Document:

Exhibit 4.10

                          SECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "AGREEMENT") is dated as of
May 21,  2004 by and between  Utix  Group,  Inc.,  a Delaware  corporation  (the
"COMPANY"),  Great  Court  Capital  LLC, a New York  limited  liability  company
("GREAT  COURT") and each  purchaser  who has  executed  this  Agreement  on the
signature page hereto (each, a "PURCHASER" and collectively, the "PURCHASERS").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement  and  pursuant  to  Section  4(2) of the  Securities  Act of 1933,  as
amended,  the  Company  desires  to issue and sell to each  Purchaser,  and each
Purchaser,  severally  and not  jointly,  desires to purchase  from the Company,
certain securities of the Company as more fully described in this Agreement.

         NOW,  THEREFORE,  in consideration of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy  of  which  are  hereby  acknowledged,  the  Company  and  each  of the
Purchasers agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         1.1    DEFINITIONS. In addition to the terms defined  elsewhere in this
Agreement, the following terms have the meanings indicated:

                1.1.1 "AFFILIATE" means any Person that,  directly or indirectly
through one or more  intermediaries,  controls or is  controlled  by or is under
common control with a Person, as such terms are used in and construed under Rule
144.

                1.1.2  "BUSINESS DAY" means any day other than Saturday,  Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

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

                1.1.4 "COMMON STOCK" means the common stock of the Company,  par
value $0.001 per share.

                1.1.5 "COMMON STOCK EQUIVALENTS"  means,  collectively,  Options
and Convertible Securities.

                1.1.6 "COMPANY  COUNSEL"  means Gersten Savage  Kaplowitz Wolf &
Marcus LP.

                1.1.7 "CONVERTIBLE  SECURITIES" means any capital stock or other
securities, including warrants (other than Options) that are convertible into or
exercisable or exchangeable for Common Stock.

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                1.1.8  "EFFECTIVE  DATE"  means the date  that the  Registration
Statement is first declared effective by the Commission.

                1.1.9 "ELIGIBLE MARKET" means any of the New York Stock Exchange
(the "NYSE"),  the American  Stock  Exchange (the "AMEX"),  the Nasdaq  National
Market  ("NASDAQ  NNM"),  the  Nasdaq  Small Cap  Market  ("NASDAQ  SCM") or the
National  Association of Securities  Dealers,  Inc. OTC Bulletin Board (the "OTC
BULLETIN BOARD").

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

                1.1.11 "INITIAL NOTES CLOSING DATE" means the date of closing of
the purchase of not less than $700,000 of the Notes, pursuant to Section 2.1.1.

                1.1.12 "LIEN" means any lien, charge,  claim, security interest,
encumbrance, right of first refusal or other restriction.

                1.1.13  "LOSSES"  means  any and all  losses,  claims,  damages,
liabilities, settlement costs and expenses, including, without limitation, costs
of preparation and reasonable attorneys' fees.

                1.1.14 "NOTES CLOSING DATES" means those dates that shall be (a)
on or before May 21, 2004 when the Initial Notes  Closing Date shall occur,  and
(b) on or before May 28, 2004,  when the Final Notes Closing Date (as defined in
Section 2.1.1) shall occur.

                1.1.15 "NOTES" means one or more 15% senior  secured  promissory
notes  aggregating up to $1,500,000 in principal  amount, to be purchased at par
by the  Purchasers  at the Notes  Closings;  which Notes shall be in the form of
SCHEDULE 1.1.15.

                1.1.16  "OPTIONS"  means any  rights,  warrants  or  options  to
subscribe for or purchase Common Stock or Convertible Securities.

                1.1.17   "PERSON"   means   any   individual   or   corporation,
partnership,  trust, incorporated or unincorporated association,  joint venture,
limited  liability  company,  joint stock  company,  government (or an agency or
subdivision  thereof)  or any  court or  other  federal,  state,  local or other
governmental authority or other entity of any kind.

                1.1.18 "PURCHASER  DESIGNEE" shall mean Great Court Capital,  or
any other  Person  designated  in writing  from time to time by the holders of a
majority of the Notes and who shall be reasonably acceptable to the Company.

                1.1.19 "PROCEEDING" means an action, claim, suit,  investigation
or  proceeding  (including,  without  limitation,  an  investigation  or partial
proceeding, such as a deposition), whether commenced or threatened.

                1.1.20   "PROSPECTUS"  means  the  prospectus  included  in  the
Registration  Statement  (including,   without  limitation,  a  prospectus  that
includes any information  previously  omitted from a prospectus filed as part of
an effective registration statement in reliance upon

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Rule 430A  promulgated  under the Securities Act), as amended or supplemented by
any  prospectus  supplement,  with  respect to the terms of the  offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments,  and  all  material  incorporated  by  reference  or  deemed  to  be
incorporated by reference in such Prospectus.

                1.1.21  "REGISTRABLE  SECURITIES"  means:  (i) any Common  Stock
issuable upon exercise of the Warrant Shares, (ii) any Common Stock issued to SD
Partners or its Affiliates under an advisory  agreement  between the Company and
SD Partners,  dated of even date herewith (the "ADVISORY AGREEMENT");  (iii) any
Common  Stock  issuable  upon  exercise of warrants to purchase up to  1,000,000
shares of Company Common Stock issued under the Advisory Agreement; and (iv) any
securities  issued  or  issuable  upon  any  stock  split,   dividend  or  other
distribution, recapitalization or similar event with respect to the foregoing.

                1.1.22 "REGISTRATION STATEMENT" means the registration statement
required  to be filed  under  Article  VI below,  including  (in each  case) the
Prospectus,  amendments  and  supplements  to  such  registration  statement  or
Prospectus,  including pre- and post-effective amendments, all exhibits thereto,
and all  material  incorporated  by reference  or deemed to be  incorporated  by
reference in such registration statement.

                1.1.23 "REQUIRED  EFFECTIVENESS  DATE" means September 30, 2004,
unless such date shall be extended by mutual agreement of the Purchaser Designee
and the Company.

                1.1.24  "RULE  144,"  "RULE 415," and "RULE 424" means Rule 144,
Rule 415 and Rule 424,  respectively,  promulgated by the Commission pursuant to
the  Securities  Act,  as such  Rules may be amended  from time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

                1.1.25 "SECURITIES" means the collective  reference to the Notes
and the Warrants.

                1.1.26  "SECURITIES  ACT" means the  Securities  Act of 1933, as
amended.

                1.1.27  "SECURITY   AGREEMENT"   means  an  agreement   granting
Purchasers  a perfected  security  interest in all the assets of the Company and
its  Subsidiaries  in  which  such  lien  may be  perfected  under  the  Uniform
Commercial Code as in force in Massachusetts,  to secure repayment of the Notes,
in the form of SCHEDULE 1.1.27.

                1.1.28  "SUBSIDIARY"  means any  Person  in which  the  Company,
directly  or  indirectly,  owns  capital  stock or holds an  equity  or  similar
interest.

                1.1.29 "TRADING DAY" means (a) any day on which the Common Stock
is listed or quoted  and  traded on any  Eligible  Market,  or (b) if the Common
Stock is not then listed or quoted and traded on any Eligible Market, then a day
on which trading occurs on the Over-the-Counter Pink Sheets.

                1.1.30 "TRADING MARKET" means the  Over-the-Counter  Pink Sheets
or any Eligible Market on which the Common Stock is then listed or quoted.

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                1.1.31  "TRANSACTION   DOCUMENTS"  means  this  Agreement,   the
Warrants,  the Security Agreement and any other documents or agreements executed
in connection with the transactions contemplated hereunder.

                1.1.32 "UCC FILINGS" means the filings  within  Delaware and New
Hampshire  required  by law to  grant a first  perfected  security  interest  as
contemplated  by the  Security  Agreement  in the assets of the  Company and its
Subsidiary, respectively.

                1.1.33  "WARRANTS"  means one or more  warrants with an exercise
price of $0.35 per share, to purchase up to an aggregate of 4,285,714  shares of
Common Stock issued to the  Purchasers  at the Notes  Closing on a  proportional
basis (a Warrant  entitling  the holder to purchase  2.8571432  shares of Common
Stock for each $1.00  principal  amount of Note  purchased)  to such  Investor's
aggregate purchase of Notes contemplated by this Agreement; which Warrants shall
be in the form of SCHEDULE 1.1.33.

                1.1.34  "WARRANT  SHARES" means the aggregate of up to 4,285,714
shares of Common  Stock  issuable  upon  exercise  of the  Warrants,  subject to
adjustment as provided therein.

                                   ARTICLE II
                         PURCHASE AND SALE OF SECURITIES

         2.1    PURCHASE AND SALE OF NOTES AND WARRANTS.

                2.1.1 NOTES  CLOSING.  Subject to the terms and  conditions  set
forth herein:

                        (a) On the Notes Closing Dates,  the Company shall issue
to each of those Purchasers  listed on and who shall have executed the signature
page to this Agreement  entitled  "PURCHASERS  SIGNATURE PAGE," and each of such
Purchasers  shall  purchase from the Company,  severally  and not jointly,  such
principal  amount of Notes as is indicated  below such  Purchaser's  name on the
Purchasers  Signature Page. On such Notes Closing Dates,  not less than $700,000
and not more than  $1,500,000  principal  amount of Notes shall be purchased and
paid for by the Purchasers. The closings of the sale of the Notes (collectively,
the  "NOTES  CLOSINGS")  shall  take  place at the  offices  of  Gersten  Savage
Kaplowitz Wolf & Marcus LP, 101 East 52nd Street,  New York, New York 10022,  or
at such other location or time as all parties may agree,  on the dates set forth
in Section 2.1.1(b) below.

                        (b) On a date that shall be not later than May 21,  2004
(the  "INITIAL  NOTES  CLOSING  DATE") an  aggregate  of not less than  $700,000
principal amount of Notes shall be purchased and paid for by the Purchasers.  On
a date that  shall be not later  than May 28,  2004 (the  "FINAL  NOTES  CLOSING
DATE") up to an additional  $800,000  principal  amount of Notes (or such lesser
principal  amount equal to the difference  between  $1,500,000 and the principal
amount of Notes sold on the Initial Note Closing Date).

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                2.1.2 NOTES CLOSINGS DELIVERABLES.

                        (a) On the Initial Notes Closing Date, the Company shall
deliver or cause to be  delivered  to each  Purchaser,  against  payment by such
Purchaser of an amount in immediately  available funds to an account  designated
in writing by the Company equal to the principal amount of Notes purchased,  the
following documents:

                                (i) Notes  aggregating not less than $700,000 in
principal amount, free and clear of all restriction and other legends (except as
expressly provided in Section 4.1.2);

                                (ii)  Warrants   entitling   each  Purchaser  to
receive  Warrants to purchase  2.857143  Warrant Shares for each $1.00 principal
amount of Notes  purchased on the Initial  Notes  Closing  Date,  which  Warrant
Shares shall be free and clear of all  restrictions and other legends (except as
expressly provided in Section 4.1.2); and

                                (iii) a signed legal opinion of Company Counsel,
substantially in the form of SCHEDULE 2.1.2(B),  adapted to reflect transactions
occurring on the Initial Notes Closing Date.

                        (b) On the Final Notes Closing  Date,  the Company shall
deliver or cause to be  delivered  to each  Purchaser,  against  payment by such
Purchaser of an amount in immediately  available funds to an account  designated
in writing by the Company equal to the principal amount of Notes purchased,  the
following documents:

                                (i)  Notes  in  aggregate  principal  amount  in
excess of $700,000 and up to $1,500,000,  free and clear of all  restriction and
other legends (except as expressly provided in Section 4.1.2);

                                (ii)  Warrants   entitling   each  Purchaser  to
receive  Warrants to purchase  2.857143  Warrant Shares for each $1.00 principal
amount of Notes purchased on the Final Notes Closing Date,  which Warrant Shares
shall be free  and  clear of all  restrictions  and  other  legends  (except  as
expressly provided in Section 4.1.2); and

                                (iii) a signed legal opinion of Company Counsel,
substantially in the form of SCHEDULE 2.1.2(B),  adapted to reflect transactions
occurring on the Initial Notes Closing Date.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1    REPRESENTATIONS  AND  WARRANTIES  OF THE  COMPANY.  The  Company
hereby represents and warrants to each of the Purchasers as follows:

                3.1.1  SUBSIDIARIES.  The Company has one Subsidiary,  Corporate
Sports Incentives, Inc.

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                3.1.2 ORGANIZATION AND  QUALIFICATION.  The Company is an entity
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction of its  incorporation  or organization  (as  applicable),  with the
requisite  power and authority to own and use its  properties  and assets and to
carry on its business as currently conducted. The Company is not in violation of
any  of  the   provisions  of  its   respective   certificate   or  articles  of
incorporation,  bylaws or other organizational or charter documents. The Company
is  duly  qualified  to  do  business  and  is in  good  standing  as a  foreign
corporation  or other  entity in each  jurisdiction  in which the  nature of the
business conducted or property owned by it makes such  qualification  necessary,
except where the failure to be so qualified or in good standing, as the case may
be,  could not,  individually  or in the  aggregate,  (i)  adversely  affect the
legality,  validity or enforceability of any Transaction Document,  (ii) have or
result in a  material  adverse  effect on the  results  of  operations,  assets,
prospects,  business or condition (financial or otherwise) of the Company, taken
as a whole, or (iii) adversely impair the Company's  ability to perform fully on
a timely basis its obligations  under any of the  Transaction  Documents (any of
(i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT").

                3.1.3 AUTHORIZATION;  ENFORCEMENT. The Company has the requisite
corporate  power and authority to enter into and to consummate the  transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of each of the
Transaction  Documents  by  the  Company  and  the  consummation  by it  of  the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary  action on the part of the Company and no further consent or action is
required by the Company, its Board of Directors or its stockholders. Each of the
Transaction  Documents  has been (or upon delivery will be) duly executed by the
Company and is, or when  delivered in  accordance  with the terms  hereof,  will
constitute,  the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.

                3.1.4 NO CONFLICTS.  The execution,  delivery and performance of
the Transaction  Documents by the Company and the consummation by the Company of
the  transactions  contemplated  hereby  and  thereby  do not and  will  not (i)
conflict with or violate any provision of the Company's  certificate or articles
of  incorporation,  bylaws or other  organizational or charter  documents,  (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both  would  become a  default)  under,  or give to others any rights of
termination,  amendment,  acceleration or cancellation  (with or without notice,
lapse  of time or  both)  of,  any  agreement,  credit  facility,  debt or other
instrument  (evidencing a Company debt or otherwise) or other  understanding  to
which the Company is a party or by which any property or asset of the Company is
bound  or  affected,  except  to the  extent  that  such  conflict,  default  or
termination  right could not  reasonably be expected to have a Material  Adverse
Effect,  or (iii) result in a violation  of any law,  rule,  regulation,  order,
judgment,  injunction,  decree or other restriction of any court or governmental
authority  to  which  the  Company  is  subject  (including  federal  and  state
securities   laws  and   regulations  and  the  rules  and  regulations  of  any
self-regulatory  organization  to  which  the  Company  or  its  securities  are
subject), or by which any property or asset of the Company is bound or affected.

                3.1.5 ISSUANCE OF THE NOTES,  WARRANTS AND WARRANT  SHARES.  The
Notes, Warrants and Warrant Shares each are duly authorized and, when issued and
paid for in accordance with the Transaction Documents,  will be duly and validly
issued, fully paid and nonassessable,  free

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and clear of all Liens and shall not be subject to preemptive  rights or similar
rights of stockholders.

                3.1.6  CAPITALIZATION.  The  number  of  shares  and type of all
authorized,  issued and outstanding capital stock,  options and other securities
of the Company  (whether or not presently  convertible  into or  exercisable  or
exchangeable  for  shares of  capital  stock of the  Company)  is set forth on a
fully-diluted  basis in SCHEDULE 3.1.6. All outstanding  shares of capital stock
are duly authorized,  validly issued, fully paid and nonassessable and have been
issued in compliance with all applicable securities laws. Except as disclosed in
SCHEDULE 3.1.6,  there are no outstanding  options,  warrants,  script rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities,   rights  or   obligations   convertible   into  or  exercisable  or
exchangeable  for, or giving any Person any right to  subscribe  for or acquire,
any  shares  of Common  Stock,  or  contracts,  commitments,  understandings  or
arrangements  by which the  Company is or may become  bound to issue  additional
shares of Common Stock, or securities or rights convertible or exchangeable into
shares of Common  Stock.  Except as  disclosed in SCHEDULE  3.1.6,  there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement  providing rights to security  holders) and the
issue and sale of the  Securities  will not obligate the Company to issue shares
of Common Stock or other  securities to any Person  (other than the  Purchasers)
and will not result in a right of any holder of Company securities to adjust the
exercise,  conversion,  exchange or reset price  under such  securities.  To the
knowledge of the Company, except as specifically disclosed in SCHEDULE 3.1.6, no
Person or group of related Persons  beneficially owns (as determined pursuant to
Rule 13d-3 under the Exchange  Act),  or has the right to acquire,  by agreement
with or by  obligation  binding  upon the  Company,  beneficial  ownership of in
excess of 5% of the  outstanding  Common  Stock,  ignoring for such purposes any
limitation  on the  number of shares  of Common  Stock  that may be owned at any
single time.

                3.1.7 SEC REPORTS;  FINANCIAL STATEMENTS.  The Company has filed
all reports required to be filed by it under the Securities Act and the Exchange
Act,  including  pursuant to Section 13(a) or 15(d) thereof,  since February 12,
2004 (the foregoing materials being collectively  referred to herein as the "SEC
REPORTS" and,  together with this Agreement and the Schedules to this Agreement,
the "DISCLOSURE  MATERIALS") on a timely basis or has received a valid extension
of such  time of  filing  and has  filed  any  such  SEC  Reports  prior  to the
expiration of any such  extension.  The Company has delivered to the  Purchasers
true,  correct and complete  copies of all SEC Reports filed within the ten (10)
days preceding the date hereof.  As of their  respective  dates, the SEC Reports
complied in all material  respects with the  requirements  of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder,  and none of the SEC  Reports,  when  filed,  contained  any  untrue
statement of a material  fact or omitted to state a material fact required to be
stated  therein or necessary  in order to make the  statements  therein,  in the
light of the  circumstances  under  which they were made,  not  misleading.  The
financial  statements of the Company  included in the SEC Reports  comply in all
material  respects with  applicable  accounting  requirements  and the rules and
regulations of the Commission  with respect  thereto as in effect at the time of
filing.  Such financial  statements have been prepared in accordance with United
States generally  accepted  accounting  principles applied on a consistent basis
during the periods involved  ("GAAP"),  except as may be otherwise  specified in
such  financial  statements  or the notes  thereto,  and  fairly  present in all
material  respects the  financial  position of the Company and its  consolidated

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subsidiaries  as of and for the dates thereof and the results of operations  and
cash  flows  for the  periods  then  ended,  subject,  in the case of  unaudited
statements,  to normal,  immaterial,  year-end audit  adjustments.  All material
agreements  to which the  Company or any  Subsidiary  is a party or to which the
property or assets of the Company or any  Subsidiary  is subject are included as
part of or specifically identified in the SEC Reports.

                3.1.8  MATERIAL  CHANGES.  Since the date of the latest  audited
financial  statements  included  within the SEC Reports,  except as specifically
disclosed in the SEC Reports or the amendment to the Form 10SB12G filed with the
Commission  on April  12,  2004,  (i) there  has been no  event,  occurrence  or
development that, individually or in the aggregate, has had or that could result
in a Material Adverse Effect,  (ii) the Company has not incurred any liabilities
(contingent  or otherwise)  other than (A) trade  payables and accrued  expenses
incurred in the ordinary  course of business  consistent  with past practice and
(B)  liabilities  not  required  to be  reflected  in  the  Company's  financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission,  (iii) the Company has not altered its method of  accounting  or the
identity of its auditors, (iv) the Company has not declared or made any dividend
or  distribution  of cash or other  property to its  stockholders  or purchased,
redeemed or made any  agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity  securities to any officer,
director or Affiliate,  except pursuant to existing  Company stock option plans;
provided that the Company may issue  capital  stock in accordance  with Sections
5.3.4 and 5.3.5. At the time the Registration  Statement becomes effective,  the
Company  will have all  necessary  procedures  in place that are required by the
Commission  and will be in compliance  with the  Sarbanes-Oxley  Act of 2002, as
amended, to the extent then binding upon the Company as a matter of law.

                3.1.9 ABSENCE OF LITIGATION.  There is no action,  suit,  claim,
proceeding,  inquiry  or  investigation  before or by any court,  public  board,
government  agency,  self-regulatory  organization  or body  pending  or, to the
knowledge  of the  Company,  threatened  against or  affecting  the Company that
could, individually or in the aggregate, have a Material Adverse Effect.

                3.1.10 COMPLIANCE. The Company (i) is not in default under or in
violation  of (and no event has  occurred  that has not been waived  that,  with
notice  or lapse of time or both,  would  result  in a  default  by the  Company
under),  nor has the  Company  received  notice of a claim that it is in default
under or that it is in violation of, any indenture,  loan or credit agreement or
any other  agreement or  instrument to which it is a party or by which it or any
of its  properties  is bound  (whether or not such default or violation has been
waived),  (ii) is not in  violation  of any order of any  court,  arbitrator  or
governmental  body, or (iii) is not or has not been in violation of any statute,
rule or regulation of any governmental  authority,  including without limitation
all  foreign,  federal,  state and local laws  relating to taxes,  environmental
protection,  occupational  health and  safety,  product  quality  and safety and
employment and labor matters,  except in each case as could not, individually or
in the aggregate, have or result in a Material Adverse Effect.

                3.1.11 TITLE TO ASSETS.  Neither the Company nor any  Subsidiary
owns any real property.  The Company and the Subsidiary have good and marketable
title in all personal property owned by them that is material to their business,
in each case free and clear of all Liens,  except for Liens as do not materially
affect the value of such property and do not  materially

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interfere  with the use made and  proposed  to be made of such  property  by the
Company or Subsidiary.  Any real property and facilities held under lease by the
Company or the Subsidiary is held by it under valid,  subsisting and enforceable
leases of which the Company or any Subsidiary are in compliance.

                3.1.12 CERTAIN FEES.  Except for the fees and  compensation  set
forth on SCHEDULE  3.1.12 to this  Agreement,  no brokerage or finder's  fees or
commissions  are or will be payable  by the  Company  to any  broker,  financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions  contemplated by this Agreement, and the
Company has not taken any action that would cause any Purchaser to be liable for
any such fees or commissions.

                3.1.13  PRIVATE  PLACEMENT.  Neither  the Company nor any Person
acting on the  Company's  behalf has sold or offered  to sell or  solicited  any
offer  to buy the  Notes  by  means  of any  form  of  general  solicitation  or
advertising. Neither the Company nor any of its Affiliates nor any Person acting
on the Company's behalf has, directly or indirectly, at any time within the past
six months,  made any offer or sale of any security or solicitation of any offer
to  buy  any  security  under   circumstances   that  would  (i)  eliminate  the
availability  of the exemption from  registration  under  Regulation D under the
Securities  Act  in  connection  with  the  offer  and  sale  of  the  Notes  as
contemplated  hereby or (ii) cause the  offering  of the Notes  pursuant  to the
Transaction  Documents to be integrated  with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder  approval  provisions,
including,  without  limitation,  under the rules and regulations of any Trading
Market. The Company is not, and is not an Affiliate of, an "investment  company"
within the  meaning of the  Investment  Company  Act of 1940,  as  amended.  The
Company is not a United  States real  property  holding  corporation  within the
meaning of the Foreign Investment in Real Property Tax Act of 1980.

                3.1.14 [Intentionally Omitted]

                3.1.15 TRADING.  The Company's  Common Stock currently is traded
in the "Pink Sheets."

                3.1.16  REGISTRATION  RIGHTS.  Except as  described  in SCHEDULE
3.1.16,  the Company has not granted or agreed to grant to any Person any rights
(including  "piggy-back"  registration  rights)  to have any  securities  of the
Company registered with the Commission or any other governmental  authority that
have not been satisfied.

                3.1.17 APPLICATION OF TAKEOVER PROTECTIONS.  There is no control
share acquisition, business combination, poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Company's  charter  documents  that is or could become  applicable to any of the
Purchasers  as a result  of the  Purchasers  and the  Company  fulfilling  their
obligations  or  exercising  their  rights  under  the  Transaction   Documents,
including,  without  limitation,  as a result of the  Company's  issuance of the
Notes and the Purchasers' ownership of the Notes.

                3.1.18 DISCLOSURE.  The Company confirms that neither it nor any
other Person  authorized to act on its behalf has provided any of the Purchasers
or their  agents or  counsel  with

                                                                               9
<PAGE>

any  information  that  constitutes  or  might  constitute  material,  nonpublic
information.  The Company  understands  and confirms that each of the Purchasers
will  rely  on  the  foregoing  representations  in  effecting  transactions  in
securities of the Company.  All disclosure provided to the Purchasers  regarding
the Company, its business and the transactions  contemplated  hereby,  including
the  Schedules to this  Agreement,  furnished by or on behalf of the Company are
true and correct and do not contain any untrue  statement of a material  fact or
omit to state any material fact necessary in order to make the  statements  made
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.  No event or  circumstance  has occurred or information  exists with
respect to the Company or the Subsidiary or its or their  business,  properties,
prospects, operations or financial conditions, which, under applicable law, rule
or regulation,  requires  public  disclosure or  announcement by the Company but
which has not been so publicly announced or disclosed.  The Company acknowledges
and agrees that no Purchaser makes or has made any representations or warranties
with  respect  to  the  transactions   contemplated   hereby  other  than  those
specifically set forth in Section 3.2.

                3.1.19   ACKNOWLEDGMENT   REGARDING   PURCHASERS'   PURCHASE  OF
SECURITIES.  The Company  acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm's length  purchaser with respect to this
Agreement  and  the  transactions   contemplated  hereby.  The  Company  further
acknowledges  that no Purchaser is acting as a financial advisor or fiduciary of
the Company or any other Purchaser (or in any similar  capacity) with respect to
this Agreement and the transactions  contemplated hereby and any advice given by
any Purchaser or any of their respective representatives or agents in connection
with  this  Agreement  and  the  transactions   contemplated  hereby  is  merely
incidental to such Purchaser's  purchase of the Securities.  The Company further
represents  to each  Purchaser  that the  Company's  decision to enter into this
Agreement  has  been  based  solely  on  the   independent   evaluation  of  the
transactions contemplated hereby by the Company and its representatives.

                3.1.20  PATENTS AND  TRADEMARKS.  The Company and its Subsidiary
have,  or have rights to use,  all  patents,  patent  applications,  trademarks,
trademark  applications,  service marks, trade names,  copyrights,  licenses and
other similar  rights that are necessary or material for use in connection  with
their  respective  businesses  as  described  in the SEC  Reports  and which the
failure  to so have  could have a Material  Adverse  Effect  (collectively,  the
"INTELLECTUAL  PROPERTY  RIGHTS").  Neither the Company nor its Subsidiary  have
received a written  notice that the  Intellectual  Property  Rights used by them
violates or  infringes  upon the rights of any Person.  To the  knowledge of the
Company,  all such Intellectual  Property Rights are enforceable and there is no
existing  infringement  by another  Person of any of the  Intellectual  Property
Rights.

                3.1.21 INSURANCE.  The Company and its Subsidiary are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such amounts as are prudent and customary in the  businesses in which the
Company and Subsidiary are engaged.  Neither the Company nor its Subsidiary have
reason to believe that they will not be able to renew their  existing  insurance
coverage as and when such coverage  expires or to obtain  similar  coverage from
similar  insurers  as may be  necessary  to  continue  its  business  without  a
significant increase in cost.

                3.1.22  REGULATORY  PERMITS.  The  Company  and  its  Subsidiary
possess all certificates,  authorizations  and permits issued by the appropriate
federal,  state,  local or foreign

                                                                              10
<PAGE>

regulatory  authorities  necessary to conduct their business as described in the
SEC  Reports,  except  where the  failure to  possess  such  permits  could not,
individually  or in the aggregate,  have or result in a Material  Adverse Effect
("MATERIAL  PERMITS"),  and the Company and its Subsidiary have not received any
notice of proceedings relating to the revocation or modification of any Material
Permit.

                3.1.23 TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set
forth in SEC Reports  filed at least ten days prior to the date hereof,  none of
the officers or  directors of the Company and, to the  knowledge of the Company,
none of the  employees  of the Company is  presently a party to any  transaction
with the  Company or its  Subsidiary  (other  than for  services  as  employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
entity in which any officer,  director,  or any such  employee has a substantial
interest or is an officer, director, trustee or partner.

                3.1.24 [INTENTIONALLY OMITTED].

                3.1.25  INTERNAL  ACCOUNTING  CONTROLS.   The  Company  and  its
Subsidiary  maintain a system of  internal  accounting  controls  sufficient  to
provide  reasonable  assurance that (i)  transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity with generally accepted  accounting  principles and to maintain asset
accountability,  (iii) access to assets is  permitted  only in  accordance  with
management's   general  or  specific   authorization,   and  (iv)  the  recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate action is taken with respect to any differences.

         3.2    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, as to itself only and for no other Purchaser, represents and warrants to
the Company as follows:

                3.2.1 ORGANIZATION;  AUTHORITY.  Such Purchaser is an individual
or entity duly organized,  validly  existing and in good standing under the laws
of  the  jurisdiction  of its  organization  with  the  requisite  corporate  or
partnership power and authority to enter into and to consummate the transactions
contemplated  by the  Transaction  Documents  and  otherwise  to  carry  out its
obligations  hereunder  and  thereunder.  The purchase by such  Purchaser of the
Notes and Warrants hereunder has been duly authorized by all necessary action on
the part of such Purchaser.  This Agreement has been duly executed and delivered
by such  Purchaser  and  constitutes  the valid and binding  obligation  of such
Purchaser, enforceable against it in accordance with its terms.

                3.2.2 INVESTMENT  INTENT.  Such Purchaser is acquiring the Notes
and Warrants as principal for its own account for  investment  purposes only and
not with a view to or for  distributing  or reselling such Notes and Warrants or
any part thereof, without prejudice, however, to such Purchaser's right, subject
to the provisions of this Agreement,  at all times to sell or otherwise  dispose
of all or any part of such Notes pursuant to an effective registration statement
under the  Securities Act or under an exemption  from such  registration  and in
compliance with applicable  federal and state securities laws. Nothing contained
herein shall be

                                                                              11
<PAGE>

deemed a representation or warranty by such Purchaser to hold Notes and Warrants
for any  period  of  time.  Such  Purchaser  does  not  have  any  agreement  or
understanding,  directly or indirectly, with any Person to distribute any of the
Notes and Warrants.

                3.2.3 PURCHASER  STATUS.  At the time such Purchaser was offered
the Notes and  Warrants  it was,  and at the date  hereof it is, an  "accredited
investor" as defined in Rule 501(a) under the Securities Act.

                3.2.4 EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone
or together with its  representatives,  has such knowledge,  sophistication  and
experience in business and financial matters,  including investments in entities
that are listed on the "Pink  Sheets",  so as to be capable  of  evaluating  the
merits  and risks of the  prospective  investment  in the  Notes,  Warrants  and
Warrant  Shares,  and has so evaluated the merits and risks of such  investment.
Such  Purchaser is (i) aware that the volume of the trading market for the Notes
is limited or may be  non-existent  for a period of time;  and (ii) able to bear
the economic risk of an investment  in the Notes,  Warrants and Warrant  Shares,
and, at the present time, is able to afford a complete loss of such investment.

                3.2.5 ACCESS TO INFORMATION. Such Purchaser acknowledges that it
has reviewed the Disclosure  Materials and has been afforded (i) the opportunity
to ask such  questions  as it has deemed  necessary  of, and to receive  answers
from,  representatives of the Company concerning the terms and conditions of the
offering of the Notes and  Warrants and the merits and risks of investing in the
Notes and  Warrants;  (ii)  access to  information  about  the  Company  and the
Subsidiaries and their respective  financial  condition,  results of operations,
business,  properties,  management  and  prospects  sufficient  to  enable it to
evaluate its  investment;  and (iii) the  opportunity to obtain such  additional
information  that the  Company  possesses  or can acquire  without  unreasonable
effort or expense that is necessary to make an informed investment decision with
respect to the  investment.  Neither such inquiries nor any other  investigation
conducted by or on behalf of such  Purchaser or its  representatives  or counsel
shall  modify,  amend or affect  such  Purchaser's  right to rely on the  truth,
accuracy  and  completeness  of  the  Disclosure  Materials  and  the  Company's
representations and warranties contained in the Transaction Documents.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

         4.1    TRANSFER RESTRICTIONS.

                4.1.1 Notes,  Warrants or Warrant Shares may only be disposed of
pursuant to an effective  registration  statement  under the  Securities  Act or
pursuant to an available  exemption from the  registration  requirements  of the
Securities Act, and in compliance with any applicable  state securities laws. In
connection  with any  transfer of Notes,  Warrants or Warrant  Shares other than
pursuant to an effective registration statement or to the Company or pursuant to
Rule 144(k),  except as otherwise set forth herein,  the Company may require the
transferor  to provide to the  Company  an  opinion of counsel  selected  by the
transferor  (with the costs associated with the production of such opinion borne
by the  Company),  the form and  substance of which  opinion shall be reasonably
satisfactory  to the Company,  to the effect that such transfer does not require

                                                                              12
<PAGE>

registration  under the  Securities  Act.  Notwithstanding  the  foregoing,  the
Company  hereby  consents  to and agrees to register on the books of the Company
and with its Transfer  Agent,  without any such legal  opinion,  any transfer of
Notes,  Warrants  or  Warrant  Shares by a  Purchaser  to an  Affiliate  of such
Purchaser,  provided that the transferee  certifies to the Company that it is an
"accredited  investor"  as defined in Rule 501(a) under the  Securities  Act. In
addition,  if a Purchaser  reasonably  believes  that a transfer  may be made in
compliance with the rules and  regulations of the Commission,  the Purchaser may
request a transfer of Notes,  Warrants or Warrant Shares without  obtaining such
legal opinion,  but the Company (if it is unsure of transferability)  may itself
seek a legal opinion before being required to take any action.

                4.1.2  The  Purchasers  agree to the  imprinting,  so long as is
required by this SECTION 4.1.2, of the following  legend on any Notes,  Warrants
or any certificate evidencing Warrant Shares:

         THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES  AND
         EXCHANGE  COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE  IN
         RELIANCE UPON AN EXEMPTION FROM  REGISTRATION  UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,  ACCORDINGLY,  MAY NOT
         BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO AN  EFFECTIVE  REGISTRATION
         STATEMENT  UNDER  THE  SECURITIES  ACT  OR  PURSUANT  TO  AN  AVAILABLE
         EXEMPTION  FROM, OR IN A TRANSACTION  NOT SUBJECT TO, THE  REGISTRATION
         REQUIREMENTS  OF THE SECURITIES ACT AND IN ACCORDANCE  WITH  APPLICABLE
         STATE SECURITIES LAWS.  NOTWITHSTANDING THE FOREGOING, THESE SECURITIES
         MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
         LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

Certificates  evidencing  Notes shall not be required to contain  such legend or
any other legend (i) while a Registration  Statement covering the resale of such
Notes is effective  under the Securities Act, or (ii) following any sale of such
Notes  pursuant to Rule 144, or (iii) if such Notes are  eligible for sale under
Rule 144(k), or (iv) if (in the written opinion of competent  securities counsel
rendered to the Company,  with the costs  associated with the production of such
opinion  borne by the  Company)  such legend is not  required  under  applicable
requirements  of the  Securities  Act (including  judicial  interpretations  and
pronouncements  issued by the Staff of the Commission).  The Company shall cause
Company  Counsel  to issue the legal  opinion  included  in the  Transfer  Agent
Instructions  to  the  Transfer  Agent  on the  Effective  Date.  Following  the
Effective  Date or at such  earlier  time as a legend is no longer  required for
certain  Notes,  the Company will no later than three Trading Days following the
delivery  by a  Purchaser  to the  Company or the  Transfer  Agent of a legended
certificate  representing  such Notes,  deliver or cause to be delivered to such
Purchaser  a  certificate   representing  such  Notes  that  is  free  from  all
restrictive  and other  legends.  The Company  may not make any  notation on its
records or give  instructions  to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.

                                                                              13
<PAGE>

                4.1.3 The Company  acknowledges  and agrees that a Purchaser may
from time to time  pledge  or grant a  security  interest  in some or all of the
Notes in connection with a bona fide margin agreement or other loan or financing
arrangement  secured  by the  Notes  and,  if  required  under the terms of such
agreement,  loan or arrangement,  such Purchaser may transfer pledged or secured
Notes to the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of the pledgee,  secured
party or pledgor shall be required in connection  therewith.  Further, no notice
shall be required of such pledge. At the appropriate  Purchaser's  expense,  the
Company will execute and deliver such reasonable  documentation  as a pledgee or
secured party of Notes may  reasonably  request in  connection  with a pledge or
transfer of the Notes,  including  the  preparation  and filing of any  required
prospectus  supplement  under  Rule  424(b)(3)  of the  Securities  Act or other
applicable  provision of the Securities Act to  appropriately  amend the list of
selling stockholders thereunder.

         4.2    FURNISHING OF INFORMATION.  As long as any Purchaser owns Notes,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. Upon the request
of any  Purchaser,  the  Company  shall  deliver  to such  Purchaser  a  written
certification  of a duly  authorized  officer as to whether it has complied with
the preceding  sentence.  As long as any Purchaser owns Notes, if the Company is
not required to file reports  pursuant to such laws, it will prepare and furnish
to the Purchasers and make publicly  available in accordance  with paragraph (c)
of Rule 144 such information as is required for the Purchasers to sell the Notes
under Rule 144.  The Company  further  covenants  that it will take such further
action as any holder of Notes may  reasonably  request to satisfy the provisions
of Rule 144 applicable to the issuer of securities  relating to transactions for
the sale of securities pursuant to Rule 144.

