of the Indebtedness so secured; 


        (4)   in
the case of the guarantee by the specified Person of any Indebtedness of any other Person, the maximum liability to which the specified Person may be subject upon the
occurrence of the contingency giving rise to the obligation; 


        (5)   in
the case of any Hedging Obligations, the net amount payable if such Hedging Obligations were terminated at that time due to default by such Person (after giving
effect to any contractually permitted set-off); and 


        (6)   the
principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other
Indebtedness. 




        "Indenture" means this Indenture, as amended or supplemented from time to time, and provisions of the TIA that are deemed by the TIA to be
a part hereof. 


        "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. 



        "Initial Notes" means the $55,000,000 aggregate principal amount of 111/2% Senior PIK Notes due 2015 issued by the Company
on the Issue Date. 


        "Initial Purchaser" means (i) with respect to the Initial Notes issued on the Issue Date, Lehman Brothers Inc. and
(2) with respect to each issuance of Additional Notes, each Person purchasing such Additional Notes under the related purchase agreement. 



        "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who are not also QIBs. 


        "Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates)
in the forms of loans (including guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale
or disposition, such Person is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition in an amount equal to the fair
market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07. The acquisition by the Company or any
Subsidiary of the Company of a Person that holds an Investment in a third Person shall be deemed to be an Investment made by the Company or such Subsidiary in such third Person in an amount equal to
the fair market value of the Investment held by the acquired Person in such third Person on the date of any such acquisition in an amount determined as provided in the final paragraph of
Section 4.07. 


        "Issue Date" means the date on which the Notes are originally issued under this Indenture. 


11







 



        "K&F Industries" means K&F Industries, Inc., a Delaware corporation, and its successors and assigns. 


        "K&F Intermediate Holdco" means K&F Intermediate Holdco, Inc., a Delaware corporation, and its successors and assigns. 


        "Legal Holiday" means a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by
law to close. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period. 


        "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer. 


        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, and any
agreement to give a security interest under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. 


        "Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding, however: 



        (1)   any
gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and 


        (2)   any
extraordinary or nonrecurring gain or loss, together with any related provision for taxes on such extraordinary or nonrecurring gain or loss. 




        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale (as reasonably estimated by the Company), in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,
amounts required to be applied to the repayment of Indebtedness, secured by a Lien on the asset or assets that were the subject of such Asset Sale, and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP. 


        "Non-Recourse Debt" means Indebtedness: 



        (1)   as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) is the lender; 


        (2)   no
default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and 



12







 




        (3)   as
to which the lenders have been notified in writing that they shall not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. 




        "Non-U.S. Person" means a Person who is not a U.S. Person. 



        "Note Custodian" means U.S. Bank National Association, as custodian for the Depositary with respect to the Notes in global form, or any
successor entity thereto. 


        "Notes" means the Initial Notes, any Additional PIK Notes, the Exchange Notes and any Additional Notes issued under this Indenture. 


        "Obligations" means any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement
obligations, damages, guarantees and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereto. 


        "Offering Memorandum" means the offering memorandum of the Company, dated February 11, 2005, in connection with the offering of the
Initial Notes. 


        "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, the Controller, the Secretary or any Vice President of such Person. 



        "Officers' Certificate" means a certificate signed by two Officers or by one Officer and any Assistant Treasurer or Assistant Secretary of
the Company, which complies with the provisions of Section 12.05 hereof. 


        "144A Global Note" means one or more global notes in the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that shall represent the aggregate principal amount of the Notes sold in reliance on
Rule 144A. 


        "Opinion of Counsel" means an opinion from legal counsel, who is reasonably acceptable to the Trustee, which meets the requirements of
Section 12.04 hereof. The counsel may be an employee of or counsel to the Company or any Subsidiary. 


        "Participant" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear
or Clearstream, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream). 



        "Participating Broker-Dealer" has the meaning set forth in the Registration Rights Agreement. 


        "Permitted Business" means the lines of business conducted by the Company and its Restricted Subsidiaries on the date of this Indenture
and any business incidental or reasonably related thereto or which is a reasonable extension thereof as determined in good faith by the Company's Board of Directors. 


        "Permitted Holder" means: 



        (1)   each
of Aurora Industrial Holdings LLC, Aurora Equity Partners II L.P., Aurora Overseas Equity Partners II, L.P., Aurora Equity Partners III L.P. and Aurora Overseas
Equity Partners III, L.P. (the "Limited Partnerships"); 


        (2)   Aurora
Capital Partners II L.P., Aurora Overseas Capital Partners II, L.P., Aurora Capital Partners III L.P. and Aurora Overseas Capital Partners III, L.P. (the "General
Partners"); 


        (3)   Aurora
Advisors II LLC, Aurora Advisors III LLC, Aurora Overseas Advisors II, LDC and Aurora Overseas Advisors III, LDC (the "Ultimate General Partners"); 



13







 




        (4)   any
limited partners of the Limited Partnerships or any limited partners of the General Partners, provided that such
limited partner gives a proxy to, or otherwise agrees that it will vote in a manner consistent with, any of the Limited Partnerships or the General Partners; 



        (5)   any
managing director, consultant or employee of Aurora Management Partners LLC, provided that such managing director,
consultant or employee gives a proxy to, or otherwise agrees that he or she will vote in a manner consistent with, the Limited Partnerships or the General Partners; 


        (6)   any
member of the Advisory Board of Aurora Management Partners LLC, provided that such member gives a proxy to, or
otherwise agrees that he or she will vote in a manner consistent with, the Limited Partnerships or the General Partners; 



        (7)   any
Affiliate of Aurora Management Partners LLC, provided that such Affiliate gives a proxy to, or otherwise agrees that
it will vote in a manner consistent with, the Limited Partnerships or the General Partners; or 


        (8)   any
investment fund or other entity controlled by or under common control with, any one or more of the Ultimate General Partners or Aurora Management Partners LLC or the
principals that control any one or more of the Ultimate General Partners or Aurora Management Partners LLC. 




        "Permitted Investments" means: 



        (1)   any
Investment in the Company or in a Restricted Subsidiary of the Company; 


        (2)   any
Investment in Cash Equivalents; 


        (3)   any
Investment by the Company or any Subsidiary of the Company in a Person, if as a result of such Investment: 



        (a)   such
Person becomes a Restricted Subsidiary of the Company; or 



        (b)   such
Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; 




        (4)   any
Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant
contained in the
Section 4.10 or any non-cash consideration received in connection with a disposition of assets excluded from the definition of "Asset Sales;" 



        (5)   workers'
compensation, utility, lease and similar deposits and prepaid expenses in the ordinary course of business and endorsements of negotiable instruments and
documents in the ordinary course of business; 


        (6)   loans
or advances to employees (or guarantees of third party loans to employees) made in the ordinary course of business of the Company or such Restricted Subsidiary in
an aggregate amount not to exceed $2.0 million at any one time outstanding; 


        (7)   any
Investments in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; 



        (8)   any
Investments received in compromise of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; 


        (9)   Hedging
Obligations; 



14







 




        (10) advances
or extensions of credit on terms customary in the industry in the form of accounts or other receivables incurred, and loans and advances made in settlement of
such accounts receivable, all in the ordinary course of business; 


        (11) Investments
existing on the date of this Indenture; 


        (12) guarantees
in accordance with the covenant set forth under Section 4.09; 


        (13) advances,
loans or extensions of credit to suppliers and vendors in the ordinary course of business; 



        (14) Investments
by the Company or any Restricted Subsidiary in joint ventures operating primarily in a Permitted Business in an aggregate amount at any one time outstanding
not to exceed $20.0 million; 


        (15) reclassification
of any Investment initially made in the form of equity as a loan or advance, and reclassification of any Investment initially made in the form of a
loan or advance as equity; provided in each case that the amount of such Investment is not increased thereby; and 


        (16) other
Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant to this clause (16) that are at the time outstanding not to exceed $10.0 million. 




        "Permitted Liens" means: 



        (1)   Liens
in favor of the Company or any of its Restricted Subsidiaries; 


        (2)   Liens
on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company or
becomes a Restricted Subsidiary of the Company or renewals or replacement of such Liens in connection with the incurrence of Permitted Refinancing Indebtedness in respect of Indebtedness secured by
such Liens; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other
than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary; 


        (3)   Liens
on property existing at the time of acquisition of the property by the Company or any Restricted Subsidiary of the Company or renewals or replacement of such Liens
in connection with the incurrence of Permitted Refinancing Indebtedness in respect of Indebtedness secured by such Liens; provided that such Liens were
in existence prior to the contemplation of such acquisition; 


        (4)   Liens
existing on the date of this Indenture and any extensions or renewals thereof, providedthat such Liens do not
extend to or cover any other property or assets of the Company or any Restricted Subsidiary; 


        (5)   Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of Section 4.09 covering only the assets
acquired with such Indebtedness or permitted by clause (5) of such paragraph, to the extent such Liens secure Permitted Refinancing Indebtedness initially incurred under clause (4); 


        (6)   statutory
Liens or landlords and carriers', warehouseman's, mechanics', suppliers', materialmen's, repairmen's or other like Liens arising in the ordinary course of
business; 


        (7)   Liens
for taxes, assessments, government charges or claims which are not yet delinquent or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor; 



15







 




        (8)   Liens
incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; 


        (9)   Liens
created or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); 


        (10) easements,
rights-of-way, restrictions and other similar charges or encumbrances not interfering in any material respect with the business of
the Company incurred in the ordinary course of business; 


        (11) judgment
liens in respect of judgments that do not constitute an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings that
may have been duly initiated for the review of such judgment have not been fully terminated or the period within which such proceedings may be initiated has not expired; 



        (12) any
other Liens imposed by operation of law which do not materially affect the Company's ability to perform its obligations under the Notes and this Indenture; 


        (13) rights
of banks to set off deposits against debts owed to said bank; 


        (14) Liens
upon specific items of inventory or other goods and proceeds of the Company or its Subsidiaries securing the Company's or any Restricted Subsidiary's obligations
in respect of bankers' acceptances issued or created for the account of any such Person to facilitate the purchase, shipment or storage of such inventory or other goods; 



        (15) Liens
securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to such letters of credit and the
products and proceeds thereof; 


        (16) Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; 


        (17) Liens
encumbering property or assets under construction arising from progress or partial payments by a customer of the Company or one of its Subsidiaries relating to
such property or assets; 


        (18) Liens
pursuant to master netting agreements entered into in the ordinary course of business in connection with Hedging Obligations; 


        (19) Liens
on assets that are the subject of a sale and leaseback transaction permitted hereby; 


        (20) Liens
on the property or assets of the Company or its Restricted Subsidiaries in favor of the PBGC in respect of unfunded pension obligations, which liens are junior to
the liens permitted under any Credit Facility; and 



        (21) Liens
incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed
$5.0 million at any one time outstanding. 




        "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, 


16








 

refinance,
renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness);  provided that: 



        (1)   the
principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in
connection with the extension, refinancing, renewal, replacement, defeasance or refunding); 



        (2)   such
Permitted Refinancing Indebtedness has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; 


        (3)   if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of the Notes as those
contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and 


        (4)   such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary that is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded. 




        "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity. 


        "Program Investments" means, for any period, the amount of investments made by the Company and its Restricted Subsidiaries during such
period consisting of the sale of original wheel and brake assemblies to customers below cost in accordance with industry practice in the commercial, general aviation and military industries. 


        "Predecessor Note" of any particular Note means every previous Note evidencing all or a portion of the same Indebtedness as that evidenced
by such particular Note; and any Note authenticated and delivered under Section 2.08 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same Indebtedness as
the mutilated, lost, destroyed or stolen Note. 


        "Private Placement Legend" means the legend set forth in Section 2.01(c)(i)(A) to be placed on all Notes issued under this
Indenture, except where otherwise permitted by the provisions of this Indenture. 


        "QIB" means a "qualified institutional buyer" as defined in Rule 144A. 



        "Qualified Proceeds" any of the following or any combination of the following: (i) cash, (ii) Cash Equivalents,
(iii) assets that are used or useful in a Permitted Business (excluding Permitted Investments made in Persons other than Restricted Subsidiaries pursuant to clause (7) of the definition
of "Permitted Investments") by the Company or any Restricted Subsidiary of the Company and (iv) the Capital Stock of any Person engaged in a Permitted Business that becomes a Restricted
Subsidiary of the Company as a result of the acquisition of such Capital Stock by the Company or any Restricted Subsidiary of the Company. 



        "Registration Rights Agreement" means (a) with respect to the Initial Notes issued on the Issue Date and any Additional PIK Notes
issued with respect thereto, the Registration Rights Agreement dated as of the date hereof among the Company and the Initial Purchaser and (b) with respect to each issuance of Additional Notes
issued in a transaction exempt from the registration requirements of the 


17







 



Securities
Act and any Additional PIK Notes issued with respect thereto, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related
purchase agreement. 


        "Registration Statement" means any registration statement filed under the Securities Act by the Company pursuant to the provisions of the
Registration Rights Agreement relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Notes issued in a transaction exempt from
the registration requirements of the Securities Act pursuant to the Shelf Registration Statement. 


        "Regulation S" means Regulation S promulgated under the Securities Act. 


        "Regulation S Global Note" means the Regulation S Temporary Global Note or the Regulation S Permanent Global Note, as
the case may be. 


        "Regulation S Permanent Global Note" means a permanent global note bearing the Global Note Legend and the Private Placement Legend
and deposited with, or on behalf of, and registered in the name of, the Depositary or its nominee, that shall equal the outstanding principal amount of the Regulation S Temporary Global Note
upon expiration of the Distribution Compliance Period. 


        "Regulation S Temporary Global Note" means one or more global notes bearing the Global Note Legend, the Temporary Global Note
Legend and the Private Placement Legend and deposited with, or on behalf of, and registered in the name of, the Depositary or its nominee that shall represent the aggregate principal amount of the
Notes sold in reliance on Regulation S. 


        "Responsible Officer" means when used with respect to the Trustee, an officer within the Corporate Trust Division of the Trustee (or any
successor unit, department or division of the Trustee) located at the Corporate Trust Office of the Trustee, who has direct responsibility for the administration of this Indenture and, for the
purposes of Section 7.01(c)(ii) and the second sentence of Section 7.05 shall also include any officer of the Trustee to whom any corporate trust matter is referred because of
such person's knowledge of and familiarity with the particular subject. 


        "Restricted Definitive Note" means a Definitive Note bearing the Private Placement Legend. 


        "Restricted Global Note" means a Global Note bearing the Private Placement Legend. 


        "Restricted Investment" means an Investment other than a Permitted Investment. 


        "Restricted Note" means a Restricted Definitive Note or a Restricted Global Note, as the case may be. 



        "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. 


        "Rule 144" means Rule 144 promulgated under the Securities Act. 


        "Rule 144A" means Rule 144A promulgated under the Securities Act. 


        "Rule 144A Global Note" means one or more Restricted Global Notes that shall represent the aggregate principal amount of Notes sold
in reliance on Rule 144A. 


        "Rule 903" means Rule 903 promulgated under the Securities Act. 


        "Rule 904" means Rule 904 promulgated under the Securities Act. 


        "Securities Act" means the Securities Act of 1933, as amended. 


        "Senior Preferred Change of Control" means a Change of Control (as defined in the Amended and Restated Certificate of Incorporation of the
Company in existence on the date of this Indenture). 