         4.3    INTEGRATION. Company Counsel and counsel to the Purchasers shall
confirm with the Securities and Exchange Commission ("SEC") that the offering of
the Notes and Warrants  shall not be deemed to be  integrated  with the offer or
sale of shares of Company Common Stock,  as reflected in the Company's Form SB-2
Registration  Statement  filed with the SEC on February  12,  2004 (the  "UNITED
STATES  COMMON  STOCK  OFFERING")  in a manner  that  would  require  the  prior
registration  under the  Securities  Act of the sale of the  Notes  and  Warrant
Shares to the Purchasers.

         4.4    RESERVATION AND LISTING OF COMMON STOCK; BLUE SKY.

                4.4.1  The  Company  shall  maintain  a  reserve  from  its duly
authorized  shares of Common  Stock for  issuance  pursuant  to the  Transaction
Documents in such amount as may be required to fulfill its  obligations  in full
under  the  Transaction  Documents.  In the  event  that at any  time  the  then
authorized  shares of Common Stock are  insufficient  for the Company to satisfy
its  obligations  in full under the  Transaction  Documents,  the Company  shall
promptly  take  such  actions  as may be  required  to  increase  the  number of
authorized shares.

                4.4.2  Following  the  Notes  Closing,  the  Company  shall  use
commercially  reasonable  best  efforts to cause its Common Stock to be approved
for listing on an Eligible  Market and maintain the listing of such Common Stock
on such  Eligible  Market.  The Company

                                                                              14
<PAGE>

covenants to promptly file any listing application  required by the OTC Bulletin
Board with respect to the Warrant Shares.

         4.5    SUBSEQUENT EQUITY OFFERINGS.

                4.5.1  Following the Notes  Closings,  the Company shall use its
best efforts to effect the sale and  placement of not less than  $3,500,000  and
not more than  $7,500,000  of shares of its Common Stock  pursuant to the United
States  Common  Stock  Offering  and/or a separate  offering of shares of Common
Stock on the London Stock Exchange  Alternative  Investment Market ("AIMS");  in
each case,  at per share  prices that shall be greater  than the $0.35 per share
Exercise Price of the Warrants.  In such  connection,  the Company shall, on the
Initial Notes Closing Date, engage SD Partners and/or the services of an advisor
recommended by SD Partners  (individually and collectively,  the "AIMS ADVISOR")
to assist the Company in  effecting  an offering of its Common Stock on the AIMs
market.  Pursuant to the Advisory Agreement,  the AIMs Advisor shall be entitled
to receive an  advisory  fee of $25,000  per month for a period of up to six (6)
consecutive  months,  payable on the first day of the month  commencing  June 1,
2004,  and  such  other  success  fees as  shall  be  provided  in the  Advisory
Agreement.

         4.6    SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall, on the
Final Notes Closing Date,  issue a press  release  reasonably  acceptable to the
Purchasers  disclosing  all  material  terms  of the  transactions  contemplated
hereby. Not later than five days after the Final Notes Closing Date, the Company
shall file a Current Report on Form 8-K with the  Commission  (the "8-K FILING")
describing  the  material  terms  of  the   transactions   contemplated  by  the
Transaction  Documents and including as exhibits to such Current  Report on Form
8-K this  Agreement in the form  required by the Exchange Act.  Thereafter,  the
Company shall timely file any filings and notices  required by the Commission or
applicable law with respect to the transactions  contemplated hereby and provide
copies thereof to the Purchasers  promptly after filing.  Except with respect to
the 8-K Filing and the press release  referenced  above (a copy of which will be
provided to the Purchaser  Designee on behalf of the Purchasers for their review
as early as practicable  prior to its filing),  the Company shall,  at least two
Trading Days prior to the filing or dissemination of any disclosure  required by
this  paragraph,  provide a copy thereof to the Purchaser  Designee on behalf of
the  Purchasers  for their  review.  The Company and the  Purchaser  Designee on
behalf of the  Purchasers  shall  consult  with each other in issuing  any press
releases  or  otherwise   making   public   statements   or  filings  and  other
communications  with the Commission or any  regulatory  agency or Trading Market
with respect to the transactions  contemplated  hereby,  and neither party shall
issue any such press release or otherwise make any such public statement, filing
or other  communication  without the prior consent of the other,  except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior  notice of such public  statement,  filing or
other  communication.  Notwithstanding  the  foregoing,  the  Company  shall not
publicly  disclose  the  name  of any  Purchaser,  or  include  the  name of any
Purchaser in any filing with the Commission or any regulatory  agency or Trading
Market,  without  the prior  written  consent of such  Purchaser,  except to the
extent such  disclosure  (but not any disclosure as to the  controlling  Persons
thereof)  is required by law or Trading  Market  regulations,  in which case the
Company shall provide the Purchasers with prior notice of such  disclosure.  The
Company shall not, and shall cause each of its  Subsidiaries and its and each of
their respective officers,  directors,  employees and agents not to, provide any
Purchaser with any material nonpublic  information  regarding the Company or

                                                                              15
<PAGE>

any of its Subsidiaries  from and after the filing of the 8-K Filing without the
express  written  consent  of such  Purchaser.  In the  event of a breach of the
foregoing  covenant by the Company,  any of its  Subsidiaries,  or any of its or
their respective officers,  directors,  employees and agents, in addition to any
other remedy provided herein or in the Transaction  Documents, a Purchaser shall
have  the  right to make a public  disclosure,  in the form of a press  release,
public  advertisement  or  otherwise,  of such  material  nonpublic  information
without the prior approval by the Company,  its  Subsidiaries,  or any of its or
their respective  officers,  directors,  employees or agents. No Purchaser shall
have any  liability to the  Company,  its  Subsidiaries,  or any of its or their
respective officers, directors,  employees,  stockholders or agents for any such
disclosure.  Subject to the  foregoing,  neither the  Company nor any  Purchaser
shall issue any press  releases or any other public  statements  with respect to
the transactions contemplated hereby; provided,  however, that the Company shall
be  entitled,  without the prior  approval of any  Purchaser,  to make any press
release or other  public  disclosure  with respect to such  transactions  (i) in
substantial  conformity with the 8-K Filing and contemporaneously  therewith and
(ii) as is required by applicable law and regulations (provided that in the case
of clause (i) each  Purchaser  shall be consulted  by the Company in  connection
with any such press  release or other public  disclosure  prior to its release).
Each press release  disseminated during the 12 months preceding the date of this
Agreement  did not at the time of  release  contain  any untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.

         4.7    USE OF PROCEEDS. The Company shall use the net proceeds from the
sale of the Notes and  Warrants  hereunder  solely for the purposes set forth on
SCHEDULE 4.7.

         4.8    REIMBURSEMENT.  If any Purchaser or any of its Affiliates or any
officer, director, partner, controlling Person, employee or agent of a Purchaser
or any of its Affiliates (a "RELATED  PERSON")  becomes involved in any capacity
in any  Proceeding  brought by or against any Person in connection  with or as a
result  of the  transactions  contemplated  by the  Transaction  Documents,  the
Company will  indemnify and hold harmless such  Purchaser or Related  Person for
its  reasonable   legal  and  other   expenses   (including  the  costs  of  any
investigation, preparation and travel) and for any Losses incurred in connection
therewith,  as such expenses or Losses are incurred,  excluding only Losses that
result directly from such Purchaser's or Related Person's  negligence or willful
misconduct.  In addition,  the Company  shall  indemnify  and hold harmless each
Purchaser and Related  Person from and against any and all Losses,  as incurred,
arising  out  of or  relating  to  any  breach  by  the  Company  of  any of the
representations,  warranties or covenants  made by the Company in this Agreement
or any other Transaction  Document,  or any allegation by a third party that, if
true, would  constitute such a breach.  The conduct of any Proceedings for which
indemnification  is available  under this paragraph shall be governed by Section
6.4(c)  below.  The  indemnification  obligations  of  the  Company  under  this
paragraph  shall be in addition to any liability  that the Company may otherwise
have and shall be  binding  upon and  inure to the  benefit  of any  successors,
assigns,  heirs and  personal  representatives  of the  Purchasers  and any such
Related  Persons.  The Company also agrees that neither the  Purchasers  nor any
Related Persons shall have any liability to the Company or any Person  asserting
claims on behalf of or in right of the Company in connection with or as a result
of the  transactions  contemplated by the Transaction  Documents,  except to the
extent that any Losses  incurred by the Company  result from the  negligence  or
willful  misconduct of the applicable  Purchaser or Related

                                                                              16
<PAGE>

Person in  connection  with  such  transactions.  If the  Company  breaches  its
obligations  under any  Transaction  Document,  then,  in  addition to any other
liabilities  the Company may have under any  Transaction  Document or applicable
law, the Company shall pay or reimburse  the  Purchasers on demand for all costs
of  collection  and  enforcement   (including   reasonable  attorneys  fees  and
expenses).  Without  limiting  the  generality  of the  foregoing,  the  Company
specifically  agrees to  reimburse  the  Purchasers  on demand  for all costs of
enforcing the indemnification obligations in this paragraph.

         4.9    FUTURE EQUITY OFFERINGS.

                (a) Subject to the exceptions described in Section 4.9(b) below,
for a period of six (6) months  following the Final  Closing  Date,  the Company
will not,  without the prior written  consent of the Purchaser  Designee,  sell,
offer to sell or contract  with any Person to obtain  proceeds  from the sale of
Equity Equivalents that involves:

                        (i) the  issuance  of shares of Common  Stock at a price
per share that shall be less than $0.35 (unless in such connection,  the Company
shall offer to reduce the exercise  price of the Warrants to such lower exercise
price), or

                        (ii)  the  issuance  of  Equity   Equivalents  that  are
convertible into or exercisable for an indeterminate  number of shares of Common
Stock, or

                        (iii) are not  subject  to  restrictions  on the  public
resale or  distribution  thereof  of for at least six (6) months  following  the
effective date of the  Registration  Statement

(the  limitations  referred  to in this  Section  4.9(a) are  referred to as the
"CAPITAL RAISING LIMITATIONS").

                (b) The Capital Raising  Limitations set forth in Section 4.9(a)
shall NOT apply to any transaction or series of transactions involving issuances
of securities:

                        (i)  to  employees,  directors  or  consultants  of  the
Company pursuant to a Company stock option plan;

                        (ii) upon the  exercise or  conversion,  as the case may
be, of currently outstanding options, warrants or convertible securities;

                        (iv)  upon  the   exercise  of  the  Warrants  or  other
Registrable Securities issued pursuant to the Transaction Documents;

                        (v)  in  connection  with  any  business   acquisitions,
mergers or strategic partnerships; or

                        (v) the sale of shares of Company  Common Stock pursuant
to the United State  Common Stock  Offering  and/or the AIMs  Offering,  in each
case, at per share prices that shall be equal to or greater than $0.35 per share
(unless, in each such

                                                                              17
<PAGE>

case,  the Company  shall offer to reduce the exercise  price of the Warrants to
such lower exercise price).

                                   ARTICLE V
                                   CONDITIONS

         5.1    CONDITIONS  PRECEDENT TO THE OBLIGATIONS OF THE PURCHASERS.  The
obligation of each  Purchaser to acquire Notes and Warrants on the Initial Notes
Closing Date and on the Final Notes Closing Date (as  applicable)  is subject to
the  satisfaction or waiver by such Purchaser,  on or before each of the Initial
Closing Date or the Final Closing Date, as applicable,  of each of the following
conditions:

                5.1.1  REPRESENTATIONS  AND WARRANTIES.  The representations and
warranties  of the  Company  contained  herein  shall be true and correct in all
material  respects as of the date when made on each of the Initial  Closing Date
and the Final Closing Date, as though made on and as of such dates; and

                5.1.2  PERFORMANCE.  The Company and each other  Purchaser shall
have  performed,  satisfied  and  complied  in all  material  respects  with all
covenants, agreements and conditions required by the Transaction Documents to be
performed,  satisfied or complied with by it at or prior to the Initial  Closing
Date and the Final Closing Date, as applicable.

                5.1.3  EFFECTIVENESS  OF FORM 10SB.  The Company's  Form 10SB12G
filing  that  was  filed  with  the  Commission  on April  12,  2004 has  become
effective.

                5.1.4  SUBORDINATION  OF  CERTAIN  COMPANY  INDEBTEDNESS.  On or
before the Final Closing Date,  the Company shall obtain from holders of Company
indebtedness  for  borrowed  money  representing  not less than an  aggregate of
$1,405,000 of the (a) $470,000  outstanding 9% convertible  notes of the Company
due 2006;  (b) $1,175,000  outstanding  amount of 7% bridge notes of the Company
due November 2004; and (c) $260,000 of outstanding  10% notes of the Company due
2005,  shall  pursuant  to  a  subordination   agreement  in  form  and  content
satisfactory to counsel to Purchasers, be made fully subject and subordinated to
the payment in full of the Notes.

                5.1.5  LOCK-UP  AGREEMENT.  On or before the Final Closing Date,
the Company  shall  undertake  to obtain from all Company  directors,  officers,
holders of 5% or more of the  Company's  Common  Stock and all selling  security
holders identified in the United States Common Stock Offering shall enter into a
Lock-Up Agreement wherein each of the foregoing agree that they will not, during
the period  ending May 15, 2005 (a) offer,  pledge,  announce  the  intention to
sell, sell, contract to sell, sell any option or contract to purchase,  purchase
any option or contract to sell, grant any option,  right or warrant to purchase,
or otherwise  transfer or dispose of, directly or indirectly,  any securities of
the Company or Equity Equivalents (including,  securities which may be deemed to
be  beneficially  owned by them in accordance  with the rules and regulations of
the Securities and Exchange  Commission and securities  which may be issued upon
exercise  of a stock  option or  warrant)  or (b) enter  into any swap,  option,
future,  forward or other agreement that transfers,  in whole or in part, any of
the economic consequences of

                                                                              18
<PAGE>

ownership of any securities of the Company,  including,  but not limited to, any
security  convertible  into or exercisable or exchangeable for any securities of
the Company.  Notwithstanding the foregoing,  in the event that any such Company
stockholder  fails or refuses to execute and deliver such  Lock-Up  Agreement by
the Final Notes Closing Date (a "DEFAULTING STOCKHOLDER"), the Company shall (i)
amend its  registration  statement in respect of the United  States Common Stock
Offering  to  remove  such  Defaulting  Stockholder  as  a  selling  stockholder
thereunder,  and (ii) instruct its legal counsel and the transfer agent to place
a "stop  transfer"  order with  respect to all shares of Common  Stock  owned of
record by such Defaulting Stockholder or his or its Affiliates.

         5.2    CONDITIONS  PRECEDENT TO THE  OBLIGATIONS  OF THE  COMPANY.  The
obligation  of the Company to sell Notes at the Notes  Closing is subject to the
satisfaction  or waiver by each  Purchaser,  at or before each such Closing,  of
each of the following conditions:

                5.2.1  REPRESENTATIONS  AND WARRANTIES.  The representations and
warranties of the Purchasers  contained  herein shall be true and correct in all
material respects as of the date when made and as of the applicable Closing Date
as though made on and as of such date; and

                5.2.2   PERFORMANCE.   The  Purchasers   shall  have  performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by the Transaction Documents to be performed,  satisfied
or complied with by the Purchasers at or prior to such Closing.

                                   ARTICLE VI
                               REGISTRATION RIGHTS

         6.1    REGISTRATION

                6.1.1 Not later than sixty (60) days after the effective date of
the United States Common Stock  Offering  registration  statement  (the "PENDING
REGISTRATION  STATEMENT")  , the Company  shall have prepared and filed with the
Commission the Registration  Statement covering the sale to the Purchasers,  and
the resale by the Purchasers of all Registrable Securities for an offering to be
made on a  continuous  basis  pursuant to Rule 415.  The Company  shall have the
right to include in such Registration  Statement,  securities of the Company (a)
registered for resale pursuant to the Pending Registration Statement, and/or (b)
previously  issued or committed  to be issued,  to the extent and to the Persons
disclosed on SCHEDULE 3.1.16.

                6.1.2 The  Company  shall  promptly  respond  to all  letters of
comment that the Company shall receive from the staff of the SEC with respect to
such  Registration  Statement  and shall use its  commercially  reasonable  best
efforts to cause the Registration  Statement to be declared effective by the SEC
as soon as practicable  thereafter;  provided,  that the Purchasers  acknowledge
that such  registration  efforts  may be delayed  in the event that the  Company
enters into any agreement or  commitment  for the  acquisition  of any assets or
securities  of any  Person  prior  to the  effectiveness  of  such  Registration
Statement,  and is required to cause an audit to be conducted in accordance with
the rules and  regulations  promulgated  by the SEC.  By his  execution  of this
Agreement, Anthony G. Roth, does hereby personally guaranty that, for so long

                                                                              19
<PAGE>

as he shall be the  President  and CEO of the Company,  the Company shall comply
with its covenants and agreements contained in this Section 6.1.2.

                6.1.3 The Company  shall use its  commercially  reasonable  best
efforts to keep the  Registration  Statement  continuously  effective  under the
Securities  Act until  the  second  anniversary  of the  Effective  Date or such
earlier  date  when all  Registrable  Securities  covered  by such  Registration
Statement have been sold (the "EFFECTIVENESS PERIOD").

                6.1.4  The  Company  shall  notify  each  Purchaser  in  writing
promptly (and in any event within one Trading Day) after receiving  notification
from the Commission that the Registration Statement has been declared effective.

                6.1.5 Upon the occurrence of any Event (as defined below) and on
every  monthly  anniversary  thereof  until the  applicable  Event is cured,  as
partial relief for the damages suffered therefrom by any Purchaser (which remedy
shall not be exclusive of any other remedies available under this Agreement,  at
law or in equity),  the Company shall pay or issue,  as the case may be, to each
Purchaser  as to which an Event  relates,  as  liquidated  damages  and not as a
penalty,  cash or,  upon the  payment of the par value  thereof,  such number of
shares  of Common  Stock as shall  equal  three  percent  (3%) of the  aggregate
outstanding  principal  amount of the Notes  purchased by such Purchasers at the
Notes Closings. Such additional shares are designated "EVENT SHARES" and will be
treated by all parties,  after issuance,  in the same manner as all other Shares
of  Common  Stock  and  shall  thereafter  be  included  in  the  definition  of
"Registrable  Securities."  Event Shares will be issued on a pro-rata  basis for
any portion of a month prior to the cure of an Event.

For such  purposes,  each of the  following if occurring  prior to or during the
Effectiveness Period shall constitute an "EVENT":

                        (i) the Registration Statement is not declared effective
on or prior to the Required Effectiveness Date;

                        (ii) after the  Effective  Date,  a  Purchaser  (without
fault  on the  part of any  Purchaser)  is not  permitted  to  sell  Registrable
Securities  under  the  Registration  Statement  (or a  subsequent  Registration
Statement filed in replacement  thereof) for any reason for five or more Trading
Days (whether or not consecutive);

                        (iii)  after  the  Effective   Date,   any   Registrable
Securities covered by such Registration  Statement are not listed on an Eligible
Market;

                        (iv) after the Effective  Date,  the Common Stock is not
listed or quoted,  or is suspended  from  trading,  on an Eligible  Market for a
period of three Trading Days (which need not be consecutive Trading Days);

                        (v) the  Company  fails  for any  reason  to  deliver  a
certificate  evidencing  any Shares of Common Stock to a Purchaser  within three
Trading  Days after  delivery of such  certificate  is required  pursuant to any
Transaction  Document or the exercise  rights of the Purchasers  pursuant to the
Transaction Documents are otherwise suspended for any reason.

                                                                              20
<PAGE>

         6.2    REGISTRATION  PROCEDURES.   In  connection  with  the  Company's
registration obligations hereunder, the Company shall:

                6.2.1 Not less than three  Trading Days prior to the filing of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that would be  incorporated  or deemed to be
incorporated  therein  by  reference),  the  Company  shall (i)  furnish to each
Purchaser  and any counsel  designated  by any  Purchaser  (each,  a  "PURCHASER
COUNSEL"),  copies of all such documents  proposed to be filed,  which documents
(other than those  incorporated  or deemed to be incorporated by reference) will
be subject to the review of such Purchasers and each Purchaser Counsel, and (ii)
cause its officers  and  directors,  counsel and  independent  certified  public
accountants  to  respond  to  such  inquiries  as  shall  be  necessary,  in the
reasonable  opinion  of  each  Purchaser   Counsel,   to  conduct  a  reasonable
investigation  within the meaning of the  Securities  Act. The Company shall not
file a  Registration  Statement  or any such  Prospectus  or any  amendments  or
supplements  thereto to which  Purchasers  holding a majority of the Registrable
Securities shall reasonably object.

                6.2.2 (i) Prepare and file with the Commission such  amendments,
including  post-effective  amendments,  to each  Registration  Statement and the
Prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424;  (iii)
respond as promptly as reasonably possible, and in any event within ten days, to
any comments  received  from the  Commission  with  respect to the  Registration
Statement  or any  amendment  thereto  and as promptly  as  reasonably  possible
provide the Purchasers true and complete copies of all  correspondence  from and
to the Commission relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the  disposition of all  Registrable  Securities  covered by the
Registration  Statement  during the  applicable  period in  accordance  with the
intended  methods of  disposition  by the  Purchasers  thereof  set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.

                6.2.3 Notify the Purchasers of Registrable Securities to be sold
and each Purchaser Counsel as promptly as reasonably possible, and (if requested
by any such Person) confirm such notice in writing no later than one Trading Day
thereafter,  of any of the following  events:  (i) the  Commission  notifies the
Company whether there will be a "review" of any Registration Statement; (ii) the
Commission comments in writing on any Registration  Statement (in which case the
Company  shall  deliver to each  Purchaser  a copy of such  comments  and of all
written   responses   thereto);   (iii)  any   Registration   Statement  or  any
post-effective amendment is declared effective; (iv) the Commission or any other
Federal or state governmental  authority requests any amendment or supplement to
any  Registration  Statement or  Prospectus or requests  additional  information
related  thereto;  (v) the  Commission  issues  any stop  order  suspending  the
effectiveness  of any  Registration  Statement or initiates any  Proceedings for
that  purpose;  (vi)  the  Company  receives  notice  of any  suspension  of the
qualification or exemption from qualification of any Registrable  Securities for
sale in any jurisdiction, or the initiation or threat of any Proceeding for such
purpose;  or  (vii)  the  financial  statements  included  in  any  Registration

                                                                              21
<PAGE>

Statement become  ineligible for inclusion  therein or any statement made in any
Registration  Statement or Prospectus or any document  incorporated or deemed to
be  incorporated  therein by reference is untrue in any material  respect or any
revision to a Registration  Statement,  Prospectus or other document is required
so that it will not contain any untrue  statement of a material  fact or omit to
state any material fact  required to be stated  therein or necessary to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading.

                6.2.4 Use its commercially  reasonable best efforts to avoid the
issuance of or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness  of any  Registration  Statement,  or (ii) any  suspension  of the
qualification  (or  exemption  from  qualification)  of any  of the  Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

                6.2.5  Furnish to each  Purchaser  and each  Purchaser  Counsel,
without charge, at least one conformed copy of each  Registration  Statement and
each amendment  thereto,  including  financial  statements  and  schedules,  all
documents  incorporated or deemed to be incorporated  therein by reference,  and
all exhibits to the extent requested by such Person  (including those previously
furnished  or  incorporated  by  reference)  promptly  after the  filing of such
documents with the Commission.

                6.2.6  Promptly  deliver to each  Purchaser  and each  Purchaser
Counsel,  without  charge,  as many  copies of the  Prospectus  or  Prospectuses
(including each form of prospectus) and each amendment or supplement  thereto as
such Persons may reasonably  request.  The Company hereby consents to the use of
such Prospectus and each amendment or supplement  thereto by each of the selling
Purchasers  in  connection  with  the  offering  and  sale  of  the  Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.

                6.2.7 Once  applicable:  (i) in the time and manner  required by
each Trading  Market,  prepare and file with such Trading  Market an  additional
shares listing application covering all of the Registrable Securities; (ii) take
all steps  necessary  to cause such  Registrable  Securities  to be approved for
listing on each Trading Market as soon as possible thereafter;  (iii) provide to
the Purchasers  evidence of such listing;  and (iv) maintain the listing of such
Registrable Securities on each such Trading Market or another Eligible Market.

                6.2.8 Prior to any public  offering of  Registrable  Securities,
use its best  efforts  to  register  or qualify or  cooperate  with the  selling
Purchasers  and  each  applicable  Purchaser  Counsel  in  connection  with  the
registration  or   qualification   (or  exemption  from  such   registration  or
qualification)  of such  Registrable  Securities  for offer  and sale  under the
securities  or blue sky laws of such  jurisdictions  within the United States as
any  Purchaser   requests  in  writing,   to  keep  each  such  registration  or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things  necessary or advisable to enable the
disposition in such  jurisdictions  of the Registrable  Securities  covered by a
Registration  Statement;  PROVIDED,  HOWEVER,  that  the  Company  shall  not be
obligated  to file any general  consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so  qualified  or to subject  itself to taxation in any  jurisdiction  in
which it is not otherwise subject.

                                                                              22
<PAGE>

                6.2.9  Cooperate  with the  Purchasers to facilitate  the timely
preparation and delivery of certificates  representing Registrable Securities to
be  delivered  to a  transferee  pursuant  to a  Registration  Statement,  which
certificates  shall be free, to the extent  permitted by this Agreement,  of all
restrictive  legends,  and to enable such  Registrable  Securities to be in such
denominations and registered in such names as any such Purchasers may request.

                6.2.10 Upon the  occurrence  of any event  described  in Section
6.2.3(vii),  as  promptly  as  reasonably  possible,  prepare  a  supplement  or
amendment,  including a post-effective  amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that,  as  thereafter  delivered,  neither the  Registration  Statement nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading.

                6.2.11 Cooperate with any due diligence investigation undertaken
by the  Purchasers  in  connection  with  the  sale of  Registrable  Securities,
including without  limitation by making available any documents and information;
provided  that the Company will not deliver or make  available to any  Purchaser
material,  nonpublic information unless such Purchaser  specifically requests in
advance to receive  material,  nonpublic  information  in writing  and agrees to
utilize such information in a manner consistent with applicable law.

                6.2.12 If Holders of a majority  of the  Registrable  Securities
being offered pursuant to a Registration  Statement select  underwriters for the
offering,  the Company  shall enter into and  perform its  obligations  under an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,   by  providing  customary  legal  opinions,   comfort  letters  and
indemnification and contribution obligations.

                6.2.13 Comply with all applicable  rules and  regulations of the
Commission.

         6.3    REGISTRATION  EXPENSES. The Company shall pay (or  reimburse the
Purchasers  for)  all  fees  and  expenses  incident  to the  performance  of or
compliance with this Agreement by the Company,  including without limitation (a)
all  registration  and filing fees and expenses,  including  without  limitation
those  related  to  filings  with the  Commission,  any  Trading  Market  and in
connection  with  applicable  state  securities  or Blue Sky laws,  (b) printing
expenses  (including  without limitation  expenses of printing  certificates for
Registrable   Securities   and  of  printing   prospectuses   requested  by  the
Purchasers),  (c)  messenger,  telephone  and  delivery  expenses,  (d) fees and
disbursements  of counsel for the Company and up to $10,000 in the aggregate for
the fees and expenses of one legal  counsel  designated by the  Purchasers,  (e)
fees and  expenses of all other  Persons  retained by the Company in  connection
with the  consummation of the transactions  contemplated by this Agreement,  and
(f) all listing fees to be paid by the Company to the Trading Market.

         6.4    INDEMNIFICATION

                6.4.1   INDEMNIFICATION  BY  THE  COMPANY.  The  Company  shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Purchaser, the officers,

                                                                              23
<PAGE>

directors,  partners,  members, agents, brokers (including brokers who offer and
sell Registrable  Securities as principal as a result of a pledge or any failure
to  perform  under a margin  call of  Common  Stock),  investment  advisors  and
employees of each of them,  each Person who controls any such Purchaser  (within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act) and the officers,  directors,  partners,  members,  agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all Losses, as incurred,  arising out of or relating to
any untrue or alleged  untrue  statement  of a material  fact  contained  in the
Registration  Statement,  any  Prospectus  or any form of  prospectus  or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged  omission of a material  fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement  thereto, in the light of the
circumstances under which they were made) not misleading,  except to the extent,
but  only to the  extent,  that  (i)  such  untrue  statements,  alleged  untrue
statements,  omissions or alleged  omissions  are based solely upon  information
regarding such  Purchaser  furnished in writing to the Company by such Purchaser
expressly  for use therein,  or to the extent that such  information  relates to
such  Purchaser  or  such   Purchaser's   proposed  method  of  distribution  of
Registrable  Securities  and was reviewed and  expressly  approved in writing by
such Purchaser expressly for use in the Registration Statement,  such Prospectus
or such form of Prospectus or in any amendment or supplement  thereto or (ii) in
the  case  of an  occurrence  of an  event  of the  type  specified  in  Section
6.2.3(v)-(vii), the use by such Purchaser of an outdated or defective Prospectus
after the Company has notified such  Purchaser in writing that the Prospectus is
outdated or defective  and prior to the receipt by such  Purchaser of the Advice
contemplated in Section 6.5. The Company shall notify the Purchasers promptly of
the  institution,  threat or assertion of any Proceeding of which the Company is
aware in connection with the transactions contemplated by this Agreement.

                6.4.2  INDEMNIFICATION  BY  PURCHASERS.  Each  Purchaser  shall,
severally  and not  jointly,  indemnify  and  hold  harmless  the  Company,  its
directors,  officers, agents and employees, each Person who controls the Company
(within  the meaning of Section 15 of the  Securities  Act and Section 20 of the
Exchange  Act),  and  the  directors,  officers,  agents  or  employees  of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses (as  determined  by a court of  competent  jurisdiction  in a
final judgment not subject to appeal or review) arising solely out of any untrue
statement  of a material  fact  contained  in the  Registration  Statement,  any
Prospectus,  or any  form  of  prospectus,  or in any  amendment  or  supplement
thereto, or arising solely out of any omission of a material fact required to be
stated therein or necessary to make the  statements  therein (in the case of any
Prospectus  or form of prospectus  or  supplement  thereto,  in the light of the
circumstances under which they were made) not misleading to the extent, but only
to the extent,  that such untrue  statement  or  omission  is  contained  in any
information   so  furnished  in  writing  by  such   Purchaser  to  the  Company
specifically for inclusion in such Registration  Statement or such Prospectus or
to the extent that (i) such untrue statements or omissions are based solely upon
information regarding such Purchaser furnished in writing to the Company by such
Purchaser  expressly  for use  therein,  or to the extent that such  information
relates to such Purchaser or such Purchaser's proposed method of distribution of
Registrable  Securities  and was reviewed and  expressly  approved in writing by
such Purchaser expressly for use in the Registration Statement,  such Prospectus
or such form of Prospectus or in any amendment or supplement  thereto or (ii) in
the  case  of an  occurrence  of an  event  of the  type  specified  in  SECTION
6.2.3(V)-(VII), the use by such Purchaser of an outdated or

                                                                              24
<PAGE>

defective  Prospectus  after the Company has notified such  Purchaser in writing
that the  Prospectus  is outdated or defective  and prior to the receipt by such
Purchaser  of the Advice  contemplated  in SECTION  6.5.  In no event  shall the
liability  of any  selling  Purchaser  hereunder  be greater in amount  than the
dollar  amount  of the net  proceeds,  in  excess  of the  amount  paid for such
Registrable  Securities,  received  by  such  Purchaser  upon  the  sale  of the
Registrable Securities giving rise to such indemnification obligation.

                6.4.3 CONDUCT OF INDEMNIFICATION  PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity  hereunder
(an  "INDEMNIFIED  PARTY"),  such  Indemnified  Party shall promptly  notify the
Person from whom indemnity is sought (the "INDEMNIFYING  PARTY") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel  reasonably  satisfactory to the Indemnified Party and the
payment of all fees and expenses  incurred in connection  with defense  thereof;
provided,  that the failure of any  Indemnified  Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

                An  Indemnified  Party  shall have the right to employ  separate
counsel in any such  Proceeding and to participate in the defense  thereof,  but
the  fees  and  expenses  of  such  counsel  shall  be at the  expense  of  such
Indemnified  Party or Parties unless:  (i) the Indemnifying  Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have
failed  promptly to assume the defense of such  Proceeding and to employ counsel
reasonably  satisfactory to such Indemnified  Party in any such  Proceeding;  or
(iii) the named parties to any such Proceeding (including any impleaded parties)
include  both  such  Indemnified  Party  and the  Indemnifying  Party,  and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified  Party
and the Indemnifying  Party (in which case, if such  Indemnified  Party notifies
the  Indemnifying  Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense  thereof and such counsel shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  effected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

                All  fees  and  expenses  of the  Indemnified  Party  (including
reasonable  fees  and  expenses  to  the  extent  incurred  in  connection  with
investigating   or  preparing  to  defend  such   Proceeding  in  a  manner  not
inconsistent  with this  Section)  shall be paid to the  Indemnified  Party,  as
incurred, within ten calendar days of written notice thereof to the Indemnifying
Party  (regardless  of whether it is ultimately  determined  that an Indemnified
Party  is  not  entitled  to  indemnification  hereunder;   provided,  that  the
Indemnifying  Party may require such Indemnified Party to undertake to reimburse
all such fees and  expenses  to the extent it is finally  judicially  determined
that such Indemnified Party is not entitled to indemnification hereunder).

                                                                              25
<PAGE>

                6.4.4 CONTRIBUTION. If a claim for indemnification under SECTION
6.4.1 or .2 is unavailable  to an  Indemnified  Party (by reasons other than the
specified exclusions to indemnification),  then each Indemnifying Party, in lieu
of indemnifying such Indemnified  Party,  shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative  fault of the  Indemnifying  Party and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the  limitations  set forth in SECTION 6.4.3,  any  reasonable  attorneys' or
other reasonable fees or expenses  incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

                The parties hereto agree that it would not be just and equitable
if  contribution  pursuant to this  SECTION  6.4.4 were  determined  by pro rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding  the  provisions of this SECTION  6.4.4,  no Purchaser  shall be
required to contribute,  in the aggregate, any amount in excess of the amount by
which the net proceeds  actually received by such Purchaser from the sale of the
Registrable  Securities  subject  to the  Proceeding  exceeds  the amount of any
damages that such Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue  statement or omission or alleged  omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any Person who was
not guilty of such fraudulent misrepresentation.

                The  indemnity  and  contribution  agreements  contained in this
Section are in addition to any liability that the Indemnifying  Parties may have
to the Indemnified Parties.

         6.5    DISPOSITIONS. Each Purchaser agrees that it will comply with the
prospectus  delivery  requirements  of the Securities Act as applicable to it in
connection  with sales of Registrable  Securities  pursuant to the  Registration
Statement. Each Purchaser further agrees that, upon receipt of a notice from the
Company  of the  occurrence  of any  event of the  kind  described  in  SECTIONS
6.2.3(V),  (VI) or (VII),  such Purchaser will  discontinue  disposition of such
Registrable  Securities under the Registration  Statement until such Purchaser's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by SECTION 6.2.10, or until it is advised in writing (the
"ADVICE")  by the  Company  that  the use of the  applicable  Prospectus  may be
resumed,  and,  in  either  case,  has  received  copies  of any  additional  or
supplemental  filings  that are  incorporated  or deemed to be  incorporated  by
reference in such Prospectus or Registration Statement.  The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

                                                                              26
<PAGE>

         6.6    PURCHASERS' PIGGY-BACK  REGISTRATIONS. If at any time during the
Effectiveness Period there is not an effective  Registration  Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the  Commission a registration  statement  relating to an offering for
its own account or the account of others under the  Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents  relating to equity  securities to
be issued solely in connection with any acquisition of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans,  then the Company shall send to each Purchaser  written notice of
such determination and if, within fifteen days after receipt of such notice, any
such  Purchaser  shall so request in writing,  the Company shall include in such
registration  statement  all or any  part of such  Registrable  Securities  such
Purchaser requests to be registered.  In such event, the following provisions of
this Agreement shall apply: Sections 6.2.5, 6.2.6, 6.4 and 6.5.

                                  ARTICLE VII
                                  MISCELLANEOUS

         7.1    TERMINATION.  Unless  otherwise  agreed  by Great  Court and the
Company, this Agreement shall automatically terminate and be of no further force
if Purchasers  fail to purchase at least  $700,000 of the Notes by May 21, 2004.
In the  event  of such  termination  no party  hereto  shall  have  any  further
liability to the other.

         7.2    FEES AND  EXPENSES.  On the  Initial  Notes  Closing  Date,  the
Company  shall pay to  counsel  for all  Purchasers  $15,000  for legal fees and
expenses  incurred in connection  with the  preparation  and  negotiation of the
Transaction  Documents.  Except as otherwise set forth herein, the Company shall
have no further obligation to pay fees of counsel for any Purchaser at any other
time.  Except  as  expressly  set  forth  in the  Transaction  Documents  to the
contrary,  each party shall pay the fees and expenses of its advisers,  counsel,
accountants and other experts,  if any, and all other expenses  incurred by such
party  incident  to  the  negotiation,   preparation,  execution,  delivery  and
performance  of this  Agreement.  The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the issuance of
the Notes.

         7.3    ENTIRE AGREEMENT.  The Transaction Documents,  together with the
Exhibits and Schedules thereto,  contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents,  exhibits and schedules. At or
after the Final Notes  Closing  Date,  and without  further  consideration,  the
parties will execute and deliver to each other such further  documents as may be
reasonably  requested in order to give practical  effect to the intention of the
parties under the Transaction Documents.

         7.4    NOTICES.   Any  and  all  notices  or  other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (a) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or

                                                                              27
<PAGE>

communication  is delivered via facsimile at the facsimile  number  specified in
this  Section on a day that is not a Trading  Day or later  than 6:30 p.m.  (New
York City time) on any Trading  Day, (c) the Trading Day  following  the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon  actual  receipt by the party to whom such  notice is required to be given.
The  addresses  and facsimile  numbers for such notices and  communications  are
those  set  forth on the  signature  pages  hereof,  or such  other  address  or
facsimile number as may be designated in writing hereafter,  in the same manner,
by such Person. Any party providing notice to the Company  simultaneously  shall
provide a copy of that notice and all  accompanying  materials to Gersten Savage
Kaplowitz Wolf & Marcus, LP, at the address shown on the signature page hereto.

         7.5    AMENDMENTS;  WAIVERS.  No  provision  of this  Agreement  may be
waived  or  amended  except in a written  instrument  signed,  in the case of an
amendment,  by the  Company  and  each of the  Purchasers  or,  in the case of a
waiver,  by the party against whom enforcement of any such waiver is sought.  No
waiver of any default with respect to any provision, condition or requirement of
this  Agreement  shall be deemed to be a  continuing  waiver in the  future or a
waiver of any subsequent  default or a waiver of any other provision,  condition
or  requirement  hereof,  nor  shall any delay or  omission  of either  party to
exercise  any right  hereunder  in any manner  impair the  exercise  of any such
right.  Notwithstanding  the  foregoing,  a waiver or consent to depart from the
provisions  hereof with  respect to a matter  that  relates  exclusively  to the
rights of  Purchasers  under ARTICLE VI and that does not directly or indirectly
affect  the rights of other  Purchasers  may be given by  Purchasers  holding at
least a majority of the  Registrable  Securities to which such waiver or consent
relates.

         7.6    CONSTRUCTION.  The headings herein are for convenience  only, do
not  constitute  a part of this  Agreement  and  shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

         7.7    SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written  consent of the  Purchasers.  Any Purchaser may assign
its rights under this Agreement to any Person to whom such Purchaser  assigns or
transfers  any Notes,  provided such  transferee  agrees in writing to be bound,
with respect to the transferred  Notes,  by the provisions  hereof that apply to
the "Purchasers."  Notwithstanding anything to the contrary herein, Notes may be
assigned to any Person in  connection  with a bona fide margin  account or other
loan or financing arrangement secured by such Notes.

         7.8    NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except that each Related Person is an intended third party
beneficiary of Section 4.8 and each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such
Sections directly against the parties with obligations thereunder.

                                                                              28
<PAGE>

         7.9    GOVERNING  LAW;  VENUE;  WAIVER  OF JURY  TRAIL.  all  questions
concerning the construction,  validity,  enforcement and  interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
laws of the STATE OF NEW YORK.  THE COMPANY AND  PURCHASERS  Hereby  Irrevocably
Submit To The Exclusive  Jurisdiction Of The State And Federal Courts Sitting In
The CITY OF NEW YORK,  STATE OF NEW YORK,  For The  Adjudication  Of Any Dispute
BROUGHT BY THE COMPANY OR ANY PURCHASER  Hereunder,  In  Connection  Herewith Or
With Any Transaction  Contemplated  Hereby Or Discussed  Herein  (Including With
Respect To The  Enforcement  Of Any Of The  Transaction  Documents),  And Hereby
Irrevocably  Waive,  And Agree Not To Assert In Any Suit,  Action Or  ProceedinG
BROUGHT BY THE  COMPANY OR ANY  PURCHASER,  Any Claim That It Is Not  Personally
Subject To The  Jurisdiction  Of Any Such  Court,  OR That Such Suit,  Action Or
Proceeding Is Improper. Each party Hereby Irrevocably Waives Personal Service Of
Process  And  Consents  To  Process  Being  Served In Any Such  Suit,  Action Or
Proceeding  By  Mailing A Copy  Thereof  Via  Registered  Or  Certified  Mail Or
Overnight  Delivery  (With Evidence Of Delivery) To Such Party At The Address In
Effect For Notices To It Under This Agreement And Agrees That Such Service Shall
Constitute Good And Sufficient  Service Of Process And Notice  Thereof.  Nothing
Contained  Herein Shall Be Deemed To Limit In Any Way Any Right To Serve Process
In Any Manner  Permitted  By Law.  The Company AND  PURCHASERS  Hereby Waive All
Rights To A Trial By Jury.

         7.10   SURVIVAL.  The  representations,   warranties,   agreements  and
covenants  contained  herein  shall  survive all Closings  hereunder,  including
without  limitation  the delivery of the Notes and the exercise of all Warrants,
as applicable.

         7.11   EXECUTION. This  Agreement  may  be  executed  in  two  or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become effective when  counterparts have been signed by
each party and  delivered  to the other  party,  it being  understood  that both
parties need not sign the same  counterpart.  In the event that any signature is
delivered by facsimile  transmission,  such  signature  shall create a valid and
binding  obligation of the party executing (or on whose behalf such signature is
executed)  with the same force and effect as if such  facsimile  signature  page
were an original thereof.

         7.12   SEVERABILITY. If any  provision of this  Agreement is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         7.13   REPLACEMENT  OF  NOTES,  WARRANTS  OR  WARRANT  SHARES.  If  any
certificate or instrument  evidencing  any Notes,  Warrants or Warrant Shares is
mutilated,  lost,  stolen or  destroyed,  the Company shall issue or cause to be
issued in exchange and substitution  for and

                                                                              29
<PAGE>

upon  cancellation  thereof,  or in lieu  of and  substitution  therefor,  a new
certificate  or  instrument,  but  only  upon  receipt  of  evidence  reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable  indemnity,  if requested.  The applicants  for a new  certificate or
instrument under such  circumstances  shall also pay any reasonable  third-party
costs associated with the issuance of such replacement.

         7.14  REMEDIES.  In addition to being  entitled to exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate. The parties further agree that no bond or other
security shall be required in obtaining  such  equitable  relief and the parties
hereby  consent to the  ordering  of  specific  performance.  The  parties  also
understand  that other  action may be taken and  remedies  enforced  against the
breaching party.

         7.15   PAYMENT  SET  ASIDE.  To the  extent  that the  Company  makes a
payment or payments to any  Purchaser  hereunder  or any  Purchaser  enforces or
exercises its rights  hereunder or  thereunder,  and such payment or payments or
the  proceeds  of  such   enforcement  or  exercise  or  any  part  thereof  are
subsequently invalidated,  declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company by a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         7.16   ADJUSTMENTS  IN SHARE  NUMBERS AND  PRICES.  In the event of any
stock split,  subdivision,  dividend or distribution payable in shares of Common
Stock (or other securities or rights  convertible  into, or entitling the holder
thereof to receive directly or indirectly  shares of Common Stock),  combination
or other similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event.

         7.17   INDEPENDENT  NATURE OF PURCHASERS'  OBLIGATIONS  AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser  under any  Transaction  Document.  The decision of each  Purchaser to
purchase  Notes  pursuant  to this  Agreement  has been  made by such  Purchaser
independently  of any other  Purchaser  and  independently  of any  information,
materials,  statements  or opinions  as to the  business,  affairs,  operations,
assets, properties,  liabilities, results of operations, condition (financial or
otherwise)  or prospects of the Company which may have been made or given by any
other  Purchaser  or by any agent or  employee  of any other  Purchaser,  and no
Purchaser  or any of its agents or  employees  shall have any  liability  to any
other  Purchaser  (or any other  Person)  relating  to or arising  from any such
information,  materials,  statements or opinions. Nothing contained herein or in
any Transaction Document, and no action taken by any

                                                                              30
<PAGE>

Purchaser  pursuant  thereto,  shall be deemed to constitute the Purchasers as a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction  Document.  Each Purchaser  acknowledges that no other Purchaser has
acted as agent for such  Purchaser  in  connection  with  making its  investment
hereunder and that no other  Purchaser will be acting as agent of such Purchaser
in connection with monitoring its investment hereunder.  Each Purchaser shall be
entitled to  independently  protect and  enforce its rights,  including  without
limitation  the  rights  arising  out of  this  Agreement  or  out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.

[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                                                              31
<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto  have caused this  Securities
Purchase   Agreement  to  be  duly  executed  by  their  respective   authorized
signatories as of the date first indicated above.

                                     UTIX GROUP, INC.

                                     By:
                                            ------------------------------------
                                     Name:  Anthony G. Roth
                                     Title: President and CEO

                                     AS TO THE PROVISIONS OF SECTION 6.1.2 ONLY:

                                     -------------------------------------------
                                              Anthony G. Roth

                                     Address for Notice:

                                     Anthony G. Roth
                                     Utix Group, Inc.
                                     170 Cambridge Street
                                     Burlington, MA 01803
                                     Facsimile No.: 781-229-8886
                                     Telephone No.: 781-229-2589

                   With a copy to:   Gersten Savage Kaplowitz
                                     Wolf & Marcus LP
                                     101 East 52nd Street
                                     New York, NY 10022
                                     Facsimile No.: 212-980-5192
                                     Telephone No.: 212-752-9700
                                     Attn: Stephen A. Weiss, Esq.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

<PAGE>

                            PURCHASER SIGNATURE PAGE

New York Holdings, Ltd

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

New York Holdings, Ltd.
Address:
3 Daniel Frisch Street
Tel Aviv 64731, Israel

$400,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         SOL KEST

Address:
5150 Overland Avenue
Culver City, CA 90230l

$250,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         ROBERT KORNSTEIN

Address:
15 West 72nd St., 15K
New York, NY 10023

$100,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         AVNER MALOUL

Address:
155 E. 34 St., #3S
New York, NY 10010

$102,500
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         ALLEN LOWY

Address:
1776 Broadway, 11th floor
New York, NY 10019

$89 ,500
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         SHAYKIN FAMILY FOUNDATION

By:
    -------------------------------
    Leonard P. Shaykin
    President/Treasurer

Address:
630 Fifth Ave., Suite 3110
New York, NY 10111

$100,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         SIDNEY KESSOUS

Address:
7 Hidden Springs Lane
East Windsor, NJ  08520

$200,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         Phil St. Germain

Address:
11 Bow Street
Portsmouth, NH  03801

$35,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         James Kendall

Address:
676 Reef Road
Vero Beach, FL  32963

$50,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         Mort Goulder

Address:
Ridge Road
Hollis, NH  03049

$100,000
Dollar Amount of Notes Purchased

<PAGE>

                            PURCHASER SIGNATURE PAGE

--------------------------------------
         David Friend

Address:
111 Huntington Ave., Ste. 2600
Boston, MA  02199

$100,000
Dollar Amount of Notes Purchased

<PAGE>

                                   SCHEDULES:

---------------------------------------------------------------------------
NUMBER            DESCRIPTION

---------------------------------------------------------------------------
1.1.17            Form of Note

---------------------------------------------------------------------------
1.1.18            Form of Warrant

---------------------------------------------------------------------------
1.1.27            Security Agreement

---------------------------------------------------------------------------
2.1.2(b)          Opinion of Company's Counsel

---------------------------------------------------------------------------
3.1.6             Capitalization

---------------------------------------------------------------------------
3.1.12            Certain Finders Fee Agreements

---------------------------------------------------------------------------
3.1.16            Existing Registration Rights

---------------------------------------------------------------------------
4.7               Use of Proceeds

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

<PAGE>

                                                                 Schedule 1.1.17

THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES  AND EXCHANGE
COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE  IN  RELIANCE  UPON AN
EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN  AVAILABLE   EXEMPTION  FROM,  OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE
REGISTRATION   REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH
APPLICABLE  STATE  SECURITIES  LAWS.   NOTWITHSTANDING   THE  FOREGOING,   THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

                                UTIX Group, Inc.
                       15% Senior Secured Promissory Note

No.__________                                Original Issue Date:  _______, 2004

         UTIX GROUP, INC., a Delaware corporation ("UTIX"),  for value received,
hereby  promises  to pay to  _________________________________________,  with an
address at _________________________________________, or registered assigns (the
"Holder"),   the   principal   amount  of   __________________________   Dollars
($_______________)  and,  subject  to the terms and  conditions  hereof,  to pay
interest on the unpaid  principal  balance hereof at the rate (calculated on the
basis of a 360-day year  consisting  of twelve  30-day  months) of 15% per annum
from the  date  hereof  until  the  Maturity  Date (as  defined  below),  all as
hereafter  provided.  In no event shall any interest to be paid hereunder exceed
the  maximum  rate  permitted  by  law.  In any  such  event,  this  Note  shall
automatically  be deemed amended to permit  interest  charges at an amount equal
to, but no greater than, the maximum rate permitted by law.

         1.     OFFERING; CONVERSION; SECURITY.

         (a) This Note was  issued by UTIX in an  offering  of up to  $1,500,000
principal  amount of 15% Senior  Secured  Promissory  Notes  (collectively,  the
"Notes") pursuant to the Securities Purchase Agreement, dated as of May __, 2004
(the  "Purchase  Agreement"),  among  UTIX,  Great  Court  Capital  LLC  and the
"Purchasers"  named therein.  Capitalized  terms used and not otherwise  defined
herein have the meanings as defined in the Purchase Agreement.

         (b) Payment of principal of and interest on this Note is secured by the
Security Agreement,  dated the Original Issue Date, between UTIX and Great Court
Capital  LLC, as Agent for itself and such other  Purchasers  that are or become
parties to the  Purchase  Agreement,  and this Note is entitled to the  benefits
thereof.

<PAGE>

         2.     PAYMENTS.

                All  principal  of and  interest  on this Note  shall be due and
payable in full on the  Maturity  Date  pursuant to the terms of this Note.  The
"Maturity Date" shall be May 28, 2005; provided, however, that, in the event and
to the extent that UTIX shall receive IN EXCESS of $2,500,000 of gross  proceeds
in connection with either (i) the United States Common Stock  Offering,  (ii) an
offering of  securities  on the AIMs,  or (iii) any private  placement of Common
Stock or other Equity Type Securities  under  Regulation S, Rule 505 or Rule 506
promulgated  under the  Securities Act prior to May 28, 2005  (collectively,  an
"Equity  Financing"),  the Company shall apply fifty percent (50%) of any or all
of such cumulative  gross proceeds in excess of $2,500,000 it shall receive from
such Equity  Financing to prepay all Notes (and this Note on a pro-rata basis by
which the principal amount of this Note bears to all Notes).

If pursuant to the foregoing,  the Maturity Date would fall on a day that is not
a  Business  Day (as  defined  below),  the  Maturity  Date  shall  be the  next
succeeding Business Day. "Business Day" means any day which is not a Saturday or
Sunday and is not a day on which banking  institutions are generally  authorized
or obligated to close in the City of New York, New York.

         (a)    Payments of principal and interest on this Note shall be made by
check sent to the Holder.  All  payments  will be  delivered  to the address set
forth therefor on the note register described below, and will be in such coin or
currency  of the United  States of  America  as at the time of payment  shall be
legal tender for the payment of public and private debts.

         (b)    UTIX  shall  have the  right to  prepay  all or any part of this
Note,  together with all interest accrued hereon to the date of such prepayment,
at any  time or from  time to  time,  without  prepayment  premium  or  penalty;
provided, that

                (i) if UTIX shall be  required  to prepay all or any  portion of
         this Note out of the net proceeds of any Equity  Financing  received on
         or after November 28, 2004, it shall pay to the Holder of this Note and
         the holders of all other Notes a prepayment  premium in an amount equal
         to (x) one years interest on the  outstanding  balance of this Note, at
         the rate of 15% per annum, less (y) all interest previously paid, and

                (ii) if UTIX shall have voluntarily prepaid the entire principal
         amount of this Note at any time on or after November 28, 2004, it shall
         simultaneously  with such prepayment pay to the Holder of this Note and
         the holders of all other Notes a prepayment  premium in an amount equal
         to (x) one years interest on the  outstanding  balance of this Note, at
         the rate of 15% per annum, less (y) all interest previously paid.

         All  payments on this Note shall be applied  first to accrued  interest
         hereon and the balance to the payment of principal hereof.

         (c) The obligations to make the payments  provided for in this Note are
absolute  and   unconditional   and  not  subject  to  any   defense,   set-off,
counterclaim,  rescission,  recoupment  or  adjustment  whatsoever.  UTIX hereby
expressly  waives demand and  presentment  for payment,  notice of  non-payment,
notice of dishonor,  protest, notice of protest,  bringing of suit and diligence
in taking any action to collect any amount  called for  hereunder,  and shall be
directly and primarily  liable for the payment of all sums owing and to be owing
hereon,  regardless of and

                                       2
<PAGE>

without any notice, diligence, act or omission with respect to the collection of
any amount called for hereunder.

         3.     CONVERSION. This Note shall not be convertible into Common Stock
or other securities of UTIX.

         4.     EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an event of default (an "Event of Default"):

         (a)    A default in the payment of the principal of or interest on this
Note,  when and as the same shall become due and payable,  which  default  shall
continue for a period of three Business Days after the date fixed for the making
of such payment.

         (b)    A failure  to  perform  or  observe  any  material  covenant  or
agreement  contained  in the  Purchase  Agreement,  this  Note  or the  Security
Agreement  within 10  Business  Days after the giving of notice by the Holder of
such failure.

         (c)    The  entry of a decree or order by a court  having  jurisdiction
adjudging  UTIX  bankrupt  or  insolvent,   or  approving  a  petition   seeking
reorganization,  arrangement,  adjustment,  or  composition  of or in respect of
UTIX,  under federal  bankruptcy  law, as now or hereafter  constituted,  or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
and the  continuance  of any such decree or order  unstayed  and in effect for a
period of 60 consecutive  days; or the  commencement by UTIX of a voluntary case
under  federal  bankruptcy  law, as now or hereafter  constituted,  or any other
applicable federal or state bankruptcy,  insolvency or other similar law, or the
consent by it to the institution of bankruptcy or insolvency proceedings against
it,  or  the  filing  by  it  of  a  petition  or  answer  or  consent   seeking
reorganization  or relief under federal  bankruptcy law or any other  applicable
federal or state law, or the consent by it to the filing of such  petition or to
the appointment of a receiver,  liquidator,  assignee, trustee, sequestration or
similar  official of UTIX or of any  substantial  part of its  property,  or the
making by it of an assignment for the benefit of creditors,  or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by UTIX in furtherance of any such action.

         5.     REMEDIES UPON DEFAULT.

         (a)    Upon the occurrence, and during the continuance,  of an Event of
Default  specified  in Section  4(a) or (b), the Holder of this Note may declare
all or any part of the unpaid  principal  amount of this Note,  and all interest
accrued  and  unpaid  thereon,  to  be  immediately  due  and  payable,  without
presentment,  demand, protest or other formalities of any kind, all of which are
hereby expressly waived by UTIX.

         (b)    Upon the occurrence of an Event of Default  specified in Section
4(c), all of the principal  amount then outstanding of, and all interest accrued
and unpaid on, the Notes shall automatically  become immediately due and payable
without  presentment,  demand,  protest or other formalities of any kind, all of
which are hereby expressly waived by UTIX.

                                       3
<PAGE>

         (c)    The Holder may institute  such actions or  proceedings in law or
equity as it shall  deem  expedient  for the  protection  of its  rights and may
prosecute and enforce its claims against all assets of UTIX.

         6.     REGISTRATION AND TRANSFER.

         (a)    UTIX shall maintain books for the  registration  and transfer of
the Notes.

         (b)    Prior to due  presentment  for  registration of transfer of this
Note,  UTIX may deem and  treat the  registered  Holder  as the  absolute  owner
thereof.  UTIX shall be entitled to treat the  registered  holder of any Note on
the note register as the owner in fact thereof for all purposes and shall not be
bound to recognize  any  equitable or other claim to or interest in such Note on
the part of any other person,  and shall not be liable for any  registration  or
transfer of the Notes which are  registered or to be registered in the name of a
fiduciary  or the nominee of a fiduciary  unless made with the actual  knowledge
that a fiduciary or nominee is committing a breach of trust in  requesting  such
registration  or  transfer,  or with  the  knowledge  of  such  facts  that  its
participation  therein  amounts to bad  faith.  In all cases of  transfer  by an
attorney, executor, administrator, guardian, or other legal representative, duly
authenticated evidence of his or its authority shall be produced.

         (c)    This Note has not been  registered  under the  Securities Act of
1933,  as amended  (the  "Securities  Act").  The  Holders  are  entitled to the
benefits of the Purchase  Agreement,  which  provides,  among other things,  for
certain  registration rights and certain  restrictions on the disposition of the
Notes and the Warrant Shares,  and each Holder, by acceptance of a Note, accepts
the  restrictions  and  other  provisions  of the  Purchase  Agreement.  Without
limiting the foregoing, no Holder may make any disposition of this Note unless:

                (i) each transferee is an accredited  investor,  as such term is
         defined in Regulation D promulgated  under the Securities  Act, and has
         delivered  certification  thereof to UTIX,  reasonably  satisfactory to
         UTIX; and

                (ii) (A) each  transferee  has  agreed in writing to be bound by
         the terms of this Note and the Purchase Agreement, (B) the Holder shall
         have notified UTIX of the proposed disposition and shall have furnished
         UTIX with a detailed  statement of the  circumstances  surrounding  the
         proposed disposition, and (C) the Holder shall have furnished UTIX with
         an opinion of counsel  (with the costs of obtaining  such opinion borne
         by UTIX),  which  counsel and opinion are  reasonably  satisfactory  to
         UTIX,  that this Note has been  registered  under the Securities Act or
         that such registration is not required.

         (d)    Each Note shall be stamped or otherwise  imprinted with a legend
substantially similar to the following (in addition to any legend required under
other applicable securities laws):

         THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES  AND
         EXCHANGE  COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE  IN
         RELIANCE UPON AN EXEMPTION FROM  REGISTRATION  UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED (THE "SECURITIES ACT"),

                                       4
<PAGE>

         AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD  EXCEPT  PURSUANT  TO AN
         EFFECTIVE  REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
         TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE STATE SECURITIES LAWS.  NOTWITHSTANDING THE FOREGOING, THESE
         SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
         OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

         (e)    UTIX shall  register  upon its books any  permitted  transfer of
this Note, upon surrender of same to UTIX with a written instrument of transfer,
in the form attached as Exhibit A, duly executed by the registered  Holder or by
a duly authorized attorney thereof and (unless being transferred to UTIX) by the
transferee or by a duly authorized  attorney  thereof,  together with such other
documents as may be required for such transfer as provided above.  Upon any such
registration of transfer,  new Note(s) shall be issued to the  transferee(s) and
the surrendered Note shall be canceled by UTIX. This Note may also be exchanged,
at the option of the Holder,  for new Notes  representing  in the  aggregate the
principal amount of this Note then outstanding.

         (f)    Upon receipt by UTIX of reasonable  evidence of the ownership of
and the loss, theft, destruction, or mutilation of this Note and, in the case of
loss, theft, or destruction,  of indemnity reasonably  satisfactory to UTIX, or,
in the case of  mutilation,  upon  surrender and  cancellation  of the mutilated
Note, UTIX shall execute and deliver in lieu thereof a new Note representing the
principal amount of such Note then outstanding.

         7.     MISCELLANEOUS.

         (a)    This Note shall be governed by and construed in accordance  with
the laws of the State of New York, without giving effect to principles governing
conflicts of law.

         (b)    Any notice or other  communication  required or  permitted to be
given  hereunder  shall be in  writing  and shall be given by  Federal  Express,
Express Mail or similar  overnight  delivery or courier service or delivered (in
person or by telecopy,  telex or similar  telecommunications  equipment) against
receipt to the party to whom it is to be given,  (i) if to UTIX,  at its address
at UTIX Group,  Inc., 170 Cambridge  Street,  Burlington,  MA 01803,  Attention:
President and Chief Executive Officer, (ii) if to the Holder, at its address set
forth on the first page hereof,  or (iii) in either case,  to such other address
as the party shall have  furnished in writing in accordance  with the provisions
of this  Section  7(b).  Any notice shall be deemed given at the time of receipt
thereof.

         (c)    No course of dealing and no delay or omission on the part of the
Holder in exercising  any right or remedy shall  operate as a waiver  thereof or
otherwise prejudice the Holder's rights,  powers or remedies. No right, power or
remedy  conferred  by this Note upon the Holder  shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter  available at law,
in equity,  by statute or  otherwise,  and all such  remedies  may be  exercised
singly or concurrently.

                                       5
<PAGE>

         IN WITNESS WHEREOF,  UTIX has caused this Note to be executed and dated
the day and year first above written.

                                           UTIX GROUP, INC.

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

                                       6
<PAGE>

                                    EXHIBIT A
                               FORM OF ASSIGNMENT

   (To be executed by the registered holder if such holder desires to transfer
                               the attached Note)

         FOR VALUE RECEIVED, ______________________ (the "Holder") hereby sells,
assigns, and transfers unto

                     Name
                          ------------------------------------

                     Address
                             ---------------------------------

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

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

                     Social Security or Tax Identification Number

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

______ Notes,  together with all right,  title, and interest  therein,  and does
hereby irrevocably constitute and appoint  _______________  attorney to transfer
such  Note on the  books  of UTIX  Group,  Inc.  ("UTIX"),  with  full  power of
substitution.

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

                        --------------------------------------------------------
                        Name of Holder

                        --------------------------------------------------------
                        Signature

                        --------------------------------------------------------
                        If executed in a representative  or fiduciary  capacity,
                        print name and title of individual executing this notice
                        on behalf of the Holder.

                        NOTE: The above signature should correspond exactly with
                        the name on the first page of the attached Note.

                        --------------------------------------------------------
                        Social Security or Tax Identification Number of Holder

                        Address of Holder:

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

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

<PAGE>

         The undersigned  transferee,  by execution  hereof,  (i) represents and
warrants to UTIX that (a) such transferee is an accredited investor,  and agrees
to provide such evidence thereof as may be reasonably requested by UTIX, (b) the
undersigned  is acquiring the Note,  and will acquire any shares of Common Stock
(as  defined in the Note)  issued in  conversion  thereof,  for  investment  and
without a view to a distribution other than pursuant to a registration statement
under the Securities Act of 1933, as amended,  and applicable  state  securities
laws, or an exemption therefrom,  and (c) the name, address, and social security
or tax identification  number of the undersigned is as set forth above, and (ii)
agrees  to be bound by the  terms of the  Note and the  Purchase  Agreement  (as
defined in the Note).

Dated: _________________

                                ------------------------------------------------
                                Name of Transferee

                                ------------------------------------------------
                                Signature

                                ------------------------------------------------
                                If executed  in a  representative  or  fiduciary
                                capacity,  print  name and  title of  individual
                                executing   this   notice   on   behalf  of  the
                                transferee.

NOTE:  The above  signature  should  correspond  exactly with the name set forth
above.

                                       2
<PAGE>

                                 SCHEDULE 1.1.18

THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES  AND EXCHANGE
COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE  IN  RELIANCE  UPON AN
EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN  AVAILABLE   EXEMPTION  FROM,  OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE
REGISTRATION   REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH
APPLICABLE  STATE  SECURITIES  LAWS.   NOTWITHSTANDING   THE  FOREGOING,   THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

                                UTIX GROUP, INC.
                                     WARRANT

Warrant No. ________                    Date of Original Issuance:  May 21, 2004

         Utix  Group,  Inc.,  a Delaware  corporation  (the  "COMPANY"),  hereby
certifies that, for value received,  _____________________________ or his, hers,
or its  registered  assigns  (the  "HOLDER"),  is entitled to purchase  from the
Company up to a total of  _____________________shares of common stock, par value
$0.001 per share (the  "COMMON  STOCK"),  of the  Company  (each such  share,  a
"WARRANT SHARE" and all such shares,  the "WARRANT SHARES") at an exercise price
equal to  thirty-five  cents ($0.35) per share (as adjusted from time to time as
provided in Section 9, the "EXERCISE PRICE"),  at any time and from time to time
from and after the date  hereof and  through  and  including  May 21,  2009 (the
"EXPIRATION DATE"), and subject to the following terms and conditions:

         1.     DEFINITIONS. The Warrants evidenced hereby are part of the issue
of warrants entitling the Holders thereof to purchase up to ____________  shares
of Common Stock of the Company  that are being  issued  pursuant to the terms of
that certain Securities Purchase Agreement, among UTIX, Great Court Capital, LLC
and the  purchasers  named  therein,  dated as of May 21, 2004 (the  "SECURITIES
PURCHASE  AGREEMENT").  Capitalized  terms used and not otherwise defined herein
have the meanings as defined in the Securities Purchase Agreement.

         2.     REGISTRATION OF WARRANT;  TRANSFERS.  The Company shall register
this Warrant, upon records to be maintained by the Company for that purpose (the
"WARRANT REGISTER"),  in the name of the record Holder hereof from time to time.
The  Company  may deem and treat the

<PAGE>

registered  Holder of this Warrant as the absolute  owner hereof for the purpose
of any  exercise  hereof or any  distribution  to the Holder,  and for all other
purposes,  absent actual notice to the contrary. The Holders are entitled to the
benefits of the  Securities  Purchase  Agreement,  which  provides,  among other
things, for certain registration rights and certain restrictions on the transfer
of the Warrants and the Warrant  Shares,  and each Holder,  by  acceptance  of a
Warrant,  accepts  the  restrictions  and  other  provisions  of the  Securities
Purchase Agreement.

         3.     REGISTRATION  OF  TRANSFERS.  The  Company  shall  register  the
transfer of any portion of this Warrant in the Warrant Register,  upon surrender
of this Warrant,  with the Form of Assignment attached hereto duly completed and
signed,  to  the  Company  at  its  address  specified  herein.  Upon  any  such
registration   or  transfer,   a  new  Warrant  to  purchase  Common  Stock,  in
substantially the form of this Warrant (any such new Warrant,  a "NEW Warrant"),
evidencing  the portion of this  Warrant so  transferred  shall be issued to the
transferee and a New Warrant  evidencing  the remaining  portion of this Warrant
not so  transferred,  if any, shall be issued to the  transferring  Holder.  The
acceptance  of the New  Warrant by the  transferee  thereof  shall be deemed the
acceptance by such  transferee of all of the rights and  obligations of a holder
of a Warrant.

         4.     EXERCISE AND DURATION OF WARRANTS; RIGHT TO REDEEM WARRANT.

                (a) This Warrant shall be exercisable  by the registered  Holder
at any time and from time to time on or after the date  hereof to and  including
the Expiration  Date. At 6:30 p.m.,  New York City time on the Expiration  Date,
the portion of this Warrant not exercised prior thereto shall be and become void
and of no value,  provided,  that if the closing sales price of the Common Stock
on the  Expiration  Date is  greater  than  102% of the  Exercise  Price  on the
Expiration  Date,  then this Warrant  shall be deemed to have been  exercised in
full (to the extent not previously  exercised) on a "cashless exercise" basis at
6:30 P.M. New York City time on the Expiration Date. The Company may not call or
redeem all or any portion of this Warrant  without the prior written  consent of
the Holder.

                (b)  Commencing  on a date  that  shall be one (1) year from the
effective date of the  Registration  Statement and prior to the Expiration Date,
the Company shall have the right to redeem and repurchase this Warrant, together
with all other  outstanding  Note Warrants and Share Warrants issued to the Note
Purchasers  and Share  Purchasers,  upon sixty (60) days prior written notice to
the Holder and all other holders of the Warrants (the "REDEMPTION NOTICE"),  for
a  redemption  price of $0.001  per  Warrant  Share  (the  "REDEMPTION  Price");
provided, that:

                        (i) as at the date of the Redemption  Notice and for the
sixty (60) days thereafter (the "REDEMPTION  PERIOD") (A) all of the Registrable
Securities  shall have been  registered  for resale under the  Securities Act of
1933, as amended,  (B) a registration  statement on Form S-1 or other applicable
form for registering securities shall be current, and (C) no stop order or other
restriction on resale of the Registrable Securities shall then be in effect;

                        (ii)  as at  the  date  of  the  Redemption  Notice  and
throughout the Redemption  Period,  the Company's Common Stock shall trade on an
Eligible Market;

                                                                             -2-
<PAGE>

                        (iii) for the thirty (30) Trading Days immediately prior
to the date of the  Redemption  Notice  and during the  Redemption  Period,  the
average of the  closing  prices of the  Company's  Common  Stock as traded on an
Eligible  Market,  shall be not less  than two  hundred  percent  (200%)  of the
Exercise Price then in effect; and

                        (iv) for the sixty (60) Trading Days  immediately  prior
to the date of the Redemption  Notice, the average daily dollar amount of shares
of Company  Common Stock that shall trade on such  Eligible  Market shall be not
less than $75,000.

Notwithstanding  the  foregoing,  even  if all of the  above  conditions  to the
Company's right to redeem and repurchase this Warrant shall have been satisfied,
the Holder of this Warrant and the holders of any of the other Note  Warrants or
Share Warrants shall have the right, at any time during the Redemption Period or
thereafter  if  the  Company  shall  not  have  redeemed  such  Warrants  at the
expiration of the sixty (60) day Redemption  Period to exercise this Warrant and
any other outstanding warrants at the Exercise Price then in effect.

On a day which  shall be not more than three (3)  Business  Days  following  the
expiration of the sixty (60) day Redemption Period, the Company shall tender the
Redemption Price to the Holder of this Warrant in immediately available funds or
by check;  failing which the Company's right to redeem this Warrant shall expire
and be of no further force or effect.

         5.     DELIVERY OF WARRANT SHARES.

                (a) To  effect  exercises  hereunder,  the  Holder  shall not be
required to  physically  surrender  this Warrant  unless the  aggregate  Warrant
Shares  represented  by this Warrant is being  exercised.  Upon  delivery of the
Exercise  Notice to the Company (with the attached  Warrant Shares Exercise Log)
at its  address  for notice set forth  herein and upon  payment of the  Exercise
Price  multiplied  by the number of Warrant  Shares  that the Holder  intends to
purchase hereunder, the Company shall promptly (but in no event later than three
Trading Days after the Date of Exercise (as defined  herein))  issue and deliver
to the Holder, a certificate for the Warrant Shares issuable upon such exercise,
which, unless otherwise required by the Securities Purchase Agreement,  shall be
free of restrictive  legends.  The Company shall, upon request of the Holder and
subsequent to the date on which a registration  statement covering the resale of
the Warrant  Shares has been declared  effective by the  Securities and Exchange
Commission,   use  its  best  efforts  to  deliver   Warrant  Shares   hereunder
electronically  through the Depository Trust Corporation or another  established
clearing corporation performing similar functions, if available, provided, that,
the Company may,  but will not be required to change its  transfer  agent if its
current transfer agent cannot deliver Warrant Shares electronically  through the
Depository Trust  Corporation.  A "DATE OF EXERCISE" means the date on which the
Holder  shall have  delivered  to Company:  (i) the  Exercise  Notice  (with the
Warrant  Exercise Log attached to it),  appropriately  completed and duly signed
and (ii) if such Holder is not utilizing the cashless  exercise  provisions  set
forth in this Warrant,  payment of the Exercise  Price for the number of Warrant
Shares so indicated by the Holder to be purchased.

                                                                             -3-
<PAGE>

                (b) If by the third  Trading  Day after a Date of  Exercise  the
Company  fails to deliver the  required  number of Warrant  Shares in the manner
required  pursuant  to  Section  5(a),  then the  Holder  will have the right to
rescind such exercise.

                (c) If by the third  Trading  Day after a Date of  Exercise  the
Company  fails to deliver the  required  number of Warrant  Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior
to the receipt of such Warrant Shares,  the Holder  purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated  receiving
upon such exercise (a  "BUY-IN"),  then the Company shall (1) pay in cash to the
Holder the amount by which (x) the  Holder's  total  purchase  price  (including
brokerage  commissions,  if any) for the  shares  of Common  Stock so  purchased
exceeds (y) the amount  obtained by multiplying (A) the number of Warrant Shares
that the Company was  required to deliver to the Holder in  connection  with the
exercise at issue by (B) the  closing bid price of the Common  Stock at the time
of the obligation giving rise to such purchase  obligation and (2) at the option
of the Holder, either reinstate the portion of the Warrant and equivalent number
of  Warrant  Shares for which such  exercise  was not  honored or deliver to the
Holder the number of shares of Common  Stock that would have been issued had the
Company timely  complied with its exercise and delivery  obligations  hereunder.
The Holder  shall  provide the Company  written  notice  indicating  the amounts
payable to the Holder in respect of the Buy-In.

                (d) The  Company's  obligations  to issue  and  deliver  Warrant
Shares in  accordance  with the terms  hereof are  absolute  and  unconditional,
irrespective  of any action or inaction  by the Holder to enforce the same,  any
waiver or consent  with  respect to any  provision  hereof,  the recovery of any
judgment  against any Person or any action to enforce  the same,  or any setoff,
counterclaim,  recoupment,  limitation or termination,  or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation  or alleged  violation of law by the Holder or any other  Person,  and
irrespective  of  any  other  circumstance  which  might  otherwise  limit  such
obligation  of the  Company to the Holder in  connection  with the  issuance  of
Warrant Shares.  Nothing herein shall limit a Holder's right to pursue any other
remedies  available  to it  hereunder,  at law or in equity  including,  without
limitation,  a decree of  specific  performance  and/or  injunctive  relief with
respect to the Company's  failure to timely  deliver  certificates  representing
shares of Common Stock upon exercise of the Warrant as required  pursuant to the
terms hereof.