18







 



        "Senior Preferred Redemption Debt" means any Indebtedness of the Company issued in exchange for, or the net proceeds of which are used to
repurchase or redeem, any Senior Preferred Stock; provided that: 



        (1)   the
principal amount (or accreted value, if applicable) of such Senior Preferred Redemption Debt does not exceed the liquidation value (plus accrued and unpaid
dividends, if any) of the Senior Preferred Stock being repurchased or redeemed (plus the amount of all fees and expenses incurred in connection with the repurchase or redemption); and 


        (2)   such
Senior Preferred Redemption Debt has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Notes. 




        "Senior Preferred Stock" means the Senior Redeemable Preferred Stock of K&F Industries. 


        "Shelf Registration Statement" has the meaning set forth for such term in the Registration Rights Agreement. 


        "Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. 



        "Specified PIK Interest" means any non-cash interest payable (and not paid in cash) and amortization of any original issue
discount on any Indebtedness of the Company. 


        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness, and shall not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. 


        "Subsidiary" means, with respect to any specified Person: 



        (1)   any
corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and 



        (2)   any
partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 




        "Subsidiary Guarantee" means any guarantee by a Guarantor of the Company's payment Obligations under this Indenture and on the Notes,
executed pursuant to the provisions of this Indenture. 


        "Tax Benefit Note" means the tax benefit note issued by the Company to the then existing stockholders and optionholders of K&F Industries
for estimated tax benefits to be received by K&F Industries due to the payment of fees and premiums in connection with the Tender Offers. 


        "Tender Offers" means the tender offers and consent solicitations initiated by K&F Industries on October 20, 2004 for all of K&F
Industries' then outstanding 91/4% Senior Subordinated Notes due 2007 and 5/8% Senior Subordinated Notes due 2010. 


        "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the date on
which this Indenture is qualified under the TIA, provided that in the event the Trust Indenture 


19







 



Act
of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. 


        "Transactions" shall have the meaning specified in the Offering Memorandum. 



        "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder. 


        "Unrestricted Definitive Note" means a Definitive Note that does not and is not required to bear the Private Placement Legend. 


        "Unrestricted Global Note" means a Global Note that does not and is not required to bear the Private Placement Legend. 



        "Unrestricted Note" means an Unrestricted Definitive Note or an Unrestricted Global Note, as the case may be. 


        "Unrestricted Subsidiary" means any Subsidiary of the Company (other than K&F Industries) that is designated by the Board of Directors as
an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary: 



        (1)   has
no Indebtedness other than Non-Recourse Debt; 


        (2)   is
not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates
of the Company; 


        (3)   is
a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional
Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and 



        (4)   has
not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries. 




        Any
designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving
effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if
such Indebtedness is not permitted to be incurred as of such date under Section 4.09, the Company shall be in default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness
by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (1) such Indebtedness is permitted
under Section 4.09, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation. 


        "U.S. Person" means a U.S. person as defined in Rule 902(k) under the Securities Act. 


        "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person. 


20







 



        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: 



        (1)   the
sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that shall elapse between such
date and the making of such payment; by 


        (2)   the
then outstanding principal amount of such Indebtedness. 




SECTION 1.02.    Other Definitions  



	Term
 
	 	Defined

in Section

	"Affiliate Transaction"	 	4.11
	"Asset Sale Offer"	 	4.10
	"Authenticating Agent"	 	2.03
	"Authentication Order"	 	2.03
	"Change of Control Offer"	 	4.15
	"Change of Control Payment"	 	4.15
	"Change of Control Payment Date"	 	4.15
	"Covenant Defeasance"	 	8.03
	"Custodian"	 	6.01
	"DTC"	 	2.01
	"Event of Default"	 	6.01
	"Excess Proceeds"	 	4.10
	"incur"	 	4.09
	"Legal Defeasance"	 	8.02
	"Maximum Amount"	 	4.09
	"New York Corporate Trust Office"	 	4.02
	"Offer Amount"	 	4.10
	"Paying Agent"	 	2.04
	"Payment Default"	 	6.01
	"Purchase Date"	 	4.10
	"Registrar"	 	2.04
	"Relevant Fixed Charge Coverage Ratio"	 	4.09
	"Restricted Payments"	 	4.07





SECTION 1.03.    Incorporation by Reference of TIA  


        Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. All terms used in this
Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. 



SECTION 1.04.    Rules of Construction  


        Unless the context otherwise requires: 



        (i)    a
term has the meaning assigned to it; 


        (ii)   an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 


        (iii)  "or"
is not exclusive; 



21







 




        (iv)  words
in the singular include the plural, and in the plural include the singular; 


        (v)   provisions
apply to successive events and transactions; 


        (vi)  "herein,"
"hereof," "hereunder" and other words of similar import refer to this Indenture (as amended or supplemented from time to time) and not to any particular
Article, Section or other subdivision; and 


        (vii) references
to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the Commission
from time to time. 



ARTICLE 2
  THE NOTES


SECTION 2.01.    Form and Dating  



        (a)   General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A
hereto; provided that only Global Notes shall have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or usage. The Company and the Trustee shall approve the forms of the Notes and any notation, legend or endorsement on them. 


        Each
Note shall be dated the date of its authentication. 


        The
terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound thereby. To the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling. 


        (b)   Global Notes. Each Global Note shall be deposited with the Note Custodian and registered in the name of the Depositary or
the nominee of the Depositary and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount
of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of
any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee, the Depositary or the Note Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as required by Section 2.07 hereof. The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes. The Trustee shall act as Note Custodian with respect to the Global Notes in accordance
with its agreement with DTC. 


        Notes
initially offered and sold to QIBs in reliance on Rule 144A shall be issued in the form of one or more Rule 144A Global Notes. 


        Notes
initially offered and sold outside the United States in reliance on Regulation S shall be issued in the form of one or more Regulation S Temporary Global Notes, which
shall be deposited with the Note Custodian and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or
Clearstream. The Distribution Compliance Period shall be terminated upon the receipt by the Trustee of a written certificate from the Depositary, together with copies of certificates from Euroclear
and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary
Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Distribution Compliance Period pursuant to another exemption from registration under the
Securities Act and who took delivery of a beneficial 


22







 



ownership
interest in a 144A Global Note, all as contemplated by Section 2.07(b)(iii) hereof). Following the termination of the Distribution Compliance Period, beneficial interests in
the Regulation S Temporary Global Note shall be exchanged for an equal amount of beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. 


        (c)   Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this
Indenture unless specifically stated otherwise in the applicable provisions of this Indenture: 



        (i)    Private Placement Legend. 



        (A)  Except
as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form: 


"THE
NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS 




23







 





AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE ISSUER, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THE NOTE IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT." 



        (B)  Notwithstanding
the foregoing, any Global Note or Definitive Note issued in compliance with subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) of Section 2.07 (and all Notes issued in exchange therefor or substitution thereof), and any Additional Notes issued pursuant to a registration statement that has
been declared effective under the Securities Act, shall not bear the Private Placement Legend. 




        (ii)   Global Note Legend. Each Global Note shall bear a legend in substantially the following form: 



"UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY
SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF A SUCCESSOR DEPOSITARY, OR ANY NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THE GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THE GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE." 


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




24







 





OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN." 




        (iii)  Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in
substantially the following form: 



"THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN)." 





SECTION 2.02.    Denominations  


        The Notes shall be in minimum denominations of $2,000 aggregate principal amount and integral multiples of $1,000 in excess thereof;  provided, however, that Additional PIK Notes shall be issued in denominations of $1.00 and integral multiples of $1.00.
 


SECTION 2.03.    Execution and Authentication  


        The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Trustee shall, upon a written order of the
Company signed by two Officers of the Company or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company (an "Authentication
Order"), authenticate (i) on the Issue Date, the Initial Notes in aggregate principal amount of $55.0 million, (ii) subject to the provisions of
Section 2.15, at any time and from time to time after July 31, 2005, Additional PIK Notes as payment for accrued interest on the Notes or Additional Interest, as specified in such
authentication order, (iii) subject to the provisions of Section 2.16, at any time and from time to time thereafter, Additional Notes in an aggregate principal amount specified in such
authentication order and (iv) subject to the provisions of Section 2.07(f), Exchange Notes issued in exchange for a like principal amount of Initial Notes, Additional PIK Notes or
Additional Notes tendered pursuant to an Exchange Offer. Such authentication order shall specify (i) the amount of the Notes to be authenticated, (ii) the date on which the Notes are to
be authenticated, (iii) whether the Notes are to be Initial Notes, Additional PIK Notes, Exchange Notes or Additional Notes and (iv) whether such Notes shall bear the Global Note Legend,
the Regulation S Temporary Global Note Legend and/or the Private Placement Legend. Furthermore, Notes may be authenticated and delivered upon registration or transfer, or in lieu of, other
Notes pursuant to Section 2.07, 2.08, 2.11 or 9.05 or in connection with a Change of Control Offer pursuant to Section 4.15. 


        An
Officer of the Company shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note
is authenticated, the Note shall nevertheless be valid. 



        A
Note shall not be valid until an authorized signatory of the Trustee manually authenticates the Note. The signature of the Trustee on a Note shall be conclusive evidence that the Note
has been duly and validly authenticated and issued under this Indenture. 


        The
Trustee may appoint an authenticating agent (the "Authenticating Agent") acceptable to the Company to authenticate Notes. An
Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent. An
Authenticating Agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. 


25







 



SECTION 2.04.    Registrar and Paying Agent  


        The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The
Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the Borough of Manhattan, The City of New York. The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. 


        The
Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints the Trustee to act as the Registrar and Paying Agent. 


SECTION 2.05.    Paying Agent to Hold Money in Trust  


        Subject to Section 2.14 hereof, by no later than 11:00 a.m. (New York City time) on the date on which any principal of, premium or Additional
Interest, if any, or interest on any Notes is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such amount when due. The Company
shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium or Additional Interest, if any, or interest on the Notes, and shall notify the Trustee in writing of any default by the Company in making any such payment. While
any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. 


SECTION 2.06.    Holder Lists  


        The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and
shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company
shall otherwise comply with TIA § 312(a). 


SECTION 2.07.    Transfer and Exchange  


        (a)   Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a
nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary. All Global Notes shall be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the 


26







 

Depositary
that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Company within 120 days after the date of such notice from the Depositary, (ii) the Company in its sole discretion determines that the Global Notes (in whole but not
in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or (iii) there shall have occurred and be continuing a Default or Event of Default
with respect to the Notes; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive
Notes prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under
the Securities Act. Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08, 2.11 and 9.05 hereof. Every Note authenticated and delivered in exchange for, or in lieu of,
a Global Note or any portion thereof, pursuant to this Section 2.07 or Section 2.08 or 2.11 or 9.05 hereof, shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.07(a); however, beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.07(b), (c) or (f) hereof. 


        (b)   Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in
the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall
be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 



        (i)    Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement
Legend and any Applicable Procedures; provided, however, that prior to the expiration of the
Distribution Compliance Period, transfers of beneficial interests in the Temporary Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser or a "distributor" (as defined in Rule 902(d) of Regulation S)). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. Except as may be required by Applicable Procedures, no written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this Section 2.07(b)(i). 



        (ii)   All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.07(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase or (B) if permitted under Section 2.07(a) hereof, (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest
to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note 



27







 




shall
be registered to effect the transfer or exchange referred to in (B)(1) above; provided that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.07(f) hereof, the
requirements of this Section 2.07(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon notification from the Registrar that all of the requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under the Securities Act have been satisfied, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.07(h) hereof. 


        (iii)  Transfer of Beneficial Interests in a Restricted Global Note to Another Restricted Global Note. A beneficial interest
in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the
requirements of Section 2.07(b)(ii) above and the Registrar and the Company receive the following: 



        (A)  if
the transferee shall take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof; 


        (B)  if
the transferee shall take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Global Note, then
the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and 


        (C)  if
the transferee shall take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable. 




        (iv)  Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the exchange or transfer complies with the requirements of
Section 2.07(b)(ii) above and: 



        (A)  such
exchange or transfer is effected pursuant to an Exchange Offer in accordance with a Registration Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a transfer, makes any and all certifications in the applicable Letter of Transmittal or is deemed to have made such
certifications if delivery is made through the Applicable Procedures as may be required by the Registration Rights Agreement; 


        (B)  such
transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  such
transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 




28







 





        (D)  the
Registrar and the Company receive the following: 



        (1)   if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or 



        (2)   if
the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 




and,
in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act. 





        If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. 



        (v)   Transfer or Exchange of Beneficial Interests in Unrestricted Global Notes for Beneficial Interests in Restricted Global Notes
Prohibited. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, beneficial
interests in a Restricted Global Note. 




        (c)   Transfer or Exchange of Beneficial Interests in Global Notes for Definitive Notes. 



        (i)    Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. Subject to Section 2.07(a) hereof,
if any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar and the Company of the following documentation: 



        (A)  if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; 


        (B)  if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof; 


        (C)  if
such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 


        (D)  if
such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 




29







 





        (E)  if
such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3)(d) thereof, if applicable; 



        (F)  if
such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; or 


        (G)  if
such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c) thereof, 





the
Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and upon receipt
of an Authentication Order in accordance with Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal amount. Any Restricted Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.07(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Restricted Definitive Notes to the Persons in whose names such Notes are so
registered. Any Restricted Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein. 



        (ii)   Notwithstanding
Sections 2.07(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Distribution Compliance Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904. 


        (iii)  Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. Subject to Section 2.07(a)
hereof, a holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note only if: 



        (A)  such
exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer, makes any and all certifications in the applicable Letter of Transmittal; 


        (B)  such
transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  such
transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar and the Company receive the following: 



        (1)   if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate
from 





30







 



such
holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or 


        (2)   if
the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 




and,
in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act. 





        Upon
satisfaction of the conditions of any of the clauses of this Section 2.07(c)(iii), the Company shall execute, and, upon receipt of an Authentication Order in accordance with
Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate and deliver to the Person designated in the instructions an Unrestricted
Definitive Note in the appropriate principal amount, and the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Note to be reduced in a corresponding amount
pursuant to Section 2.07(h) hereof. 



        (iv)  Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. Subject to Section 2.07(a)
hereof, if any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note, then, upon satisfaction of the applicable conditions set forth in Section 2.07(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable Unrestricted Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and,
upon receipt of an Authentication Order in accordance with Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate and deliver to
the Person designated in the instructions an Unrestricted Definitive Note in the appropriate principal amount. Any Unrestricted Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.07(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Unrestricted Definitive Notes to the Persons in whose names such Notes
are so registered. Any Unrestricted Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv) shall not bear the Private Placement Legend. 




        (d)   Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. 



        (i)    Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar and the Company of the following documentation: 



        (A)  if
the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; 




31







 


        (B)  if
such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof; 


        (C)  if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 


        (D)  if
such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with
Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 


        (E)  if
such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if applicable; 


        (F)  if
such Restricted Definitive Note is being transferred to either of the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or 


        (G)  if
such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c) thereof, 





the
Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the appropriate Restricted Global Note. 



        (ii)   Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive
Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note only if: 



        (A)  such
exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, makes any and all certifications in the applicable Letter of Transmittal; 


        (B)  such
transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement; 



        (C)  such
transfer is effected by a Participating Broker-Dealer pursuant to an Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar and the Company receives the following: 



        (1)   if
the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or 



        (2)   if
the Holder of such Restricted Definitive Note proposes to transfer such Note to a Person who shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 





32







 







and,
in each such case set forth in this subparagraph (D), if the Registrar and the Company request or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities Act. 