         6.     CHARGES,   TAXES  AND   EXPENSES.   Issuance   and  delivery  of
certificates  for shares of Common Stock upon  exercise of this Warrant shall be
made  without  charge to the Holder for any issue or transfer  tax,  withholding
tax,  transfer  agent fee or other  incidental  tax or expense in respect of the
issuance of such certificates,  all of which taxes and expenses shall be paid by
the Company;  provided,  however,  that the Company shall not be required to pay
any tax  which  may be  payable  in  respect  of any  transfer  involved  in the
registration of any  certificates for Warrant Shares or Warrants in a name other
than that of the  Holder.  The  Holder  shall be  responsible  for all other tax
liability that may arise as a result of holding or transferring  this Warrant or
receiving Warrant Shares upon exercise hereof.

         7.     REPLACEMENT  OF WARRANT.  If this  Warrant is  mutilated,  lost,
stolen or  destroyed,  the Company shall issue or cause to be issued in exchange
and substitution for and upon

                                                                             -4-
<PAGE>

cancellation  hereof,  or in lieu of and  substitution  for this Warrant,  a New
Warrant,  but only upon  receipt  of  evidence  reasonably  satisfactory  to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity (which shall not include a surety bond), if requested.  Applicants for
a New  Warrant  under  such  circumstances  shall  also  comply  with such other
reasonable  regulations and procedures and pay such other reasonable third-party
costs as the Company may prescribe. If a New Warrant is requested as a result of
a  mutilation  of this  Warrant,  then the Holder shall  deliver such  mutilated
Warrant to the Company as a condition  precedent to the Company's  obligation to
issue the New Warrant.

         8.     RESERVATION  OF WARRANT  SHARES.  The Company  covenants that it
will at all  times  reserve  and  keep  available  out of the  aggregate  of its
authorized but unissued and otherwise  unreserved  Common Stock,  solely for the
purpose of enabling it to issue Warrant  Shares upon exercise of this Warrant as
herein  provided,  the  number of Warrant  Shares  which are then  issuable  and
deliverable  upon the  exercise of this  entire  Warrant,  free from  preemptive
rights or any other contingent  purchase rights of persons other than the Holder
(taking into account the adjustments and restrictions of Section 9). The Company
covenants  that all  Warrant  Shares so issuable  and  deliverable  shall,  upon
issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof,  shall be duly and validly  authorized,  issued and fully paid and
nonassessable.

         9.     CERTAIN  ADJUSTMENTS.  The Exercise  Price and number of Warrant
Shares  issuable upon  exercise of this Warrant are subject to  adjustment  from
time to time as set forth in this Section 9.

                (a) STOCK  DIVIDENDS  AND SPLITS.  If the  Company,  at any time
while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock
or otherwise  makes a distribution on any class of capital stock that is payable
in shares of Common Stock,  (ii) subdivides  outstanding  shares of Common Stock
into a larger number of shares, or (iii) combines  outstanding  shares of Common
Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator  shall be the number of
shares of Common Stock  outstanding  immediately  before such event and of which
the  denominator  shall be the  number of shares  of  Common  Stock  outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph  shall  become  effective  immediately  after the record  date for the
determination of stockholders entitled to receive such dividend or distribution,
and any  adjustment  pursuant  to clause (ii) or (iii) of this  paragraph  shall
become  effective  immediately  after the effective date of such  subdivision or
combination. If any event requiring an adjustment under this Section 9(a) occurs
during the period  that an  Exercise  Price is  calculated  hereunder,  then the
calculation  of such Exercise Price shall be adjusted  appropriately  to reflect
such event.

                (b) FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant
is  outstanding,  (1) the  Company  effects any merger or  consolidation  of the
Company with or into another Person,  (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,  (3)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (4) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which

                                                                             -5-
<PAGE>

the  Common  Stock  is  effectively   converted  into  or  exchanged  for  other
securities,  cash or property (in any such case, a  "FUNDAMENTAL  TRANSACTION"),
then the Holder shall have the right  thereafter  to receive,  upon  exercise of
this  Warrant,  the same amount and kind of  securities,  cash or property as it
would have been  entitled to receive  upon the  occurrence  of such  Fundamental
Transaction if it had been,  immediately prior to such Fundamental  Transaction,
the holder of the number of Warrant  Shares then  issuable upon exercise in full
of this  Warrant  (the  "ALTERNATE  CONSIDERATION").  For  purposes  of any such
exercise,  the  determination  of the  Exercise  Price  shall  be  appropriately
adjusted  to apply  to such  Alternate  Consideration  based  on the  amount  of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental  Transaction,  and the Company shall  apportion  the Exercise  Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the  securities,  cash or property to be
received in a Fundamental  Transaction,  then the Holder shall be given the same
choice as to the Alternate  Consideration  it receives upon any exercise of this
Warrant  following  such  Fundamental  Transaction.  At the Holder's  option and
request,  any successor to the Company or surviving  entity in such  Fundamental
Transaction shall, either (1) issue to the Holder a new warrant substantially in
the form of this  Warrant  and  consistent  with the  foregoing  provisions  and
evidencing  the Holder's right to purchase the Alternate  Consideration  for the
aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant from
the Holder for a purchase price,  payable in cash within five Trading Days after
such  request  (or,  if  later,   on  the  effective  date  of  the  Fundamental
Transaction),  equal to the Black  Scholes  value of the  remaining  unexercised
portion of this Warrant on the date of such request.  The terms of any agreement
pursuant to which a  Fundamental  Transaction  is effected  shall  include terms
requiring any such  successor or surviving  entity to comply with the provisions
of this  Section  9(b) and  insuring  that the Warrant (or any such  replacement
security) will be similarly adjusted upon any subsequent  transaction  analogous
to a Fundamental Transaction.

                (c) In case the Company  shall issue  shares of Common  Stock or
rights,  options,  or warrants to subscribe  for or purchase  Common  Stock,  or
securities  convertible into or exchangeable for Common Stock (excluding shares,
rights, options, warrants, or convertible or exchangeable securities,  issued or
issuable (i) in any of the  transactions  with respect to which an adjustment of
the Exercise Price is provided  pursuant to Sections 9(a) or 9(b) above, or (ii)
upon exercise of the Warrants, at a price per share (determined,  in the case of
such rights, options,  warrants, or convertible or exchangeable  securities,  by
dividing  (x)  the  total  amount  received  or  receivable  by the  Company  in
consideration  of the sale and issuance of such rights,  options,  warrants,  or
convertible or exchangeable securities, plus the minimum aggregate consideration
payable to the Company upon exercise,  conversion,  or exchange thereof,  by (y)
the maximum  number of shares  covered by such  rights,  options,  warrants,  or
convertible  or  exchangeable  securities)  lower  than the  Exercise  Price (as
hereinafter  defined) per share of Common Stock in effect  immediately  prior to
such  issuance,  then the  Exercise  Price  shall be reduced on the date of such
issuance to a price  (calculated to the nearest cent)  determined by multiplying
the Exercise Price in effect  immediately  prior to such issuance by a fraction,
(1) the numerator of which shall be an amount equal to the sum of (A) the number
of shares of Common Stock  outstanding  immediately  prior to such issuance plus
(B) the quotient obtained by dividing the consideration  received by the Company
upon such  issuance by such Exercise  Price,  and (2) the  denominator  of which
shall be the total  number of shares  of Common  Stock  outstanding  immediately
after such

                                                                             -6-
<PAGE>

issuance.  For the purposes of such  adjustments,  the maximum  number of shares
which the holders of any such  rights,  options,  warrants,  or  convertible  or
exchangeable  securities,  shall  be  entitled  to  initially  subscribe  for or
purchase  or  convert or  exchange  such  securities  into shall be deemed to be
issued and  outstanding as of the date of such issuance,  and the  consideration
received  by the  Company  therefor  shall  be  deemed  to be the  consideration
received by the Company for such rights,  options,  warrants,  or convertible or
exchangeable  securities,  plus the minimum aggregate  consideration or premiums
stated  in such  rights,  options,  warrants,  or  convertible  or  exchangeable
securities,  to be paid for the shares covered thereby. No further adjustment of
the Exercise Price shall be made as a result of the actual issuance of shares of
Common Stock on exercise of such rights,  options, or warrants, or on conversion
or exchange of such convertible or exchangeable securities. On the expiration or
the termination of such rights, options, or warrants, or the termination of such
right to convert or exchange,  the Exercise Price shall  forthwith be readjusted
(but only with respect to Warrants  exercised or converted after such expiration
or  termination)  to  such  Exercise  Price  as  would  have  obtained  had  the
adjustments  made  upon the  issuance  of such  rights,  options,  warrants,  or
convertible or exchangeable securities, been made upon the basis of the delivery
of only the  number  of  shares  of Common  Stock  actually  delivered  upon the
exercise  of such  rights,  options,  or  warrants,  or upon the  conversion  or
exchange  of any such  securities;  and on any change of the number of shares of
Common  Stock  deliverable  upon the exercise of any such  rights,  options,  or
warrants  or  conversion,  or  exchange  of  such  convertible  or  exchangeable
securities,  or any change in the  consideration  to be  received by the Company
upon such exercise,  conversion,  or exchange,  including, but not limited to, a
change resulting from the anti-dilution  provisions thereof, the Exercise Price,
as then in effect,  shall  forthwith  be  readjusted  (but only with  respect to
Warrants  exercised or converted  after such change) to such  Exercise  Price as
would have been obtained had an  adjustment  been made upon the issuance of such
rights,  options,  or warrants not exercised prior to such change, or securities
not converted or exchanged prior to such change, on the basis of such change. In
case the Company shall issue shares of Common Stock or any such rights, options,
warrants,  or  convertible  or  exchangeable  securities,  for  a  consideration
consisting,  in whole or in part, of property other than cash or its equivalent,
then the "price per share" and the  "consideration  received by the Company" for
purposes of the first  sentence of this Section 9(c) shall be as  determined  in
good faith by the Board of  Directors  of the  Company.  Shares of Common  Stock
owned by or held for the account of the Company or any majority-owned subsidiary
shall not be deemed outstanding for the purpose of any such computation.

                (d) For the purposes of this Agreement,  "EXERCISE  PRICE" shall
mean the  Exercise  Price,  as  adjusted  from time to time as  provided in this
Section 9; provided,  however,  that  notwithstanding  anything to the contrary,
express or implied,  contained in this  Agreement,  the Exercise  Price shall be
subject to  reduction  to the lowest price per share of Common Stock that may be
sold by the Company as is contemplated by Section 4.9(a)(i) or Section 4.9(b)(v)
of the Securities Purchase Agreement.

                (e) NUMBER OF WARRANT SHARES. Simultaneously with any adjustment
to the Exercise  Price  pursuant to Sections  9(a),  9(b) or 9(c), the number of
Warrant  Shares that may be purchased  upon  exercise of this  Warrant  shall be
increased  or  decreased  proportionately,  so that  after such  adjustment  the
aggregate  Exercise Price payable  hereunder for the adjusted  number of Warrant
Shares shall be the same as the aggregate  Exercise Price in effect  immediately
prior to such adjustment.

                                                                             -7-
<PAGE>

                (f) CALCULATIONS. All calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share,  as applicable.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company,  and the  disposition
of any such shares shall be considered an issue or sale of Common Stock.

                (g)  NOTICE  OF   ADJUSTMENTS.   Upon  the  occurrence  of  each
adjustment  pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare
a  certificate  setting  forth such  adjustment,  including a  statement  of the
adjusted  Exercise Price and adjusted  number or type of Warrant Shares or other
securities  issuable upon exercise of this Warrant (as  applicable),  describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such  adjustment  is based.  Upon written  request,  the Company will
promptly  deliver  a copy of each  such  certificate  to the  Holder  and to the
Company's Transfer Agent.

                (h) NOTICE OF  CORPORATE  EVENTS.  If the Company (i) declares a
dividend or any other  distribution  of cash,  securities  or other  property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or  solicits  stockholder  approval  for any  Fundamental  Transaction  or (iii)
authorizes  a  repurchase  of  Common  Stock  or  the   voluntary   dissolution,
liquidation or winding up of the affairs of the Company,  then the Company shall
deliver to the Holder a notice  describing  the material terms and conditions of
such  transaction,  at least 20 calendar days prior to the applicable  record or
effective  date on which a Person  would need to hold  Common  Stock in order to
participate  in or vote with respect to such  transaction,  and the Company will
take all steps reasonably  necessary in order to insure that the Holder is given
the practical  opportunity  to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that
the failure to deliver  such notice or any defect  therein  shall not affect the
validity of the corporate action required to be described in such notice.

                (i)  SUCCESSIVE  ADJUSTMENTS  AND  CHANGES.  The  provisions  of
Section  9  shall  similarly  apply  to  successive   dividends,   subdivisions,
combinations, and distributions,  to successive consolidations,  mergers, sales,
leases, or conveyances, and to successive  reclassifications,  changes of shares
of Common Stock and issuances of Common Stock, warrants, options or other rights
to subscribe for or purchase Common Stock, or securities convertible into Common
Stock. If applicable, appropriate adjustment, as determined in good faith by the
Company's Board of Directors, shall be made in the application of the provisions
herein set forth with respect to the rights and  interests of the Holder so that
the  provisions  of  Section  9 shall  thereafter  be  applicable,  as nearly as
possible,  in relation to any shares or other  property  thereafter  deliverable
upon exercise of this Warrant.

                (j) PAYMENT OF EXERCISE PRICE. The Holder shall pay the Exercise
Price only in cash in immediately available funds;  provided,  that if, and only
if, the Company shall have realized  cumulative  gross proceeds of $4,500,000 or
more from any equity  financing(s)  consummated on or before May 21, 2005,  then
and in such event the Holder may, at his or its option, notify the Company in an
Exercise  Notice of its election to utilize a cashless  exercise.  If the Holder
shall  have the right and shall  elect to effect  such  cashless  exercise,  the
Company  shall

                                                                             -8-
<PAGE>

issue to the Holder the number of Warrant Shares equal to the product of (i) the
number  of  Warrant  Shares  as to  which  such  Warrants  are  being  exercised
multiplied  by (ii) a fraction,  the numerator of which is the Fair Market Value
of the Common Stock less the Exercise Price and the denominator of which is such
Fair Market  Value.  The Fair  Market  Value shall be defined as the closing bid
price of the Company's Common Stock on the Trading Day immediately preceding the
date on which the Exercise Notice annexed to such Warrant Certificate as to such
exercise  is deemed to have been sent to the  Company  pursuant  to  Section  12
hereof.  Notwithstanding  the foregoing,  the Holder's obligation to pay cash in
connection  with his or its  exercise  of this  Warrant  shall be subject to the
effectiveness of a current registration statement covering the Warrant Shares.

         10.    LIMITATIONS  ON  EXERCISE.   Notwithstanding   anything  to  the
contrary  contained  herein,  the  number of shares of Common  Stock that may be
acquired  by the Holder  upon any  exercise of this  Warrant  (or  otherwise  in
respect  hereof)  shall be  limited  to the  extent  necessary  to insure  that,
following  such  exercise  (or other  issuance),  the total  number of shares of
Common Stock then  beneficially  owned by such Holder and its Affiliates and any
other  Persons  whose  beneficial  ownership of Common Stock would be aggregated
with the Holder's for purposes of Section  13(d) of the Exchange  Act,  does not
exceed  4.999% of the total  number of issued and  outstanding  shares of Common
Stock  (including for such purpose the shares of Common Stock issuable upon such
exercise).  For such  purposes,  beneficial  ownership  shall be  determined  in
accordance  with Section 13(d) of the Exchange Act and the rules and regulations
promulgated  thereunder.  This provision shall not restrict the number of shares
of Common  Stock  which a Holder  may  receive or  beneficially  own in order to
determine the amount of securities or other  consideration  that such Holder may
receive in the event of a Fundamental  Transaction as  contemplated in Section 9
of this Warrant. This restriction may not be waived.

         11.    NO FRACTIONAL  SHARES.  No fractional  shares of Warrant  Shares
will be issued in connection  with any exercise of this Warrant.  In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing bid price of one
Warrant  Share as  reported  by the  applicable  Trading  Market  on the date of
exercise.

         12.    NOTICES.   Any  and  all  notices  or  other  communications  or
deliveries hereunder (including,  without limitation, any Exercise Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile  number  specified in this Section prior to 6:30 p.m. (New York
City  time) on a  Trading  Day,  (ii) the next  Trading  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day,  (iii) the Trading
Day following the date of mailing,  if sent by nationally  recognized  overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications  shall be: (i) if to
the Company,  to the contact  information  set forth on the Company's  signature
page to the  Securities  Purchase  Agreement,  or (ii) if to the Holder,  to the
address or  facsimile  number  appearing  on the Warrant  Register or such other
address  or  facsimile  number as the  Holder  may  provide  to the  Company  in
accordance with this Section.

                                                                             -9-
<PAGE>

         13.    WARRANT  AGENT.  The Company  shall serve as warrant agent under
this Warrant.  Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent.  Any corporation  into which the Company or any new warrant agent
may be merged or any corporation  resulting from any  consolidation to which the
Company or any new warrant  agent shall be a party or any  corporation  to which
the  Company  or  any  new  warrant  agent  transfers  substantially  all of its
corporate trust or shareholders  services  business shall be a successor warrant
agent under this Warrant  without any further act.  Any such  successor  warrant
agent shall  promptly  cause  notice of its  succession  as warrant  agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

         14.    MISCELLANEOUS.

                (a) This Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective  successors and assigns.  Subject to the
preceding  sentence,  nothing in this Warrant  shall be construed to give to any
Person  other than the  Company  and the Holder  any legal or  equitable  right,
remedy or cause of action under this  Warrant.  This Warrant may be amended only
in  writing  signed by the  Company  and the  Holder  and their  successors  and
assigns.

                (b)  All  questions   concerning  the  construction,   validity,
enforcement  and  interpretation  of  this  Warrant  shall  be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
agrees that all legal proceedings  concerning the  interpretations,  enforcement
and  defense  of  this  Warrant  and  the   transactions   herein   contemplated
("PROCEEDINGS")  (whether  brought  against  a party  hereto  or its  respective
Affiliates,  employees or agents) may be commenced  non-exclusively in the state
and federal  courts  sitting in the City of New York,  Borough of Manhattan (the
"NEW  YORK  COURTS").  Each  party  hereto  hereby  irrevocably  submits  to the
non-exclusive  jurisdiction  of the New York Courts for the  adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein,  and hereby  irrevocably  waives,  and agrees not to
assert in any  Proceeding,  any claim that it is not  personally  subject to the
jurisdiction  of any New York Court,  or that such Proceeding has been commenced
in an improper or  inconvenient  forum.  Each party  hereto  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such  Proceeding by mailing a copy thereof via  registered or certified  mail or
overnight  delivery  (with evidence of delivery) to such party at the address in
effect for notices to it under this Warrant and agrees that such  service  shall
constitute good and sufficient  service of process and notice  thereof.  Nothing
contained  herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably  waives, to
the fullest  extent  permitted by applicable  law, any and all right to trial by
jury in any legal  proceeding  arising out of or relating to this Warrant or the
transactions contemplated hereby. If either party shall commence a Proceeding to
enforce  any  provisions  of this  Warrant,  then the  prevailing  party in such
Proceeding  shall be reimbursed by the other party for its  attorney's  fees and
other  costs and  expenses  incurred  with the  investigation,  preparation  and
prosecution of such Proceeding.

                (c)  The  headings  herein  are  for  convenience  only,  do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.

                                                                            -10-
<PAGE>

                (d) In case any one or more of the  provisions  of this  Warrant
shall  be  invalid  or   unenforceable   in  any   respect,   the  validity  and
enforceability  of the remaining  terms and provisions of this Warrant shall not
in any way be affected or impaired  thereby and the parties will attempt in good
faith  to  agree  upon a  valid  and  enforceable  provision  which  shall  be a
commercially  reasonable  substitute  therefor,  and  upon  so  agreeing,  shall
incorporate such substitute provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                                                            -11-
<PAGE>

         IN WITNESS  WHEREOF,  the Company  has caused  this  Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                      UTIX GROUP, INC.

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

                                                                            -12-
<PAGE>

                       UTIX GROUP, INC. -- EXERCISE NOTICE

Exercise Notice for Warrant No: ________

The undersigned hereby irrevocably  elects to purchase  _____________  shares of
Common Stock pursuant to the above captioned Warrant, and, if such Holder is not
utilizing the cashless  exercise  provisions set forth in the Warrant,  encloses
herewith $________ in cash,  certified or official bank check or checks or other
immediately  available funds,  which sum represents the aggregate Exercise Price
(as defined in the  Warrant)  for the number of shares of Common  Stock to which
this Exercise Notice relates,  together with any applicable taxes payable by the
undersigned pursuant to the Warrant.

         By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise  evidenced  hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock  (determined in accordance  with Section 13(d) of the Securities  Exchange
Act of 1934)  permitted  to be owned under  Section 11 of this  Warrant to which
this notice relates.

         The  undersigned  requests that  certificates  for the shares of Common
Stock issuable upon this exercise be issued in the name of:

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

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

                    ----------------------------------------
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and,  if such  number of  Warrant  Shares  shall not be all the  Warrant  Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by within Warrant be registered in the name of, and delivered to,
the undersigned at the address stated below.

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

                               By:
                                  ----------------------------------------------
                                        Print Name

                               -------------------------------------------------
                               Signature

Address:

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

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

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

<PAGE>

                           WARRANT SHARES EXERCISE LOG

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Date                  Number of Warrant Shares     Number of Warrant Shares        Number of Warrant
                      Available to be Exercised    Exercised                       Shares Remaining to
                                                                                   be Exercised
--------------------------------------------------------------------------------------------------------
<S>                   <C>                          <C>                             <C>

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<PAGE>

                                UTIX GROUP, INC.

                               FORM OF ASSIGNMENT

           [To be completed and signed only upon transfer of Warrant]

Warrant No: ____________

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto    ________________________________    the   right   represented   by   the
above-captioned Warrant to purchase ____________ shares of Common Stock to which
such Warrant  relates and appoints  ________________  attorney to transfer  said
right on the  books of the  Company  with  full  power  of  substitution  in the
premises.

Dated:   _______________, ____

                                ------------------------------------------------
                                (Signature  must  conform in all respects to
                                name of holder as specified on the face of the
                                Warrant)

                                ------------------------------------------------
                                Address of Transferee

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

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

In the presence of:

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

<PAGE>

                                                                 Schedule 1.1.27

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT ("Agreement") is made this 21st day of May
2004, by and between UTIX GROUP, INC., a Delaware corporation (the "Debtor"),
and GREAT COURT CAPITAL LLC (the "Secured Party"), as Agent for itself and such
other persons or entities (collectively, the "Note Purchasers" and each
individually, a "Note Purchaser") that are or become parties to that certain
Securities Purchase Agreement, dated as of May 21, 2004 (as amended or in effect
from time to time, the "Purchase Agreement"), by and among the Debtor, the Note
Purchasers, and the Secured Party.

                                    RECITALS

         A.     Pursuant to the Purchase Agreement, the Note Purchasers have
agreed to purchase from the Debtor 15% Senior Secured Promissory Notes (the
"Notes") in the aggregate principal amount of up to $1,250,000.

         B.     The Debtor has agreed to issue the Notes and enter into this
Agreement to induce the Note Purchasers to purchase the Notes from the Debtor.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1    "Accounts", "Account Debtors", and "Proceeds" shall each have
the meaning set forth in the Uniform Commercial Code.

         1.2    "Collateral" shall mean all of the Debtor's right, title and
interest in and to the following properties, assets and rights of the Debtor,
wherever located, whether now owned or existing or hereafter acquired or
arising:

                           (a) All personal and fixture property of every kind
         and nature including without limitation all goods (including inventory,
         equipment and any accessions thereto and all farm products and proceeds
         thereof), instruments (including promissory notes), documents, accounts
         (including health-care insurance receivables), chattel paper (whether
         tangible or electronic), deposit accounts, letter-of-credit rights

<PAGE>

         (whether or not the letter of credit is evidenced by a writing),
         commercial tort claims, securities and all other investment property,
         supporting obligations, any other contract rights or rights to the
         payment of money, insurance claims and proceeds, tort claims, and all
         general intangibles (including all payment intangibles); and

                  (b) All proceeds of every kind and nature and in whatever
         form, including, without limitation, both cash and non-cash proceeds
         resulting or arising from the rendering of services by the Debtor or
         the sale or other disposition of inventory or other collateral and all
         products thereof.

         1.3    "Event of Default" shall mean any event of default set forth in
Article VI.

         1.4    "Obligations" shall have the meaning set forth in Article II.

         1.5    "Security Interest" shall mean the interest in the Collateral
granted by the Debtor to the Secured Party in this Agreement.

         1.6    "U.C.C." shall mean the Uniform Commercial Code.

         1.7    "Uniform Commercial Code" shall mean the Uniform Commercial Code
as presently enacted in the Commonwealth of Massachusetts as the same may be
amended from time to time.

All terms defined by the U.C.C. and used herein shall have the same meanings
herein as specified therein. All other capitalized terms that are not otherwise
defined herein shall have the meanings ascribed to them in the Notes and the
Purchase Agreement.

                                   ARTICLE II
                               SECURITY INTERESTS

         2.1    To secure the payment of the principal sum and interest
evidenced by the Notes and the payment, performance and discharge of each and
every obligation of the Debtor under this Agreement, the Notes and the Purchase
Agreement (the "Obligations"), the Debtor hereby grants to the Secured Party a
continuing, Security Interest in the Collateral. The Security Interest of the
Secured Party in and to the Collateral shall be and shall represent:

                (a) subject only to the exception set forth in Section 6.1
hereof, a senior and first priority lien and Security Interest on the Collateral
with respect to $1,405,000 of the (i) $470,000 outstanding 9% convertible notes
of the Company due 2006; (ii) $1,175,000 outstanding amount of 7% bridge notes
of the Company due November 2004; and (iii) $260,000 of outstanding 10% notes of
the Company due 2005 (collectively, the "Existing Notes"); it being agreed that
the holders of not less than $1,405,000 principal amount of such Existing Notes
shall

                                       2
<PAGE>

on or before the "Subordination Agreements Delivery Date" (as hereinafter
defined) execute and deliver subordination agreements in form and content
reasonably satisfactory to counsel to Purchasers (the "Subordination
Agreements"), pursuant to which such Existing Notes shall be made fully subject
and subordinated to the payment in full of the Obligations; and

                (b) a second priority lien and Security Interest, subordinated
only to the remaining $500,000 principal amount of Existing Notes.

The Secured Party acknowledges the Debtor does not presently have, but shall
undertake to obtain duly executed Subordination Agreements from the holders of
not less than $1,405,000 principal amount of such Existing Notes on a date that
shall be not later than May 31, 2004 (the "Subordination Agreements Delivery
Date"). The Secured Party further acknowledges that the attachment of its
security interest in any commercial tort claim as original collateral is subject
to the Debtor's compliance with Section 3.5.

                                   ARTICLE III
                        PERFECTION OF SECURITY INTERESTS

         3.1    The Debtor agrees to cooperate and join, at its expense, with
the Secured Party in taking such steps as are reasonably necessary, in the
Secured Party's judgment, to perfect or continue the perfected status of the
Security Interest granted hereunder, including, without limitation, the delivery
of any financing statements, amendments thereto and continuation statements, the
obtaining of landlords' and mortgagees' waivers reasonably required by the
Secured Party, the notation of encumbrances in favor of the Secured Party on
certificates of title, and the execution and filing of any collateral
assignments and any other instruments reasonably requested by the Secured Party
to perfect its Security Interest in any and all of the Collateral.

         3.2    The Debtor hereby authorizes the Secured Party, at any time and
from time to time, to file financing statements, continuation statements and
amendments thereto which contain any information required by the U.C.C. for the
sufficiency or filing office acceptance of any financing statement, continuation
statement, or amendment, including whether the Debtor is an organization, the
type of organization, and any organization identification number issued to the
Debtor. The Debtor agrees to furnish any such information to the Secured Party
promptly upon request. Any such financing statements, continuation statements,
or amendments may be filed at any time in any jurisdiction whether or not
"Revised Article 9" of the U.C.C. is then in effect in that jurisdiction.

         3.3    The Debtor shall, at any time and from time to time, take such
steps as the Secured Party may reasonably require for the Secured Party, (a) to
obtain an acknowledgment, in form and substance reasonably satisfactory to the
Secured Party of any third party having possession of any of the Collateral that
the third party holds such Collateral for the benefit of the Secured Party, (b)
to obtain "control" (as described in the U.C.C.) of any Collateral with any

                                       3
<PAGE>

agreements, establishing control to be in form and substance reasonably
satisfactory to the Secured Party, and (c) otherwise to ensure the continued
perfection and priority of the Secured Party's Security Interest in any of the
Collateral and of the preservation of its rights therein.

         3.4    The Debtor shall, at its expense, execute, deliver, file and
record (in such manner and form as the Secured Party may at any time reasonably
require), and authorize the Secured Party to file and record, any financing
statements, any carbon, photographic or other reproduction of a financing
statement or of this Agreement (which shall be sufficient as a financing
statement hereunder), any specific assignments or other paper that may be
reasonably necessary or desirable or that the Secured Party may request, to
create, preserve, perfect, continue or validate any Security Interest or to
enable the Secured Party to exercise and enforce its rights hereunder with
respect to any of the Collateral.

         3.5    If the Debtor shall at any time hold or acquire a commercial
tort claim, the Debtor shall immediately notify the Secured Party in a writing
signed by the Debtor of the details thereof and grant to the Secured Party in
such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, such writing to be in form and substance
satisfactory to the Secured Party.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         The Debtor represents and warrants as follows:

         4.1    Except for the Security Interest and as set forth in Section
2.1, the Debtor has good and marketable title to, and is the owner of, the
Collateral free from any other lien, security interest, claim or encumbrance.

         4.2    Except as set forth in Section 2.1, there is no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral on file in any recording office except as may have been
filed in favor of the Secured Party pursuant to this Agreement.

         4.3    This Agreement creates a valid security interest of the Secured
Party in the Collateral securing payment of the Obligations. Upon the filing of
the financing statements with the Delaware Secretary of State, the Secured Party
shall, except as provided in Section 2.1, have valid first and prior perfected
liens on and Security Interests in the Collateral as to which security interests
can be perfected by the filing of a financing statements with the Delaware
Secretary of State.

         4.4.   Except for the Subordination Agreements contemplated by Section
2.1, no consent, authorization, approval, or other action by, and no notice to
or filing with, any

                                       4
<PAGE>

governmental authority, regulatory body, or other person is required for the
grant by the Debtor of the Security Interest granted hereby or for the
execution, delivery, or performance of this Agreement by the Debtor or for the
perfection or exercise by the Secured Party of its rights and remedies
hereunder, except filings of financing statements.

         4.5    The Debtor is a corporation organized under the laws of the
State of Delaware. The Debtor's exact legal name is as set forth in the first
paragraph of this Agreement.

         4.6    The places of business of the Debtor are as set forth in
Schedule 4.6. If the Debtor has more than one place of business, the chief
executive offices of the Debtor are at the address set forth in Schedule 4.6 or
at the location(s) hereafter disclosed to the Secured Party pursuant to Section
5.7.

         4.7    The locations of the offices where the Debtor maintains its
books and records concerning the Collateral are as set forth in Schedule 4.7 or
at the location(s) hereafter disclosed to the Secured Party pursuant to Section
5.7.

                                    ARTICLE V
                                    COVENANTS

         The Debtor agrees and covenants as follows:

         5.1    The Debtor shall preserve its corporate existence and shall not,
either in one transaction or a series of transactions, merge into or consolidate
with any entity or change its corporate name.

         5.2    The Collateral shall remain in the possession or under the
control of the Debtor (except for sale or replacement in the ordinary course of
business) and shall not be used for any unlawful purpose. The Collateral shall
not be misused, abused, wasted, or allowed to deteriorate, ordinary wear and
tear and insured casualty excepted. The Debtor shall keep the Collateral, as
appropriate and applicable, in good condition and repair (ordinary wear and tear
and insured casualty excepted), and shall clean, shelter, and otherwise deal
with the Collateral in all such ways as are considered normal practice by owners
of like property.

         5.3    The Debtor shall have and maintain insurance at all times with
respect to the Collateral against risks of fire (including so-called extended
coverage) and theft, and such other risks as the Secured Party may reasonably
require, containing such terms, in such amounts (not exceeding replacement
value), in such form for such periods and written by such companies as may be
reasonably satisfactory to the Secured Party, such insurance to be payable to
the Secured Party for the ratable benefit of the holders of the Notes and to the
Debtor as their interests may appear. Upon request, Debtor shall utilize
commercially reasonable efforts to cause all policies of insurance to provide
for 30 days' minimum written notice to the Secured Party of cancellation

                                       5
<PAGE>

or material change, and upon request the Debtor shall furnish the Secured Party
original policies of insurance or other evidence satisfactory to the Secured
Party of compliance with the foregoing insurance provisions.

         5.4    The Debtor shall defend the Collateral against the claims and
demands of all other parties, including, without limitation, defenses, setoffs,
claims, and counterclaims asserted against the Debtor or Secured Party; shall
keep the Collateral free from all security interests or other encumbrances,
except as set forth in Section 2.1 and for the Security Interest created hereby;
and shall not sell, transfer, lease, assign, deliver, or otherwise dispose of
any Collateral or any interest therein without the prior written consent of the
Secured Party, except that the Debtor may in the ordinary course of its business
sell assets which are not material.

         5.5    The Debtor shall promptly pay any and all taxes, assessments and
governmental charges upon the Collateral prior to the date penalties are
attached thereto, except to the extent that such taxes, assessments and charges
shall be contested in good faith and diligently by the Debtor.

         5.6    The Debtor shall promptly notify the Secured Party in writing of
any event causing a substantial loss or diminution in the value of all or any
material part of the Collateral and the amount or an estimate of the amount of
such loss or diminution.

         5.7    The Debtor shall maintain complete and accurate books and
records concerning the Collateral at its offices set forth in Schedule 4.7, or
at such other place or places of business as the Secured Party may approve in
writing. The Debtor shall hold and preserve such records and shall, upon
reasonable notice, permit representatives of the Secured Party at any time
during normal business hours (but not so as to materially interfere with the
business of the Debtor) to examine and inspect the Collateral and to make
abstracts from or copies of such records and shall furnish to the Secured Party
such information and reports regarding the Collateral as the Secured Party may
from time to time reasonably request.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         The existence or occurrence of any one or more of the following events
shall constitute an Event of Default:

         6.1    The Debtor shall fail to deliver duly executed Subordination
Agreements from the holders of not less than $1,405,000 principal amount of
Existing Notes by the Subordination Agreements Delivery Date; provided, that the
failure or refusal (after request by the Debtor) of any of The Rubin Family
Irrevocable Stock Trust, Charles Warshaw Family Limited Partnership, Mark and
Jolene Bolendar or Norman Friedman to execute and deliver such Subordination
Agreements shall not be deemed to be an Event of Default hereunder;

                                       6
<PAGE>

         6.2    The Debtor fails to perform or observe any other covenant or
agreement contained in this Agreement within 10 days after the giving of notice
by the Secured Party of such default;

         6.3    Any representation or warranty of the Debtor contained in this
Agreement, or in any certificate or other writing delivered by the Debtor
pursuant to this Agreement, proves to have been incorrect in any material
respect; or

         6.4    The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in the Notes or the Purchase Agreement) under
the Notes or the Purchase Agreement, as applicable.

                                   ARTICLE VII
                         REMEDIES UPON EVENT OF DEFAULT

         Upon the occurrence of an Event of Default that remains uncured:

         7.1    The Secured Party may exercise all the rights and remedies of a
Secured Party under the U.C.C. and all applicable law and, with respect to
Accounts, the rights provided in Article IX hereof. In addition, the Secured
Party may, without notice to the Debtor, (a) set off all or any part of the
Collateral against the Obligations, (b) apply the cash, if any, then held by it
as Collateral in the manner set forth in Article X, and (c) if there shall be no
such cash or if such cash shall be insufficient to pay all the Obligations in
full upon 10 days' prior written notice to the Debtor, sell the Collateral, or
any part thereof at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Secured Party may reasonably deem satisfactory.

         7.2    The Secured Party may require the Debtor to assemble all or any
part of the Collateral and make it available to the Secured Party at a place
within Massachusetts to be designated by the Secured Party which is reasonably
convenient to the Secured Party.

         7.3    Any holder of the Notes may be the purchaser of any or all of
the Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is subject to
widely distributed standard price quotations, at any private sale) and
thereafter hold the same, absolutely, free from any right or claim of whatsoever
kind. Upon any such sale, the Secured Party shall have the right to deliver,
assign, and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold absolutely free
from any claim or right of whatsoever kind, including any equity or right or
redemption of the Debtor. The Debtor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any rule of law or statute now existing or hereafter adopted.

                                       7
<PAGE>

         7.4    The Secured Party shall give the Debtor 10 days' written notice
of its intention to make any such public or private sale or sale at a broker's
board or on a securities exchange, which notice period is deemed by the Debtor
and by the Secured Party to be commercially reasonable. Such notice, in case of
a public sale, shall state the time and place fixed for such sale, and in case
of sale at a broker's board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, shall first be offered for
sale at such board or exchange. Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as the
Secured Party may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Secured Party may determine. The Secured Party may, without notice or
publication, adjourn the sale from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Secured Party until the selling price is paid by the purchaser
thereof, but the Secured Party shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may again be sold upon like notice.

         7.5    The Secured Party may sell the Collateral without giving any
warranties of any kind. The Secured Party may specifically disclaim any
warranties of title or the like and warranties of fitness and merchantability.
The disclaimer of warranties by the Secured Party shall not be deemed to affect
adversely the commercial reasonableness of any disposition of the Collateral.

         7.6    The Secured Party, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interest and sell the Collateral, or any portion thereof,
under a judgment or decree of a court or courts of competent jurisdiction.