        Upon
satisfaction of the conditions of any of the subparagraphs in this Section 2.07(d)(ii), the Trustee shall cancel such Restricted Definitive Note and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note. 



        (iii)  Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. 


        (iv)  Transfer or Exchange of Unrestricted Definitive Notes to Beneficial Interests in Restricted Global Notes Prohibited. An
Unrestricted Definitive Note may not be exchanged for, or transferred to Persons who take delivery thereof in the form of, beneficial interests in a Restricted Global Note. 



        (v)   Issuance of Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest
in an Unrestricted Global Note is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. 




        (e)   Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such
Holder's compliance with the provisions of this Section 2.07(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange,
the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by such Holder's attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 2.07(e). 



        (i)    Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: 



        (A)  if
the transfer shall be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; 



        (B)  if
the transfer shall be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and 


        (C)  if
the transfer shall be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (3)(c) thereof. 




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        (ii)   Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the
Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note only if: 



        (A)  such
exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, makes any and all certifications in the applicable Letter of Transmittal; 


        (B)  any
such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  any
such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights
Agreement; or 


        (D)  the
Registrar and the Company receive the following: 



        (1)   if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d) thereof; or 


        (2)   if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 




and,
in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 





        Upon
satisfaction of the conditions of any of the clauses of Section 2.07(e)(ii), the Trustee shall cancel the prior Restricted Definitive Note and the Company shall execute, and,
upon receipt of an Authentication Order in accordance with Section 2.03 hereof or in accordance with a previously delivered Authentication Order, the Trustee shall authenticate and deliver to
the Person designated in the instructions an Unrestricted Definitive Note in the appropriate principal amount. 



        (iii)  Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer
such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof. 




        (f)    Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with a Registration Rights Agreement, the Company
shall issue and, upon receipt of an Authentication Order in accordance with Section 2.03, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial interests in the applicable Restricted Global Notes tendered for acceptance by Persons that make any and all certifications in the
applicable Letter of Transmittal or are deemed to have made such certifications if delivery is made through the Applicable Procedures as may be required by such Registration Rights Agreement and
accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes tendered for
acceptance by Persons who made the foregoing certifications and accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the 


34







 

aggregate
principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated
by the Holders of Restricted Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount. 


        (g)   Cancellation and/or Adjustment of Global Notes. 


        At
such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in
whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.12 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect
such increase. 


        (h)   General Provisions Relating to Transfers and Exchanges. 



        (i)    To
permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's
order. 


        (ii)   No
service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.06, 4.10, 4.15 and 9.05 hereof). 



        (iii)  The
Registrar shall not be required to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part. 


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


        (v)   The
Registrar shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business
15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection or (B) to register the
transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. 


        (vi)  The
Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. 



        (vii) The
Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.03 hereof. 



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        (viii) All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.07 to effect a registration of
transfer or exchange may be submitted by facsimile. 


        (ix)  The
Trustee is hereby authorized and directed to enter into a letter of representations with the Depositary in the form provided by the Company and to act in accordance
with such letter. 


        (x)   Subject
to compliance with any applicable additional requirements contained in this Article, when a Note is presented to the Registrar with a request to register a
transfer thereof or to exchange such Note for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested;  provided,
however, that every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by an assignment form and, if applicable, a transfer certificate, each in the form included in Exhibit A attached hereto and in form satisfactory to the
Registrar and each duly executed by the Holder thereof or its attorney duly authorized in writing. To permit registration of transfers and exchanges, upon surrender of any Note for registration of
transfer or exchange at an office or agency maintained for such purpose pursuant to Section 2.04, the Company shall execute, and the Trustee shall authenticate, Notes of a like aggregate
principal amount at the Registrar's request. 


        (xi)  Any
Registrar appointed pursuant to Section 2.04 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Notes upon transfer or exchange of Notes. 


        (xii) The
Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants or other beneficial owners of interests in any Global Note) other than to
require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express requirements hereof. 



        (xiii) None
of the Company, the Trustee or any Paying Agent shall have any responsibility or liability for any aspect of the records relating to, or payments made on account
of or transfers of, beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. 


        (xiv) None
of the Company, the Trustee or the Registrar shall have any liability for any acts or omissions of the Depositary, for any Depositary records of beneficial
interests, for any transaction between the Depositary or any Participant and/or beneficial owners, for any transfers of beneficial interests in the Notes, or in respect of any transfers effected by
the Depositary or by any Participant or any beneficial owner of any interest in any Notes held through any such Participant. 



36









   SECTION 2.08.    Mutilated, Destroyed, Lost or Stolen Notes  


        If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any
Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order or in accordance with a previously delivered Authentication Order, shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect
the Company, the Trustee, any Agent and any Authenticating Agent from any loss that any of them may suffer if a Note is replaced. The Company and the Trustee may charge for their expenses in replacing
a Note. 


        Every
replacement Note issued in accordance with this Section 2.08 is an additional obligation of the Company and any other obligor upon the Notes and shall be entitled to all of
the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. 



        The
Company and the Trustee may charge the Holder for their expenses in replacing a Note. In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about
to become due and payable, the Company in its discretion may pay such Note instead of issuing a new Note in replacement thereof. 


        The
provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
lost, destroyed or wrongfully taken Notes. 


SECTION 2.09.    Outstanding Notes  



        The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in
Section 2.10 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. 


        If
a Note is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the Company and the Trustee receive proof satisfactory to it that the replaced Note is
held by a bona fide purchaser. 


        If
the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. New York City time, on a redemption date or other maturity date money
sufficient to pay all principal, premium and Additional Interest, if any, and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue. 


SECTION 2.10.    Treasury Notes  



        In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by
any Affiliate of the Company shall be deemed not to be outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. 


SECTION 2.11.    Temporary Notes  


        In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form, and shall carry all rights, of 


37







 



Definitive
Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive
Notes. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at any office or agency maintained by the Company
for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute, and the Trustee shall
authenticate and make available for delivery in exchange therefor, one or more Definitive Notes representing an equal principal amount of Notes. Until so exchanged, the Holder of temporary Notes shall
in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Notes. 


SECTION 2.12.    Cancellation  


        The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to
them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy all Notes surrendered for registration of transfer, exchange, payment, replacement or
cancellation in accordance with customary practices (subject to the record retention requirement of the Exchange Act) and, upon request, deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Notes to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for
cancellation. 


SECTION 2.13.    Defaulted Interest  


        If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate and in the manner provided in the Notes and in Sections 2.14 and 4.01
hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 


SECTION 2.14.    Computation and Payment of Interest  


        Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months. The Company, at its option, shall be
entitled to (i) pay accrued interest on the Notes in cash or (ii) issue Additional PIK Notes under this Indenture as payment for accrued interest on the Notes in lieu of the payment of
cash interest or Additional Interest. 


SECTION 2.15.    Issuance of Additional PIK Notes  


        (a)   The
Company shall be entitled to issue Additional PIK Notes under this Indenture which shall have identical terms as the Notes. The Initial Notes issued on the Issue
Date and any Additional PIK Notes shall be treated as a single class for all purposes under this Indenture. 



        (b)   Unless
otherwise agreed to between the Company and the Trustee, with respect to any Additional PIK Notes, the Company shall deliver to the Trustee and the Paying Agent: 



        (1)   no
later than the record date for the relevant interest payment date, a written notice setting forth the extent to which such interest payment will be made in the form
of cash, if an 



38







 

election
is made to pay in cash, and if no such election is made, such interest payment shall otherwise be payable in Additional PIK Notes; and 



        (2)   no
later than one Business Days prior to the relevant interest payment date, (i) if such securities are in definitive form, the required amount of new definitive
Additional PIK Notes and an order to authenticate and deliver such Additional PIK Notes or (ii) if such Notes are in global form, an order to increase the principal amount of such Notes by the
relevant amount (or, if necessary, to authenticate a new Global Notes executed by the Company with such increased principal amounts). 




        (c)   Any
Additional PIK Notes shall, after being executed and authenticated pursuant to Section 2.03 hereof, be (i) mailed to the person entitled thereto as
shown on the register for the Definitive Notes as of the relevant Record Date or (ii) deposited into the account specified by the Holder or Holders thereof as of the relevant Record Date if the
Notes are held in global form. Alternatively, the Company may direct the Paying Agent to make the appropriate amendments to the schedule of principal amounts of the relevant Global Notes outstanding
and arrange for deposit into the account specified by the Holder or Holders thereof as of the relevant Record Date. Payment shall be made in such form and upon such terms as specified herein and the
Company shall and Paying Agent may take additional steps as is necessary to effect such payment. 


        (d)   With
respect to any Additional PIK Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Notes pursuant to Sections 2.07, 2.08, 2.09, 2.11 and 3.06), the aggregate principal amount of such Additional PIK Notes which may be authenticated and delivered under this
Indenture shall be (i) established in or pursuant to a Board Resolution of the Company (provided that any such Board Resolution may authorize authentication of up to a maximum aggregate
principal amount from time to time without referring to aggregate principal amounts for specific interest periods) and (ii) set forth or determined in an Officers' Certificate of the Company.
If any of the terms of any Additional PIK Notes are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by an
Officers' Certificate of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate of the Company in accordance with Section 2.15(d)(ii). 


SECTION 2.16.    Issuance of Additional Notes  


        The Company shall be entitled, subject to its compliance with Section 4.09, to issue Additional Notes under this Indenture which shall have identical terms
as the Initial Notes issued on the Issue Date or the Exchange Notes, other than with respect to the date of issuance and issue price, first payment of interest and rights under a related Registration
Rights Agreement, if any. 


        With
respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers' Certificate, a copy of each which shall be delivered to the
Trustee, the following information: 


        (a)   the
aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; 


        (b)   the
issue price, the issue date and the CUSIP number and corresponding ISIN of such Additional Notes; and 



        (c)   whether
such Additional Notes shall be Transfer Restricted Securities and issued in the form of Initial Notes as set forth in Exhibit A to this Indenture or shall
be issued in the form of Exchange Notes as set forth in Exhibit A to this Indenture. 


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SECTION 2.17.    One Class of Notes  



        The Initial Notes issued on the Issue Date, any Additional PIK Notes, any Additional Notes and all Exchange Notes issued in exchange therefor shall be treated as
a single class for all purposes under this Indenture. 


SECTION 2.18.    CUSIP, ISIN or Other Similar Numbers  


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


ARTICLE 3
  REDEMPTION AND PREPAYMENT


SECTION 3.01.    Notices to Trustee  



        If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, the Company shall furnish to the Trustee, at
least 35 days but not more than 60 days (unless a shorter period is acceptable to the Trustee) before a redemption date, an Officers' Certificate setting forth (i) the clause of
this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price (expressed
as a percentage or principal amount). 


SECTION 3.02.    Selection of Notes to Be Redeemed  



        If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased
among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro
rata basis, by lot or in accordance with any other method the Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or less shall be
redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days
prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. 



        The
Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof
to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. 


SECTION 3.03.    Notice of Redemption  



        At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days 


40







 



prior
to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. 



        The
notice shall identify the Notes to be redeemed and shall state: 


        (a)   the
redemption date; 


        (b)   the
redemption price; 


        (c)   if
any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; 


        (d)   the
name and address of the Paying Agent; 


        (e)   that
Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; 


        (f)    that,
unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 


        (g)   the
paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and 



        (h)   that
no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. 


        At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided that the
Company shall have delivered to the Trustee, at least 35 days prior to the redemption date (unless a shorter period is acceptable to the Trustee), an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 


SECTION 3.04.    Effect of Notice of Redemption  


        Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption shall become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be conditional. 


SECTION 3.05.    Deposit of Redemption Price  



        Prior to 11:00 a.m. New York City time on the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest and Additional Interest, if any, on all Notes to be redeemed on that date. Subject to applicable abandoned property laws, the Trustee or the Paying Agent
shall promptly, upon request, return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed. 


        If
the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such 


41







 



unpaid
principal, in each case at the rate and in the manner provided in the Notes and in Sections 2.14 and 4.01 hereof. 


SECTION 3.06.    Notes Redeemed in Part  


        Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon receipt of an Authentication Order, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. 


SECTION 3.07.    Optional Redemption  


        (a)   Except
as set forth in clause (b) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to February 1, 2007. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest and Additional Interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on February 1 of
the years indicated below: 



	Year
 
	 	Percentage

	2007	 	102.000%
	2008	 	101.000%
	2009 and thereafter	 	100.000%






        If
the redemption date is on or after an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest and Additional Interest, if any,
will be paid to the Holder in whose name the Note is registered at the close of business on such record date, and no additional interest or Additional Interest, if any, will be payable to Holders
whose Notes will be subject to redemption by the Company. 


        (b)   Notwithstanding
the provisions of clause (a) of this Section 3.07, at any time prior to February 1, 2007, the Company may redeem (i) on any
one or more occasions up to 35% or (ii) 100% (but, other than as provided in the foregoing clause (i), not less than 100%) of the aggregate principal amount of Notes issued under this
Indenture (including any Additional PIK Notes and any Additional Notes) at a redemption price equal to 105.750% of the principal amount thereof on the redemption date, plus accrued and unpaid interest
and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings by the Company; provided that
(1) in the case of a redemption pursuant to clause (i) above, at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and (2) that such redemption shall occur within 90 days of the date of the closing of such
Equity Offering. 


        (c)   Any
redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof. 


SECTION 3.08.    Mandatory Redemption  


        Except as set forth in Sections 4.10 and 4.15, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 


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ARTICLE 4
  COVENANTS


SECTION 4.01.    Payment of Notes  


        The Company shall pay or cause to be paid the principal of or premium, if any, Additional Interest, if any, or interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, interest and Additional Interest, if any, shall be considered paid on the date due (a) if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal
of or premium, if any, Additional Interest, if any, or interest on the Notes then due and (b) if the Company elects to pay accrued interest on the Notes in the form of Additional PIK Notes
pursuant to Section 2.15 hereof, the Company issues to the Holder Additional PIK Notes in aggregate principal amount sufficient to pay all interest on the Notes then due. The Company shall pay
all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. 



        Subject
to Section 2.14 hereof, the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at
the rate equal to the then applicable interest rate on the Notes to the extent lawful; subject to Section 2.14 hereof, it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful. 


        The
Company shall make all premium, if any, and principal payments by wire transfer of immediately available funds to any Holder who shall have given written directions to the Company or
the Paying Agent to make such payments by wire transfer pursuant to the wire transfer instructions supplied to the Company or the Paying Agent by such Holder on or prior to the applicable record date.
The Company shall make all interest and Additional Interest payments by (a) wire transfer of immediately available funds to any Holder who shall have given written directions to the Company or
the Paying Agent to make such payments by wire transfer pursuant to the wire transfer instructions supplied to the Company or the Paying Agent by such Holder on or prior to the applicable record date
or (b) issuing Additional PIK Notes to the accounts specified by DTC (or, if Notes are held in the form of Definitive Notes, to the Holders by mail at their address set forth in the register of
Holders). All other payments on Notes shall be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments
by check mailed to the Holders at their address set forth in the register of Holders. 


        Cash
payments in respect of Notes represented by a Global Note (including interest, premium, if any, Additional Interest, if any, and principal payments) shall be made by wire transfer
of immediately available funds to the accounts specified by DTC. 


SECTION 4.02.    Maintenance of Office or Agency  



        The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at
the office of the Trustee, 100 Wall Street, 16th Floor, New York, New York (the "New York Corporate Trust Office"). 


43







 



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


        The
Company hereby designates the New York Corporate Trust Office as one such office or agency of the Company in accordance with Section 2.04. 