                                  ARTICLE VIII
              RIGHT OF SECURED PARTY TO USE AND OPERATE COLLATERAL

         During the existence of an Event of Default, the Secured Party shall
have the right and power to take possession of all or any part of the
Collateral, and to exclude the Debtor and all persons claiming under the Debtor
wholly or partly therefrom, and thereafter to hold, store, use, operate, manage
or control the same. Upon taking possession, the Secured Party may, from time to
time, at the expense of the Debtor, make all such repairs, replacements,
alterations, additions, and improvements to and of the Collateral as the Secured
Party may reasonably deem proper. The Secured Party shall have the right to
manage and control the Collateral and to carry on the business and to exercise
all rights and powers of the Debtor in respect thereto as the Secured Party
shall reasonably deem best, including the right to enter into any agreements
with respect to the leasing or operation of the Collateral or any part thereof,
and the Secured Party shall be

                                       8
<PAGE>

entitled to collect and receive all rents, issues, profits, fees, revenues, and
other income of the same and every part thereof. Such rents, issues, profits,
fees, revenues, and other income shall be applied to pay the expenses of holding
and operating the Collateral and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions, and improvements,
and to make all payments which the Secured Party may be required or may elect to
make, if any, for taxes, assessments, insurance, and other charges upon the
Collateral or any part thereof, and all other payments which the Secured Party
may be required or authorized to make under any provisions of this Agreement
(including reasonable attorneys' fees). The remainder of such rents, issues,
profits, fees, revenues, and other income shall be applied to the payment of the
Obligations in such order of priority as the Secured Party shall determine
(subject to the provisions of Article X).

                                   ARTICLE IX
                                POWER OF ATTORNEY

         After an Event of Default that remains uncured, upon demand by the
Secured Party for payment of the Obligations in full or acceleration of the
Obligations by any holder of the Notes, the Debtor does hereby irrevocably make,
constitute and appoint the Secured Party and any of its officers, employees or
agents as the true and lawful attorneys of the Debtor with power to:

         9.1    sign the name of the Debtor on any notice or other similar
document which, in the Secured Party's opinion, must be filed to perfect or
continue perfected the Security Interests;

         9.2    receive, endorse, assign and deliver, in the name of the Debtor
or in the name of the Secured Party, all checks, notes, drafts and other
instruments relating to any Collateral and to notify postal authorities to
change the address for delivery of mail to such address as the Secured Party may
designate;

         9.3    notify all or any Account Debtors of the Security Interest
created hereby and direct such Account Debtors to make all payments on the
Collateral to, or as directed by, the Secured Party; and

         9.4    do all other things reasonably necessary to carry out the
provisions of this Agreement.

The Secured Party shall not be liable for any act of commission or omission,
except for its own gross negligence or willful misconduct. This power of
attorney is coupled with an interest and is irrevocable so long as this
Agreement is in effect.

                                       9
<PAGE>

                                    ARTICLE X
                     APPLICATION OF COLLATERAL AND PROCEEDS

         10.1 The proceeds of any disposition of, or other realization upon, all
or any part of the Collateral shall be applied in the following order of
priorities:

                  10.1.1 first, to pay the expenses of such disposition or other
         realization, including reasonable expenses of the Secured Party and its
         agents, attorneys' fees, costs, and expenses reasonably incurred in
         enforcing the Obligations and the Security Interest, and all expenses,
         liabilities and advances reasonably incurred or made by the Secured
         Party in connection therewith, and any other unreimbursed expenses for
         which the Secured Party is to be reimbursed pursuant to Article XI;

                  10.1.2 second, to the payment of the amount then owing or
         unpaid on the Notes, with application to be made first to the unpaid
         interest thereon, and second, to the unpaid principal thereof; and

                  10.1.3 third, to the payment of the balance or surplus, if
         any, to the Debtor, its successors and assigns, or to whomever may be
         lawfully entitled to receive the same.

         If the Secured Party sells any of the Collateral upon credit, the
Debtor shall receive credit only when payments are actually made by the
purchaser, received by the Secured Party and applied to the Obligations.

                                   ARTICLE XI
                         EXPENSES; SECURED PARTY'S LIEN

         The Debtor shall promptly upon demand pay to the Secured Party:

         11.1   the amounts of any taxes, assessments or other amounts which the
Secured Party may have been required to pay to free any of the Collateral from
any lien thereon; and

         11.2   reasonable fees and disbursements of its counsel and of any
agents which the Secured Party may incur in connection with the collection, sale
or other disposition of any of the Collateral or any Event of Default on the
Debtor's part hereunder.

                                   ARTICLE XII
             TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL

         Upon the repayment and performance in full, or other extinguishment, of
all the Obligations the Security Interest shall terminate and all rights to the
Collateral shall revert to the Debtor. Upon any such termination of the Security
Interest or release of the Collateral, the

                                       10
<PAGE>

Secured Party shall execute and deliver to the Debtor such documents as the
Debtor shall reasonably request to evidence the termination of the Security
Interest or the release of such Collateral, as the case may be.

                                  ARTICLE XIII
                                  MISCELLANEOUS

         13.1   This Agreement and the Schedules hereto set forth the entire
understanding of the parties with respect to the subject matter hereof and
supersede all existing agreements among them concerning such subject matter.

         13.2   Any provisions of this Agreement may be modified, amended, or
waived if, but only if, such modification, amendment or waiver is in writing and
is signed by the Debtor and the Secured Party.

         13.3   Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be given by Federal Express,
Express Mail, or similar overnight delivery or courier service, or delivered (in
person or by telecopy, telex, or similar telecommunications equipment) against
receipt to the party to whom it is to be given,

                (a)     if to the Debtor:

                        UTIX Group, Inc.
                        170 Cambridge Street
                        Burlington, MA 01803
                        Attn:  Anthony G. Roth, President
                        Facsimile No. (781) 229-8886

                        with a copy to:

                        Stephen A. Weiss, Esq.
                        Gersten Savage Kaplowitz Wolf & Marcus, LP
                        101 East 52nd Street
                        New York, NY 10022
                        Facsimile No. 212-980-5192

                (b)     if to the Secured Party:

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

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

                         ------------------------
                         Attn:
                               ------------------
                         Facsimile No.
                                       ----------

                                       11
<PAGE>

                         with a copy to:

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

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

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

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

                         Facsimile No.
                                       ----------

         or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 13.3. Any notice shall be
deemed given at the time of receipt thereof.

         13.4   Any waiver by any party of a breach of any term of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that term or of any breach of any other term of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. The rights, powers, and remedies of the Secured
Party provided in this Agreement are cumulative and not exclusive of any right,
power, or remedy provided by law or equity.

         13.5   No party may sell, assign, transfer, or otherwise convey any of
its rights or delegate any of its duties under this Agreement, except as
hereinafter provided, and this Agreement shall be binding upon and inure to the
benefit of the parties hereto and the respective permitted successors and
assigns. Nothing herein shall restrict any Note Purchasers from assigning his,
her or its rights under this Agreement to any permitted transferee of such Note
Purchasers's Notes. Any attempted sale, assignment, transfer, conveyance, or
delegation in violation of this Section 13.5 shall be void. The provisions of
this Agreement shall inure to the benefit of each indemnified party and its
successors and assigns.

         13.6   If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect.

         13.7   The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.

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

         13.9   This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts, without regard to principles
of conflicts of law.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.

                                DEBTOR:
                                UTIX GROUP, INC.

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

                                SECURED PARTY:

                                -----------------------------------------------,
                                as Agent for the Note Purchasers

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

                                       13
<PAGE>

                                                               Schedule 2.1.2(b)

                 GERSTEN, SAVAGE, KAPLOWITZ, WOLF & MARCUS, LLP
                               101 EAST 52 STREET
                                    9TH FLOOR
                            NEW YORK, NEW YORK 10022
                               TEL: (212) 752-9700
                               FAX: (212) 980-5192

                                                                    May 21, 2004

New York Holdings, Ltd.
Sol Kest, Robert Kornstein,
Avner Maloul, Avner Lowy and
Great Court Capital, LLC
c/o Great Court Capital LLC
380 Madison Avenue
New York, NY 10017

           RE: SALE OF 15% SENIOR SECURED NOTES OF UTIX GROUP, INC.

Gentlemen:

We have acted as special counsel to Utix Group, Inc, a Delaware corporation (the
"COMPANY"), in connection with that certain securities purchase agreement, dated
of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),  among the Company,
Great Court Capital,  LLC, a New York limited liability company ("GREAT COURT"),
and the other  purchasers  party  thereto  (collectively  with Great Court,  the
"PURCHASERS").

           This opinion is being  delivered to the  Purchasers at the request of
the Company pursuant to Section 2.1.2(iii) of the Securities Purchase Agreement,
and is  given  with its  consent.  Terms  are  used  herein  as  defined  in the
Securities Purchase Agreement, unless otherwise defined herein.

           In  rendering  the  following  opinions,  we have  assumed  that  the
representations  and  warranties  made  by the  Purchasers  in  the  Transaction
Documents (as defined below) are true and correct. Whenever an opinion herein is
qualified by the phrase "to our knowledge" or similar  phrases,  such opinion is
based  solely on the  actual  knowledge  of the  attorneys  in this firm who are
currently  involved in the substantive  legal  representation  of the Company in
this transaction and, while such attorneys have not been informed by the Company
that the matters  stated are factually  incorrect,  we have made no  independent
investigation of such matters.

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Great Court Capital, LLC, et. al.
May 21, 2004
Page 2

         In  rendering  the  opinions  expressed  below,  we have  reviewed  the
following instruments, documents and agreements, each of which is dated the date
of this opinion:

     o    The Securities Purchase Agreement;

     o    The Warrants;

     o    The Notes; and

     o    The Security Agreement.

The  Securites  Purchase  Agreement,  the  Warrants,  the Notes and the Security
Agreement are collectively referred to herein as the "TRANSACTION DOCUMENTS").

         In addition to the Transaction Documents,  in rendering our opinion, we
have also examined and relied upon:

     o    a certified copy dated May [ ], 2004, of the Articles of Incorporation
          of the Company from the Delaware  Secretary of State (the "ARTICLES OF
          INCORPORATION");

     o    a  certified  copy of the  Bylaws of the  Company  effective  [ ] (the
          "BYLAWS");

     o    a  certificate  of good  standing  dated May [ ], 2004 for the Company
          from the Massachusetts Secretary of the Commonwealth; and

     o    Consent and  resolutions  dated [ ], 2004 of the board of directors of
          the Company;

     o    The  active  shareholder  report  of [ ],  the  transfer  agent of the
          Company,  as of May [ ],  2004  (the  "TRANSFER  AGENT  REPORT");  and

     o    Periodic  reports  filed  by the  Company  under  the  Securities  and
          Exchange Act of 1934, as amended (collectively, the "PUBLIC FILINGS").

         Based  upon  and  subject  to  the   foregoing,   and  subject  to  the
assumptions,  qualifications  and limitations  stated in this opinion letter, we
are of the opinion that:

         1.       The  Company  is  a  corporation  duly  incorporated,  validly
existing  and in good  standing  under the laws of the State of  Delaware,  with
corporate  power to own its properties and assets and to conduct its business as
currently conducted.

<PAGE>

Great Court Capital, LLC, et. al.
May 21, 2004
Page 3

         2.       The Company has the  corporate  power to execute,  deliver and
perform the  Transaction  Documents.  The  Transaction  Documents have been duly
executed,  have been authorized by all requisite corporate action by the Company
and constitute the valid and binding obligations of the Company,  enforceable in
accordance  with their terms,  except (a) as limited by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other laws of  general  application
affecting enforcement of creditors' rights, and (b) general principles of equity
that restrict the availability of equitable or legal remedies.

         3.       The execution,  delivery and  performance  of the  Transaction
Documents by the Company and the consummation of the  transactions  contemplated
thereby,  will not,  with or without the giving of notice or the passage of time
or both:

                  (a) conflict  with or violate the  provisions of the Company's
articles  of  incorporation  or  bylaws  or  other   organizational  or  charter
documents, as applicable; or

                  (b) to the best of our knowledge, result in a violation of any
law, rule, regulation, order, judgment,  injunction, decree or other restriction
of any court or  governmental  authority  to which the  Company is subject or by
which any property or asset of the Company is bound or affected.

         4.       The  Notes,  Warrants  and  Warrants  Shares  have  been  duly
authorized  and, when issued,  and paid for in accordance  with the  Transaction
Documents, will be duly and validly issued, fully paid and non-assessable,  free
and clear of all liens and shall not be subject to preemptive  rights or similar
rights of stockholders.

         For  purposes of the  foregoing  opinions,  we have  assumed all of the
following:

     o    the legal capacity of each natural person;

     o    the legal existence of all parties to the transaction,  other than the
          Company;

     o    the power and  authority  of each  person,  other than the  Company or
          person(s)  acting on behalf of the  Company,  to execute,  deliver and
          perform each document  executed and delivered and to do each other act
          done or to be done by such person;

     o    the authorization,  execution and delivery by each person,  other than
          the  Company or  person(s)  acting on behalf of the  Company,  of each
          document  executed and  delivered  or to be executed and  delivered by
          such person;

     o    the legality,  validity,  binding effect and enforceability as to each
          person,  other than the Company,  or person(s) acting on behalf of the
          Company, of each document executed and delivered or to be executed and
          delivered and of each other act done or to be done by such person;

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Great Court Capital, LLC, et. al.
May 21, 2004
Page 4

     o    the payment of all required documentary stamps, taxes and fees imposed
          upon the execution, filing or recording of documents;

     o    there have been no undisclosed  modifications  of any provision of any
          document  reviewed by us in  connection  with the  rendering  of these
          opinions  and no  undisclosed  prior  waiver  of any  right or  remedy
          contained in any of the documents;

     o    the genuineness of each signature,  other than that of the Company, or
          person(s)  acting on behalf of the Company,  the  completeness of each
          document reviewed by us as an original, the conformity to the original
          of each document  reviewed by us as a copy and the authenticity of the
          original of each document received by us as a copy;

     o    the accuracy on the date of the opinion  letter as well as of the date
          stated in all governmental certifications of each statement as to each
          factual matter contained in such governmental certifications;

     o    Great  Court  Capital,  LLC  and  other  parties  to  the  Transaction
          Documents,  other than the Company,  have acted in good faith, without
          notice of adverse  claims,  and have complied with all laws applicable
          to them that affect the transaction;

     o    the  transaction  complies with all tests of good faith,  fairness and
          conscionability required by law;

     o    routine procedural matters such as service of process or qualification
          to do business in the relevant  jurisdictions will be satisfied by the
          parties  seeking to enforce  any  agreements  in  connection  with the
          transaction;

     o    all statutes,  judicial and  administrative  decisions,  and rules and
          regulations of governmental agencies constituting the law for which we
          are  assuming  responsibility  are  published  (E.G.,  reported  court
          decisions  and the  specialized  reporting  services  of BNA,  CCH and
          Prentice-Hall)  or  otherwise  generally  accessible  (E.G.,  LEXIS or
          WESTLAW) in each case in a manner generally  available (I.E., in terms
          of  access  and   distribution   following   publication)  to  lawyers
          practicing in our judicial circuit;

     o    agreements  related to the  transaction  (other  than the  Transaction
          Documents) will be enforced as written;

     o    no action,  discretionary or otherwise,  will be taken by or on behalf
          of the Company in the future that might result in a violation of law;

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Great Court Capital, LLC, et. al.
May 21, 2004
Page 5

     o    there are no other agreements or understandings among the parties that
          would modify the terms of the Transaction  Documents or the respective
          rights or obligations of the parties to those documents;

     o    with respect to the transaction and the Transaction  Documents,  there
          has been no  mutual  mistake  of fact  and  there  exists  no fraud or
          duress;

     o    the constitutionality  and validity of all relevant laws,  regulations
          and  agency  actions  unless a  reported  case has  otherwise  held or
          widespread  concern has been expressed by commentators as reflected in
          materials which lawyers routinely consult; and

     o    the Transaction Documents have been duly executed and delivered by the
          parties thereto, other than by the Company.

         We have made no  assumptions  other than those  expressly  set forth in
this opinion letter.

         Notwithstanding the foregoing, we do not express any opinion concerning
the  following  types  of  laws:  usury  laws;   Federal  Reserve  Board  margin
regulations;  pension and employee  benefit laws and regulations  such as ERISA;
Federal and state antitrust and unfair competition laws and regulations; Federal
and  state  regulations   concerning  filing   requirements  other  than  filing
requirements  applicable  to  filings  related  to  articles  of  incorporation,
articles of merger, financing statements and the like; compliance with fiduciary
duty  requirements;  Federal  and  state  laws and  regulations  concerning  the
priority  of  security  interests;   Federal  and  state  laws  and  regulations
concerning the priority or enforcement of security interests;  Federal and state
environmental  laws  and  regulations;  Federal  and  state  land  use  laws and
regulations;  and local laws (including statutes,  administrative decisions, and
rules and regulations of county, municipal and political subdivisions).

         This opinion  letter is  furnished to you by us, as special  counsel to
the Company,  and is rendered solely in connection with the transaction to which
this opinion letter relates.  This opinion letter may be relied upon by you only
in  connection  with this  transaction  and may not be relied  upon by any other
person without our prior written consent.

         This  opinion  letter is limited  to the  matters  expressly  set forth
herein and no opinion is implied or may be inferred beyond the matters expressly
set forth herein.

         We are admitted to practice in the State of New York, and we express no
opinion herein as to any matters governed by any laws other than the laws of the
State of New York, the Delaware General  Corporation law and the federal laws of
the United States.

<PAGE>

Great Court Capital, LLC, et. al.
May 21, 2004
Page 6

         This opinion letter is rendered as of the date hereof.  We disclaim any
obligation  to advise you of any changes that  thereafter  may be brought to our
attention.

                                                     Sincerely yours,

                                                     GERSTEN SAVAGE KAPLOWITZ
                                                     WOLF & MARCUS, LLP

<PAGE>

                                 SCHEDULE 3.1.6
                            UTIX GROUP CAPITALIZATION

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

The authorized capital stock of Utix Group, Inc. (the "Company") consists of
60,000,000 shares, of which

         (a)      50,000,000 are shares of Common Stock, par value $0.001 per
                  share, 17,468,391 shares of which are issued and outstanding
                  as of March 31, 2004, and, on a pro forma basis, 29,111,248
                  shares shall be outstanding, giving effect to (i) the offer
                  and sale of all 12,000,000 shares of Common Stock under a
                  registration statement on Form SB-2 in connection with the
                  U.S. Common Stock Offering, (ii) the issuance of 1,142,857
                  shares to SD Partners under an advisory agreement of even
                  date, and (iii) the repurchase and cancellation in May 2004 of
                  1,500,000 shares of Common Stock by the Company from a
                  stockholder;

         (b)      10,000,000 of which are shares of preferred stock, par value
                  $.001 per share of which no shares are issued and outstanding.

Since March 31, 2004, the Company has engaged in the following transaction for
the repurchase of its Common Stock

In May 2004, the Company repurchased 1,500,000 shares of its Common Stock from
Joel Pensley, former president and principal stockholder of the Company, and
subsequently cancelled such shares.

COMMON STOCK EQUIVALENTS

As partial consideration for the stock repurchase from Mr. Pensley, the Company
issued to Mr. Pensley a five-year warrant to purchase up to 750,000 shares of
Common Stock at an exercise price of $0.15 per share.

As of March 31, 2004, there were outstanding options and warrants to acquire
2,572,000 and 1,829,688 shares of Common Stock, respectively, and notes
convertible into 1,614, 534 shares of Common Stock.

PRINCIPAL STOCKHOLDERS.

Reference is made to the draft of Amendment No. 2 to the Company's registration
statement in connection with the U.S. Common Stock Offering to be filed with the
SEC following the Initial Notes Closing Date.

<PAGE>

                          SCHEDULE 3.1.12 CERTAIN FEES

The Company has agreed to pay the following finders' fees:

         (a)      To Great Court Capital LLC - a cash finders fee equal to 10%
                  of the gross proceeds received from the sale of the Notes, up
                  to a maximum of $100,000 in the aggregate; payable in pro rata
                  amounts on the Initial Notes Closing Date and the Final Notes
                  Closing Date.

         (b)      To William Hayde - a five year warrant to purchase up to
                  500,000 shares of Company Common Stock at an exercise price of
                  $0.25 per share, and containing substantially the same terms
                  and conditions as the Warrants issued to the Purchasers.

<PAGE>

                       3.1.16 EXISTING REGISTRATION RIGHTS

The Company has granted registration rights to the following persons:

Joel Pensley, with respect to 970,000 shares of common stock of the Company and
750,000 shares underlying warrants. The Company has agreed to file a
registration statement with the SEC for such shares within 30 days after the
effective date of the registration on Form SB-2 filed on April 12, 2004 with the
SEC. Mr. Pensley has agreed not to effect a public distribution of such
securities prior to June 30, 2005; provided that he is permitted to sell up to
10% of his registrable securities every 30 days, commencing on the effective
date of the registration statement.

The Company has granted registration rights to other holders of its securities,
all of which securities are being registered in the U.S. Common Stock Offering
registration statement, but subject to the lock up provisions set forth therein.

<PAGE>

                                  SCHEDULE 4.6

                               PLACES OF BUSINESS

Debtor's sole place of business is located at 170 Cambridge Street, Burlington,
MA 01803-2933

                                       1
<PAGE>

                                  SCHEDULE 4.7

                          LOCATION OF BOOKS AND RECORDS

Debtor's books and records are located at 170 Cambridge Street, Burlington, MA
01803-2933

                                       1

<PAGE>

                               4.7 USE OF PROCEEDS

The net proceeds from the sale of the Notes, net of transaction costs and
expenses, will be used solely to (a) provide a security deposit to
DISCOVER/Novus under its escrow and payment account arrangements to, and (b) to
purchase additional inventories of gift tickets and packaging; in each case to
facilitate the launch of the Company's Spring 2004 Giftix program.EXHIBIT 4.1

                                                              EXECUTION VERSION
-------------------------------------------------------------------------------

                         MUELLER HOLDINGS (N.A.), INC.,

                                   as Issuer

                     14.75% SENIOR DISCOUNT NOTES DUE 2014

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

                                   INDENTURE

                           Dated as of April 29, 2004

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

                    Law Debenture Trust Company of New York,

                                   as Trustee

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

<PAGE>

                             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)...............................................           N.A.
     (b)(2)...............................................        7.06; 7.07
     (c)..................................................       7.06; 10.02
     (d)..................................................           7.06
314(a)....................................................    4.03;10.01; 11.05
     (b)..................................................           N.A.
     (c)(1)...............................................          11.04
     (c)(2)...............................................          11.04
     (c)(3)...............................................           N.A.
     (d)..................................................           N.A.
     (e)..................................................          11.05
     (f)..................................................           N.A.
315(a)....................................................           7.01
     (b)..................................................       7.05; 10.02
     (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)....................................................          11.01
     (b)..................................................           N.A.
     (c)..................................................          11.01

N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.

<PAGE>

                               TABLE OF CONTENTS

                                                                           Page

                                   ARTICLE 1
                         DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01       Definitions................................................1
Section 1.02       Other Definitions.........................................21
Section 1.03       Incorporation by Reference of Trust Indenture Act.........22
Section 1.04       Rules of Construction.....................................22

                                   ARTICLE 2
                                   THE NOTES

Section 2.01       Form and Dating...........................................23
Section 2.02       Execution and Authentication..............................24
Section 2.03       Registrar and Paying Agent................................24
Section 2.04       Paying Agent to Hold Money in Trust.......................25
Section 2.05       Holder Lists..............................................25
Section 2.06       Transfer and Exchange.....................................25
Section 2.07       Replacement Notes.........................................38
Section 2.08       Outstanding Notes.........................................38
Section 2.09       Treasury Notes............................................38
Section 2.10       Temporary Notes...........................................38
Section 2.11       Cancellation..............................................39
Section 2.12       Defaulted Interest........................................39
Section 2.13       CUSIP and CINS Numbers....................................39

                                   ARTICLE 3
                           REDEMPTION AND PREPAYMENT

Section 3.01       Notices to Trustee........................................39
Section 3.02       Selection of Notes to Be Redeemed or Purchased............40
Section 3.03       Notice of Redemption......................................40
Section 3.04       Effect of Notice of Redemption............................41
Section 3.05       Deposit of Redemption or Purchase Price...................41
Section 3.06       Notes Redeemed or Purchased in Part.......................41
Section 3.07       Optional Redemption.......................................41
Section 3.08       Mandatory Redemption......................................42
Section 3.09       Offer to Purchase by Application of Excess Proceeds.......42

                                   ARTICLE 4
                                   COVENANTS

Section 4.01       Payment of Notes..........................................44
Section 4.02       Maintenance of Office or Agency...........................44
Section 4.03       Reports...................................................45
Section 4.04       Compliance Certificate....................................45
Section 4.05       Taxes.....................................................46
Section 4.06       Stay, Extension and Usury Laws............................46
Section 4.07       Restricted Payments.......................................46
Section 4.08       Dividend and Other Payment Restrictions Affecting
                   Restricted Subsidiaries...................................50
Section 4.09       Incurrence of Indebtedness and Issuance of
                   Preferred Stock...........................................52

                                       i
<PAGE>

Section 4.10       Asset Sales...............................................54
Section 4.11       Transactions with Affiliates..............................56
Section 4.12       Liens.....................................................58
Section 4.13       Corporate Existence.......................................58
Section 4.14       Offer to Repurchase Upon Change of Control................58
Section 4.15       Limitation on Sale and Leaseback Transactions.............60

                                   ARTICLE 5
                                   SUCCESSORS

Section 5.01       Merger, Consolidation, or Sale of Assets..................60
Section 5.02       Successor Corporation Substituted.........................61

                                   ARTICLE 6
                             DEFAULTS AND REMEDIES

Section 6.01       Events of Default.........................................62
Section 6.02       Acceleration..............................................63
Section 6.03       Other Remedies............................................64
Section 6.04       Waiver of Past Defaults...................................64
Section 6.05       Control by Majority.......................................64
Section 6.06       Limitation on Suits.......................................65
Section 6.07       Rights of Holders of Notes to Receive Payment.............65
Section 6.08       Collection Suit by Trustee................................65
Section 6.09       Trustee May File Proofs of Claim..........................65
Section 6.10       Priorities................................................66
Section 6.11       Undertaking for Costs.....................................66

                                   ARTICLE 7
                                    TRUSTEE

Section 7.01       Duties of Trustee.........................................66
Section 7.02       Rights of Trustee.........................................67
Section 7.03       Individual Rights of Trustee..............................68
Section 7.04       Trustee's Disclaimer......................................68
Section 7.05       Notice of Defaults........................................68
Section 7.06       Reports by Trustee to Holders of the Notes................68
Section 7.07       Compensation and Indemnity................................69
Section 7.08       Replacement of Trustee....................................69
Section 7.09       Successor Trustee by Merger, etc..........................70
Section 7.10       Eligibility; Disqualification.............................70
Section 7.11       Preferential Collection of Claims Against Company.........71

                                   ARTICLE 8
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01       Option to Effect Legal Defeasance or Covenant Defeasance..71
Section 8.02       Legal Defeasance and Discharge............................71
Section 8.03       Covenant Defeasance.......................................71
Section 8.04       Conditions to Legal or Covenant Defeasance................72
Section 8.05       Deposited Money and Government Securities to be Held
                   in Trust; Other Miscellaneous Provisions..................73
Section 8.06       Repayment to Company......................................74
Section 8.07       Reinstatement.............................................74

                                      ii
<PAGE>

                                   ARTICLE 9
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01       Without Consent of Holders of Notes.......................74
Section 9.02       With Consent of Holders of Notes..........................75
Section 9.03       Compliance with Trust Indenture Act.......................76
Section 9.04       Revocation and Effect of Consents.........................76
Section 9.05       Notation on or Exchange of Notes..........................77
Section 9.06       Trustee to Sign Amendments, etc...........................77

                                   ARTICLE 10
                           SATISFACTION AND DISCHARGE

Section 10.01      Satisfaction and Discharge................................77
Section 10.02      Application of Trust Money................................78

                                   ARTICLE 11
                                 MISCELLANEOUS

Section 11.01      Trust Indenture Act Controls..............................78
Section 11.02      Notices...................................................78
Section 11.03      Communication by Holders of Notes with Other
                   Holders of Notes..........................................79
Section 11.04      Certificate and Opinion as to Conditions Precedent........79
Section 11.05      Statements Required in Certificate or Opinion.............80
Section 11.06      Rules by Trustee and Agents...............................80
Section 11.07      No Personal Liability of Directors, Officers,
                   Employees and Stockholders................................80
Section 11.08      Governing Law.............................................80
Section 11.09      No Adverse Interpretation of Other Agreements.............80
Section 11.10      Successors................................................81
Section 11.11      Payment Date Other Than a Business Day....................81
Section 11.12      Severability..............................................81
Section 11.13      Counterpart Originals.....................................81
Section 11.14      Table of Contents, Headings, etc..........................81

                                 EXHIBITS

Exhibit A1        FORM OF NOTE
Exhibit A2        FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B         FORM OF CERTIFICATE OF TRANSFER
Exhibit C         FORM OF CERTIFICATE OF EXCHANGE

                                      iii
<PAGE>

     INDENTURE dated as of April 29, 2004 among Mueller Holdings (N.A.), Inc.,
a Delaware corporation, and Law Debenture Trust Company of New York, as
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 (as defined) of the 14.75%
Senior Discount Notes due 2014, including any Additional Notes issued hereunder
(the "Notes"):

                                   ARTICLE 1
                         DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01 Definitions.

     "144A Global Note" means a Global Note substantially in the form of
Exhibit A1 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 will be initially issued in a denomination equal
to the outstanding principal amount at maturity of the Notes sold in reliance
on Rule 144A.

     "Accounts Receivable Subsidiary" means an Unrestricted Subsidiary of the
Company to which the Company or any of its Restricted Subsidiaries sells any of
its accounts receivable pursuant to a Receivables Facility.

     "Accreted Value" means, as of any date of determination prior to the Full
Accretion Date, the sum of (a) the initial offering price of each Note of
$493.596 per $1,000 principal amount at maturity and (b) the portion of the
excess of the principal amount at maturity of each Note over such initial
offering price as shall have been accreted thereon through such date, such
amount to be so accreted on a daily basis at 14.75% per annum of the initial
offering price of the Notes, compounded semi-annually on each April 15 and
October 15 from the date of issuance of the Notes through the date of
determination; provided that, on and after the Full Accretion Date, the
Accreted Value of each Note shall be equal to the principal amount at maturity
of such Note.

     "Acquired Indebtedness" means, with respect to any specified Person,

          (1) Indebtedness of any other Person existing at the time that other
     Person is merged with or into or became a Subsidiary of that specified
     Person, including, without limitation, Indebtedness incurred in connection
     with, or in contemplation of, that other Person merging with or into or
     becoming a Subsidiary of that specified Person; and

          (2) Indebtedness secured by a Lien encumbering an asset acquired by
     that specified Person at the time that asset is acquired by that specified
     Person.

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

     "Additional Notes" means additional Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof,
as part of the same series as the Initial Notes.

     "Affiliate" of any specified Person means any other Person which, directly
or indirectly, controls, is controlled by or is under direct or indirect common
control with, that specified Person. For purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and

                                       1
<PAGE>

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

     "Agent" 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 and Clearstream that apply to such transfer or exchange.

     "Asset Sale" means:

          (1) the sale, lease, conveyance, disposition or other transfer (a
     "disposition") of any properties, assets or rights (including, without
     limitation, by way of a sale and leaseback); provided that the sale,
     lease, conveyance or other disposition of all or substantially all of the
     assets of the Company and its Subsidiaries taken as a whole will be
     governed by the provisions of Section 4.14 and Section 5.01 hereof and not
     Section 4.10 hereof; and

          (2) the issuance, sale or transfer by the Company or any of its
     Restricted Subsidiaries of Equity Interests of any of the Company's
     Restricted Subsidiaries,

in the case of either clause (1) or (2), whether in a single transaction or a
series of related transactions,

               (a) that have a Fair Market Value in excess of $5.0 million; or

               (b) for net proceeds in excess of $5.0 million.

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

          (1) dispositions in the ordinary course of business;

          (2) a disposition of assets by the Company to a Restricted Subsidiary
     or by a Restricted Subsidiary to the Company or to another Restricted
     Subsidiary;

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

          (4) the sale and leaseback of any assets within 90 days of the
     acquisition thereof;

          (5) foreclosures on assets;

          (6) any exchange of like property pursuant to Section 1031 of the
     Internal Revenue Code of 1986, as amended, for use in a Permitted
     Business;

          (7) any sale of Equity Interests in, or Indebtedness or other
     securities of, an Unrestricted Subsidiary;

          (8) a Permitted Investment or a Restricted Payment that is permitted
     by Section 4.07 hereof; and

          (9) sales of accounts receivable, or participation therein, in
     connection with any Receivables Facility.

                                       2
<PAGE>

     "Attributable Indebtedness" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in that transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in that sale and leaseback transaction, including
any period for which that lease has been extended or may, at the option of the
lessor, be extended.

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

     "Board of Directors" means:

          (1) with respect to a corporation, the board of directors of the
     corporation or any committee thereof duly authorized to act on behalf of
     such board;

          (2) with respect to a partnership, the Board of Directors of the
     general partner of the partnership;

          (3) with respect to a limited liability company, the managing member
     or members or any controlling committee of managing members thereof; and

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

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

     "Business Day" means any day other than a Legal Holiday.

     "Capital Lease Obligation" means, at the time any determination thereof 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.

     "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 interests (whether general or limited) or membership
     interests; 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) Government Securities;

          (2) any certificate of deposit maturing not more than 365 days after
     the date of acquisition issued by, or demand deposit or time deposit of,
     an Eligible Institution or any lender under the Credit Agreement;

                                       3
<PAGE>

          (3) commercial paper maturing not more than 365 days after the date
     of acquisition of an issuer (other than an Affiliate of the Company) with
     a rating, at the time as of which any investment therein is made, of "A-3"
     (or higher) according to S&P or "P-2" (or higher) according to Moody's or
     carrying an equivalent rating by a nationally recognized rating agency if
     both of the two named rating agencies cease publishing ratings of
     investments;

          (4) any bankers acceptances or money market deposit accounts issued
     by an Eligible Institution;

          (5) any fund investing exclusively in investments of the types
     described in clauses (1) through (4) above; and

          (6) in the case of any Subsidiary organized or having its principal
     place of business outside the United States, investments denominated in
     the currency of the jurisdiction in which that Subsidiary is organized or
     has its principal place of business which are similar to the items
     specified in clauses (1) through (5) above, including without limitation
     any deposit with a bank that is a lender to any Restricted Subsidiary.

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

          (1) the 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 assets of the Company and
     its Subsidiaries, taken as a whole, to any "person" or "group" (as those
     terms are used in Section 13(d) of the Exchange Act), other than the
     Principals and their Related Parties;

          (2) the adoption of a plan for 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" or "group" (as those terms are used in Section 13(d) of the
     Exchange Act), other than the Principals and their Related Parties,
     becomes the "beneficial owner" (as that term is defined in Rule 13d-3 and
     Rule 13d-5 under the Exchange Act), directly or indirectly through one or
     more intermediaries, of 50% or more of the voting power of the outstanding
     voting stock of the Company; or

          (4) the first day on which a majority of the members of the board of
     directors of the Company are not Continuing Members.

     "Clearstream" means Clearstream Banking, S.A.

     "Company" means Mueller Holdings (N.A.), Inc., and any successor obligor
pursuant to Section 5.01.

     "Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of that Person and its Restricted Subsidiaries for
that period plus, to the extent deducted in computing Consolidated Net Income,

          (1) provision for taxes based on income or profits of that Person and
     its Restricted Subsidiaries for that period;

          (2) Fixed Charges of that Person for that period;

                                       4
<PAGE>

          (3) depreciation, amortization (including amortization of goodwill
     and other intangibles) and all other non-cash charges, but excluding any
     other non-cash charge to the extent that it represents an accrual of or
     reserve for cash expenses that will be paid within twelve months after the
     date of determination, of that Person and its Restricted Subsidiaries for
     that period;

          (4) net periodic pension and other post-retirement benefits;

          (5) other income or expense net as set forth on the face of that
     Person's statement of operations;

          (6) any payments made pursuant to the Financial Advisory Agreement;
     and

          (7) any non-capitalized transaction costs incurred in connection with
     actual, proposed or abandoned financings, acquisitions or divestitures,
     including, but not limited to, any earn-out or similar expenses in
     connection with acquisitions or dispositions and financing and refinancing
     fees and costs incurred in connection with the Offering, the Mueller
     Offerings and related transactions,

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

     Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, the Fixed Charges of, and the depreciation and amortization and
other non-cash charges of, a Restricted Subsidiary of a Person shall be added
to Consolidated Net Income to compute Consolidated Cash Flow only to the extent
and in the same proportion that Net Income of that Restricted Subsidiary was
included in calculating the Consolidated Net Income of that Person.

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

          (1) the interest expense of that Person and its Restricted
     Subsidiaries for that period, on a consolidated basis, determined in
     accordance with GAAP, including amortization of original issue discount,
     non-cash interest payments, 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 payments, if any, pursuant to Hedging Obligations; provided that
     in no event shall any amortization of deferred financing costs be included
     in Consolidated Interest Expense; and

          (2) the consolidated capitalized interest of that Person and its
     Restricted Subsidiaries for that period, whether paid or accrued;
     provided, however, that Receivables Fees shall be deemed not to constitute
     Consolidated Interest Expense.

     Notwithstanding the foregoing, the Consolidated Interest Expense with
respect to any Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary shall be included only to the extent and in the same proportion that
the net income of that Restricted Subsidiary was included in calculating
Consolidated Net Income.

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

                                       5
<PAGE>

          (1) the Net Income (or 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 (or loss) of any Restricted Subsidiary other than
     a Subsidiary organized or having its principal place of business outside
     the United States shall be excluded to the extent that the declaration or
     payment of dividends or similar distributions by that Restricted
     Subsidiary of that Net Income (or loss) 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, judgment, decree, order, statute, rule or
     governmental regulation applicable to that Restricted Subsidiary;

          (3) the Net Income (or loss) of any Person acquired in a pooling of
     interests transaction for any period prior to the date of that acquisition
     shall be excluded; and

          (4) the cumulative effect of a change in accounting principles shall
     be excluded.

     "Continuing Members" means, as of any date of determination, any member of
the board of directors of the Company who:

          (1) was a member of the Company's board of directors on the date of
     this Indenture; or

          (2) was nominated for election or elected to the Company's board of
     directors with the approval of, or whose election to the board of
     directors was ratified by, at least a majority of the Continuing Members
     who were members of the Company's board of directors at the time of that
     nomination or election.

     "Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.

     "Credit Agreement" means that certain Second Amended and Restated Credit
Agreement, dated on or about April 23, 2004 among the Mueller Group, various
financial institutions party thereto, and Credit Suisse First Boston, 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, including any agreement:

          (1) extending or shortening the maturity of any Indebtedness incurred
     thereunder or contemplated thereby;

          (2) adding or deleting borrowers or guarantors thereunder,

          (3) increasing the amount of Indebtedness incurred thereunder or
     available to be borrowed thereunder, provided that on the date that
     Indebtedness is incurred it would not be prohibited by Section 4.09(b)(1);
     or

          (4) otherwise altering the terms and conditions thereof.

     "Credit Facilities" means, with respect to the Company and its Restricted
Subsidiaries, one or more debt facilities (including the Credit Agreement and
any Foreign Credit Facility), commercial paper facilities,

                                       6
<PAGE>

or indentures providing for revolving credit loans, term loans, notes, or other
financing or letters of credit, or other credit facilities, in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.

     "Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.

     "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 2.06 hereof, substantially
in the form of Exhibit A1 hereto, except that such Note 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 2.03 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.

     "Designated Noncash Consideration" means the Fair Market Value of non-cash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate, setting forth the basis of
that valuation, executed by the principal executive officer and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a sale of that Designated Noncash Consideration.

     "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), or upon the happening of any event (other than any event solely
within the control of the issuer thereof), matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, is exchangeable
for Indebtedness (except to the extent exchangeable at the option of that
Person subject to the terms of any debt instrument to which that Person is a
party) or redeemable at the option of the holder thereof, in whole or in part,
on or prior to the date on which the Notes mature; provided that (i) any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase that
Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall
not constitute Disqualified Stock if the terms of that Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant
to those provisions unless that repurchase or redemption complies with Section
4.07 hereof and (ii) if that Capital Stock is issued to any plan for the
benefit of employees of the Company or its Subsidiaries or by any such plan to
those employees, that Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations and (iii) any Capital
Stock issued to Dale Smith that is subject to repurchase pursuant to the terms
of his employment agreement upon termination of his employment with the Company
shall not constitute Disqualified Stock as a result of such provision.

     "DLJ Merchant Banking funds" means DLJ Merchant Banking Partners II, L.P.
and its Affiliates.

     "Domestic Subsidiary" means a Subsidiary that is organized under the laws
of the United States or any State, district or territory thereof.

                                       7
<PAGE>

     "Eligible Institution" means a commercial banking institution that has
combined capital and surplus not less than $100.0 million or its equivalent in
foreign currency, whose short-term debt is rated "A-3" or higher according to
Standard & Poor's Ratings Group ("S&P") or "P-2" or higher according to Moody's
Investor Services, Inc. ("Moody's") or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.

     "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).

     "Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.

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

     "Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.

     "Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.

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

     "Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture, until those amounts are repaid.

     "Fair Market Value" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors
of the Company (unless otherwise provided in this Indenture).

     "Financial Advisory Agreement" means the financial advisory agreement with
Credit Suisse First Boston LLC described in the offering circular dated April
22, 2004 with respect to the Initial Notes under "Certain Relationships and
Related Party Transactions" or any amendment, modification, or replacement
thereof between the Company or any of its Subsidiaries and a Principal or one
of its Affiliates.

     "Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of that Person for that period
(exclusive of amounts attributable to discontinued operations, as determined in
accordance with GAAP, or operations and businesses disposed of prior to the
Calculation Date (as defined)) to the Fixed Charges of that Person for that
period (exclusive of amounts attributable to discontinued operations, as
determined in accordance with GAAP, or operations and businesses disposed of
prior to the Calculation Date).

     In the event that the referent Person or any of its Subsidiaries incurs,
assumes, guarantees or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems preferred stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
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 that incurrence,
assumption, guarantee or redemption of Indebtedness, or that issuance 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.

                                       8
<PAGE>

     In addition, for purposes of making the computation referred to above,
acquisitions that have been made by the Company or any of its Subsidiaries,
including all mergers or consolidations and any related financing transactions,
during the four-quarter reference period or subsequent to that reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
that reference period shall be calculated to include the Consolidated Cash Flow
of the acquired entities on a pro forma basis after giving effect to cost
savings reasonably expected to be realized in connection with that acquisition,
as determined in good faith by an officer of the Company (regardless of whether
those cost savings could then be reflected in pro forma financial statements
under GAAP, Regulation S-X promulgated by the SEC or any other regulation or
policy of the SEC) and without giving effect to clause (3) of the proviso set
forth in the definition of Consolidated Net Income.

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

          (1) the Consolidated Interest Expense of that Person for that period,
     excluding any amounts that represent mark-to-market gains or losses; and

          (2) the product of (a) all dividend payments on any series of
     preferred stock of that Person (other than dividends payable solely in
     Equity Interests that are not Disqualified Stock) 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, determined on a
     consolidated basis in accordance with GAAP.

in each case, on a consolidated basis and in accordance with GAAP. For purposes
of calculating Fixed Charges and notwithstanding the foregoing, no effect shall
be given to any increase in the amount of interest expense associated with the
Notes as a result of the attribution of a portion of the purchase price of the
Units to the Warrants issued in connection with the Notes.

     "Foreign Credit Facilities" means any Indebtedness of a Restricted
Subsidiary organized or having its principal place of business outside the
United States.

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

     "Full Accretion Date" means April 15, 2009.

     "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 on the date of this Indenture.

     "Global Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.

     "Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A1 hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.

                                       9
<PAGE>

     "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

     "guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit or
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.

     "Hedging Obligations" means, with respect to any Person, the obligations
of that Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (b) other agreements or
arrangements designed to protect that Person against fluctuations in interest
rates and (c) agreements or arrangements designed to protect that Person
against fluctuations in currency rates.

     "Holder" means a Person in whose name a Note is registered.

     "Indebtedness" means, with respect to any Person, any indebtedness of that
Person in respect of borrowed money or evidenced by bonds, notes, debentures or
similar instruments or letters of credit (or reimbursement agreements in
respect thereof) or banker's acceptances or representing Capital Lease
Obligations or the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense, trade payable or customer contract advances, 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 that Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of that Person (whether
or not that Indebtedness is assumed by that Person) and, to the extent not
otherwise included, the guarantee by that Person of any Indebtedness of any
other Person, provided that Indebtedness shall not include the pledge by the
Company of the Capital Stock of an Unrestricted Subsidiary of the Company to
secure Non-Recourse Debt of that Unrestricted Subsidiary.

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

          (1) the accreted value thereof (together with any interest thereon
     that is more than 30 days past due), in the case of any Indebtedness that
     does not require current payments of interest;

          (2) the principal amount thereof, in the case of any other
     Indebtedness (except as specified below) provided that the principal
     amount of any Indebtedness that is denominated in any currency other than
     United States dollars shall be the amount thereof, as determined pursuant
     to the foregoing provision, converted into United States dollars at the
     Spot Rate in effect on the date that Indebtedness was incurred or, if that
     indebtedness was incurred prior to the date of this Indenture, the Spot
     Rate in effect on the date of this Indenture;

          (3) the net termination value of any Hedging Obligations as of such
     date or, in the case of any Hedging Obligation permitted to be incurred
     pursuant to clause (8) of Permitted Indebtedness, zero; and

          (4) in the case of any Indebtedness permitted to be incurred pursuant
     to clause (11) of Permitted Indebtedness, zero.

     "Indenture" means this Indenture, as amended or supplemented from time to
time.

                                      10
<PAGE>

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

     "Initial Notes" means the Notes issued on the date of this Indenture and
any Notes issued in exchange or replacement therefor.

     "Initial Purchasers" means Credit Suisse First Boston LLC, Deutsche Bank
Securities Inc. and J.P. Morgan Securities Inc., collectively.

     "Investments" means, with respect to any Person, all investments by that
Person in other Persons, including Affiliates, in the forms of direct or
indirect loans (including guarantees by the referent Person of, and Liens on
any assets of the referent Person securing, Indebtedness or other obligations
of other Persons), 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, provided that an investment by the Company for
consideration consisting of common equity securities of the Company shall not
be deemed to be an Investment other than for purposes of clause (3) of the
definition of "Qualified Proceeds."

     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, that 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 equal to the Fair Market Value of the Equity Interests of that
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the penultimate paragraph of Section 4.07 hereof.

     "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.

     "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, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

     "Management Loans" means one or more loans by the Company, Mueller Group
or Parent to officers and/or directors of the Company and any of its Restricted
Subsidiaries to finance the purchase by such officers and directors of common
stock of the Company or Parent; provided that the aggregate principal amount of
all such Management Loans outstanding at any time shall not exceed $7.5
million.

     "Mueller Group" means Mueller Group, Inc., a Delaware corporation, and a
direct, wholly-owned subsidiary of the Company.

     "Mueller Offerings" means the offerings by Mueller Group of its
Subordinated Notes and its Secured Notes, substantially concurrently with this
offering.

                                      11
<PAGE>

     "Net Income" means, with respect to any Person, the net income (loss) of
that 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 that gain (or loss), realized in connection with:

               (a) any Asset Sale, including, without limitation, dispositions
          pursuant to sale and leaseback transactions; or

               (b) the extinguishment of any Indebtedness of that Person or any
          of its Restricted Subsidiaries; and

          (2) any extraordinary, unusual or nonrecurring income (or expense) or
     any restructuring costs, or costs reasonably determined by management to
     be associated with facility or product line closures, consolidation or
     rationalization, together with any related provision for taxes and any
     compensation charge incurred in connection with the Offering, the Mueller
     Offerings and related transactions.

     "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, without duplication,

          (1) the direct costs relating to that Asset Sale, including, without
     limitation, legal, accounting and investment banking fees, and sales
     commissions, recording fees, title transfer fees and appraiser fees and
     cost of preparation of assets for sale, and any relocation expenses
     incurred as a result thereof;

          (2) taxes paid or payable as a result thereof (after taking into
     account any available tax credits or deductions and any tax sharing
     arrangements);

          (3) amounts required to be applied to the repayment of Indebtedness
     (other than revolving credit Indebtedness incurred pursuant to the Credit
     Agreement) secured by a Lien on the asset or assets that were the subject
     of that Asset Sale; and

          (4) any reserve established in accordance with GAAP or any amount
     placed in escrow, in either case for adjustment in respect of the sale
     price of such asset or assets until such time as that reserve is reversed
     or that escrow arrangement is terminated, in which case Net Proceeds shall
     include only the amount of the reserve so reversed or the amount returned
     to the Company or its Restricted Subsidiaries from that escrow
     arrangement, as the case may be.

     "Non-Recourse Debt" means Indebtedness,

          (1) no default with respect to, which (including any rights that the
     holders thereof 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 of the Company or any of its
     Restricted Subsidiaries to declare a default on such other Indebtedness or
     cause the payment thereof to be accelerated or payable prior to its stated
     maturity; and

                                       12
<PAGE>

          (2) as to which the lenders have been notified in writing that they
     will not have any recourse to the stock (other than the stock of an
     Unrestricted Subsidiary pledged by the Company to secure debt of that
     Unrestricted Subsidiary) or assets of the Company or any of its Restricted
     Subsidiaries;

provided that in no event shall Indebtedness of any Unrestricted Subsidiary fail
to be Non-Recourse Debt solely as a result of any default provisions (and any
related right of recourse) contained in a guarantee thereof by the Company or
any of its Restricted Subsidiaries if the Company or that Restricted Subsidiary
was otherwise permitted to incur that guarantee pursuant to this Indenture.

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

     "Notes" has the meaning assigned to it in the preamble to this Indenture.

     "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

     "Offering" means the offering of the Initial Notes.

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

     "Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, that meets the requirements of Section 11.05
hereof.

     "Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.

     "Parent" means any parent of Mueller Holdings (N.A.), Inc., from time to
time.

     "Pari Passu Indebtedness" means Indebtedness of the Company that ranks pari
passu in right of payment to the Notes.

     "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 DTC, shall include Euroclear and
Clearstream).

     "Permitted Business" means any Person engaged directly or indirectly in the
flow-control product business or any business reasonably related, incidental or
ancillary thereto.

     "Permitted Investments" means:

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

          (2) any Investment in cash or Cash Equivalents;

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

                                       13
<PAGE>

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

               (b) that 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 Wholly Owned 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 Section 4.10 hereof;

          (5) any Investment acquired solely in exchange for Equity Interests
     (other than Disqualified Stock) of the Company;

          (6) any Investment in a Person engaged in a Permitted Business (other
     than an Investment in an Unrestricted Subsidiary) having an aggregate Fair
     Market Value, taken together with all other Investments made pursuant to
     this clause (6) that are at that time outstanding, not to exceed 15% of
     Total Assets at the time of that Investment (with the Fair Market Value of
     each Investment being measured at the time made and without giving effect
     to subsequent changes in value);

          (7) Investments relating to any special purpose Wholly Owned
     Subsidiary of the Company organized in connection with a Receivables
     Facility that, in the good faith determination of the board of directors
     of the Company, are necessary or advisable to effect that Receivables
     Facility;

          (8) the Management Loans or Investments in Parent to fund Management
     Loans; and

          (9) Hedging Obligations permitted to be incurred under Section 4.09
     hereof or other hedging obligations designed to protect a Person against
     fluctuations in commodity prices, incurred in the ordinary course of
     business.

     "Permitted Liens" means:

          (1) Liens on property or shares of a Person existing at the time that
     Person is merged into or consolidated with or acquired by the Company or
     any Restricted Subsidiary, provided that those Liens were not incurred in
     contemplation of that merger or consolidation or acquisition and do not
     secure any property or assets of the Company or any Restricted Subsidiary
     other than the property or assets subject to the Liens prior to that
     merger or consolidation or acquisition;

          (2) Liens existing on the date of this Indenture;

          (3) Liens securing Indebtedness consisting of Capitalized Lease
     Obligations, purchase money Indebtedness, mortgage financings, industrial
     revenue bonds or other monetary obligations (and all Obligations in
     respect thereof), in each case incurred solely for the purpose of
     financing all or any part of the purchase price or cost of construction or
     installation of assets used in the business of the Company or its
     Restricted Subsidiaries, or repairs, additions or improvements to those
     assets (including Capital Stock of any Person owning such assets),
     provided that:

               (a) those Liens secure Indebtedness in an amount not in excess of
          the original purchase price or the original cost of any such assets or
          repair, additional or

                                       14
<PAGE>

          improvement thereto (plus an amount equal to the reasonable fees and
          expenses in connection with the incurrence of that Indebtedness);

               (b) those Liens do not extend to any other assets of the Company
          or its Restricted Subsidiaries (and, in the case of repair, addition
          or improvements to any such assets, that Lien extends only to the
          assets (and improvements thereto or thereon) repaired, added to or
          improved);

               (c) the Incurrence of that Indebtedness is permitted by Section
          4.09 hereof; and

               (d) those Liens attach within 365 days of that purchase,
          construction, installation, repair, addition or improvement;

          (4) Liens to secure any refinancings, renewals, extensions,
     modification or replacements (collectively, "refinancing") (or successive
     refinancings), in whole or in part, of any Indebtedness secured by Liens
     referred to in the clauses above (and all Obligations in respect thereof)
     so long as that Lien does not extend to any other property (other than
     improvements thereto);

          (5) Liens securing surety bonds or letters of credit entered into in
     the ordinary course of business and consistent with past business
     practice;

          (6) Liens on and pledges of the capital stock of any Unrestricted
     Subsidiary securing Non-Recourse Debt of that Unrestricted Subsidiary;

          (7) Liens securing (a) Indebtedness (including all Obligations) under
     any Credit Facility and (b) Hedging Obligations payable to a lender under
     the Credit Agreement or an Affiliate thereof or to a Person that was a
     lender or Affiliate thereof at the time the contract was entered into to
     the extent such Hedging Obligations are secured by Liens on assets also
     securing Indebtedness (including all Obligations in respect thereof) under
     the Credit Agreement;

          (8) other Liens securing Indebtedness that is permitted by the terms
     of this Indenture to be outstanding having an aggregate principal amount
     at any one time outstanding not to exceed $50.0 million;

          (9) Liens securing Mueller Group's Second Priority Senior Secured
     Notes due 2011 and the guarantees thereof (and all Obligations in respect
     thereof);

          (10) Liens incurred in the ordinary course of business not securing
     debt for money borrowed and not in the aggregate materially detracting
     from the value of the properties or their use in the operation of the
     business of the Company and its Restricted Subsidiaries;

          (11) Liens securing Indebtedness or other obligations of a Subsidiary
     owing to the Company or a Restricted Subsidiary (and all Obligations in
     respect thereof);

          (12) Liens securing Hedging Obligations otherwise permitted under
     this Indenture; and

          (13) judgment liens and Liens securing appeal bonds or letters of
     credit in lieu of appeal bonds in respect of judgments not otherwise
     giving rise to an Event of Default.

                                       15
<PAGE>

     "Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued within 60 days after repayment of,
in exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund other Indebtedness of the Company or any of
its Restricted Subsidiaries; provided that:

          (1) the principal amount (or accreted value, if applicable) of that
     Permitted Refinancing Indebtedness does not exceed the principal amount of
     (or accreted value, if applicable), plus premium, if any, and accrued
     interest on the Indebtedness so extended, refinanced, renewed, replaced,
     defeased or refunded (plus the amount of reasonable expenses incurred in
     connection therewith);

          (2) that Permitted Refinancing Indebtedness has a final maturity date
     no earlier 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; and

          (3) if the Indebtedness being extended, refinanced, renewed,
     replaced, defeased or refunded is subordinated in right of payment to the
     Notes, that Permitted Refinancing Indebtedness is subordinated in right of
     payment to, the Notes on terms at least as favorable, taken as a whole, to
     the holders of Notes as those contained in the documentation governing 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.

     "Principals" means (i) the DLJ Merchant Banking funds and (ii) except for
purposes of Section 4.14 hereof, any Person that acquires Equity Interests of
Parent or the Company from a Principal.

     "Private Placement Legend" means the legend set forth in Section 2.06(g)(1)
hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

     "Public Equity Offering" means

     (1) any issuance of common stock by the Company, other than to Parent and
other than Disqualified Stock, and

     (2) any issuance of common stock or preferred stock by Parent, other than
Disqualified Stock

that is registered pursuant to the Securities Act, other than issuances
registered on Form S-8 and issuances registered on Form S-4, excluding issuances
of common stock pursuant to employee benefit plans of Parent or the Company or
otherwise as compensation to employees of Parent or the Company.

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

     "Qualified Proceeds" means any of the following or any combination of the
following:

          (1) cash;

          (2) Cash Equivalents;

                                       16
<PAGE>

          (3) assets (other than Investments) that are used or useful in a
     Permitted Business; and

          (4) the Capital Stock of any Person engaged in a Permitted Business
     if, in connection with the receipt by the Company or any Restricted
     Subsidiary of the Company of that Capital Stock,

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

               (b) that 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 any Restricted Subsidiary of the
          Company.

     "Receivables Facility" means one or more receivables financing facilities,
as amended from time to time, pursuant to which the Company or any of its
Restricted Subsidiaries sells its accounts receivable to an Accounts Receivable
Subsidiary.

     "Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility.

     "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of April 29, 2004, among the Company and the other parties named on the
signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time; and, with respect to any Additional Notes, one
or more registration rights agreements among the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.

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

     "Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.

     "Regulation S Permanent Global Note" means a permanent Global Note in the
form of Exhibit A1 hereto bearing the Global Note Legend and deposited with or
on behalf of and registered in the name of the Depositary or its nominee, issued
in a denomination equal to the outstanding principal amount at maturity of the
Regulation S Temporary Global Note upon expiration of the Restricted Period.

     "Regulation S Temporary Global Note" means a temporary Global Note in the
form of Exhibit A2 hereto bearing the Global Note Legend and the Private
Placement Legend deposited with or on behalf of and registered in the name of
the Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount at maturity of the Notes initially sold in reliance on Rule 903
of Regulation S.

     "Related Party" means, with respect to any Principal,

          (1) any controlling stockholder or partner of that Principal on the
     date of this Indenture; or

                                       17
<PAGE>

          (2) any trust, corporation, partnership or other entity, the
     beneficiaries, stockholders, partners, owners or Persons beneficially
     holding (directly or through one or more Subsidiaries) a 51% or more
     controlling interest of which consist of the Principals and/or such other
     Persons referred to in the immediately preceding clauses (1) or (2).

     "Representative" means the Indenture trustee or other trustee, agent or
representative for any Senior Debt.

     "Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his 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 Period" means the 40-day distribution compliance period as
defined in Regulation S.

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

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

     "SEC" means the Securities and Exchange Commission.

     "Secured Notes" means Mueller Group's Second Priority Senior Secured
Floating Rate Notes issued pursuant to the Secured Notes Indenture.

     "Secured Notes Indenture" means the indenture governing the Secured Notes
dated as of April 23, 2004 by and among the Company and Law Debenture Trust
Company of New York.

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

     "Separation Date" means the earliest of:

          (1) October 26, 2004;

          (2) the effectiveness of any registration statement with respect to
     any Exchange Offer for the Notes;

          (3) the effectiveness of any Shelf Registration Statement with
     respect to the Notes;

                                       18
<PAGE>

          (4) such date as the Initial Purchasers in their sole discretion
     determine; or

          (5) the occurrence of a Change of Control.

Notwithstanding the foregoing, units offered to non-U.S. persons pursuant to
Regulation S will be immediately separated upon the closing of the Offering.

     "Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.

     "Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in either clause (1) or clause (2) of Article 1, Rule
1-02(w) of Regulation S-X, promulgated pursuant to the Securities Act, as that
Regulation is in effect on the date hereof.

     "Spot Rate" means, for any currency, the spot rate at which that currency
is offered for sale against United States dollars as determined by reference to
the New York foreign exchange selling rates, as published in The Wall Street
Journal on that date of determination for the immediately preceding business day
or, if that rate is not available, as determined in any publicly available
source of similar market data.

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

     "Subordinated Notes" means Mueller Group's 10% Senior Subordinated Notes
due 2012.

     "Subordinated Notes Indenture" means the indenture governing Mueller
Group's Senior Subordinated Notes due 2012.

     "Subsidiary" means, with respect to any 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 thereof 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 or limited liability company,

               (a) the sole general partner or the managing general partner or
          managing member of which is that Person or a Subsidiary of that
          Person; or

               (b) the only general partners or managing members of which are
          that Person or of one or more Subsidiaries of that Person (or any
          combination thereof).

     "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.ss.ss.
77aaa-77bbbb).

     "Tax Sharing Agreement" means any tax sharing agreement or arrangement
between the Company and Parent, as the same may be amended from time to time;
provided that in no event shall the amount permitted to be paid pursuant to all
such agreements and/or arrangements exceed the amount the

                                       19
<PAGE>

Company would be required to pay for income taxes were it to file a consolidated
tax return for itself and its consolidated Restricted Subsidiaries as if it were
a corporation that was a parent of a consolidated group.

     "Total Assets" means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet (excluding
the footnotes thereto) of the Company.

     "Trustee" means Law Debenture Trust Company of New York 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 bear
and is not required to bear the Private Placement Legend.

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

     "Unrestricted Subsidiary" means (1) Anvil International LLC, (2) Nipples el
Superior de Mexico S.A. de C.V. and (3) any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a board resolution,
but only to the extent that 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 permitted by Section 4.11 hereof;

          (3) is a Person with respect to which neither the Company nor any of
     its Restricted Subsidiaries has any direct or indirect obligation (other
     than Investments described in clause (7) of the definition of Permitted
     Investments),

               (a) to subscribe for additional Equity Interests; or

               (b) to maintain or preserve that Person's financial condition or
          to cause that 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 such designation by the Board of Directors shall be evidenced to the
Trustee by filing with the trustee a certified copy of the board resolution
giving effect to that designation and an Officers' Certificate certifying that
designation complied with the foregoing conditions and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as a Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of that Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of that date (and, if that Indebtedness is not
permitted to be incurred as of that date under the covenant described under
Section 4.09 hereof, the Company shall be in default of Section 4.09).

     The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that the
designation shall be deemed to be an incurrence of

                                       20
<PAGE>

Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of that Unrestricted Subsidiary and that designation shall only be
permitted if:

          (1) that Indebtedness is permitted under Section 4.09 hereof; and

          (2) no Default or Event of Default would be in existence following
     that designation.

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

     "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 will elapse between such date and the making of
     such payment; by

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

     "Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of that Person all the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares) shall at the time
be owned by that Person or by one or more Wholly Owned Restricted Subsidiaries
of that Person or by that Person and one or more Wholly Owned Restricted
Subsidiaries of that Person.

     "Wholly Owned Subsidiary" of any Person means a Subsidiary of that Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by that
Person or by one or more Wholly Owned Subsidiaries of that Person.

Section 1.02 Other Definitions.

                                                                      Defined in
     Term                                                               Section
     ----                                                               -------
     "Affiliate Transaction".......................................      4.11
     "Asset Sale Offer"............................................      3.09
     "Authentication Order"........................................      2.02
     "Change of Control Offer".....................................      4.14
     "Change of Control Payment"...................................      4.14
     "Change of Control Payment Date"..............................      4.14
     "Covenant Defeasance".........................................      8.03
     "DTC".........................................................      2.03
     "Event of Default"............................................      6.01
     "Excess Proceeds".............................................      4.10
     "incur".......................................................      4.09
     "Legal Defeasance"............................................      8.02
     "Offer Amount"................................................      3.09
     "Offer Period"................................................      3.09

                                       21
<PAGE>

                                                                      Defined in
     Term                                                               Section
     ----                                                               -------
     "Paying Agent"................................................      2.03
     "Payment Default" ............................................      6.01
     "Permitted Indebtedness"......................................      4.09
     "Purchase Date"...............................................      3.09
     "Registrar"...................................................      2.03
     "Restricted Payments".........................................      4.07

Section 1.03 Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

     The following TIA terms used in this Indenture have the following meanings:

     "indenture securities" means the Notes;

     "indenture security Holder" means a Holder of a Note;

     "indenture to be qualified" means this Indenture;

     "indenture trustee" or "institutional trustee" means the Trustee; and

     "obligor" on the Notes means the Company and any successor obligor upon the
Notes.

     All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.

Section 1.04 Rules of Construction.

     Unless the context otherwise requires:

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

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

          (3) "or" is not exclusive;

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

          (5) "will" shall be interpreted to express a command;

          (6) provisions apply to successive events and transactions; and

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

                                    ARTICLE 2
                                    THE NOTES

                                       22
<PAGE>

Section 2.01 Form and Dating.

     (a) General. The Notes and the Trustee's certificate of authentication will
be substantially in the form of Exhibits A1 and A2 hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 principal amount at maturity and integral
multiples thereof.

     The terms and provisions contained in the Notes will 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. However, 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. Notes issued in global form will be substantially in the
form of Exhibits A1 or A2 hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A1
hereto (but without the Global Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
will represent such of the outstanding Notes as will be specified therein and
each shall provide that it represents the aggregate principal amount at maturity
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount at maturity 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 at maturity of
outstanding Notes represented thereby will be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.

     (c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, 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, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. Following the termination of the Restricted
Period and upon the receipt by the Trustee of:

          (1) 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 Restricted Period pursuant to another exemption
     from registration under the Securities Act, all as contemplated by Section
     2.06(b) hereof); and

          (2) an Officers' Certificate from the Company.

     Beneficial interests in the Regulation S Temporary Global Note will be
exchanged for 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 will cancel the Regulation S
Temporary Global Note. The aggregate principal amount at maturity of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.

                                       23
<PAGE>

          (3) Euroclear and Clearstream Procedures Applicable. The provisions of
     the "Operating Procedures of the Euroclear System" and "Terms and
     Conditions Governing Use of Euroclear" and the "General Terms and
     Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream
     will be applicable to transfers of beneficial interests in the Regulation S
     Temporary Global Note and the Regulation S Permanent Global Note that are
     held by Participants through Euroclear or Clearstream.

Section 2.02 Execution and Authentication.

     At least one Officer must 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 will nevertheless be valid.

     A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.

     The Trustee will, upon receipt of a written order of the Company signed by
at least one Officer (an "Authentication Order"), authenticate Notes for (i)
original issue, up to the aggregate principal amount at maturity stated in
paragraph 4 of the Notes and (ii) Additional Notes in such amounts as may be
specified from time to time without limit, subject to Article 4 hereof.
Additional Notes shall have the same terms in all respects as the Notes, or
similar in all respects except for the payment of interest on the Notes (1)
scheduled and paid prior to the date of issuance of those Additional Notes or
(2) payable on the first Interest Payment Date following that date of issuance.
The Notes and any Additional Notes will be treated as a single class for all
purposes under this Indenture. In addition, the Trustee shall authenticate upon
receipt of an Authentication Order other Notes issued in exchange therefor from
time to time. The aggregate principal amount at maturity of Notes outstanding at
any time may not exceed the aggregate principal amount at maturity of Notes
authorized for issuance by the Company pursuant to one or more Authentication
Orders, except as provided in Section 2.07 hereof.

     The Trustee may appoint an 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 agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.

Section 2.03 Registrar and Paying Agent.

     The Company will 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 Registrar
will 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 may change any Paying
Agent or Registrar without notice to any Holder. The Company will 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 Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.

                                       24
<PAGE>

     The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.04 Paying Agent to Hold Money in Trust.

     The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on the Notes, and will
notify the Trustee 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. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it will 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 will serve as
Paying Agent for the Notes.

Section 2.05 Holder Lists.

     The Trustee will 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 ss. 312(a). If the Trustee is not the
Registrar, the Company will furnish to the Trustee at least seven 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 ss. 312(a).

Section 2.06 Transfer and Exchange.

     (a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole 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 will be exchanged by
the Company for Definitive Notes if:

          (1) the Company delivers to the Trustee notice from the 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;

          (2) 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; provided that
     in no event shall the Regulation S Temporary Global Note be exchanged by
     the Company for Definitive Notes prior to (A) the expiration of the
     Restricted Period and (B) the receipt by the Registrar of any certificates
     required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or

          (3) there has occurred and is continuing a Default or Event of Default
     with respect to the Notes.

     Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged

                                       25
<PAGE>

or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or
2.10 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 2.06(a), however, beneficial interests in a Global Note
may be transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof upon prior written notice given to the Trustee by or on behalf of the
Depositary.

     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will 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 will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:

          (1) 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. 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. No written orders or instructions shall be
     required to be delivered to the Registrar to effect the transfers described
     in this Section 2.06(b)(1).

          (2) 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 2.06(b)(1) above, the transferor
     of such beneficial interest must deliver to the Registrar either:

               (A) both:

                    (i) 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

                    (ii) instructions given in accordance with the Applicable
               Procedures containing information regarding the Participant
               account to be credited with such increase; or

               (B) both:

                    (i) 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

                    (ii) instructions given by the Depositary to the Registrar
               containing information regarding the Person in whose name such
               Definitive Note shall be registered to effect the transfer or
               exchange referred to in (1) above; provided that in no event
               shall Definitive Notes be issued upon the exchange of beneficial

                                       26
<PAGE>

               interests in the Regulation S Temporary Global Note prior to (A)
               the expiration of the Restricted Period and (B) 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
2.06(f) hereof, the requirements of this Section 2.06(b)(2) 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 satisfaction of 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, the Trustee shall adjust the principal amount at maturity of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.

          (3) Transfer of Beneficial Interests 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 2.06(b)(2) above and the
     Registrar receives the following:

               (A) if the transferee will 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; and

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

          (4) 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 if the exchange or
     transfer complies with the requirements of Section 2.06(b)(2) above and:

               (A) such exchange or transfer is effected pursuant to the
          Exchange Offer in accordance with the 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,
          certifies in the applicable Letter of Transmittal that it is not (i) a
          Broker-Dealer acquiring Notes directly from the Company, (ii) a Person
          participating in the distribution of the Exchange Notes or (iii) a
          Person who is an affiliate (as defined in Rule 144) of the Company;

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

               (C) the Registrar receives the following:

                    (i) 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

                                       27
<PAGE>

                    (ii) 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 (C), if the
          Registrar 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.

     If any such transfer is effected pursuant to subparagraph (B) or (C) 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 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount at maturity equal to the aggregate
principal amount at maturity of beneficial interests transferred pursuant to
subparagraph (B) or (C) above.

     Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.

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

          (1) Beneficial Interests in Restricted Global Notes to Restricted
     Definitive Notes. 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 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, 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, 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, a certificate to the effect set forth in
          Exhibit B hereto, including the certifications in item (3)(a) thereof;

               (E) if such beneficial interest is being transferred in reliance
          on another 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

                                       28
<PAGE>

          hereto, including the certifications, certificates and Opinion of
          Counsel required by item (3)(d) thereof, if applicable; or

               (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,

the Trustee shall cause the aggregate principal amount at maturity of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount at maturity. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.06(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 Definitive
Notes to the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.

          (2) Beneficial Interests in Regulation S Temporary Global Note to
     Definitive Notes. Notwithstanding Sections 2.06(c)(1)(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 (A) the
     expiration of the Restricted Period and (B) 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.

          (3) Beneficial Interests in Restricted Global Notes to Unrestricted
     Definitive Notes. 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 the
          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, certifies in
          the applicable Letter of Transmittal that it is not (i) a
          Broker-Dealer acquiring Notes directly from the Company, (ii) a Person
          participating in the distribution of the Exchange Notes or (iii) a
          Person who is an affiliate (as defined in Rule 144) of the Company;

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

               (C) the Registrar receives the following:

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

                                       29
<PAGE>

                    (ii) 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 (C), if the
          Registrar 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.

          (4) Beneficial Interests in Unrestricted Global Notes to Unrestricted
     Definitive Notes. If any holder of a beneficial interest in an Unrestricted
     Global Note proposes to exchange such beneficial interest for a Definitive
     Note or to transfer such beneficial interest to a Person who takes delivery
     thereof in the form of a Definitive Note, then, upon satisfaction of the
     conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
     the aggregate principal amount at maturity of the applicable Global Note to
     be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company
     will execute and the Trustee will authenticate and deliver to the Person
     designated in the instructions a Definitive Note in the appropriate
     principal amount at maturity. Any Definitive Note issued in exchange for a
     beneficial interest pursuant to this Section 2.06(c)(4) will be registered
     in such name or names and in such authorized denomination or denominations
     as the holder of such beneficial interest requests through instructions to
     the Registrar from or through the Depositary and the Participant or
     Indirect Participant. The Trustee will deliver such Definitive Notes to the
     Persons in whose names such Notes are so registered. Any Definitive Note
     issued in exchange for a beneficial interest pursuant to this Section
     2.06(c)(4) will not bear the Private Placement Legend.

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

          (1) 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 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;

               (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, a certificate to the effect set forth in Exhibit B
          hereto, including the certifications in item (2) thereof; or

                                       30
<PAGE>

               (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;

          the Trustee will cancel the Restricted Definitive Note, increase or
          cause to be increased the aggregate principal amount at maturity of,
          in the case of clause (A) above, the appropriate Restricted Global
          Note, in the case of clause (B) above, the 144A Global Note, and in
          the case of clauses (C) and (D) above, the Regulation S Global Note.

          (2) 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 the
          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, certifies in the applicable Letter of Transmittal
          that it is not (i) a Broker-Dealer acquiring Notes directly from the
          Company, (ii) a Person participating in the distribution of the
          Exchange Notes or (iii) a Person who is an affiliate (as defined in
          Rule 144) of the Company;

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

               (C) the Registrar receives the following:

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

                    (ii) if the Holder of such Definitive Notes proposes to
               transfer such Notes to a Person who shall take delivery thereof
               in the form of a beneficial interest in the 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 (C), if the
          Registrar 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 subparagraphs in
     this Section 2.06(C)(2), the Trustee will cancel the Definitive Notes and
     increase or cause to be increased the aggregate principal amount at
     maturity of the Unrestricted Global Note.

          (3) 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 Definitive Notes to a Person who takes delivery thereof

                                       31
<PAGE>

     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 will cancel the applicable Unrestricted Definitive Note and
     increase or cause to be increased the aggregate principal amount at
     maturity of one of the Unrestricted Global Notes.

          If any such exchange or transfer from a Definitive Note to a
     beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(C) or
     (3) above at a time when an Unrestricted Global Note has not yet been
     issued, the Company will issue and, upon receipt of an Authentication Order
     in accordance with Section 2.02 hereof, the Trustee will authenticate one
     or more Unrestricted Global Notes in an aggregate principal amount at
     maturity equal to the principal amount at maturity 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 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must 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 its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

          (1) 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 will 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 will 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;

               (C) if the transfer will 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, certificates and Opinion of Counsel
          required by item (3) thereof, if applicable; and

               (D) if such 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.