SECTION 4.03.    Reports  



        Whether or not required by the Commission, so long as any Notes are outstanding, the Company shall furnish to the Trustee and the Holders of Notes, within the
time periods specified in the Commission's rules and regulations: 



        (i)    all
quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if
the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified independent accountants; and 



        (ii)   all
current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. 




        If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include
a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in a "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company. 


        In
addition, following the consummation of the Exchange Offer contemplated by the Registration Rights Agreement, whether or not required by the Commission, the Company shall
file a copy of all of the information and reports referred to in clauses (i) and (ii) above with the Commission for public availability within the time periods specified in the
Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition,
the Company has agreed that, for so long as any Notes remain outstanding, it shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 



        The
Company also shall comply with the other provisions of TIA Section 314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's
compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers' Certificates). The Trustee shall have no duty or responsibility to review such reports, information or
documents. 


SECTION 4.04.    Compliance Certificate  



        (a)   The
Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing 


44







 

Officers
with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto). 


        (b)   The
Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, as soon as possible and in any event within 10 days after any Officer
becoming aware of any Event of Default, an Officers' Certificate specifying such Event of Default and what action the Company is taking or proposes to take with respect thereto. 


SECTION 4.05.    Taxes  


        The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent all material taxes, assessments and governmental
charges levied or imposed upon the Company or any Restricted Subsidiary, except such as are contested in good faith and by appropriate proceedings or where the failure to pay or discharge the same
would not have a material adverse effect on the ability of the Company to perform its obligations under the Notes or this Indenture. 


SECTION 4.06.    Stay, Extension and Usury Laws  


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


SECTION 4.07.    Restricted Payments  


        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: 


        (1)   declare
or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company's or any
of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company or payable in Equity
Interests (other than Disqualified Stock) of the Company); 


        (2)   purchase,
redeem or otherwise acquire or retire for value (including, without limitation, any payment in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent of the Company; 



        (3)   make
any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company that is subordinated to the
Notes, except payments of interest (or the equivalent of Additional Interest, if any) or payments of principal at the Stated Maturity thereof; or 


45







 




        (4)   make
any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as
"Restricted Payments"), 


unless,
at the time of and after giving effect to such Restricted Payment: 


        (1)   no
Default or Event of Default has occurred and is continuing or would occur immediately after giving effect to such Restricted Payment; 


        (2)   (A)
with respect to a Restricted Payment by the Company or any of Restricted Subsidiary of the Company (other than K&F Industries and any of its Restricted
Subsidiaries), the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in clause (i) of the first
paragraph of Section 4.09 or (B) with respect to a Restricted Payment by K&F Industries or any Restricted Subsidiary of K&F Industries, K&F Industries would, at the time of such
Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in clause (ii) of the first paragraph of Section 4.09; and 



        (3)   such
Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after
November 18, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7) and (8)(b) of the next succeeding paragraph), is less than the sum, without
duplication, of: 



        (a)   an
amount equal to the difference (but not less than zero) between (A) Cumulative Operating Cash Flow and (B) the product of 1.3 times Cumulative Total
Interest Expense, plus


        (b)   100%
of the fair market value of the Qualified Proceeds received by the Company since November 18, 2004 as a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the
Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the
Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination), plus


        (c)   to
the extent that any Restricted Investment that was made after the date of this Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of
(i) the return of capital with respect to such Restricted Investment, whether through interest payments, principal payments, dividends or other distributions or payments or Qualified Proceeds
(less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus



        (d)   to
the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after the date of this Indenture, the lesser of (i) the
fair market value of the Company's Investment in such Subsidiary as of the date of such redesignation and (ii) such fair market value as of the date on which such Subsidiary was most recently
designated as an Unrestricted Subsidiary plus the amount of any Investments in such Unrestricted Subsidiary subsequent to the date such Subsidiary was most recently designated as an Unrestricted
Subsidiary. 



46







 





        The
preceding provisions shall not prohibit: 


        (1)   the
payment of any dividend within 60 days after the date of declaration of the dividend, if at the date of declaration the dividend payment would have complied
with the provisions of this Indenture; 


        (2)   the
redemption, repurchase, retirement, defeasance or other acquisition of any Indebtedness subordinated to the Notes or of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock and
other than Equity Interests issued or sold to an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from
or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination);  provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (3)(b) of the preceding paragraph; 



        (3)   the
redemption, repurchase, retirement, defeasance or other acquisition of Indebtedness subordinated to the Notes with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; 


        (4)   the
payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis (or on a basis more
favorable to the Company and its Restricted Subsidiary); 


        (5)   so
long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company or any direct or indirect parent of the Company held by any then current or former director, officer or
employee of, or consultant to, the Company or any of its Restricted Subsidiaries issued pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or
agreement or the declaration and payment of dividends by the Company to, or the making of loans by the Company or any of its Restricted Subsidiaries to, any direct or indirect parent in order to
effectuate any such repurchase, redemption or other acquisition or retirement for value by such direct or indirect parent; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any fiscal year; provided that
the amount available in any given fiscal year shall be increased by the excess, if any, of (i) $5.0 million over (ii) the amount used pursuant to this clause (5) in the
immediately preceding two fiscal years; 


        (6)   so
long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, any payments made in connection with the consummation of the
Transactions on substantially the terms described in the Offering Memorandum; 


        (7)   the
declaration and payment of dividends by the Company to, or the making of loans to, any direct or indirect parent in amounts required for any direct or indirect
parent companies to pay: 



        (a)   franchise
taxes and other fees, taxes and expenses required to maintain their corporate existence, 


        (b)   federal,
state and local income taxes, to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries and, to the extent
of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries, 



        (c)   reasonable
salary, bonus and other benefits payable to directors, officers and employees of any direct or indirect parent company of the Company to the extent such
salaries, bonuses and 



47







 




other
benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries, and 


        (d)   general
corporate overhead expenses of any direct or indirect parent company of the Company to the extent such expenses are attributable to the ownership or operation of
the Company and its Restricted Subsidiaries; 




        (8)   so
long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, the repurchase or redemption of the Senior Preferred Stock
with (a) cash on hand or (b) the proceeds of, or in exchange for, Senior Preferred Redemption Debt; 


        (9)   if,
upon a Senior Preferred Change of Control, the Company irrevocably deposits with the Trustee, in the Change of Control Escrow Account, cash in U.S. dollars,
non-callable Government Securities or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient to repurchase the Notes
(including any principal, premium, if any, interest and Additional Interest, if any) upon the consummation of a Change of Control Offer, the repurchase or redemption of the Senior Preferred Stock; and 


        (10) so
long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, other Restricted Payments in an aggregate amount since the
date of this Indenture not to exceed $15.0 million. 


        The
amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this
covenant will be determined by (a) an executive officer of the Company if the value is less than $10.0 million or (b) in all other cases, by the Company's Board of Directors. 


SECTION 4.08.    Dividend and Other Payment Restrictions Affecting Subsidiaries  



        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: 


        (1)   pay
dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries; 


        (2)   make
loans or advances to the Company or any of its Restricted Subsidiaries; or 


        (3)   transfer
any of its properties or assets to the Company or any of its Restricted Subsidiaries. 


        However,
the preceding restrictions shall not apply to encumbrances or restrictions existing under or by reason of: 


        (1)   agreements
governing Existing Indebtedness and Credit Facilities as in effect on the date of this Indenture and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of those agreements, provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, as determined by the Board of Directors of the Company in good faith with respect
to such dividend and other payment restrictions than those contained in those agreements on the date of this Indenture; 


        (2)   this
Indenture, the Notes and any other agreement or instrument entered into after the date of this Indenture; provided
that such agreement or instrument is no more restrictive, taken as a whole, 


48







 



as
determined by the Board of Directors of the Company in good faith than this Indenture and the Notes; 


        (3)   applicable
law, rule, regulation or order (including agreements with regulatory authorities); 


        (4)   any
agreement or instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred or such Capital Stock was issued in connection with or in contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, including any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or refinancings of any such agreements or instruments, provided that the
amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, as determined by the Board of Directors
of the Company in good faith than those contained in the agreements governing such original agreement or instrument as in effect on the date of the acquisition, provided,
further, that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred; 



        (5)   customary
non-assignment provisions in leases, licenses or contracts entered into in the ordinary course of business; 


        (6)   Capital
Lease Obligations, mortgage financings or purchase money obligations for property acquired in the ordinary course of business that impose restrictions on that
property of the nature described in clause (3) of the preceding paragraph; 


        (7)   any
agreement for the sale or other disposition of assets or Capital Stock of a Restricted Subsidiary permitted under this Indenture that restricts the sale of assets,
distributions or loans by that Restricted Subsidiary pending its sale or other disposition; 



        (8)   Permitted
Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, as determined by the Board of Directors of the Company in good faith than those contained in the agreements governing the
Indebtedness being refinanced; 


        (9)   Liens
securing Indebtedness or other Obligations (i) of any of the Company's Restricted Subsidiaries or (ii) otherwise permitted to be incurred under
Section 4.12, which, in each case, limit the right of the debtor to dispose of the assets subject to such Liens; 



        (10) other
Indebtedness of K&F Intermediate Holdco or any of its Restricted Subsidiaries permitted to be incurred pursuant to an agreement entered into subsequent to the
date of this Indenture in accordance with Section 4.09, provided that the provisions relating to such encumbrance or restriction contained in
such Indebtedness are no more restrictive to the Company, taken as a whole, as determined by the Board of Directors of the Company in good faith than the provisions contained in the Credit Agreement
and in the indenture governing the Existing Notes, in each case, as in effect on the date of this Indenture; 


        (11) provisions
with respect to the disposition or distribution of assets or property in joint venture agreements; provided
that such restrictions apply only to the assets or property subject to such joint venture; and 


        (12) restrictions
on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. 


49







 



SECTION 4.09.    Incurrence of Indebtedness and Issuance of Preferred Stock  



        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and
the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that (i) the Company may incur Indebtedness (including Acquired Debt) and the Company may issue Disqualified Stock if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least 2.0 to 1.0, and (ii) K&F Industries and any of its Domestic Subsidiaries may incur Indebtedness (including Acquired Debt) and K&F
Industries and any of its Domestic Subsidiaries may issue Disqualified Stock if the Fixed Charge Coverage Ratio for K&F Industries' most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0, in each
case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period. 


        The
first paragraph of this covenant shall not prohibit: 


        (1)   the
incurrence by the Company or any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed $530.0 million, less the sum of all principal payments with respect to such Indebtedness pursuant to clause (A) of Section 4.10; 



        (2)   the
incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; 


        (3)   the
incurrence by the Company of Indebtedness represented by the Notes (including any Additional PIK Notes but excluding any Additional Notes); 


        (4)   (A)
Indebtedness incurred to finance the purchase, improvement or construction of property, plant or equipment (including through the purchase of all of the Capital
Stock of a Person) so long as such Indebtedness is secured by a Lien on the property, plant or equipment so purchased, improved or constructed and such Indebtedness does not exceed the value of such
property, plant or equipment so purchased or constructed or the value of such improvements and such Lien shall not extend to or cover other assets of the Company or any of its Restricted Subsidiaries
other than the property, plant or equipment so purchased, improved or constructed and the real property, if any, on which the property so constructed, improved or purchased, is situated and the
accessions, attachments, replacements and improvements thereto or (B) Indebtedness incurred in connection with any lease financing transaction in conjunction with the acquisition of new
property or improvements to existing property; provided that such lease financing transaction is consummated within 90 days of such acquisition
or completion of such improvements and the aggregate of the Indebtedness incurred pursuant to clauses (A) and (B) does not exceed $15.0 million during any fiscal year (such amount
is referred to as the "Maximum Amount"); provided that the Maximum Amount for each year shall be
increased by the excess, if any, of (a) $30.0 million over (b) the amount of expenditures made in reliance on the provisions of this clause (4) for the immediately
preceding two years; 


        (5)   the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness (other than intercompany Indebtedness) in exchange for, or the
net proceeds of which are used to redeem, repurchase, retire, defease, or otherwise refund, refinance, or replace Indebtedness 


50







 



that
was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (6) of this paragraph; 


        (6)   the
incurrence by the Company of Senior Preferred Redemption Debt; 


        (7)   the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries;  provided, however, that: 



        (a)   if
the Company is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect
to the Notes; and 


        (b)   (i) any
subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company, (ii) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company or (iii) the
designation of a Restricted Subsidiary that holds such Indebtedness as an Unrestricted Subsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this clause (7); 




        (8)   the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations; 



        (9)   the
guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries that was permitted to be incurred
by another provision of this Section 4.09; 


        (10) obligations
incurred in the ordinary course of business under (a) bankers acceptances or trade letters of credit which are to be repaid in full not more than one
year after the date on which such Indebtedness is originally incurred to finance the purchase of goods by the Company or a Restricted Subsidiary of the Company; (b) standby letters of credit
issued for the purpose of supporting (i) workers' compensation liabilities of the Company or any of its Restricted Subsidiaries as required by law, (ii) obligations with respect to
leases of the Company or any of its Restricted Subsidiaries, or (iii) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries;
(c) performance bonds and surety bonds, and refinancings thereof; and (d) guarantees of Indebtedness incurred in the ordinary course of business of suppliers, licensees, franchisees, or
customers in an aggregate amount not to exceed $5.0 million at any time outstanding; 


        (11) Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business, provided, however, that such Indebtedness is extinguished within five business days
of the Company or its applicable Restricted Subsidiary being advised of such incurrence; 


        (12) Indebtedness
under guarantees in respect of obligations of joint ventures of the Company or any of its Restricted Subsidiaries in aggregate principal amount not to
exceed $20.0 million at any one time; 


        (13) Indebtedness
incurred in connection with any sale and leaseback transaction; provided that the aggregate of the
Indebtedness incurred pursuant to this clause (13) shall not exceed $30.0 million at any time outstanding; 



        (14) Indebtedness
to repurchase shares, or cancel options to purchase shares, of Equity Interests of the Company or any Restricted Subsidiary of the Company or any direct or
indirect parent of the Company held by any then current or former director, officer or employee of, or consultant to, the Company or any of its Restricted Subsidiaries;  provided that the aggregate of
the Indebtedness incurred pursuant to this clause (14) shall not exceed $5.0 million in any fiscal year;  provided that the amount 


51







 



available
in any given fiscal year shall be increased by the excess, if any, of (i) $5.0 million over (ii) the amount used pursuant to this clause (14) in the immediately
preceding two fiscal years; 


        (15) Indebtedness
arising from any agreement providing for indemnities, guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the
performance of the acquired or disposed assets or similar obligations (other than guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets; 


        (16) the
incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt related to the acquisition of a Permitted Business if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence of Acquired Debt (the
"Relevant Fixed Charge Coverage Ratio") determined immediately after giving effect to such incurrence and the related acquisition (including through a
merger, consolidation or otherwise) is higher than the Relevant Fixed Charge Coverage Ratio determined immediately before giving effect to such incurrence and the related acquisition; 


        (17) the
issuance of any preferred stock by a Restricted Subsidiary of the Company to the Company or to any other wholly-owned Restricted Subsidiary of the Company; and 



        (18) the
incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance of Disqualified Stock or preferred stock of Restricted
Subsidiaries in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $25.0 million. 


        The
Company will not incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Obligations of the Company
subordinated to the Notes unless such Indebtedness will be subordinated to the Notes to at least the same extent as such subordinated Obligations. 



        If
any Non-Recourse Debt of an Unrestricted Subsidiary shall at any time cease to constitute Non-Recourse Debt or such Unrestricted Subsidiary shall be
redesignated a Restricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary. 


        For
purposes of determining compliance with this Section 4.09: 


        (1)   in
the event that an item of proposed Indebtedness meets the criteria of more than one of the categories described in clauses (1) through (18) above, or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole
discretion) such item of Indebtedness in any manner that complies with this Section 4.09; 


        (2)   the
accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness
with the same, or less onerous, terms, the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock, the accrual of dividends on Disqualified
Stock and the accretion of the liquidation preference of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;  provided, in each such case (except for Specified PIK Interest), that the amount thereof is included in the Fixed Charges of the Company; and
 


        (3)   for
the purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the
dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the earlier of the date that such
Indebtedness was incurred or the date that the Company or its applicable Restricted Subsidiary committed to incur such Indebtedness. 


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SECTION 4.10.    Asset Sales  


        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: 


        (1)   the
Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets
or Equity Interests issued or sold or otherwise disposed of (such fair market value to be determined on the date of contractually agreeing to such Asset Sale); 


        (2)   the
fair market value is determined (a) by an executive officer of the Company if the value is less than $10.0 million or (b) in all other cases, by
a resolution of the Company's Board of Directors, in either such case, as set forth in an Officers' Certificate delivered to the Trustee; and 


        (3)   at
least 75% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of
this clause (3), each of the following shall be deemed to be cash: 



        (a)   the
amount of any liabilities, as shown on the Company's or such Restricted Subsidiary's most recent balance sheet or in the notes thereto, of the Company or such
Restricted Subsidiary (other than liabilities of the Company that are by their terms subordinated to the Notes and contingent liabilities of the Company or any of its Restricted Subsidiaries) that are
assumed by the transferee of any such assets; and 


        (b)   any
securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are substantially concurrently, subject to
normal settlement periods, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received in that conversion); and 


        (c)   property
received as consideration for such Asset Sale that would otherwise constitute a permitted application of Net Proceeds (or other cash in such amount) under
clauses (B) or (D) under the next succeeding paragraph below. 




        Within
390 days (or, if the Senior Preferred Stock is outstanding, 325 days) after the receipt of any Net Proceeds from an Asset Sale, the Company or any of its Restricted
Subsidiaries may apply an amount of cash equal to the amount of those Net Proceeds at its option to: 



        (A)  reduce
or repurchase Indebtedness of (i) the Company that is pari passu in right of payment with the Notes
(provided that if the Company shall so reduce Obligations pari passu in right of payment with the Notes, the Company will offer to equally and ratably
reduce Obligations under the Notes by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of the Notes) or (ii) any Restricted Subsidiary of the Company; and, if
the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; 



        (B)  acquire
(including by way of merger or consolidation) all or substantially all of the assets of, or a majority of the Voting Stock of, another Permitted Business; 


        (C)  make
a capital expenditure relating to an asset used or useful in a Permitted Business; or 


        (D)  acquire
other long-term assets that are used or useful in a Permitted Business. 


        Pending
the final application of any Net Proceeds, the Company or any of its Restricted Subsidiaries may temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture. 


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        To
the extent that the Company and its Restricted Subsidiaries do not apply an amount of cash equal to the amount of such Net Proceeds from Asset Sales during such period as provided in
the second preceding paragraph the amount not so applied shall constitute "Excess Proceeds." No later than the 395th day (or, if the
Senior Preferred Stock is outstanding, the 330th day) after the Asset Sale (or, at the Company's option, an earlier date), if the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company shall make an offer (an "Asset Sale Offer") to all Holders of Notes and all holders of other Indebtedness that is  pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds (the "Offer Amount"). The offer price in any Asset Sale Offer will be equal to 100% of the principal amount (or accreted value, as
applicable) of the Notes and such other pari passu Indebtedness, plus accrued and unpaid interest and Additional Interest (or its equivalent with
respect to any such pari passu Indebtedness), if any, to the date of purchase, and will be payable in cash, in each case, in a minimum of $1,000
aggregate principal amount and integral multiples of $1.00 in excess thereof. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any
purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in such Asset
Sale Offer exceeds the amount of Excess Proceeds, the Excess Proceeds will be allocated by the Company to the Notes and such other pari passu
Indebtedness on a pro rata basis (based upon the respective principal amounts (or accreted value, if applicable) of the Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer) and the portion of each Note to be purchased will thereafter be determined by the Trustee on a pro rata basis among the Holders of such Notes with
appropriate adjustments such that the Notes may only be purchased in a minimum of $1,000 aggregate principal amount and integral multiples of $1.00 in excess thereof. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero. 


        Upon
the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer, shall state: 


        (1)   that
the Asset Sale Offer is being made pursuant to this Section 4.10 and that such Asset Sale Offer shall remain open for 20 Business Days; 


        (2)   the
Offer Amount attributable to the Notes, the purchase price and the purchase date of the Notes tendered pursuant to the Asset Sale Offer (the
"Purchase Date"); 


        (3)   that
any Note not tendered or accepted for payment shall continue to accrue interest and Additional Interest, if any; 


        (4)   that,
unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest, and Additional
Interest, if any; 


        (5)   that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase Date; 


        (6)   that
Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the offer period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal 


54







 



amount
of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; 


        (7)   that,
if the aggregate accreted value of Notes and aggregate principal amount of such other pari passu Indebtedness
tendered by Holders exceeds the Offer Amount, the Company shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata
basis on the basis of the aggregate accreted value of Notes and the aggregate principal amount of such other pari passu Indebtedness tendered (with such
adjustments as may be deemed appropriate by the Company so that only Notes in denominations of a minimum of $1,000 aggregate principal amount and integral multiples of $1.00 in excess thereof shall be
purchased); and 


        (8)   that
Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer). 


        On
or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes and such other  pari passu Indebtedness or
portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes,
and such other pari passuIndebtedness or portions thereof tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes,
and such other pari passu
Indebtedness or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.10. The Company, the Depositary or the Paying Agent, as the case may be,
shall on the Purchase Date mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company
shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the
Asset Sale Offer promptly after Purchase Date. 


        If
the Purchase Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any,
will be paid to the Holder in whose name a Note is registered at the close of business on such record date, and no interest or Additional Interest, if any, will be payable to Holders who tender Notes
pursuant to the Asset Sale Offer. 


        The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws
and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the
Asset Sale provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale
provisions of this Indenture by virtue of such conflict. 


SECTION 4.11.    Transactions with Affiliates  


        The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company or 


55







 



any
of its Restricted Subsidiaries (each, an "Affiliate Transaction") involving aggregate consideration in excess of $1.0 million, unless: 


        (1)   the
Affiliate Transaction is on terms that are at least as favorable to the Company or the relevant Restricted Subsidiary as those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person, provided that any such Affiliated Transaction shall be
conclusively deemed to be at least as favorable as the terms which could be obtained on an arm's length basis with an unrelated Person if such transaction is approved by a majority of the Company's
directors (including a majority of the disinterested members of the Board of Directors); and 


        (2)   the
Company delivers to the Trustee: 



        (a)   with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $2.0 million, a resolution of
the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors; and 


        (b)   with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, or if the
Company does not have any disinterested members, an opinion as to the fairness to the holders of the Notes of such Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing selected by the Company. 




        The
following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph: 


        (1)   transactions
between the Company or any of its Restricted Subsidiaries and any employee, officer or director of, or consultant to, the Company, any direct or indirect
parent company of the Company, or any of its Restricted Subsidiaries that are approved by the disinterested members of the Board of Directors; 


        (2)   reasonable
and customary directors' fees, indemnification and similar arrangements for officers, directors or employees, consulting fees, officer or employee salaries,
bonuses or employment agreements, compensation or employee benefit arrangements and incentive arrangements with any officer, director or employee of the Company, any direct or indirect parent company
of the Company or any of its Restricted Subsidiaries and payments under any indemnification arrangements permitted by applicable law; 


        (3)   transactions
between or among the Company and/or its Restricted Subsidiaries; 


        (4)   transactions
with a Person that is an Affiliate of the Company or any Restricted Subsidiary solely because the Company or any Restricted Subsidiary owns an Equity
Interest in, or controls, such Person; 


        (5)   the
pledge of Equity Interests of Unrestricted Subsidiaries to support the Indebtedness thereof; 


        (6)   issuances
and sales of Equity Interests (other than Disqualified Stock) to Affiliates of the Company; 


        (7)   Restricted
Payments that are permitted by Section 4.07; 


        (8)   the
payment of management fees and related expenses to Aurora Management Partners LLC and its Affiliates; provided that
such fees shall not, in the aggregate, exceed $2.0 million (plus out of pocket expenses) in any twelve-month period commencing after the date of this Indenture; 


56







 



        (9)   the
payment of transaction, consulting and advisory fees and related expenses to Aurora Management Partners LLC and its Affiliates for financial advisory, financing,
underwriting or placement services or in respect of other investment banking activities, including without limitation, in connection with acquisitions or divestitures, in each case, which payments are
(a) reasonably related to the services performed and (b) either (i) under $10.0 million in any fiscal year or (ii) approved by a majority of the members of the Board
of Directors of the Company; and 


        (10) the
payment of all fees and expenses related to the Acquisition Transactions, which are described in the Offering Memorandum. 


SECTION 4.12.    Liens  


        The Company shall not create, incur, assume or otherwise cause or suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or trade payables
(other than Permitted Liens) upon any of its property or assets, now owned or hereafter acquired, unless all payments due under this Indenture and the Notes are secured (i) in the case of Liens
securing Indebtedness that is pari passu in right of payment to the Notes, on an equal and ratable basis with the obligations so secured until such time
as such obligations are no longer secured by a Lien and (ii) in the case of Liens securing Indebtedness that
is expressly subordinate or junior in right of payment to the Notes, on a senior basis to the obligations so secured with the same relative priority as the Notes shall have to that subordinated or
junior Indebtedness until such time as such obligations are no longer secured by a Lien. 


SECTION 4.13.    Business Activities  



        The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would
not be material to the Company and its Subsidiaries taken as a whole. 


SECTION 4.14.    Corporate Existence  


        Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended
from time to time) of the Company or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries, except where the
failure to do so would not have a material adverse effect on the ability of the Company to perform its obligations under the Notes or this Indenture. 


SECTION 4.15.    Offer to Repurchase upon Change of Control  


        If a Change of Control occurs, the Company will be required to make an offer (a "Change of Control Offer") to each
Holder of Notes, unless the Company has exercised its right to redeem all the Notes as described under Section 3.07, to repurchase all or any part (equal to $1,000 or an integral multiple of
$1,000) of that Holder's Notes on the terms set forth in this Indenture. In the Change of Control Offer, the Company will offer a payment in cash (the "Change of Control
Payment") equal to 101% of the aggregate principal amount of the Notes repurchased plus accrued and unpaid interest and Additional Interest, if any, on the Notes repurchased,
to the date of purchase (the "Change of Control Payment Date"). Within 30 days following any Change of Control, the Company shall mail a notice
to each Holder stating: (i) that the Change of Control Offer is being made pursuant to this Section 4.15 (and describing the transaction or transactions that constitute the Change of
Control) and that all Notes tendered shall be accepted for payment; (ii) the purchase price and Change of Control Payment Date, which shall be no earlier than 30 days and no later than
60 days from the date such 


57







 



notice
is mailed; (iii) that any Note not tendered shall continue to accrue interest and Additional Interest, if any; (iv) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest and Additional Interest, if any, after the Change of Control Payment Date;
(v) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(vi) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his
election to have the Notes purchased; and (vii) that Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, which unpurchased portion must be in a minimum principal amount of $2,000 or an integral multiple of $1.00 in excess thereof. 


        The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws
and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with
the Change of Control provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this
Section 4.15 by virtue of such conflict. 


        On
the Change of Control Payment Date, the Company shall, to the extent lawful: 


        (1)   accept
for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 


        (2)   deposit
with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 



        (3)   deliver
or cause to be delivered to the Trustee the Notes properly accepted together with an Officers' Certificate stating the aggregate principal amount of the Notes or
portions of Notes being purchased by the Company. 


        The
Paying Agent shall promptly mail to each Holder of Notes validly tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any;  provided that each new Note will be in a minimum
principal amount of $2,000 or an integral multiple of $1.00 in excess thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 


        If
the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional
Interest, if any, shall be paid (or Additional PIK Notes shall be issued, in the case the Company elects to pay interest in the form of Additional PIK Notes pursuant to Section 2.15 hereof) to
the Holder in whose name a Note is registered at the close of business on such record date, and no other interest or Additional Interest, if any, will be payable to Holders who tender pursuant to the
Change of Control Offer. 


        The
Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise
in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer 


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made
by the Company and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer or if an irrevocable notice of redemption has been given pursuant to
Section 3.03. 


SECTION 4.16.    Future Subsidiary Guarantees  


        The Company will cause each Restricted Subsidiary that guarantees any Indebtedness of the Company to execute and deliver to the Trustee a supplemental indenture
in form and substance set forth in Exhibit E pursuant to which such Restricted Subsidiary will guarantee payment of the Notes; provided that, if
such Indebtedness is by its terms subordinated in right of payment to the Notes, any such guarantee of such Restricted Subsidiary with respect to such Indebtedness shall be subordinated to such
Guarantor's Subsidiary Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes. 


        Each
Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Subsidiary Guarantee,
as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. 


SECTION 4.17.    Designation of Unrestricted Subsidiaries  



        The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the first paragraph of Section 4.07 or
Permitted Investments, as determined by the Company. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default. 


        All
Subsidiaries of Unrestricted Subsidiaries shall be automatically deemed to be Unrestricted Subsidiaries. All designations of Subsidiaries as Unrestricted Subsidiaries and revocations
thereof must be evidenced by filing with the Trustee resolutions of the Board of Directors of the Company and an Officers' Certificate certifying compliance with the foregoing provisions. 


SECTION 4.18.    Payments for Consent  



        The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of
any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the applicable time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 


ARTICLE 5
  SUCCESSORS


SECTION 5.01.    Merger, Consolidation or Sale of Assets  


        The Company may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey, lease or 


59







 



otherwise
dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person,
unless: 


        (1)   either:
(a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company)
or to which such sale, assignment, transfer, conveyance, lease or other disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United
States or the District of Columbia; 


        (2)   the
Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance, lease
or other disposition has been made assumes all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to
the Trustee; 


        (3)   immediately
after such transaction no Default or Event of Default exists; and 


        (4)   the
Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance,
lease or other disposition has been made will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning
of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in clause (i) of
the first paragraph of Section 4.09. 


        For
purposes of this Section, the sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the properties and assets of one or more Restricted
Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Restricted Subsidiaries, would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. 


        Notwithstanding
the preceding clause (4), (x) any Restricted Subsidiary may consolidate with, merge into, sell, assign, convey, lease or otherwise transfer all or part of
its properties and assets to the Company or to any other Restricted Subsidiary and (y) the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company
in another jurisdiction to realize tax benefits. 


SECTION 5.02.    Successor Corporation Substituted  



        Upon any consolidation or merger, or any sale, assignment, transfer, conveyance or other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, conveyance
or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, conveyance or other disposition, the provisions of this
Indenture referring to the Company shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein. The predecessor company shall be relieved from the obligation to pay the principal of and interest on the Notes (and its
obligations to the Trustee pursuant to Section 7.07) only in the case of a sale or other disposition of all or substantially all of the properties and assets of all of the Company and its
Restricted Subsidiaries taken as a whole that meets the requirements of Section 5.01 hereof. The successor Person shall execute a supplemental indenture in form and substance satisfactory to
the Trustee and deliver an Opinion of Counsel satisfactory to the Trustee to the Trustee within ten Business Days of the date of any such consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the assets of the Company. 