          (2) 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 if:

               (A) such exchange or transfer is effected pursuant to the
          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, certifies in the applicable Letter of

                                       32
<PAGE>

          Transmittal that it is not (i) a Broker-Dealer acquiring Notes
          directly from the Company, (ii) a Person participating in the
          distribution of the Exchange Notes or (iii) a Person who is an
          affiliate (as defined in Rule 144) of the Company;

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

               (C) the Registrar receives the following:

                    (i) 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

                    (ii) 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 (C), if the
          Registrar so requests, 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.

          (3) 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 the Exchange Offer in accordance
with the Registration Rights Agreement, the Company will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate:

          (1) one or more Unrestricted Global Notes in an aggregate principal
     amount at maturity equal to the principal amount at maturity of the
     beneficial interests in the Restricted Global Notes accepted for exchange
     in the Exchange Offer by Persons that certify in the applicable Letters of
     Transmittal that (A) they are not Broker-Dealers acquiring Notes directly
     from the Company, (B) they are not participating in a distribution of the
     Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of
     the Company; and

          (2) Unrestricted Definitive Notes in an aggregate principal amount at
     maturity equal to the principal amount at maturity of the Restricted
     Definitive Notes accepted for exchange in the Exchange Offer by Persons
     that certify in the applicable Letters of Transmittal that (A) they are not
     Broker-Dealers acquiring Notes directly from the Company, (B) they are not
     participating in a distribution of the Exchange Notes and (C) they are not
     affiliates (as defined in Rule 144) of the Company.

     Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount at maturity of the applicable Restricted Global Notes
to be reduced accordingly, and the Company

                                       33
<PAGE>

will execute and the Trustee will authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Unrestricted
Definitive Notes in the appropriate principal amount at maturity.

     The Company may issue, and upon receipt of an authentication order the
Trustee will authenticate, Exchange Notes with respect to the Notes to be sold
using a Shelf Registration Statement.

     (g) Legends. The following legends will 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.

          (1) 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

"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT ACQUIRED THE NOTE PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR ANY OTHER AVAILABLE EXEMPTION FROM REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE
HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, PROVIDED THAT PRIOR TO ANY SUCH TRANSFER THE PURCHASER FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION AND TRANSFER OF THIS NOTE AND, IF REQUIRED BY THE
COMPANY, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN

                                       34
<PAGE>

CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."

               (B) Notwithstanding the foregoing, any Global Note or Definitive
          Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2),
          (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes
          issued in exchange therefor or substitution thereof), any Regulation S
          Permanent Global Note and any Additional Notes issued in transactions
          registered with the SEC will not bear the Private Placement Legend.

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

"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY 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 MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

          (3) Regulation S Temporary Global Note Legend. The Regulation S
     Temporary Global Note will 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,

                                       35
<PAGE>

ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."

          (4) Unit Legend. Each Note issued prior to the Separation Date will
     bear the following legend (the "Unit Legend") on the face thereof:

"THE NOTES EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT at maturity
OF THE NOTES AND ONE WARRANT (THE "WARRANT") INITIALLY ENTITLING THE HOLDER
THEREOF TO PURCHASE 109.80889 SHARES OF CLASS A COMMON STOCK, PAR VALUE $0.01
PER SHARE, OF THE COMPANY. PRIOR TO THE CLOSE OF BUSINESS UPON THE EARLIEST TO
OCCUR OF (1) OCTOBER 26, 2004, (2) the effectiveness of any registration
statement with respect to any Exchange Offer for the Notes, (3) THE
EFFECTIVENESS OF A SHELF REGISTRATION STATEMENT RELATING TO THE NOTES, (4) SUCH
DATE AS THE INITIAL PURCHASERS IN THEIR SOLE DISCRETION SHALL DETERMINE, OR (5)
THE OCCURRENCE OF A CHANGE OF CONTROL, THE NOTES EVIDENCED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR
EXCHANGED ONLY TOGETHER WITH, THE WARRANTS."

Notwithstanding such legend, units initially issued in reliance on Regulation S
will separate immediately upon issuance and shall not bear such legend
thereafter.

          (5) Original Issue Discount Legend. Each Note will bear a legend in
     substantially the following form:

     "FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS
$483.033, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $516.967, THE ISSUE DATE IS
APRIL 29, 2004 AND THE YIELD TO MATURITY IS 15.01598% PER ANNUM."

     (h) 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 will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 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 will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount at maturity of Notes represented by such Global Note
will be reduced accordingly and an endorsement will 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 will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.

                                       36
<PAGE>

     (i) General Provisions Relating to Transfers and Exchanges.

          (1) To permit registrations of transfers and exchanges, the Company
     will execute and the Trustee will authenticate Global Notes and Definitive
     Notes upon receipt of an Authentication Order in accordance with Section
     2.02 hereof or at the Registrar's request.

          (2) No service charge will 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 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

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

          (4) All Global Notes and Definitive Notes issued upon any registration
     of transfer or exchange of Global Notes or Definitive Notes will 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.

          (5) Neither the Registrar nor the Company will 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;

               (B) 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; or

               (C) to register the transfer of or to exchange a Note between a
          record date and the next succeeding interest payment date.

          (6) Prior to due presentment for the registration of a transfer of any
     Note, 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.

          (7) The Trustee will authenticate Global Notes and Definitive Notes in
     accordance with the provisions of Section 2.02 hereof.

          (8) All certifications, certificates and Opinions of Counsel required
     to be submitted to the Registrar pursuant to this Section 2.06 to effect a
     registration of transfer or exchange may be submitted by facsimile.

                                       37
<PAGE>

Section 2.07 Replacement 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 will issue and the Trustee, upon receipt of an
Authentication Order, will 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 may charge for its expenses in replacing a Note.

     Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

Section 2.08 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 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.

     If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

     If the Accreted Value of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding, principal ceases to accrete and interest on
it ceases to accrue.

     If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrete or accrue
interest.

Section 2.09 Treasury Notes.

     In determining whether the Holders of the required principal amount at
maturity of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, will
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
will be so disregarded.

Section 2.10 Temporary Notes.

     Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.

                                       38
<PAGE>

     Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.

Section 2.11 Cancellation.

     The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment. The Trustee and no
one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes will be delivered 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 2.12 Defaulted Interest.

     If the Company defaults in a payment of interest on the Notes, it will 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 provided in the Notes
and in Section 4.01 hereof. The Company will 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 will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may 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) will 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 2.13 CUSIP and CINS Numbers.

     The Company in issuing the Notes may use "CUSIP" and "CINS" numbers, and
the Trustee will use CUSIP numbers or CINS numbers in notices of redemption or
exchange or in Offers to Purchase as a convenience to Holders, the notice to
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 redemption or
exchange or Offer to Purchase. The Company will promptly notify the Trustee of
any change in the CUSIP or CINS 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, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:

          (1) the clause of this Indenture pursuant to which the redemption
     shall occur;

          (2) the redemption date;

          (3) the principal amount at maturity of Notes to be redeemed; and

          (4) the redemption price.

                                       39
<PAGE>

Section 3.02 Selection of Notes to Be Redeemed or Purchased.

     If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase:

          (1) if the Notes are listed on any national securities exchange, in
     compliance with the requirements of the principal national securities
     exchange on which the Notes are listed; or

          (2) if otherwise on a pro rata basis.

     In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.

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

Section 3.03 Notice of Redemption.

     Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company will 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 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 pursuant to Articles 8 or 12 hereof.

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

          (1) the redemption date;

          (2) the redemption price;

          (3) if any Note is being redeemed in part, the portion of the
     principal amount at maturity 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 at maturity equal to the unredeemed portion will be issued
     upon cancellation of the original Note;

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

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

          (6) 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;

                                       40
<PAGE>

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

          (8) 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 will give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days prior to the redemption date, 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 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 or Purchase Price.

     One Business Day prior to the redemption or purchase date, the Company will
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption or purchase price of and accrued interest and Additional Interest, if
any, on all Notes to be redeemed or purchased on that date. The Trustee or the
Paying Agent will promptly 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 or purchase price of, and accrued interest and Additional
Interest, if any, on, all Notes to be redeemed or purchased.

     If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, the Notes or the portions of Notes
called for redemption or purchase will cease to accrete or accrue interest. If a
Note is redeemed or purchased 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 or purchase
is not so paid upon surrender for redemption or purchase because of the failure
of the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid Accreted Value, from the redemption or purchase date until such Note
is paid, and to the extent lawful on any interest not paid on such unpaid
Accreted Value, in each case at the rate provided in the Notes and in Section
4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Part.

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

Section 3.07 Optional Redemption.

     (a) At any time on or prior to April 15, 2007, the Company may redeem up to
35% of the aggregate principal amount at maturity of Notes from time to time
originally issued under this Indenture in cash at a redemption price of 114.75%
of the Accreted Value thereof, plus accrued and unpaid interest

                                       41
<PAGE>

and Additional Interest, if any, thereon to the redemption date, with the net
cash proceeds of one or more Public Equity Offerings; provided that:

          (1) at least 65% of the aggregate principal amount at maturity of
     Notes from time to time originally issued under this Indenture remains
     outstanding immediately after the occurrence of the redemption; and

          (2) the redemption shall occur within 90 days of the date of the
     closing of any such Public Equity Offering.

     (b) Except pursuant to the preceding paragraph, the Notes will not
redeemable at the Company's option prior to April 15, 2007.

     (c) On and after April 15, 2009, the Notes will be subject to redemption at
any time at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice to each Holder and the Trustee, in cash at the
redemption prices (expressed as percentages of principal amount at maturity) set
forth below, plus accrued and unpaid interest and Additional Interest, if any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 15, 2009 of the years indicated below:

     Year                                                            Percentage
     2009 ........................................................     107.375%
     2010 ........................................................     104.917%
     2011 ........................................................     102.458%
     2012 and thereafter .........................................     100.000%

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

Section 3.08 Mandatory Redemption.

     The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.

Section 3.09 Offer to Purchase by Application of Excess Proceeds.

     In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.

     The Asset Sale Offer shall be made to all Holders. The Asset Sale Offer
will remain open for a period of at least 20 Business Days following its
commencement and not more than 30 Business Days, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company will apply all Excess Proceeds (the "Offer Amount") to the
purchase of Notes or, if less than the Offer Amount has been tendered, all
Notes and other Indebtedness tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased will be made in the same manner as interest
payments are made.

     If the Purchase Date is on or after an interest 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 Person in

                                      42
<PAGE>

whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to Holders who tender Notes pursuant
to the Asset Sale Offer.

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

          (1) that the Asset Sale Offer is being made pursuant to this Section
     3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
     will remain open;

          (2) the Offer Amount, the purchase price and the Purchase Date;

          (3) that any Note not tendered or accepted for payment will continue
     to accrete and accrue interest;

          (4) that, unless the Company defaults in making such payment, any
     Note accepted for payment pursuant to the Asset Sale Offer will cease to
     accrete or accrue interest after the Purchase Date;

          (5) that Holders electing to have a Note purchased pursuant to an
     Asset Sale Offer may elect to have Notes purchased in integral multiples
     of $1,000 principal amount at maturity only;

          (6) that Holders electing to have Notes purchased pursuant to any
     Asset Sale Offer will be required to surrender the Note, with the form
     entitled "Option of Holder to Elect Purchase" attached to the Notes
     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 days before the Purchase Date;

          (7) that Holders will 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 amount at maturity of the Note the Holder delivered for purchase
     and a statement that such Holder is withdrawing his election to have such
     Note purchased;

          (8) that, if the aggregate Accreted Value of Notes surrendered by
     holders thereof exceeds the Offer Amount, the Trustee will select the
     Notes to be purchased in compliance with the requirements of any national
     securities exchange on which the Notes are listed or, if not listed, on a
     pro rata basis based on the principal amount at maturity of Notes
     surrendered (with such adjustments as may be deemed appropriate by the
     Company so that only Notes in denominations of $1,000 principal amount at
     maturity, or integral multiples thereof, will be purchased); and

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

     On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
will deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in

                                      43
<PAGE>

accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, will promptly (but in any case not later
than five days after 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 will promptly
issue a new Note, and the Trustee, upon written request from the Company, will
authenticate and mail or deliver (or cause to be transferred by book entry)
such new Note to such Holder, in a principal amount at maturity 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
will publicly announce the results of the Asset Sale Offer on the Purchase
Date.

     Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

                                   ARTICLE 4
                                   COVENANTS

Section 4.01 Payment of Notes.

     The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Additional Interest, if any, on, the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest and Additional Interest, if any will be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 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, premium, if any, and interest then due. The Company will pay all
Additional Interest, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

     The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue Accreted Value at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it will 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.

Section 4.02 Maintenance of Office or Agency.

     The Company will 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 will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

     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,
however, that no such designation or rescission will 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 will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

                                      44
<PAGE>

     The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03
hereof.

Section 4.03 Reports.

     Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company will furnish to the Holders of Notes:

     (a) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company
were required to file those 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 thereon by the Company's certified
independent accountants; and

     (b) all current reports that would be required to be filed with the SEC on
Form 8-K if the Company were required to file those reports, in each case,
within the time periods specified in the SEC's rules and regulations.

     In addition, following the consummation of the Exchange Offer contemplated
by the Registration Rights Agreement, whether or not required rules and
regulations of the SEC, the Company will file a copy of all that information
and reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make that
information available to securities analysts and prospective investors upon
request.

     In addition, for so long as any Notes remain outstanding, the Company will
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.

Section 4.04 Compliance Certificate.

     (a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, 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 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 has 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) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

                                      45
<PAGE>

     (c) So long as any of the Notes are outstanding, the Company will deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.

Section 4.05 Taxes.

     The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will 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 that it will not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law has been enacted.

Section 4.07 Restricted Payments.

     The Company will not, and will 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 other than (x) dividends or (y)
     distributions payable in Equity Interests (other than Disqualified Stock)
     of the Company or dividends or distributions payable to the Company or any
     Wholly Owned Restricted Subsidiary of the Company;

          (2) purchase, redeem or otherwise acquire or retire for value any
     Equity Interests of the Company other than any of those Equity Interests
     owned by the Company or any Restricted Subsidiary of the Company;

          (3) make any principal payment on or with respect to, or purchase,
     redeem, defease or otherwise acquire or retire for value, any Indebtedness
     of the Company that is contractually subordinated to the Notes
     ("Subordinated Debt"), except a payment of interest or principal at the
     Stated Maturity thereof; or

          (4) make any Restricted Investment

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

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

          (1) no Default or Event of Default shall have occurred and be
     continuing or would occur as a consequence thereof;

                                      46
<PAGE>

          (2) the Company would, immediately after giving pro forma effect
     thereto as if that 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 the first paragraph of Section 4.09 hereof; and

          (3) that Restricted Payment together with the aggregate amount of all
     other Restricted Payments made by the Company and its Restricted
     Subsidiaries after the date of this Indenture (excluding Restricted
     Payments permitted by clauses (1) (to the extent that the declaration of
     any dividend referred to therein reduces amounts available for Restricted
     Payments pursuant to this clause (3)), (2) through (13), (15) and (16) of
     the next succeeding paragraph of this Section 4.07), is less than the sum,
     without duplication, of:

               (a) 50% of the Consolidated Net Income of the Company for the
          period (taken as one accounting period) commencing January 1, 2004 to
          the end of the Company's most recently ended fiscal quarter for which
          internal financial statements are available at the time of that
          Restricted Payment (or, if Consolidated Net Income for that period is
          a deficit, less 100% of the deficit); plus

               (b) 100% of the Qualified Proceeds received by the Company on or
          after the date of this Indenture from contributions to the Company's
          capital or from the issue or sale on or after the date of this
          Indenture of Equity Interests of the Company or of Disqualified Stock
          or convertible debt securities of the Company to the extent that they
          have been converted into those Equity Interests, other than (i)
          Equity Interests, Disqualified Stock or convertible debt securities
          sold to a Subsidiary of the Company and (ii) Disqualified Stock or
          convertible debt securities that have been converted into
          Disqualified Stock; plus

               (c) the amount equal to the net reduction in Investments in
          Persons after the date of this Indenture who are not Restricted
          Subsidiaries (other than Permitted Investments) resulting from:

                    (i) Qualified Proceeds received as a dividend, repayment of
               a loan or advance or other transfer of assets (valued at the
               Fair Market Value thereof) to the Company or any Restricted
               Subsidiary from those Persons;

                    (ii) Qualified Proceeds received upon the sale or
               liquidation of those Investments; and

                    (iii) the redesignation of Unrestricted Subsidiaries
               (excluding any increase in the amount available for Restricted
               Payments pursuant to clause (11) below arising from the
               redesignation of that Unrestricted Subsidiary) whose assets are
               used or useful in, or which is engaged in, one or more Permitted
               Business as Restricted Subsidiaries (valued, proportionate to
               the Company's equity interest in that Subsidiary, at the Fair
               Market Value of the net assets of that Subsidiary at the time of
               that redesignation).

     The foregoing provisions will not prohibit:

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

                                      47
<PAGE>

          (2) the redemption, repurchase, retirement, defeasance or other
     acquisition of any subordinated Indebtedness or 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 other Equity Interests of the Company (other than any Disqualified
     Stock), 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 defeasance, redemption, repurchase, retirement or other
     acquisition of subordinated Indebtedness with the net cash proceeds from
     an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;

          (4) payments and transactions in connection with (x) the Financial
     Advisory Agreement, not to exceed $500,000 in any one calendar year, and
     (y) the Offering and the Mueller Offerings and the Credit Agreement
     (including commitment, syndication and arrangement fees payable
     thereunder) and the application of the proceeds thereof, including to make
     a dividend or distribution to the Company's equityholders, and the payment
     of fees and expenses with respect thereto;

          (5) the payment of dividends or the making of loans or advances by
     the Company to Parent not to exceed $2.0 million in any fiscal year for
     costs and expenses incurred by Parent in its capacity as a holding company
     for services rendered by Parent on behalf of the Company;

          (6) payments or distributions to Parent pursuant to any Tax Sharing
     Agreement;

          (7) the payment of dividends by a Restricted Subsidiary on any class
     of common stock of that Restricted Subsidiary if:

               (a) that dividend is paid pro rata to all holders of that class
          of common stock; and

               (b) at least 51% of that class of common stock is held by the
          Company or one or more of its Restricted Subsidiaries;

          (8) the repurchase of any class of common stock of a Restricted
     Subsidiary if:

               (a) that repurchase is made pro rata with respect to that class
          of common stock; and

               (b) at least 51% of that class of common stock is held by the
          Company or one or more of its Restricted Subsidiaries;

          (9) (the declaration and payment of dividends to holders of any class
     or series of Disqualified Stock of the Company or any Restricted
     Subsidiary issued on or after the date of this Indenture in accordance
     with Section 4.09 hereof; provided that no Default or Event of Default
     shall have occurred and be continuing immediately after making that
     Restricted Payment;

          (10) repurchases of Equity Interests deemed to occur upon exercise of
     stock options if those Equity Interests represent a portion of the
     exercise price of those options;

                                      48
<PAGE>

          (11) any other Restricted Payment (other than a Restricted Payment of
     a type described in clause (1) of the first paragraph of this Section
     4.07) which, together with all other Restricted Payments made pursuant to
     this clause (11) since the date of this Indenture, does not exceed $40.0
     million, in each case, after giving effect to all subsequent reductions in
     the amount of any Restricted Investment made pursuant to this clause (11)
     either as a result of (i) the repayment or disposition thereof for cash or
     (ii) the redesignation of an Unrestricted Subsidiary as a Restricted
     Subsidiary (valued, proportionate to the Company's equity interest in that
     Subsidiary at the time of that redesignation, at the Fair Market Value of
     the net assets of that Subsidiary at the time of that redesignation), in
     the case of clause (i) and (ii), not to exceed the amount of the
     Restricted Investment previously made pursuant to this clause (11);
     provided that no Default or Event of Default shall have occurred and be
     continuing immediately after making that Restricted Payment;

          (12) the pledge by the Company of the Capital Stock of an
     Unrestricted Subsidiary of the Company to secure Non-Recourse Debt of that
     Unrestricted Subsidiary;

          (13) the purchase, redemption or other acquisition or retirement for
     value of any Equity Interests of any Restricted Subsidiary issued after
     the date of this Indenture, provided that the aggregate price paid for any
     such repurchased, redeemed, acquired or retired Equity Interests shall not
     exceed the sum of:

               (a) the amount of cash and Cash Equivalents received by that
          Restricted Subsidiary from the issue or sale thereof; and

               (b) any accrued dividends thereon the payment of which would be
          permitted pursuant to clause (9) above;

          (14) any Investment in an Unrestricted Subsidiary that is funded by
     Qualified Proceeds received by the Company on or after the date of this
     Indenture from contributions to the Company's capital or from the issue
     and sale on or after the date of this Indenture of Equity Interests of the
     Company or of Disqualified Stock or convertible debt securities to the
     extent they have been converted into that Equity Interests (other than
     Equity Interests, Disqualified Stock or convertible debt securities sold
     to a Subsidiary of the Company and other than Disqualified Stock or
     convertible debt securities that have been converted into Disqualified
     Stock) in an amount (measured at the time that Investment is made and
     without giving effect to subsequent changes in value) that does not exceed
     the amount of those Qualified Proceeds (excluding any such Qualified
     Proceeds to the extent utilized to permit a prior "Restricted Payment"
     pursuant to clause (3)(b) of the preceding paragraph);

          (15) distributions or payments of Receivables Fees; and

          (16) the payment, on or about the date of this Indenture, of:

               (a) an amount equal to 101% of the liquidation amount thereof to
          the holders of the Company's preferred stock as consideration for the
          repurchase thereof; and

               (b) an amount not to exceed (i) the net proceeds of the Offering
          and the Mueller Offerings and borrowings under the Credit Agreement
          on the date of the Subordinated Notes Indenture (less amounts thereof
          used to repay Indebtedness, to redeem preferred stock pursuant to
          clause (a) and pay related fees and expenses) plus (ii) any amounts
          distributed to the extent used to repay loans owed to the Company or

                                      49
<PAGE>

          accrued interest thereon to holders of the Company's Equity
          Interests, whether such amount is paid as a dividend, to repurchase
          such Equity Interests or in respect of options held by such Holders.

     The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. For purposes of making that designation, all outstanding Investments
by the Company and its Restricted Subsidiaries (except to the extent repaid in
cash) in the Subsidiary so designated will be deemed to be Investments made at
the time of that designation. All such outstanding Investments will be deemed
to constitute Investments in an amount equal to the greater of

          (1) the net book value of that Investments at the time of that
     designation and

          (2) the Fair Market Value of that Investments at the time of that
     designation.

That designation will only be permitted if that Investment would be permitted
at that time and if that Restricted Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.

     The amount of

          (1) all Restricted Payments (other than cash) shall 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 that
     Restricted Subsidiary, as the case may be, pursuant to the Restricted
     Payment and

          (2) Qualified Proceeds (other than cash) shall be the Fair Market
     Value on the date of receipt thereof by the Company of those Qualified
     Proceeds.

The Fair Market Value of any non-cash Restricted Payment shall be determined by
the Board of Directors of the Company whose resolution with respect thereto
shall be delivered to the Trustee.

     Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that the
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant "Restricted Payments" were computed.

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

     (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:

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

               (b) 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.

                                      50
<PAGE>

     (b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:

          (1) Existing Indebtedness as in effect on the date of this Indenture;

          (2) the Credit Agreement, the Secured Notes Indenture, and the
     Subordinated Notes Indenture as in effect as of the date of this
     Indenture, and any amendments, modifications, restatements, renewals,
     increases, supplements, refundings, replacements or refinancings thereof;
     provided that the restrictions contained in any amendment, modification,
     restatement, renewal, increase, supplement, refunding, replacement or
     refinancing of the Credit Agreement, the Secured Notes Indenture or the
     Subordinated Notes Indenture are, in the good faith judgment of the
     Company's Board of Directors, not materially less favorable, taken as a
     whole, to the holders of the Notes than those contained in the Credit
     Agreement, the Secured Notes Indenture or the Subordinated Notes
     Indenture, as applicable;

          (3) this Indenture and the Notes;

          (4) applicable law and any applicable rule, regulation or order;

          (5) any agreement or instrument of a Person acquired by the Company
     or any of its Restricted Subsidiaries as in effect at the time of that
     acquisition (except to the extent created in contemplation of that
     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, provided that, in
     the case of Indebtedness, that Indebtedness was permitted by the terms of
     this Indenture to be incurred;

          (6) customary non-assignment provisions in leases entered into in the
     ordinary course of business and consistent with past practices;

          (7) purchase money obligations for property acquired in the ordinary
     course of business that impose restrictions of the nature described in
     Section 4.08(a)(3) hereof on the property so acquired;

          (8) contracts for the sale of assets, including, without limitation,
     customary restrictions with respect to a Subsidiary pursuant to an
     agreement that has been entered into for the sale or disposition of all or
     substantially all of the Capital Stock or assets of that Subsidiary;

          (9) Permitted Refinancing Indebtedness, provided that the
     restrictions contained in the agreements governing that Permitted
     Refinancing Indebtedness are, in the good faith judgment of the Company's
     board of directors, not materially less favorable, taken as a whole, to
     the holders of the Notes than those contained in the agreements governing
     the Indebtedness being refinanced;

          (10) secured Indebtedness otherwise permitted to be incurred under
     the provisions of Sections 4.09 and 4.12 hereof that limit the right of
     the debtor to dispose of the assets securing that Indebtedness;

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

          (12) other Indebtedness or Disqualified Stock of Restricted
     Subsidiaries permitted to be incurred subsequent to the Issuance Date
     pursuant to the provisions of Section 4.09 hereof;

                                      51
<PAGE>

          (13) customary provisions in joint venture agreements and other
     similar agreements entered into in the ordinary course of business; and

          (14) restrictions created in connection with any Receivables Facility
     that, in the good faith determination of the board of directors of the
     Company, are necessary or advisable to effect that Receivables Facility.

Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock

     (a) The Company

          (1) will not, and will 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 Indebtedness);

          (2) will not and will not permit any of its Restricted Subsidiaries
     to, issue any shares of Disqualified Stock; and

          (3) will not permit any of its Restricted Subsidiaries to issue any
     shares of preferred stock;

provided that the Company or any Restricted Subsidiary may incur Indebtedness,
including Acquired Indebtedness, or issue shares of 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 that additional Indebtedness is
incurred or that Disqualified Stock is issued would have been at least 2.1 to
1, determined on a consolidated pro forma basis, including a pro forma
application of the net proceeds therefrom, as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of that four-quarter period.

     (b) The provisions of Section 4.09(a) will not apply to the incurrence of
any of the following items of Indebtedness (collectively, "Permitted
Indebtedness"):

          (1) the incurrence by the Company and its Restricted Subsidiaries of
     Indebtedness under Credit Facilities; provided that the aggregate
     principal amount of all Indebtedness (with letters of credit being deemed
     to have a principal amount equal to the maximum potential liability of the
     Company and those Restricted Subsidiaries thereunder) then classified as
     having been incurred in reliance upon this clause (1) that remains
     outstanding under such Credit Facilities after giving effect to that
     incurrence does not exceed an amount equal to $665.0 million;

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

          (3) the incurrence by the Company of Indebtedness represented by the
     Notes and the incurrence by Mueller Group, Inc. of the Secured Notes and
     the Subordinated Notes and the guarantees thereof by its Restricted
     Subsidiaries;

          (4) the incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness represented by Capital Lease Obligations or
     other obligations, in each case, the proceeds of which are used solely for
     the purpose of financing all or any part of the purchase price or cost of

                                      52
<PAGE>

     construction or improvement of property, plant or equipment (including
     acquisitions of Capital Stock of a Person that becomes a Restricted
     Subsidiary to the extent of the Fair Market Value of the property, plant
     or equipment so acquired) used in the business of the Company or that
     Restricted Subsidiary, in an aggregate principal amount (or accreted
     value, as applicable), including all Permitted Refinancing Indebtedness to
     refund, refinance or replace such Indebtedness not to exceed $40.0 million
     outstanding after giving effect to that incurrence;

          (5) Indebtedness arising from agreements of the Company or any
     Restricted Subsidiary providing for indemnification, adjustment of
     purchase price or similar obligations, in each case, incurred or assumed
     in connection with the acquisition or disposition of any business, assets
     or a Subsidiary, other than guarantees of Indebtedness incurred by any
     Person acquiring all or any portion of such business, assets or Restricted
     Subsidiary for the purpose of financing that acquisition; provided that:

               (a) that Indebtedness is not reflected on the balance sheet of
          the Company or any Restricted Subsidiary (contingent obligations
          referred to in a footnote or footnotes to financial statements and
          not otherwise reflected on the balance sheet will not be deemed to be
          reflected on that balance sheet for purposes of this clause (a)); and

               (b) in the case of a disposition, the maximum assumable
          liability in respect of that Indebtedness shall at no time exceed the
          gross proceeds including non-cash proceeds (the Fair Market Value of
          those non-cash proceeds being measured at the time received and
          without giving effect to any subsequent changes in value) actually
          received by the Company and/or that Restricted Subsidiary in
          connection with that disposition;

          (6) the incurrence by the Company or any of its Restricted
     Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
     net proceeds of which are used to refund, refinance or replace
     Indebtedness (other than intercompany Indebtedness) that is then
     classified as having been incurred pursuant to paragraph (a) of this
     Section 4.09 or by clauses (2), (3), (4), (6), (10) or (12) of paragraph
     (b) of Section 4.09;

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

               (a) if the Company is the obligor on that Indebtedness, that
          Indebtedness is 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 thereof and

                    (ii) any sale or other transfer of any such Indebtedness to
               a Person that is not either the Company or a Restricted
               Subsidiary thereof shall be deemed, in each case, to constitute
               an incurrence of that Indebtedness by the Company or that
               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 that are incurred for the purpose of
     fixing or hedging;

                                      53
<PAGE>

               (a) interest rate risk with respect to any Indebtedness that is
          permitted by the terms of this indenture to be outstanding; or

               (b) exchange rate risk of that Person;

     provided that those agreements do not increase the Indebtedness of the
     obligor outstanding at any time other than as a result of fluctuations in
     foreign currency exchange rates or interest rates or by reason of fees,
     indemnities and compensation payable thereunder;

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

          (10) the incurrence by the Company or any of its Restricted
     Subsidiaries of Acquired Indebtedness; provided that the Company would
     have a higher Fixed Charge Coverage Ratio immediately after giving pro
     forma effect to such incurrence than the Fixed Charge Coverage Ratio
     immediately prior to such incurrence;

          (11) obligations in respect of trade letters of credit, performance
     and surety bonds and completion guarantees (including related letters of
     credit) provided by the Company or any Restricted Subsidiary in the
     ordinary course of business; and

          (12) the incurrence by the Company or any of its Restricted
     Subsidiaries of additional Indebtedness in an aggregate principal amount
     (or accreted value, as applicable) outstanding after giving effect to that
     incurrence, including all Permitted Refinancing Indebtedness incurred to
     refund, refinance or replace any Indebtedness incurred pursuant to this
     clause (12), not to exceed $20.0 million.

     For purposes of determining compliance with this Section 4.09: (1) In the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (12)
above or is entitled to be incurred pursuant to the first paragraph of this
covenant, the Company shall, in its sole discretion, classify that item of
Indebtedness in any manner that complies with this Section 4.09 and that item
of Indebtedness will be treated as having been incurred pursuant to only one of
those clauses or pursuant to the first paragraph hereof. (2) The Company may,
at any time, change the classification of an item of Indebtedness (or any
portion thereof) to any other clause or to the first paragraph hereof; provided
that the Company would be permitted to incur that item of Indebtedness (or that
portion thereof) pursuant to that other clause or the first paragraph hereof,
as the case may be, at the time of reclassification. (3) The accrual of
interest, accretion or amortization of original issue discount will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.

     Section 4.10 Asset Sales.

     The Company will not, and will 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 that Asset Sale at least equal to
     the Fair Market Value (evidenced by a resolution of the Board of Directors
     set forth in an Officers' Certificate delivered to the Trustee) of the
     assets or Equity Interests issued or sold or otherwise disposed of; and

                                      54
<PAGE>

          (2) at least 75% of the consideration therefor received by the
     Company or the Restricted Subsidiary is in the form of:

               (a) cash or Cash Equivalents; or

               (b) property or assets that are used or useful in a Permitted
          Business, or the Capital Stock of any Person engaged in a Permitted
          Business if, as a result of the acquisition by the Company or any
          Restricted Subsidiary thereof, that Person becomes a Restricted
          Subsidiary.

     For the purposes of this provision, each of the following shall be deemed
to be cash:

                    (i) any liabilities, as shown on the Company's or the
               Restricted Subsidiary's most recent balance sheet, of the
               Company or any Restricted Subsidiary (other than contingent
               liabilities and liabilities that are by their terms subordinated
               to the Notes or any guarantee thereof) that are assumed by the
               transferee of any such assets pursuant to a customary novation
               agreement that releases the Company or the Restricted Subsidiary
               from further liability;

                    (ii) any securities, notes or other obligations received by
               the Company or the Restricted Subsidiary from the transferee
               that are converted by the Company or the Restricted Subsidiary
               into cash or Cash Equivalents within 180 days of their receipt
               by the Company of the Restricted Subsidiary, but only to the
               extent of the cash or Cash Equivalents received; and

                    (iii) any Designated Noncash Consideration received by the
               Company or any of its Restricted Subsidiaries in that Asset Sale
               having an aggregate Fair Market Value, taken together with all
               other Designated Noncash Consideration received pursuant to this
               clause (iii) that is at that time outstanding, not to exceed 15%
               of Total Assets at the time of the receipt of that Designated
               Noncash Consideration, with the Fair Market Value of each item
               of Designated Noncash Consideration being measured at the time
               received and without giving effect to subsequent changes in
               value.

     The 75% limitation referred to in clause (2) above will not apply to any
Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in accordance with subclauses (i), (ii) and
(iii) above, is equal to or greater than what the after-tax proceeds would have
been had that Asset Sale complied with the aforementioned 75% limitation.

     Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or the Restricted Subsidiary, as the case may be, shall apply the
Net Proceeds, at its option, to:

          (1) repay or purchase Indebtedness of the Company or any Restricted
     Subsidiary, as the case may be,

          provided that if the Company shall so repay or purchase Indebtedness
     of the Company that is not secured by liens on any assets of the Company
     or any of its Subsidiaries;

               (a) it will equally and ratably reduce Indebtedness under the
          Notes if the Notes are then redeemable; or

                                      55
<PAGE>

               (b) if the Notes may not then be redeemed, the Company shall
          make an offer, in accordance with the procedures set forth below for
          an Asset Sale Offer, to all holders of Notes to purchase at a
          purchase price equal to 100% of the Accreted Value of the Notes, plus
          accrued and unpaid interest and Additional Interest, if any, thereon
          to the date of purchase, the Notes that would otherwise be redeemed;
          or

          (2) (a) an investment in property, the making of a capital
     expenditure or the acquisition of assets that, in each case, are used or
     useful in a Permitted Business; or

               (b) the acquisition of Capital Stock of any Person primarily
     engaged in a Permitted Business if:

                    (x) as a result of the acquisition by the Company or any
          Restricted Subsidiary thereof, that Person becomes a Restricted
          Subsidiary; or

                    (y) the Investment in that Capital Stock is permitted by
          clause (6) of the definition of Permitted Investments.

Pending the final application of any Net Proceeds, the Company may temporarily
reduce Indebtedness or otherwise invest those Net Proceeds in any manner that
is not prohibited by this Indenture.

     Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of Notes (an
"Asset Sale Offer") to purchase the maximum principal amount at maturity of
Notes 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 (or, if such Asset Sale Offer is prior to the Full Accretion Date,
100% of the Accreted Value thereof on the date of purchase, plus accrued and
unpaid interest and Additional Interest, if any, thereon to the date of
purchase), in accordance with the procedures set forth herein.

     To the extent that 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 at
maturity of Notes surrendered by holders thereof in connection with an Asset
Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased as set forth under Section 3.09 hereof. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

     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 pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of Section 3.09 hereof or this Section 4.10, the Company will comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.10 by
virtue of such compliance.

Section 4.11 Transactions with Affiliates.

     (a) The Company will not, and will 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,

                                      56
<PAGE>

understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an "Affiliate Transaction"),
unless:

          (1) that Affiliate Transaction is on terms that are no less favorable
     to the Company or that Restricted Subsidiary than those that would have
     been obtained in a comparable transaction by the Company or that
     Restricted Subsidiary with an unrelated Person; and

          (2) the Company delivers to the Trustee, with respect to any
     Affiliate Transaction or series of related Affiliate Transactions:

               (a) for transactions involving aggregate consideration in excess
          of $7.5 million, a resolution of the Board of Directors set forth in
          an Officers' Certificate certifying that the relevant Affiliate
          Transaction complies with clause (1) of this Section 4.11 and that
          such Affiliate Transaction has been approved by a majority of the
          disinterested members of the Board of Directors; and

               (b) for transactions involving aggregate consideration in excess
          of $20.0 million, an opinion as to the fairness to the holders of
          that Affiliate Transaction from a financial point of view issued by
          an accounting, appraisal or investment banking firm of national
          standing.