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ARTICLE 6
  DEFAULTS AND REMEDIES


SECTION 6.01.    Events of Default  


        Each of the following is an Event of Default: 


        (1)   default
for 30 days in the payment when due of interest on, or Additional Interest with respect to, the Notes; 


        (2)   default
in payment when due of the principal of, or premium, if any, on the Notes; 


        (3)   failure
by the Company to comply with any of the provisions of Section 5.01 hereof; 


        (4)   failure
by the Company or any of its Restricted Subsidiaries to purchase Notes tendered pursuant to an offer required by Section 4.10 or Section 4.15
hereof; 


        (5)   failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice to comply with any of the other agreements in this Indenture; 


        (6)   default
under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed of
the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture, if that default: 



        (a)   is
caused by a failure to pay at the final Stated Maturity the principal amount of such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or 


        (b)   results
in the acceleration of such Indebtedness prior to its Stated Maturity, 



and,
in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more; 





        (7)   failure
by the Company or any of its Subsidiaries to pay final judgments (not subject to appeal) aggregating in excess of $15.0 million, which judgments are not
paid, discharged or stayed within a period of 60 days after the date on which the right to appeal has expired; 


        (8)   except
as permitted by this Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to
be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; 


        (9)   the
Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law: 



        (a)   commences
a voluntary case, 


        (b)   consents
to the entry of an order for relief against it in an involuntary case, 


        (c)   consents
to the appointment of a Note Custodian of it or for all or substantially all of its property, 


        (d)   makes
a general assignment for the benefit of its creditors, or 


        (e)   generally
is not paying its debts as they become due; and 



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        (10) a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 



        (a)   is
for relief against the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary in an involuntary case; 


        (b)   appoints
a Custodian of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or for all or substantially all of the property of the Company
or any of its Restricted Subsidiaries that is a Significant Subsidiary; or 



        (c)   orders
the liquidation of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary; and the order or decree remains unstayed and in effect for
60 consecutive days. 




        The
term "Custodian" means any receiver, trustee, assignee, liquidation, sequestrator or similar official under any Bankruptcy Law. 


SECTION 6.02.    Acceleration  


        In the case of an Event of Default arising from clause (9) or (10) of the first paragraph of Section 6.01, with respect to the Company or any
Restricted Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes, by
notice in writing to the Trustee and the Company designated as a "Notice of Default," may declare all the Notes to be due and payable and, upon any such declaration, such principal amount (and
premium, if any) and accrued interest, notwithstanding anything contained in this Indenture or the Notes to the contrary, will become immediately due and payable. Any such declaration with respect to
the Notes may be annulled by the Holders of a majority in aggregate principal amount of the then outstanding Notes upon the conditions set forth herein. 



        Notwithstanding
the foregoing, if an Event of Default specified in clause (6) of Section 6.01 shall have occurred and be continuing, such Event of Default and any
consequential acceleration shall be automatically rescinded if (i) the Indebtedness that is the subject of such Event of Default has been repaid, or (ii) if the default relating to such
Indebtedness is waived or cured and if such Indebtedness has been accelerated, then the Holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness. 


        Any
such declaration with respect to the Notes may be rescinded and annulled by the Holders of a majority in aggregate principal amount of the outstanding Notes by written notice to the
Trustee, except a continuing Default or Event of Default in the payment of principal of, or interest or premium or Additional Interest, if any, on the Notes, if (i) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction, (ii) all existing Events of Default have been cured or waived except nonpayment of principal of or interest on the
Notes that has become due solely by such declaration of acceleration, (iii) to the extent the payment of such interest is lawful, interest (at the same rate specified in the Notes) on overdue
installments of interest and overdue payments of principal, which has become due otherwise than by such declaration of acceleration, has been paid, (iv) the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances and (v) in the event of the cure or waiver of a Default or Event of Default of the type described
in Section 6.01(9) and (10) the Trustee has received an Officers' Certificate and Opinion of Counsel that such Default or Event of Default has been cured or waived. No such rescission
shall affect any subsequent Default or impair any right consequent thereto. 


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SECTION 6.03.    Other Remedies  


        If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium on, Additional Interest,
if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. 


        The
Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of
a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law. 


SECTION 6.04.    Waiver of Past Defaults  



        Subject to Section 9.02 and in any event in accordance with the conditions set forth in the last paragraph of Section 6.02, Holders of not less than
a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Additional Interest on, or interest on the Notes (including in connection with
an offer to purchase); provided that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from such acceleration, so long as
such acceleration was not the result of a payment default. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 


SECTION 6.05.    Control by Majority  


        Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any
remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 


SECTION 6.06.    Limitation on Suits  


        A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: 



        (a)   the
Holder of a Note gives to the Trustee written notice of a continuing Event of Default; 


        (b)   the
Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; 


        (c)   such
Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; 


        (d)   the
Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and 



        (e)   during
such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with
the request. 




        A
Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 


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SECTION 6.07.    Rights of Holders of Notes to Receive Payment  


        Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Additional Interest, if any,
and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the consent of such Holder. 


SECTION 6.08.    Collection Suit by Trustee  


        If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of principal of, premium and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel. 


SECTION 6.09.    Trustee May File Proofs of Claim  


        The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and
all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 


SECTION 6.10.    Priorities  



        After an Event of Default, any money or other property distributable in respect of the Company's obligations under this Indenture shall be paid in the following
order: 


        First:    to the Trustee (including any predecessor Trustee), its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 


        Second:    to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Additional Interest, if any,
and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Additional Interest, if any and interest,
respectively; and 


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        Third:    to the Company or to such party as a court of competent jurisdiction shall direct in writing. 



        The
Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 


SECTION 6.11.    Undertaking for Costs  


        In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee,
a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding
Notes. 


ARTICLE 7
  TRUSTEE


SECTION 7.01.    Duties of Trustee  


        (a)   If
an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. 


        (b)   Except
during the continuance of an Event of Default: 



        (i)    the
duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 



        (ii)   in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture. 




        (c)   The
Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 



        (i)    this
paragraph does not limit the effect of paragraph (b) or (d) of this Section; 


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


        (iii)  the
Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to
Section 6.05 hereof. 




        (d)   Whether
or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and
(e) of this Section. 


        (e)   No
provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any
of its rights and powers 


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under
this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. 


        (f)    The
Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law. 


SECTION 7.02.    Rights of Trustee  



        (a)   The
Trustee may, in the absence of bad faith on its part, conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated in the document. 


        (b)   Before
the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel selected by it and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 


        (c)   The
Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. 


        (d)   The
Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it
by this Indenture. 


        (e)   Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the
Company. 


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


        (g)   Any
request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a Board Resolution. 


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


        (i)    The
Trustee shall not be deemed to have notice, nor shall it be charged with knowledge, of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of such Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes
and this Indenture. 


        (j)    The
rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall
be enforceable by, the Trustee 


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in
each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. 


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


        (l)    In
no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss
of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 


        (m)  The
Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics;
riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental
action. 


SECTION 7.03.    Individual Rights of Trustee  


        The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. If the Trustee does become a creditor of the Company, this indenture limits its rights to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any such claim as security or otherwise. However, in the event that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for
permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 


SECTION 7.04.    Trustee's Disclaimer  



        The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes or any security for the payment
of the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture,
it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. 


SECTION 7.05.    Notice of Defaults  



        If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium and Additional
Interest, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes. 


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SECTION 7.06.    Reports by Trustee to Holders of the Notes  


        Within 60 days after each May 15 beginning with the May 15 following the Issue Date, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred
within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2) to the extent applicable. The Trustee shall also
transmit by mail all reports as required by TIA § 313(c). 


        A
copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the Commission and each stock exchange on which the Notes are
listed in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or any delisting thereof. 


SECTION 7.07.    Compensation and Indemnity  



        The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon written request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel. 


        The
Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence or bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. 



        The
obligations of the Company under this Section 7.07 shall survive the resignation or removal of the Trustee, the satisfaction and discharge of this Indenture and the
termination of this Indenture. 


        To
secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held
in trust to pay principal and interest on particular Notes. Such Lien shall survive the resignation or removal of the Trustee, the satisfaction and discharge of this Indenture and the termination of
this Indenture. 


        In
addition and without prejudice to its rights hereunder, when the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(9) or
(10) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law. 


SECTION 7.08.    Replacement of Trustee  



        A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment
as provided in this Section. 


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        The
Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: 


        (a)   the
Trustee fails to comply with Section 7.10 hereof; 


        (b)   the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 


        (c)   a
Custodian or public officer takes charge of the Trustee or its property; or 


        (d)   the
Trustee becomes incapable of acting. 


        If
the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. 


        If
a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of Notes of at least
10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 



        If
the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may
petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 


        A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of
the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. 


SECTION 7.09.    Successor Trustee by Merger, etc.  



        If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person, the successor
Person without any further act shall be the successor Trustee. 


SECTION 7.10.    Eligibility; Disqualification  


        There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state
thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and
surplus of at least $50 million as set forth in its most recent published annual report of condition. 


        This
Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b). Nothing
herein shall prohibit the Trustee from making the application to the Commission referred to in the penultimate paragraph of Section 310(b) of the TIA. 


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        For
purposes of Section 310(b)(1) of the TIA and to the extent permitted thereby, the Trustee shall not be deemed to have a conflicting interest arising from its capacity as
trustee in respect of the indenture governing the Existing Notes. 


SECTION 7.11.    Preferential Collection of Claims Against the Company  



        The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been
removed shall be subject to TIA § 311(a) to the extent indicated therein. 


ARTICLE 8
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE


SECTION 8.01.    Option to Effect Legal Defeasance or Covenant Defeasance  



        The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either
Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article Eight. 


SECTION 8.02.    Legal Defeasance and Discharge  


        Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors, if any,
shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from all of its obligations with respect to all outstanding Notes
(including any Subsidiary Guarantees) and this Indenture on the date the conditions set forth below are satisfied and, if applicable, the Guarantors shall be deemed to have been discharged with
respect to their Subsidiary Guarantees (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company and the Guarantors,
if any, shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including any Subsidiary Guarantees), which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes, the Subsidiary Guarantees, if any, and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the
same); provided that the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders
of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of or premium, if any, Additional Interest, if
any, or interest on the Notes when such payments are due, (b) the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes and mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors', if any, obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. 


SECTION 8.03.    Covenant Defeasance  


        Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and the Guarantors, if any, shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Article 4 (other those in Sections 4.01,
4.02, 4.06 and 4.14) and in clause (3) of Section 5.01(4) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter 


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be
deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and any Subsidiary Guarantees, the Company and the Guarantors, if applicable, may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such Notes and any Subsidiary Guarantees shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(6) through
6.01(8) hereof shall not constitute Events of Default. 


SECTION 8.04.    Conditions to Legal or Covenant Defeasance  


        The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: 


        (1)   the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank or
firm of independent public accountants, to pay the principal of, or interest and premium and Additional Interest, if any, on the outstanding Notes on the Stated Maturity or on the applicable
redemption date specified by the Company, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; 


        (2)   in
the case of an election under Section 8.02 hereof, the Company has delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee
confirming that: 



        (a)   the
Company has received from, or there has been published by, the Internal Revenue Service a ruling; or 


        (b)   since
the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of
counsel will confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; 




        (3)   in
the case of an election under Section 8.03 hereof, the Company has delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 


        (4)   no
Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; 


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        (5)   such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than
this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; 



        (6)   the
Company must have delivered to the Trustee an opinion of counsel, subject to customary qualifications, to the effect that after the 91st day following the deposit,
no trust funds will be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or in connection with Covenant Defeasance,
such trust funds will be subject to a first priority lien in favor of the Trustee for the benefit of the Holders of Notes; 


        (7)   the
Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes
over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and 


        (8)   the
Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance
or the Covenant Defeasance have been complied with. 


SECTION 8.05.    Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions  


        Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee
(or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal of or premium, if any, Additional Interest, if any, or interest, but
such money need not be segregated from other funds except to the extent required by law. 


        The
Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes. 


        Anything
in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 


SECTION 8.06.    Repayment to the Company  


        Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or premium, if any, Additional
Interest, if any, or interest on the Notes and remaining unclaimed for two years after such principal, and premium, if any, Additional Interest, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as 


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trustee
thereof, shall thereupon cease; provided that the Trustee or such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company. 


SECTION 8.07.    Reinstatement  


        If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and, if any, the Guarantors' obligations under this Indenture and the Notes and, if applicable, the Subsidiary Guarantees shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as
the case may be; provided that, if the Company has made any payment of principal of, premium, if any, Additional Interest, if any, or interest on any
Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying
Agent. 


ARTICLE 9
  AMENDMENT, SUPPLEMENT AND WAIVER


SECTION 9.01.    Without Consent of Holders of Notes  


        Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee may amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note to: 


        (1)   cure
any ambiguity, defect or inconsistency; 


        (2)   provide
for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code); 


        (3)   provide
for the assumption of the Company's obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Company's
assets; 


        (4)   make
any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the rights under this Indenture of any
such Holder; 


        (5)   provide
for the issuance of Additional Notes in accordance with the provisions set forth in this Indenture; 


        (6)   evidence
and provide for the acceptance of an appointment of a successor trustee; 


        (7)   conform
this Indenture or the Notes to the "Description of Notes" set forth in the Offering Memorandum; 


        (8)   add
Subsidiary Guarantees with respect to the Notes; or 


        (9)   comply
with requirements of the Commission in order to effect or maintain the qualification of the indenture under the TIA. 


        Upon
the request of the Company accompanied by a resolution of the Board of Directors of the Company authorizing the execution of any such amended or supplemental indenture, and upon
receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the 


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Company
in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. 


SECTION 9.02.    With Consent of Holders of Notes  


        Except as provided in Section 9.01 or below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture and the Notes
may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or
compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class
(including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.09 hereof shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02. 


        However,
without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a nonconsenting Holder): 


        (1)   reduce
the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 


        (2)   reduce
the principal of (or the premium on) or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to the covenants contained in Section 4.10 and Section 4.15); 


        (3)   reduce
the rate of or change the time for payment of interest or Additional Interest on any Note; 


        (4)   waive
a Default or Event of Default in the payment of principal of, or interest or premium or Additional Interest, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration); 


        (5)   make
any Note payable in currency other than that stated in the Notes; 


        (6)   make
any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or
interest or premium or Additional Interest, if any, on the Notes; 


        (7)   waive
a redemption payment with respect to any Note (other than a payment required by Section 4.10 or Section 4.15); 


        (8)   release
any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture; or 


        (9)   make
any change in the preceding amendment and waiver provisions. 


        In
addition, any amendment to, or waiver of, the provisions of this Indenture relating to subordination that adversely affects the rights of the Holders of the Notes will require the
consent of the Holders of at least 75% in aggregate principal amount of Notes then outstanding. 


        Upon
the request of the Company accompanied by a resolution of the Board of Directors of the Company authorizing the execution of any such amended or supplemental Indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as 


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aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture. 


SECTION 9.03.    Compliance with Trust Indenture Act  


        Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in
effect. 


SECTION 9.04.    Revocation and Effect of Consents  



        Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. 


SECTION 9.05.    Notice of Amendment; Notation on or Exchange of Notes  



        After any amendment under this Article becomes effective, the Company shall mail to Holders of Notes a notice briefly describing such amendment. The failure to
give such notice to all Holders of Notes, or any defect therein, shall not impair or affect the validity of an amendment under this Article. 


        The
Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the
Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 



        Failure
to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. 


        SECTION 9.06.    Trustee to Sign Amendments, etc.


        The
Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article 9 if the amendment or supplement, in the sole discretion of the Trustee, does not
adversely affect the rights, duties, liabilities or immunities of the Trustee. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 


ARTICLE 10
  SUBSIDIARY GUARANTEES


SECTION 10.01.    Guarantee  



        (a)   Subject
to this Article 10, each of the Guarantors, if any, hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to 


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the
Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: 



        (i)    the
principal of, premium and Additional Interest, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof, and 


        (ii)   in
case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. 




        Failing
payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. 


        (b)   The
Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. 


        (c)   Each
Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Subsidiary Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. 


        (d)   If
any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect. 


        (e)   Each
Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment
in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the
maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. 



        (f)    The
Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under the Subsidiary Guarantee. 


SECTION 10.02.    Limitation on Guarantor Liability  


        Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state
law to the extent 


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applicable
to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be
limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving
effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this
Article 10, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance. 


SECTION 10.03.    Guarantors May Consolidate, etc., on Certain Terms  


        No Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor
is the surviving Person), another Person, other than the Company or another Guarantor, unless: 


        (1)   immediately
after giving effect to such transaction, no Default or Event of Default exists; and 


        (2)   either:




        (a)   the
Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the
obligations of that
Guarantor under this Indenture (including its Subsidiary Guarantee) and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the trustee; or 



        (b)   the
Net Proceeds of such sale or other disposition will be required to be applied in accordance with the applicable provisions of this Indenture. 




SECTION 10.04.    Releases of Subsidiary Guarantees  


        The Subsidiary Guarantee of a Guarantor will be released: 


        (1)   in
connection with any sale, disposition or other transfer (including through merger or consolidation) of (x) the Equity Interests of such Guarantor following
which such Guarantor is no longer a Subsidiary of the Company or (y) all or substantially all the assets of the applicable Guarantor, in each case, to a Person that is not (either before or
after giving effect to such transaction) a Subsidiary of the Company if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture; 


        (2)   upon
the release or discharge of the guarantee by such Guarantor of Indebtedness of the Company which resulted in the obligation to guarantee the Notes; 


        (3)   in
connection with the Legal Defeasance of the Notes and the Subsidiary Guarantees; or 



        (4)   if
the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the applicable provisions of this Indenture. 


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ARTICLE 11
  SATISFACTION AND DISCHARGE


SECTION 11.01.    Satisfaction and Discharge  



        This Indenture shall be discharged and will cease to be of further effect as to all Notes and Subsidiary Guarantees issued hereunder, except as to surviving
rights of registration of transfer or exchange of the Notes, when: 


        (a)   either:




        (i)    all
Notes that have been previously authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has
previously been deposited in trust or segregated and held in trust by the Company and is thereafter repaid to the Company or discharged from the trust) have been delivered to the Trustee for
cancellation; or 


        (ii)   all
Notes that have not been previously delivered to the Trustee for cancellation (A) have become due and payable by reason of the mailing of a notice of
redemption or otherwise or (B) will become due and payable at their maturity within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of a notice of redemption by the Trustee, and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely
for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not previously delivered to the Trustee for cancellation for principal, premium, if any, and interest and Additional
Interest, if any, on the Notes to the date of deposit, in the case of Notes that have become due and payable, or to the Stated Maturity or redemption date, as the case may be; 




        (b)   the
Company or any Guarantor has paid or caused to be paid all other sums payable by it under this Indenture; 


        (c)   no
Default or Event of Default has occurred and is continuing on the date of such deposit or shall occur as a result of such deposit and such deposit shall not result in
a breach or violation of, or constitute a default under, any other instrument to which the Company is a party or by which the Company or any Guarantor is bound; and 


        (d)   the
Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be. 


        In
addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent under this Indenture relating to the
satisfaction and discharge of this Indenture have been satisfied. 


        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07 and, if money shall have been deposited with the
Trustee pursuant to subclause (C) of Clause (ii) of this Section, the obligations of the Trustee under Section 11.02 shall survive. 


SECTION 11.02.    Application of Trust Funds  


        Subject to Section 11.03 hereof, all cash and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee
pursuant to Section 11.01 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent 


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(including
the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and
interest and Additional Interest, if any, but such cash and securities need not be segregated from other funds except to the extent required by law. 


SECTION 11.03.    Repayment to Company  


        Any cash or non-callable Government Securities deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment
of the principal of, premium, if any, or interest or Additional Interest, if any, on, any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest or
Additional Interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder shall
thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such cash and securities, and all liability of
the Company as trustee thereof, shall thereupon cease; provided that the Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such cash and securities remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such cash and securities then remaining will be
repaid to the Company. 



SECTION 11.04.    Reinstatement  


        If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Sections 11.01
and 11.02, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's and any
Guarantor's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Sections 11.01 and 11.02 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Sections 11.01 and 11.02 hereof, as the case may be; provided that, if the
Company makes any payment of principal of, premium on, if any, or interest or Additional Interest, if any, on any Note following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 


ARTICLE 12
  MISCELLANEOUS


SECTION 12.01.    Trust Indenture Act Controls  



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


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SECTION 12.02.    Notices  



        Any notice or communication by the Company or the Trustee shall be in writing (which may be a facsimile, receipt confirmed) and delivered in person or mailed by
first class mail addressed as follows: 





If
to the Company or any Guarantor: 


K&F
Parent, Inc.

c/o K&F Industries, Inc.

600 Third Avenue

27th Floor

New York, NY 10016

Attn: General Counsel

Fax: (212) 297-0900 


With
a copy to: 



Gibson,
Dunn & Crutcher LLP

333 Grand Avenue

Los Angeles, CA 90071

Attention: Bruce D. Meyer

Facsimile: (213) 229-6979 


If
to the Trustee: 


U.S.
Bank National Association

Goodwin Square

224 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust/C. Silva

Facsimile: (860) 241-6881

Re: K&F Parent, Inc. 






        The
Company, any Guarantor or the Trustee, by notice to the other may designate additional or different addresses for subsequent notices or communications. 



        All
notices and communications (other than those sent to Holders) shall be in writing and shall be deemed to have been duly given when received. 


        Any
notice or communication to a Holder shall be mailed by first class mail to its address shown on the register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. 


        If
the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. 


SECTION 12.03.    Communication by Holders of Notes with Other Holders of Notes  


        Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c). 


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SECTION 12.04.    Certificate and Opinion as to Conditions Precedent  


        Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 


        (a)   an
Officers' Certificate (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions
precedent (including any covenants compliance with which constitutes a condition precedent) provided for in this Indenture relating to the proposed action have been satisfied; and 


        (b)   an
Opinion of Counsel (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions
precedent (including any covenants compliance with which constitutes a condition precedent) have been satisfied. 


        In
any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of,
only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such eligible
and qualified Persons as to other matters, and any such Person may certify or given an opinion as to such matters in one or several documents. 


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


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


SECTION 12.05.    Statements Required in Certificate or Opinion  



        Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to
TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include: 


        (a)   a
statement that the person(s) making such certificate or opinion has read such covenant or condition; 


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


        (c)   a
statement that, in the opinion of such person, he or she has or they have made such examination or investigation as is necessary to enable such person or persons to
express an informed opinion as to whether or not such covenant or condition has been satisfied; and 


        (d)   a
statement as to whether or not, in the opinion of such persons, such condition or covenant has been satisfied. 


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SECTION 12.06.    Rules by Trustee and Agents  


        The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions. 


SECTION 12.07.    No Personal Liability of Directors, Officers, Employees and Stockholders  



        No director, officer, employee, incorporator, Affiliate or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of
the Company or the Guarantors under the Notes, this Indenture, the Subsidiary Guarantees or the Registration Rights Agreement, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of a Note by accepting such Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The
wavier may not be effective to waive liabilities under the federal securities laws. 



SECTION 12.08.    Governing Law  


        THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 


SECTION 12.09.    No Adverse Interpretation of Other Agreements  


        This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture. 


SECTION 12.10.    Successors  


        All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.04. 


SECTION 12.11.    Severability  



        In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby to the extent permitted by applicable law. 


SECTION 12.12.    Counterpart Originals  


        The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 


SECTION 12.13.    Table of Contents, Headings, etc.  



        The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 


SECTION 12.14.    Benefits of Indenture  


        Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable 


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right,
remedy or claim under this Indenture, except as may otherwise be provided pursuant to this Indenture with respect to such Notes. 


SECTION 12.15.    Legal Holidays  


        In any case where any interest payment date, redemption date or maturity of any Note, or any date on which a Holder has the right to convert his Note, shall not
be a Business Day at any place of payment, then (notwithstanding any other provision of this Indenture or of the Notes (other than a provision of any Note which specifically states that such provision
shall apply in lieu of this Section)) payment of interest or principal (and premium, if any), or conversion of such Note need not be made at such place of payment on such date, but may be made on the
next succeeding Business Day at such place of payment with the same force and effect as if made on the interest payment date or redemption date, or at the maturity, or on such date for conversion, as
the case may be. 


[Signatures
on following page] 


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        IN
WITNESS WHEREOF, the parties hereto have executed this Indenture this 11th of February 2005. 



	 	 	K&F PARENT, Inc.
	

 	
 	

By:	

/s/  KENNETH M. SCHWARTZ      

	 	 	 	Name:	Kenneth M. Schwartz
	 	 	 	Title:	President and Chief Executive Officer
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION, as Trustee
	

 	
 	

By:	

/s/  KATHY L. MITCHELL      

	 	 	 	Name:	Kathy L. Mitchell
	 	 	 	Title:	Vice President




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   EXHIBIT A  


[Insert the Global Note Legend, if applicable, pursuant to the provisions of the Indenture] 


[Insert the Private Placement Legend, if applicable, pursuant to the provisions of the Indenture] 


[Insert the Regulation S Legend, if applicable, pursuant to the provisions of the Indenture] 


CUSIP
No.

ISIN No. 


[Face
of Note] 


111/2%
Senior PIK Notes due 2015 


Principal
amount $                  


K&F PARENT, INC.  


K&F
Parent, Inc., a Delaware corporation (the "Company"), promises to pay to                        , or registered assigns, the
principal sum of                        Dollars
on                        ,
20[    ] [or such greater or lesser amount as may be indicated on Schedule A hereto]1. 


Interest
Payment Dates: February 1 and August 1, commencing                        ,
        . 


Record
Dates: January 15 and July 15 


Additional
provisions of this Note are set forth on the other side of this Note. 




	1
	If
this Note is a Global Note, include this provision. 


A-1







 

Dated:




	 	 	K&F PARENT, INC.
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 





TRUSTEE'S
CERTIFICATE OF AUTHENTICATION 


This
is one of the [Global] Notes referred

to in the within-mentioned Indenture: 


U.S.
BANK NATIONAL ASSOCIATION,

    as Trustee 



	By:	 	    
 Authorized Signatory	 




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[FORM OF REVERSE OF NOTES]

111/2% Senior PIK Notes due 2015  


        Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 



        (1)   Interest. K&F Parent, Inc., a Delaware corporation (together with its permitted successors, the "Company"),
promises to pay interest on the principal amount of this Note at 111/2% per annum from February 11, 2005 until maturity and shall pay the Additional Interest, if any, payable
pursuant to Section 5 of the Registration Rights Agreement. The Company shall pay interest and Additional Interest, if any, semi-annually in arrears on February 1 and
August 1 of each such year, commencing                        , 20    or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). The
Company, at its option, shall be entitled to issue Additional PIK Notes under the Indenture as payment for accrued interest on the Notes in lieu of the payment of cash interest or Additional Interest.
Interest on the Notes shall accrue from the most recent date to which interest has been paid (whether in cash or in Additional PIK Notes) or, if no interest has been paid, from the date of
issuance[; provided that if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date]2. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 


        (2)   Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Additional Interest, if
any, to the Persons in whose name(s) this Note (or one or more Predecessor Notes) is registered at the close of business on the January 15 or July 15 next preceding the Interest Payment
Date (each, a "Record Date"), even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with
respect to defaulted interest. 


        The
Notes shall be payable as to principal of or premium (if any), Additional Interest (if any and if paid in cash), or interest (if paid in cash) at the office or agency of the Company
maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest, if any, may be made (i) by check
mailed to the Holders at their addresses set forth in the register of Holders or (ii) in the form of Additional PIK Notes to the accounts specified by DTC (or, if Notes are held in the form of
Definitive Notes, to the Holders by mail at their address set forth in the register of Holders); provided, payment by wire transfer of immediately
available funds shall be required with respect to principal of or premium (if any), Additional Interest (if any and if the Company elects to pay Additional Interest in cash), or interest (if the
Company elects to pay interest in cash) on, the Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent prior to the
applicable Record Date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 



        (3)   Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee under the Indenture, shall act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 




	2
	Insert
if Notes are Additional Notes. 


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        (4)   Indenture. The Company issued the Notes under an Indenture, dated as of February 11, 2005 ("Indenture"), between
the Company and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
§§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are obligations of the Company initially in
the aggregate principal amount of $55,000,000. Subject to compliance with Section 2.16 of the Indenture, the Company is permitted to issue Additional Notes under the Indenture in an unlimited
principal amount. Any such Additional Notes that are actually issued shall be treated as issued and outstanding Notes (and as the same class as the Initial Notes) for all purposes of the Indenture,
unless the context clearly indicated otherwise. 


        (5)   Optional Redemption. 



        (a)   Except
as set forth in clause (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes pursuant to Section 3.07 of the
Indenture prior to February 1, 2007. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest thereon, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on February 1 of the years indicated below: 



	Year
 
	 	Percentage

	2007	 	102.000%
	2008	 	101.000%
	2009 and thereafter	 	100.000%






        (b)   Notwithstanding
the provisions of clause (a) of this Paragraph 5, at any time prior to February 1, 2007, the Company may redeem (i) on any
one or more occasions up to 35% or (ii) 100% (but, other than as provided in the foregoing clause (i), not less than 100%) of the aggregate principal amount of Notes issued under this
Indenture (including any Additional PIK Notes and any Additional Notes) at a redemption price equal to 105.750% of the principal amount thereof on the redemption date, plus accrued and unpaid interest
and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings by the Company; provided that
(1) in the case of a redemption pursuant to clause (i) above, at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and (2) that such redemption shall occur within 90 days of the date of the closing of such
Equity Offering. 


        (c)   On
and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 




        (6)   Repurchase at Option of Holder. 



        (a)   Upon
the occurrence of a Change of Control, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the
Company 



A-4







 

shall
mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. 


        (b)   If
the Company or a Restricted Subsidiary consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10 million, the Company or the
applicable Restricted Subsidiary shall commence an offer to all Holders pursuant to Section 4.10 of the Indenture to purchase the maximum principal amount of Notes (an "Asset Sale Offer") to
all Holders of Notes and all holders of such other Indebtedness of the Company that is pari passu with the Notes containing provisions similar to those
set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds,
the Excess Proceeds will be allocated by the Company to the Notes and such other pari passu Indebtedness on a pro rata basis (based upon the respective
principal amounts (or accreted value, if applicable) of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer) and the
portion of each Note to be purchased will thereafter be determined by the Trustee on a pro rata basis among the Holders of such Notes with appropriate adjustments such that the Notes may only be
purchased in a minimum of $1,000 aggregate principal amount and integral multiples of $1.00 in excess thereof. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset to
zero. Holders of Notes that are the subject of an offer to purchase shall receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 




        (7)   Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days
before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed on the basis of the aggregate principal amount (or accreted value, as applicable) of Notes and other pari
passu Indebtedness tendered. 


        (8)   Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000
and integral multiples of $1,000 in excess thereof; provided, however, that Additional PIK Notes shall be issued in denominations of $1.00 and integral
multiples of $1.00. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. No service
charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection
therewith. 


        (9)   Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes. 


A-5







 



        (10) Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes (other than a Default or Event of Default in the payment of the principal of or premium, if any, Additional Interest, if any, or interest on the Notes) or
compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class.
Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency; provide for uncertificated Notes in addition to
or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(B) of the Code); provide for the assumption of the Company's obligations to Holders of Notes in the case of a merger or consolidation or sale of all or
substantially all of the Company's assets; make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the rights under the Indenture
of any such Holder; provide for the issuance of Additional Notes in accordance with the provisions set forth in this Indenture; evidence and provide for the acceptance of an appointment of a successor
trustee; conform this Indenture or the Notes to the "Description of Notes" set forth in the Offering Memorandum; add Subsidiary Guarantees with respect to the Notes; or comply with requirements of the
Commission in order to effect or maintain the qualification of the indenture under the TIA. 



        (11) Events of Default. Events of Default include (1) default for 30 days in the payment when due of interest
on, or Additional Interest with respect to, the Notes; (2) default in payment when due of the principal of, or premium, if any, on the Notes; (3) failure by the Company to comply with
any of the provisions of Section 5.01 of the Indenture; (4) failure by the Company or any of its Restricted Subsidiaries to purchase Notes tendered pursuant to an offer required by
Section 4.10 or Section 4.15 of the Indenture; (5) failure by the Company or any of its Restricted Subsidiaries for 60 days after notice to comply with any of the other
agreements in the Indenture; (6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money
borrowed of the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, if that default: (a) is caused by a failure to pay at the final Stated Maturity the principal amount of such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or (b) results in the acceleration of such Indebtedness prior to its Stated
Maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $15.0 million or more; (7) failure by the Company or any of its Subsidiaries to pay final judgments (not subject to appeal)
aggregating in excess of $15.0 million, which judgments are not paid, discharged or stayed within a period of 60 days after the date on which the right to appeal has expired;
(8) except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; and (9) certain events of bankruptcy or
insolvency with respect to the Company or any of its Significant Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary. If any Event of
Default (other than an Event of Default specified in clause (9) of this Paragraph 11) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency
as specified in clause (9) of this Paragraph 11, all outstanding Notes shall become due and payable immediately without further 


A-6







 



action
or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of interest or Additional Interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon becoming aware of any Event of Default, to deliver to the Trustee a statement specifying such Event of Default. 



        (12) Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 


        (13) No Recourse Against Others. No director, officer, employee, incorporator, Affiliate or stockholder of the Company or any
of the Guarantors, as such, will have any liability for any obligations of the Company or such Guarantor under the Notes, the Indenture, the Subsidiary Guarantee, the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Notes. 


        (14) Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an
Authenticating Agent. 


        (15) Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act). 


        (16) Registration Rights Agreement. In addition to the rights provided to Holders of Notes under the Indenture, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of February 11, 2005 between the Company and the
Initial Purchaser. 


        (17) CUSIP, ISIN or Other Similar Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP, ISIN or other similar numbers to be printed on the Notes and the Trustee may use CUSIP, ISIN or other similar numbers in notices of redemption
as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon. 


        (18) Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York. 


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ASSIGNMENT FORM  


        To assign this Note, fill in the form below and have your signature guaranteed: (I) or (we) assign and transfer this Note to 



	 
	 

	
 (Insert assignee's soc. sec. or tax I.D. no.)
	


	


	


	

 (Print or type assignee's name, address and zip code)
	

and irrevocably appoint                                     
agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.
	







	 
	 
	 	 
	 

	Date:	    
	 	Your Name:	    
 (Print your name exactly as it

appears on the face of this Note)
	

 	

 	
 	

Your Signature:	

    
 (Sign exactly as your name appears

on the face of this Note)
	

 	

 	
 	

Signature Guarantee*:	

    







	*
	Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 


A-8







 
OPTION OF HOLDER TO ELECT PURCHASE  


        If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below: 


        o
Section 4.10    oSection 4.15 


        If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: 


$                   



	 
	 
	 	 
	 

	Date:	    
	 	Your Signature:	    
 (Sign exactly as your name appears

on the face of this Note)
	

 	

 	
 	

Tax Identification No.:	

    

	Signature Guarantee*:	 	 	 
	

	
 	

 	

 
	

(*Participant in a Recognized Signature

Guarantee Medallion Program)	
 	

 	

 




A-9







 
SCHEDULE A  


SCHEDULE OF INCREASES IN OR EXCHANGES

OF INTERESTS IN THE GLOBAL NOTE  


        The following increases in this Global Note as a result of the payment of Additional PIK Notes or exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made: 



	Date of Increase

or Exchange
	 	Amount of decrease in

Principal Amount

of this Global Note
	 	Amount of increase in

Principal Amount

of this Global Note
	 	Principal Amount

of this Global Note following such decrease or increase
	 	Signature of

authorized officer

of Trustee or Note Custodian





A-10








  



 
 

EXHIBIT B
  
    FORM OF CERTIFICATE OF TRANSFER    
    


K&F
Parent, Inc.

c/o K&F Industries, Inc.

600 Third Avenue

27th Floor

New York, NY 10016

Attn: General Counsel

Fax: (212) 297-0900 


U.S.
Bank National Association

Goodwin Square

224 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Division 



	Re:
	111/2%
Senior PIK Notes due 2015 




        Reference
is hereby made to the Indenture, dated as of February 11, 2005 (the "Indenture"), between K&F Parent, Inc., as
issuer (the "Company"), and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture. 


                            ,
(the "Transferor") owns and proposes to transfer the Note[s] or interest in such
Note[s] specified in Annex A hereto, in the principal amount of $                  in such Note[s] or interests (the
"Transfer"), to                        (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that: 


        1.     o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR
A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such
Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note
and in the Indenture and the Securities Act. 


        2.     o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S
TEMPORARY GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States
and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any
Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling 


B-1







 



efforts
have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the transaction is not part of a
plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Distribution Compliance Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, the Temporary Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 



        3.     o CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN IAI
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): 



        (a)   o such
Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; 



        or 



        (b)   o such
Transfer is being effected to the Company or a subsidiary thereof; 



        or 



        (c)   o such
Transfer is being effected pursuant to an effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities Act. 



        or 



        (d)   o such
Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note
or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to
the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is
in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject
to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and in the Indenture and the Securities Act. 




        4.     o Check
if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an
Unrestricted Definitive Note. 



        (a)   o CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the 



B-2







 

Indenture,
the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture. 


        (b)   o CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 


        (c)   o CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and
in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture. 




        This certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	 	 	
 [Insert Name of Transferor]
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 





Dated:                        ,            


B-3







 
 
 

ANNEX A TO CERTIFICATE OF TRANSFER    
    



	1.	 	The Transferor owns and proposes to transfer the following:
	

[CHECK ONE]
	

 	
 	

(a)	
 	

[    ]	
 	

a beneficial interest in the:
	

 	
 	

 	
 	

(i)	
 	

144A Global Note (CUSIP            ); or
	

 	
 	

 	
 	

(ii)	
 	

Regulation S Global Note (CUSIP            ); or
	

 	
 	

 	
 	

(iii)	
 	

IAI Global Note (CUSIP            ); or
	

 	
 	

(b)	
 	

[    ]	
 	

a Restricted Definitive Note; or
	

2.	
 	

After the Transfer the Transferee will hold:
	

[CHECK ONE]
	

 	
 	

(a)	
 	

[    ]	
 	

a beneficial interest in the:
	

 	
 	

 	
 	

(i)	
 	

[    ] 144A Global Note (CUSIP            ); or
	

 	
 	

 	
 	

(ii)	
 	

[    ] Regulation S Global Note (CUSIP            ); or
	

 	
 	

 	
 	

(iii)	
 	

IAI Global Note (CUSIP            ); or
	

 	
 	

 	
 	

(iv)	
 	

[    ] Unrestricted Global Note (CUSIP            ); or
	

 	
 	

(b)	
 	

[    ]	
 	

a Restricted Definitive Note; or
	

 	
 	

(c)	
 	

[    ]	
 	

an Unrestricted Definitive Note,
	

in accordance with the terms of the Indenture.




B-4








  



 
 

EXHIBIT C
  FORM OF CERTIFICATE OF EXCHANGE    
    


K&F
Parent, Inc.

c/o K&F Industries, Inc.

600 Third Avenue

27th Floor

New York, NY 10016

Attn: General Counsel

Fax: (212) 297-0900 


U.S.
Bank National Association

Goodwin Square

224 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Division 



	Re:
	111/2%
Senior PIK Notes due 2015 



(CUSIP                        )



        Reference
is hereby made to the Indenture, dated as of February 11, 2005 (the "Indenture"), between K&F Parent, Inc., as
issuer (the "Company") and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture. 


        ,
(the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s]
specified herein, in the principal amount of $            in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that: 


        1.     EXCHANGE
OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED
GLOBAL NOTE 



        (a)   o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any
state of the United States. 


        (b)   o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED
DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to
the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the
United States. 



C-1







 




        (c)   o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States. 


        (d)   o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE
NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the
United States. 




        2.     EXCHANGE
OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL
NOTES 



        (a)   o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED
DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount,
the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms
of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note
and in the Indenture and the Securities Act. 


        (b)   o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] 144A
Global Note, Regulation S Global Note, IAI Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture
and the Securities Act. 



C-2







 





        This certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	 	 	
 [Insert Name of Transferor]
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 





Dated:                        ,            


C-3








  



 
 

EXHIBIT D
  
    FORM OF CERTIFICATE FROM
  INSTITUTIONAL ACCREDITED INVESTOR    
    


K&F
Parent, Inc.

c/o K&F Industries, Inc.

600 Third Avenue

27th Floor

New York, NY 10016

Attn: General Counsel

Fax: (212) 297-0900 


U.S.
Bank National Association

Goodwin Square

224 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Division 



	Re:
	111/2%
Senior PIK Notes due 2015 



(CUSIP                        ) 


        Reference
is hereby made to the Indenture, dated as of February 11, 2005 (the "Indenture"), between K&F Parent, Inc., as
issuer (the "Company") and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture. 



        In
connection with our proposed purchase of $            aggregate principal amount of an 111/2% Senior PIK Notes due 2015 (the "Notes"), I hereby confirm that:



        1.     We
are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933,
as amended (the "Securities Act")) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we
and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 



        2.     We
are acquiring the Notes or beneficial interest therein for our own account or for one or more accounts (each of which is an "accredited investor") as to each of which
we exercise sole investment discretion. 


        3.     We
understand that any subsequent transfer of the Notes, or any interest therein is subject to certain restrictions and conditions set forth in the Notes and the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act"). 



        4.     We
understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or
sold except as permitted in the following sentence. We agree, on our behalf and on behalf of any accounts for which we are acting, that if we should sell the Notes or any interest therein, we will do
so only (a) to the Company, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) for so long as the Notes are eligible for
resale pursuant to Rule 144A, to a "Qualified Institutional Buyer" as defined in Rule 144A under the Securities Act that purchases for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the transfer is being made in reliance on Rule 144A inside the United States, (d) pursuant to offers and sales to non-U.S.
persons that occur outside the United States within the meaning of Regulation S 


D-1







 



under
the Securities Act or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, and we further agree to provide to any person purchasing a
Note from us in a transaction meeting the requirements of clauses (a) through (e) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated
herein. 


        5.     We
understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect. 


        6.     We
are acquiring the Notes for investment purposes only with no present intention to resell the Notes, and agree not to sell, transfer, assign, pledge or hypothecate any
of the Notes for at least three months following the completion of the offering. 



        You
and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. 



	 	 	
 [Insert Name of Institutional Accredited Investor]
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 





Dated:                        ,            


D-2








  



 
 

EXHIBIT E
  
    [FORM OF SUPPLEMENTAL INDENTURE
  TO BE DELIVERED BY SUBSEQUENT GUARANTORS]    
    


        This SUPPLEMENTAL INDENTURE, dated as of                        ,
200    , among                        (the "Guaranteeing Subsidiary"), a subsidiary of K&F
Parent, Inc. (or its permitted successor), a Delaware corporation (the "Company"), the Company and U.S. Bank National Association, as Trustee. 


 
 

W I T N E S S E T H    
    


        WHEREAS, the Company and the Trustee entered into an Indenture (the "Indenture"), dated as of February 11, 2005, pursuant to which the Company has issued
$55,000,000 in principal amount of 111/2% Senior PIK Notes due 2015 (the "Notes"); 



        WHEREAS,
Section 9.01(8) of the Indenture provides that the Company and the Trustee may amend or supplement the Indenture in order to add Subsidiary Guarantees with respect to the
Notes, without the consent of the Holders of the Notes; and 


        WHEREAS,
all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company and the
Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company and the Trustee, in accordance with its terms, have been duly done and performed; 



        NOW
THEREFORE, to comply with the provisions of the Indenture, and in consideration of the foregoing, the Guaranteeing Subsidiary, the Company and the Trustee mutually covenant and agree
for the equal and ratable benefit of the Holders of the Notes as follows: 


 
 

ARTICLE 1    
    


        Section 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in
connection with and as part of, the Indenture for any and all purposes. 



        Section 1.02.
This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Guaranteeing Subsidiaries, the Company and the Trustee. 


 
 

ARTICLE 2    
    


        Section 2.01. Each of the Guaranteeing Subsidiaries hereby agrees to be bound by the terms, conditions and other provisions of the Indenture with all
attendant rights, duties and obligations stated therein, on a joint and several basis with the parties hereto and thereto, with the same force and effect as if originally named as a Guarantor therein
and as if such party executed the Indenture on the date thereof. 


 
 

ARTICLE 3    
    


        Section 3.01. Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall
remain in full force and effect in accordance with their terms. 


        Section 3.02.
All capitalized terms used but not defined herein shall have the same respective meanings ascribed to them in the Indenture. 



        Section 3.03.
Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason
of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all of the 


E-1







 



terms
and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. 



        Section 3.04.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 


        Section 3.05.
The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. 


        Section 3.06.
The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this letter
agreement. 


        Section 3.07.
The recitals hereto are statements only of the Company and the Guaranteeing Subsidiaries and shall not be considered statements of or attributable to the Trustee. 


E-2







 

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



	 	 	[GUARANTEEING SUBSIDIARY]
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 
	

 	
 	

K&F PARENT, INC.
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION,

as Trustee
	

 	
 	

By:	


	 	 	 	Name:	 
	 	 	 	Title:	 




E-3











QuickLinks



Exhibit 4.8



EXHIBIT B FORM OF CERTIFICATE OF TRANSFER

ANNEX A TO CERTIFICATE OF TRANSFER



EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE


EXHIBIT D FORM OF CERTIFICATE FROM INSTITUTIONAL ACCREDITED INVESTOR


EXHIBIT E [FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

W I T N E S S E T H

ARTICLE 1

ARTICLE 2

ARTICLE 3