     (b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a)
hereof:

          (1) customary directors' fees, indemnification or similar
     arrangements or any employment agreement or other compensation plan or
     arrangement entered into by the Company or any of its Restricted
     Subsidiaries in the ordinary course of business (including ordinary course
     loans to employees not to exceed (a) $5.0 million outstanding in the
     aggregate at any time and (b) $2.0 million to any one employee) and
     consistent with the past practice of the Company or that Restricted
     Subsidiary;

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

          (3) payments of customary fees by the Company or any of its
     Restricted Subsidiaries to the Principals and their Affiliates made for
     any financial advisory, financing, underwriting or placement services
     (whether structured as a fee or as an underwriting discount) or in respect
     of other commercial or investment banking activities, including, without
     limitation, in connection with acquisitions or divestitures which are
     approved by a majority of the Board of Directors in good faith;

          (4) any agreement as in effect on the date of this Indenture or any
     amendment thereto (so long as that amendment is not disadvantageous to the
     Holders of the Notes in any material respect) or any transaction
     contemplated thereby;

          (5) payments and transactions in connection with the Credit Agreement
     (including commitment, syndication and arrangement fees payable
     thereunder) the Mueller Group Offerings and the Offering, including
     underwriting discounts and commissions in connection therewith, and the
     application of the proceeds of each, and the payment of fees and expenses
     with respect thereto;

                                      57
<PAGE>

          (6) Restricted Payments that are permitted under Section 4.07 hereof
     and any Permitted Investments;

          (7) sales of accounts receivable, or participation therein, in
     connection with any Receivables Facility;

          (8) any issuance or sale of Equity Interests (other than Disqualified
     Stock) of the Company; and

          (9) transactions with joint ventures and Unrestricted Subsidiaries on
     an arm's length basis approved by the Board of Directors.

Section 4.12 Liens.

     The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien, other than a Permitted Lien, that secures obligations under any
Pari Passu Indebtedness or subordinated Indebtedness of the Company on any
asset or property now owned or hereafter acquired by the Company or any of its
Restricted Subsidiaries, or any income or profits therefrom or assign or convey
any right to receive income therefrom, unless the Notes are equally and ratably
secured with the obligations so secured until such time as those obligations
are no longer secured by a Lien; provided that, in any case involving a Lien
securing subordinated Indebtedness of the Company, that Lien is subordinated to
the Lien securing the Notes to the same extent that subordinated Indebtedness
is subordinated to the Notes.

Section 4.13 Corporate Existence.

     Subject to Section 4.10 and Article 5 hereof, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect:

          (1) its corporate existence, and the corporate, partnership or other
     existence of each of its Subsidiaries, in accordance with the respective
     organizational documents (as the same may be amended from time to time) of
     the Company or any such Subsidiary; and

          (2) the rights (charter and statutory), licenses and franchises of
     the Company and its Subsidiaries; provided, however, that the Company
     shall not be required to preserve any such right, license or franchise, or
     the corporate, partnership or other existence of any of its Subsidiaries,
     if the Board of Directors shall determine that the preservation thereof is
     no longer desirable in the conduct of the business of the Company and its
     Subsidiaries, taken as a whole, and that the loss thereof is not adverse
     in any material respect to the Holders of the Notes.

Section 4.14 Offer to Repurchase Upon Change of Control.

Upon the occurrence of a Change of Control, the Company will make an offer (a
"Change of Control Offer") to each Holder to repurchase all or any part (equal
to $1,000 principal amount at maturity or an integral multiple of $1,000
principal amount at maturity) of that Holder's Notes at a purchase price in
cash equal to 101% of the aggregate principal amount of Notes repurchased plus
accrued and unpaid interest and Additional Interest, if any, thereon to the
date of repurchase (or if such Change of Control Offer is prior to the Full
Accretion Date, 101% of the Accreted Value thereof on the date of repurchase,
plus accrued and unpaid Additional Interest, if any, thereon to the date of
repurchase) (the "Change of Control Payment"). Within 90 days following any
Change of Control, the Company will, or will cause

                                      58
<PAGE>

the Trustee to, mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating:

          (1) that the Change of Control Offer is being made pursuant to this
     Section 4.14 and that all Notes tendered will be accepted for payment;

          (2) the purchase price and the purchase date, which shall be no
     earlier than 30 days and no later than 60 days from the date such notice
     is mailed (the "Change of Control Payment Date");

          (3) that any Note not tendered will continue to accrete and accrue
     interest;

          (4) 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 will cease to accrete or accrue interest after the Change of
     Control Payment Date;

          (5) that Holders electing to have any Notes purchased pursuant to a
     Change of Control Offer will be required to surrender the Notes, with the
     form entitled "Option of Holder to Elect Purchase" attached to the Notes
     completed, or transfer by book-entry transfer, 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;

          (6) that Holders will 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 telegram,
     telex, facsimile transmission or letter setting forth the name of the
     Holder, the principal amount at maturity of Notes delivered for purchase,
     and a statement that such Holder is withdrawing his election to have the
     Notes purchased; and

          (7) that Holders whose Notes are being purchased only in part will be
     issued new Notes equal in principal amount at maturity to the unpurchased
     portion of the Notes surrendered, which unpurchased portion must be equal
     to $1,000 in principal amount at maturity or an integral multiple 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
provisions of this Indenture relating to a Change of Control Offer, the Company
will comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations described in this Indenture by
virtue thereof.

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

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

          (9) 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

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

                                      59
<PAGE>

     The Paying Agent will promptly mail to each Holder of Notes that properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount at maturity to any unpurchased
portion of the Notes surrendered, if any; provided that each new Note will be
in a principal amount at maturity of $1,000 or an integral multiple thereof.
The Company will publicly announce the results of the Change of Control Offer
on or as soon as practicable after the Change of Control Payment Date.

     Prior to complying with any of the provisions of this Section 4.14, but in
any event within 90 days following a Change of Control, the Company will either
repay all outstanding Indebtedness of its Subsidiaries or obtain the requisite
consents, if any, under all agreements governing outstanding Indebtedness of
its Subsidiaries to permit the repurchase of Notes required by this Section
4.14.

     (b) Notwithstanding anything to the contrary in this Section 4.14, the
Company will 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
Section 4.14 and Section 3.09 hereof and purchases all Notes properly tendered
and not withdrawn under the Change of Control Offer.

Section 4.15 Limitation on Sale and Leaseback Transactions.

     The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:

          (1) the Company or that Restricted Subsidiary, as the case may be,
     could have:

               (a) incurred Indebtedness in an amount equal to the Attributable
          Indebtedness relating to that sale and leaseback transaction under
          Section 4.09 hereof; and

               (b) incurred a Lien to secure such Indebtedness pursuant to the
          provisions of Section 4.12 hereof;

          (2) the gross cash proceeds of that sale and leaseback transaction
     are at least equal to the Fair Market Value (as determined in good faith
     by the Board of Directors and set forth in an Officers' Certificate
     delivered to the trustee) of the property that is the subject of that sale
     and leaseback transaction; and

          (3) the transfer of assets in that sale and leaseback transaction is
     permitted by, and the Company applies the proceeds of such transaction in
     compliance with Section 4.10 hereof.

                                   ARTICLE 5
                                   SUCCESSORS

Section 5.01 Merger, Consolidation, or Sale of Assets.

     The Company will not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to, another Person unless:

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<PAGE>

          (1) the Company is the surviving corporation or the Person formed by
     or surviving any such consolidation or merger (if other than the Company)
     or to which that sale, assignment, transfer, conveyance or other
     disposition shall have been made is a corporation, partnership or limited
     liability company organized or existing under the laws of the United
     States, any state thereof or the District of Columbia provided that if
     such Person is a limited liability company or partnership, a corporate
     Wholly Owned Restricted Subsidiary of such Person organized under the laws
     of the United States, any state thereof or the District of Columbia
     becomes a co-issuer of the Notes in connection therewith;

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

          (3) immediately after that 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 that
     sale, assignment, transfer, conveyance or other disposition shall have
     been made

               (a) will, at the time of such transaction and after giving pro
          forma effect thereto as if that transaction 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 Section 4.09(a) hereof or

               (b) would, together with its Restricted Subsidiaries, have a
          higher Fixed Charge Coverage Ratio immediately after that transaction
          (after giving pro forma effect thereto as if that transaction had
          occurred at the beginning of the applicable four-quarter period) than
          the Fixed Charge Coverage Ratio of the Company and its Restricted
          Subsidiaries immediately prior to that transaction.

     The foregoing clause (4) will not prohibit:

          (a) a merger between the Company and a Wholly Owned Restricted
     Subsidiary of Parent created for the purpose of holding the Capital Stock
     of the Company;

          (b) a merger between the Company and a Wholly Owned Restricted
     Subsidiary; or

          (c) a merger between the Company and an Affiliate incorporated solely
     for the purpose of reincorporating or reorganizing the Company in another
     State of the United States

so long as, in each case, the amount of Indebtedness of the Company and its
Restricted Subsidiaries is not increased thereby.

     The Company will not lease all or substantially all of its properties or
assets to any Person in one or more related transactions.

Section 5.02 Successor Corporation Substituted.

                                      61
<PAGE>

     Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the properties
or assets of the Company in a transaction that is subject to, and that complies
with the provisions of, Section 5.01 hereof, the successor Person 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, assignment, transfer, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor Person 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; provided,
however, that the predecessor Company shall not be relieved from the obligation
to pay the principal of and interest on the Notes except in the case of a sale
of all of the Company's assets in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof.

                                   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, if any, with respect to the Notes);

          (2) default in the payment when due (at maturity, upon redemption or
     otherwise) of the principal of, or premium, if any, on, the Notes;

          (3) failure by the Company or any of its Restricted Subsidiaries for
     30 days after receipt of notice from the Trustee or holders of at least
     25% in principal amount at maturity of the Notes then outstanding to
     comply with the provisions of Sections 4.07, 4.09, 4.10, 4.14 or 5.01
     hereof;

          (4) failure by the Company or any of its Restricted Subsidiaries for
     60 days after notice to the Company by the Trustee or the Holders of at
     least 25% in aggregate principal amount at maturity of the Notes then
     outstanding to comply with any of their other agreements herein or in the
     Notes;

          (5) 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 by 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 Indebtedness at its stated
          final maturity (after giving effect to any applicable grace period
          provided in that Indebtedness) (a "Payment Default"); or

               (b) results in the acceleration of that Indebtedness prior to
          its stated final 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

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          Default or the maturity of which has been so accelerated, aggregates
          $20.0 million or more;

          (6) failure by the Company or any of its Restricted Subsidiaries to
     pay final judgments entered by a court or courts of competent jurisdiction
     aggregating in excess of $20.0 million (net of any amounts with respect to
     which a reputable and credit worthy insurance company has acknowledged in
     writing), which judgments are not paid, discharged or stayed for a period
     of 60 days;

          (7) the Company or any of its Restricted Subsidiaries that is 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 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; or

          (8) 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.

Section 6.02 Acceleration.

     In the case of an Event of Default specified in clause (7) or (8) of
Section 6.01 hereof, with respect to the Company or any Restricted Subsidiary
of the Company that is a Significant Subsidiary, the Accreted Value of the
Notes and all accrued and unpaid interest and Additional Interest thereon will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Holders of at least 25% in
aggregate principal amount at maturity of the then outstanding Notes may direct
the Trustee to declare all the Notes to be due and payable immediately. Upon
any such declaration, the Accreted Value of the Notes and all accrued and
unpaid interest and Additional Interest shall become due and payable
immediately.

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     The Holders of a majority in aggregate principal amount at maturity of the
then outstanding Notes by written notice to the Trustee may, on behalf of all
of the Holders, rescind an acceleration and its consequences, if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium or Additional
Interest, if any, that has become due solely because of the acceleration) have
been cured or waived; provided that, in the event of a declaration of
acceleration of the Notes because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness described in
Section 6.01 (5) hereof, the declaration of acceleration of the Notes shall be
automatically annulled if the Holders of any Indebtedness described in that
Section 6.01 (5) have rescinded the declaration of acceleration in respect of
that Indebtedness within 30 days of the date of that declaration and if:

          (1) the annulment of the acceleration of the Notes would not conflict
     with any judgment or decree of a court of competent jurisdiction; and

          (2) all existing Events of Default, except non-payment of principal
     or interest on the subordinated notes that became due solely because of
     the acceleration of the Notes, have been cured or waived.

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 and
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.

     Holders of not less than a majority in aggregate principal amount at
maturity 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, if
any, or interest on, the Notes (including in connection with an offer to
purchase); provided, however, that the Holders of a majority in aggregate
principal amount at maturity of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. 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 aggregate principal amount at maturity 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.

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Section 6.06      Limitation on Suits.

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

          (1) such Holder gives to the Trustee written notice that an Event of
     Default is continuing;

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

          (3) such Holder or Holders offer and, if requested, provide to the
     Trustee security or indemnity reasonably satisfactory to the Trustee
     against any loss, liability or expense;

          (4) the Trustee does not comply with the request within 60 days after
     receipt of the request and the offer of security or indemnity; and

          (5) during such 60-day period, Holders of a majority in aggregate
     principal amount at maturity of the then outstanding Notes do not give the
     Trustee a direction inconsistent with such 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.

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) hereof 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

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<PAGE>

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.

     If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:

          First: to the Trustee, its agents and attorneys for amounts due under
     Section 7.07 hereof, including payment of all compensation, expenses 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

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

     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, 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 6.11 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 aggregate principal amount at maturity 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
will 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.

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<PAGE>

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

          (1) the duties of the Trustee will 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

          (2) 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 will 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:

          (1) this paragraph does not limit the effect of paragraph (b) of this
     Section 7.01;

          (2) the Trustee will 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

          (3) the Trustee will 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), and (c) of this Section 7.01.

     (e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.

     (f) The Trustee will 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 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 will 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 and the written advice of such counsel or any Opinion of Counsel will
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.

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<PAGE>

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

     (d) The Trustee will 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 will be sufficient if signed by
an Officer of the Company.

     (f) The Trustee will 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 have offered to the Trustee reasonable
indemnity or security against the losses, liabilities and expenses that might
be incurred by it in compliance with such request or direction.

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. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (if this Indenture has been qualified under the TIA) 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 will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or 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 will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will 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 will 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 or 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.

Section 7.06 Reports by Trustee to Holders of the Notes.

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

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     (b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee
with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA ss. 313(d). The Company will promptly notify the Trustee
when the Notes are listed on any stock exchange.

Section 7.07 Compensation and Indemnity.

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

     (b) The Company will 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, 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. The Trustee will notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company will not relieve the Company of their obligations hereunder. The
Company will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. The Company does not need to pay for any
settlement made without its consent, which consent will not be unreasonably
withheld.

     (c) The obligations of the Company under this Section 7.07 will survive
the satisfaction and discharge of this Indenture.

     (d) To secure the Company's payment obligations in this Section 7.07, the
Trustee will 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; provided, however, that the foregoing exception
shall in no way alter the priorities set forth in Section 6.10. Such Lien will
survive the satisfaction and discharge of this Indenture.

     (e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) 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.

     (f) The Trustee will comply with the provisions of TIAss. 313(b)(2) to the
extent applicable.

Section 7.08 Replacement of Trustee.

     (a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.

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     (b) 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 a majority
in aggregate principal amount at maturity 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:

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

          (2) 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;

          (3) a custodian or public officer takes charge of the Trustee or its
     property; or

          (4) the Trustee becomes incapable of acting.

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

     (d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount at maturity of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

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

     (f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its
succession to Holders. The retiring Trustee will 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 will
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 corporation, the
successor corporation without any further act will be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

     There will 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 $50.0
million as set forth in its most recent published annual report of condition.

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     This Indenture will always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).

Section 7.11 Preferential Collection of Claims Against Company.

     The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 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 any time, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

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 will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which will 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 clauses (1) and (2) below, and to have satisfied all their other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive
until otherwise terminated or discharged hereunder:

          (1) the rights of Holders of outstanding Notes to receive payments in
     respect of the principal of, or interest or premium and Additional
     Interest, if any, on, such Notes when such payments are due from the trust
     referred to in Section 8.04 hereof;

          (2) the Company's obligations with respect to such Notes under
     Article 2 and Section 4.02 hereof;

          (3) the rights, powers, trusts, duties and immunities of the Trustee
     hereunder and the Company's obligations in connection therewith; and

          (4) 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 will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be

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released from each of their obligations under the covenants contained in
Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14, and 4.15
hereof and clauses (3) and (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section
8.04 hereof are satisfied will be released (hereinafter, "Covenant
Defeasance"), and the Notes will thereafter 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
will continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company may omit to comply with and will 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 will 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 will be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(3) through 6.01(6) hereof will not constitute Events of Default.

Section 8.04 Conditions to Legal or Covenant Defeasance.

     In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:

          (1) the Company must irrevocably deposit with the Trustee, in trust,
     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, in the opinion of a nationally recognized investment bank,
     appraisal firm, or firm of independent public accountants, to pay the
     principal of, premium and Additional Interest, if any, and interest on,
     the outstanding Notes on the stated date for payment thereof or on the
     applicable redemption date, as the case may be, and the Company must
     specify whether the Notes are being defeased to such stated date for
     payment or to a particular redemption date;

          (2) in the case of an election under Section 8.02 hereof, the Company
     must deliver to the Trustee an Opinion of Counsel 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 shall confirm that, subject to customary assumptions and
     exclusions, 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

                                      72
<PAGE>

     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
     must deliver to the Trustee an Opinion of Counsel confirming that, subject
     to customary assumptions and exclusions, 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 shall have occurred and be
     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 123rd day
     after the date of deposit;

          (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 to the effect that, subject to customary assumptions and
     exclusions, after the 123rd day following the deposit, the trust funds
     will not be subject to the effect of Section 547 of the United States
     Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;

          (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 any
     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
will 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, premium and Additional Interest, if
any, and interest, but such money need not be segregated from other funds
except to the extent required by law.

     The Company will 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.

     Notwithstanding anything in this Article 8 to the contrary, the Trustee
will 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(1) 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.

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<PAGE>

Section 8.06 Repayment to 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, premium or
Additional Interest, if any, or interest on, any Note and remaining unclaimed
for two years after such principal, premium or 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) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in 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 will not be less than
30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

Section 8.07 Reinstatement.

     If the Trustee or Paying Agent is unable to apply any U.S. 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 obligations under this Indenture and the Notes
will 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, however, that, if the Company makes any
payment of principal of, premium or Additional Interest, if any, or interest
on, any Note following the reinstatement of its obligations, the Company will
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 Note:

          (1) to cure any ambiguity, defect or inconsistency;

          (2) to provide for uncertificated Notes in addition to or in place of
     certificated Notes;

          (3) to provide for the assumption of the Company's obligations to the
     Holders of the Notes by a successor to the Company pursuant to Article 5
     hereof;

          (4) to make any change that would provide any additional rights or
     benefits to the Holders of the Notes or that does not materially adversely
     affect the legal rights hereunder of any Holder;

          (5) to comply with requirements of the SEC in order to effect or
     maintain the qualification of this Indenture under the TIA; or

                                      74
<PAGE>

          (6) to conform the text of this Indenture or the Notes to any
     provision of the "Description of Notes" section of the Company's Offering
     Circular dated April 22, 2004, relating to the initial offering of the
     Notes.

     Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee will join with the 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 will not be obligated to enter
into such amended or supplemental indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.

     After an amendment, supplement or waiver under this Section 9.01 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.

Section 9.02 With Consent of Holders of Notes.

     Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including, without limitation, Section
3.09, 4.10 and 4.14 hereof) and the Notes with the consent of the Holders of at
least a majority in aggregate principal amount at maturity 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), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium or Additional Interest, if any, or
interest on, the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity 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
2.08 hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount at maturity of the Notes
then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment, supplement
or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

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

          (2) reduce the principal of or change the fixed maturity of any Note
     or alter or waive any of the provisions with respect to the redemption of
     the Notes (except as provided above with respect to Sections 3.09, 4.10
     and 4.14 hereof);

          (3) reduce the rate of or extend the time for payment of interest,
     including default interest, on any Note;

                                      75
<PAGE>

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

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

          (6) make any change in the provisions of this Indenture relating to
     waivers of past Defaults;

          (7) waive a redemption payment with respect to any Note (other than a
     payment required by Sections 3.09, 4.10 or 4.14 hereof); or

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

     Notwithstanding the foregoing, any amendment to or waiver of Section 4.14
hereof will require the consent of the Holders of at least two-thirds in
aggregate principal amount at maturity of the Notes then outstanding if that
amendment would materially adversely affect the rights of such Holders.

     Upon the request of the Company accompanied by a resolution of its Board
of Directors 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 aforesaid, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the Trustee
will 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 will not be obligated to,
enter into such amended or supplemental Indenture.

     It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.

     After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.

Section 9.03 Compliance with Trust Indenture Act.

     Every amendment or supplement to this Indenture or the Notes will be set
forth in a 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 amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in

                                      76
<PAGE>

accordance with its terms and thereafter binds every Holder unless it is of the
type requiring the consent of each Holder affected. If the amendment,
supplement or waiver is of the type requiring the consent of each Holder
affected, the amendment, supplement or waiver will bind each Holder that has
consented to it and every subsequent Holder of a Note that evidences the same
debt as the Note of the consenting Holder.

Section 9.05 Notation on or Exchange of Notes.

     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 will not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, etc.

     The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amended or supplemental indenture until the Board of
Directors of the Company approves it. In executing any amended or supplemental
indenture, the Trustee will be entitled to receive and (subject to Section 7.01
hereof) will be fully protected in relying upon, in addition to the documents
required by Section 11.04 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
                           satisfaction and discharge

Section 10.01 Satisfaction and Discharge.

     This Indenture will be discharged and will cease to be of further effect
as to all Notes issued hereunder, when:

          (1) either:

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

               (b) all Notes that have not been delivered to the Trustee for
          cancellation have become due and payable by reason of the mailing of
          a notice of redemption or otherwise and the Company 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 delivered to the Trustee for
          cancellation for principal, premium and Additional Interest, if any,
          and accrued interest to the date of maturity or redemption; and

                                      77
<PAGE>

          (2) the Company has paid or caused to be paid all sums payable by it
     under this Indenture.

In addition, the Company must deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.

     Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section 10.01, the provisions of Sections 10.02 and 8.06 hereof will
survive. In addition, nothing in this Section 10.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.

Section 10.02 Application of Trust Money.

     Subject to the provisions of Section 8.06 hereof, all money deposited with
the Trustee pursuant to Section 10.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Additional Interest, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

     If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 10.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 10.01 hereof;
provided that if the Company has made any payment of principal of, premium or
Additional Interest, if any, or interest on, any Notes because of 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 or
Government Securities held by the Trustee or Paying Agent.

                                  ARTICLE 11
                                 MISCELLANEOUS

Section 11.01 Trust Indenture Act Controls.

     If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties will control.

Section 11.02 Notices.

     Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or by first class mail
(registered or certified, return receipt requested), facsimile transmission or
overnight air courier guaranteeing next day delivery, to the others' address:

     If to the Company:

     Mueller Holdings (N.A.), Inc.
     110 Corporate Drive, Suite 10
     Portsmouth, New Hampshire 03801

                                      78
<PAGE>

     Facsimile No.: (603) 422-8035
     Attention: General Counsel

     With a copy to:
     Davis Polk & Wardwell
     450 Lexington Avenue
     New York, New York 10017
     Facsimile No.: (212) 450-4000
     Attention: Michael Kaplan, Esq.

     If to the Trustee:
     Law Debenture Trust Company of New York
     767 Third Avenue, 31st Floor
     New York, New York 10017
     Facsimile No.: 212-750-1361
     Attention: Patrick Healy

     The Company or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.

     All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.

     Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication will also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.

     If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives
it.

     If the Company mails a notice or communication to Holders, it will mail a
copy to the Trustee and each Agent at the same time.

Section 11.03 Communication by Holders of Notes with Other Holders of Notes.

     Holders may communicate pursuant to TIA ss. 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 ss.
312(c).

Section 11.04 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:

          (1) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee (which must include the statements set forth
     in Section 11.05 hereof) stating that, in the opinion

                                      79
<PAGE>

     of the signers, all conditions precedent and covenants, if any, provided
     for in this Indenture relating to the proposed action have been satisfied;
     and

          (2) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee (which must include the statements set forth
     in Section 11.05 hereof) stating that, in the opinion of such counsel, all
     such conditions precedent and covenants have been satisfied.

Section 11.05 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 ss. 314(a)(4)) must comply with the provisions of TIA ss.
314(e) and must include:

          (1) a statement that the Person making such certificate or opinion
     has read such covenant or condition;

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

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

          (4) a statement as to whether or not, in the opinion of such Person,
     such condition or covenant has been satisfied.

Section 11.06 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 11.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.

     No past, present or future director, officer, employee, incorporator or
stockholder of the Company will have any liability for any obligations of the
Company under the Notes or this Indenture, 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 issuance of the Notes.

Section 11.08 Governing Law.

     THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 11.09 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.

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<PAGE>

Section 11.10 Successors.

     All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors.

Section 11.11 Payment Date Other Than a Business Day.

     If any payment with respect to a payment of any principal of, premium, if
any, or interest on any Note (including any payment to be made on any date
fixed for redemption or purchase of any Note) is due on a day which is not a
Business Day, then the payment need not be made on such date, but may be made
on the next Business Day with the same force and effect as if made on such
date, and no interest will accrue on such payment for the intervening period.

Section 11.12 Severability.

     In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.

Section 11.13 Counterpart Originals.

     The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same
agreement.

Section 11.14 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 will in no way
modify or restrict any of the terms or provisions hereof.

                         [Signatures on following page]

<PAGE>

                                   SIGNATURES

Dated as of April 29, 2004
                                        MUELLER HOLDINGS (N.A.), INC.

                                        By:  /s/ Darrell Jean
                                             ----------------------------------
                                             Name: Darrell Jean
                                             Title: Vice President and
                                                    Chief Financial Officer

<PAGE>

                                        LAW DEBENTURE TRUST COMPANY OF NEW YORK

                                        By:  /s/ Daniel R. Fisher
                                             ----------------------------------
                                             Name: Daniel R. Fisher
                                             Title: Senior Vice President

<PAGE>

                                 [Face of Note]
-------------------------------------------------------------------------------

FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS
$483.033, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $516.967, THE ISSUE DATE IS
APRIL 29, 2004 AND THE YIELD TO MATURITY IS 15.01598% PER ANNUM.

[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]

                                                        CUSIP/CINS ____________

                     14.75% Senior Discount Notes due 2014

No. ___                                                           $____________

                         MUELLER HOLDINGS (N.A.), INC.

promises to pay to _______ or registered assigns,

the principal sum of ___________________________________________________DOLLARS
on April 15, 2014.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

Dated:        , 20

                                        MUELLER HOLDINGS (N.A.), INC.

                                        By:  __________________________________
                                             Name:
                                             Title:

This is one of the Notes referred to in the within-mentioned Indenture:

LAW DEBENTURE TRUST COMPANY OF NEW YORK,
  as Trustee

By:  __________________________________
          Authorized Signatory

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

                                     A1-1
<PAGE>

                                 [Back of Note]
                     14.75% Senior Discount Notes due 2012

[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]

     Capitalized terms used herein have the meanings assigned to them in this
Indenture referred to below unless otherwise indicated.

          (1) INTEREST. Mueller Holdings (N.A.), Inc., a Delaware corporation
     (the "Company"), promises to pay interest on the principal amount of this
     Note at 14.75% per annum from April 15, 2009 until maturity as set forth
     below and shall pay the Additional Interest, if any, payable pursuant to
     Section 5 of the Registration Rights Agreement referred to below. No
     interest will accrue on the Notes prior to April 15, 2009 (the "Full
     Accretion Date"). Instead. the Accreted Value of each Note will increase
     (representing amortization of original issue discount) between the date of
     original issuance and April 15, 2009 at a rate of 14 3/4% calculated on a
     semi-annual bond equivalent basis using a 360-day year comprised of twelve
     30-day months (as more fully set forth in the Indenture), such that the
     Accreted Value on April 15, 2009 will be equal to the full principal
     amount at maturity of the Notes. Beginning on the Full Accretion Date,
     cash interest on the Notes will accrue at the rate of 14 3/4% per annum
     and will be payable semi-annually in arrears on April 15 and October 15 of
     each year, or if any such day is not a Business Day, on the next
     succeeding Business Day (each, an "Interest Payment Date"). Interest on
     the Notes will accrue from the most recent date to which interest has been
     paid or, if no interest has been paid, from April 15, 2009; provided that
     if there is no existing Default in the payment of interest, and 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; provided, further, that the
     first Interest Payment Date shall be October 15, 2009. The Company will
     pay interest (including post-petition interest in any proceeding under any
     Bankruptcy Law) on overdue principal and premium, if any, from time to
     time on demand at a rate that is 1% per annum in excess of the rate then
     in effect to the extent lawful; it will pay interest (including
     post-petition interest in any proceeding under any Bankruptcy Law) on
     overdue installments of interest and Additional Interest, if any, (without
     regard to any applicable grace periods) from time to time on demand at the
     same rate to the extent lawful. Interest will be computed on the basis of
     a 360-day year of twelve 30-day months.

          (2) METHOD OF PAYMENT. The Company will pay interest on the Notes
     (except defaulted interest) and Additional Interest, if any, to the
     Persons who are registered Holders of Notes at the close of business on
     the April 1 or October 1 next preceding the Interest Payment Date, even if
     such Notes are canceled after such record date and on or before such
     Interest Payment Date, except as provided in Section 2.12 of the Indenture
     with respect to defaulted interest. The Notes will be payable as to
     principal, premium and Additional Interest, if any, and interest 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 by check
     mailed to the Holders at their addresses set forth in the register of
     Holders; provided that payment by wire transfer of immediately available
     funds will be required with respect to principal of and interest, premium
     and Additional Interest, if any, on, all Global Notes and all other Notes
     the Holders of which will have provided wire transfer instructions to the
     Company or the Paying Agent. Such payment will be in such coin or currency

                                     A1-2
<PAGE>

     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, Law Debenture Trust
     Company of New York, the Trustee under the Indenture, will 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.

          (4) INDENTURE. The Company issued the Notes under an Indenture dated
     as of April 29, 2004 (the "Indenture") among 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 TIA. 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 unsecured
     obligations of the Company initially limited to $223.0 million in
     aggregate principal amount at maturity. Subject to Article 4 of the
     Indenture, the Company may issue Additional Notes that shall constitute
     part of the same series as the Notes initially issued under the Indenture.

          (5) OPTIONAL REDEMPTION.

     (a) At any time on or prior to April 15, 2007, the Company may redeem up
     to 35% of the aggregate principal amount of Notes from time to time
     originally issued under this Indenture in cash at a redemption price of
     114.75% of the Accreted Value thereof, plus accrued and unpaid interest
     and Additional Interest, if any, thereon to the redemption date, with the
     net cash proceeds of one or more Public Equity Offerings; provided that:

          (1) at least 65% of the aggregate principal amount at maturity of
          Notes from time to time originally issued under this Indenture
          remains outstanding immediately after the occurrence of the
          redemption; and

          (2) the redemption shall occur within 90 days of the date of the
          closing of any such Public Equity Offering.

     (b) Except pursuant to the preceding paragraph, the Notes will not be
     redeemable at the Company's option prior to April 15, 2007.

     (c) On and after April 15, 2009, the Notes will be subject to redemption
     at any time at the option of the Company, in whole or in part, upon not
     less than 30 nor more than 60 days' notice to each Holder and the Trustee,
     in cash at the redemption prices (expressed as percentages of principal
     amount) set forth below, plus accrued and unpaid interest and Additional
     Interest, if any, thereon to the applicable redemption date, if redeemed
     during the twelve-month period beginning on April 15, 2009 of the years
     indicated below:

          Year                                                       Percentage
          ----                                                       ----------
          2009 .....................................................   107.375%
          2010 .....................................................   104.917%
          2011 .....................................................   102.458%
          2012 and thereafter ......................................   100.000%

                                     A1-3
<PAGE>

     (d) Any redemption shall be made pursuant to the provisions of Sections
3.01 through 3.06 of the Indenture.

          (6) Mandatory Redemption.

     The Company is not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.

          (7) REPURCHASE AT THE OPTION OF HOLDER.

               (a) If there is a Change of Control, the Company will be
          required to make an offer (a "Change of Control Offer") to each
          Holder to repurchase all or any part (equal to $1,000 or an integral
          multiple of $1,000) of that Holder's Notes at a purchase price in
          cash equal to 101% of the aggregate Accreted Value of Notes
          repurchased plus accrued and unpaid interest and Additional Interest,
          if any, on the Notes repurchased to the date of repurchase, the
          "Change of Control Payment"). Within 90 days following any Change of
          Control, the Company will mail a notice to each Holder describing the
          transaction or transactions that constitute the Change of Control as
          required by the Indenture.

               (b) If the Company or a Restricted Subsidiary of the Company
          consummates any Asset Sales, within five days of each date on which
          the aggregate amount of Excess Proceeds exceeds $10.0 million, the
          Company will commence an offer to all Holders of Notes (an "Asset
          Sale Offer") pursuant to Section 3.09 of the Indenture to purchase
          the maximum principal amount of Notes 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 the purchase price for aggregate amount of Notes tendered
          pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
          Company (or such Restricted Subsidiary) may use such deficiency for
          any purpose not otherwise prohibited by the Indenture. If the
          aggregate Accreted Value of Notes tendered into such Asset Sale Offer
          exceeds the amount of Excess Proceeds, the Trustee shall select the
          Notes to be purchased on a pro rata basis. Holders of Notes that are
          the subject of an offer to purchase will 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" attached to the Notes.

          (8) NOTICE OF REDEMPTION. Notice of redemption will 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, except
     that redemption notices may be mailed more than 60 days prior to a
     redemption date if the notice is issued in connection with a defeasance of
     the Notes or a satisfaction or discharge of the Indenture. 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.

          (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
     form without coupons in denominations of $1,000 principal amount at
     maturity and integral multiples of $1,000 principal amount at maturity.
     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

                                     A1-4
<PAGE>

     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.

          (10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
     treated as its owner for all purposes.

          (11) 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 aggregate principal amount of the
     then outstanding Notes voting as a single class, and any existing Default
     or Event or Default (other than a Default or Event of Default in the
     payment of the principal of, premium or Additional Interest, if any, or
     interest on, the Notes, except a payment default resulting from an
     acceleration that has been rescinded) or compliance with any provision of
     the Indenture or the Notes may be waived with the consent of the Holders
     of a majority in aggregate 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, to provide for uncertificated Notes in
     addition to or in place of certificated Notes, to provide for the
     assumption of the Company's obligations to Holders of the Notes in case of
     a merger or consolidation, to make any change that would provide any
     additional rights or benefits to the Holders of the Notes or that does not
     materially adversely affect the legal rights under the Indenture of any
     such Holder, to comply with the requirements of the SEC in order to effect
     or maintain the qualification of the Indenture under the TIA or to conform
     the text of the Indenture or the Notes to any provision of the
     "Description of Notes" section of the Company's Offering Memorandum dated
     April 22, 2004, relating to the initial offering of the Notes.

          (12) DEFAULTS AND REMEDIES. Events of Default include: (i) default
     for 30 days in the payment when due of interest on, or Additional
     Interest, if any, with respect to the Notes; (ii) default in the payment
     when due of the principal of, or premium, if any, on, the Notes when the
     same becomes due and payable (at maturity, upon redemption (including in
     connection with an offer to purchase) or otherwise), (iii) failure by the
     Company or any of its Restricted Subsidiaries for 30 days after receipt of
     notice to the Company by the Trustee or the Holders of at least 25% in
     aggregate principal amount of the Notes then outstanding voting as a
     single class to comply with Section 4.07, 4.09, 4.10, 4.14 or 5.01 of the
     Indenture; (iv) failure by the Company or any of its Restricted
     Subsidiaries for 60 days after notice to the Company by the Trustee or the
     Holders of at least 25% in aggregate principal amount of the Notes then
     outstanding to comply with any of the other agreements in the Indenture or
     the Notes; (v) default under certain other agreements relating to
     Indebtedness of the Company which default results in the acceleration of
     such Indebtedness prior to its express maturity; (vi) certain final
     judgments for the payment of money that remain undischarged for a period
     of 60 days; and (vii) certain events of bankruptcy or insolvency with
     respect to the Company or any of its Restricted Subsidiaries that is a
     Significant Subsidiary. If any Event of Default occurs and is continuing,
     the Holders of at least 25% in aggregate principal amount at maturity of
     the then outstanding Notes may direct the Trustee to declare the Accreted
     Value of all the Notes and all accrued and unpaid interest and Additional
     Interest, if any, 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, the Accreted Value of all outstanding Notes
     and accrued and unpaid interest and Additional Interest, if any, will
     become due and payable immediately without further action or notice.
     Holders may not enforce

                                     A1-5
<PAGE>

     the Indenture or the Notes except as provided in the Indenture. Subject to
     certain limitations, Holders of a majority in aggregate 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 or
     premium or Additional Interest, if any,) if it determines that withholding
     notice is in their interest. The Holders of 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, rescind an acceleration
     or 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 premium or Additional Interest, if any, 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 Default or Event of
     Default, to deliver to the Trustee a statement specifying such Default or
     Event of Default.

          (13) 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.

          (14) NO RECOURSE AGAINST OTHERS. No past, present or future director,
     officer, employee, incorporator or stockholder of the Company, will have
     any liability for any obligations of the Company under the Notes or the
     Indenture or for any claim based on, in respect of, or by reason of, such
     obligations or their creation. Each Holder 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.

          (15) AUTHENTICATION. This Note will not be valid until authenticated
     by the manual signature of the Trustee or an authenticating agent.

          (16) 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 right of
     survivorship and not as tenants in common), CUST (= Custodian), and
     U/G/M/A (= Uniform Gifts to Minors Act).

          (17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
     RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
     of Notes under the Indenture, Holders of Restricted Global Notes and
     Restricted Definitive Notes will have all the rights set forth in the
     Registration Rights Agreement dated as of April 29, 2004, among the
     Company and the other parties named on the signature pages thereof or, in
     the case of Additional Notes, Holders of Restricted Global Notes and
     Restricted Definitive Notes will have the rights set forth in one or more
     registration rights agreements, if any, among the Company and the other
     parties thereto, relating to rights given by the Company to the purchasers
     of any Additional Notes (collectively, the "Registration Rights
     Agreement").

          (18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
     Committee on Uniform Security Identification Procedures, the Company has
     caused CUSIP numbers to be printed on the Notes, and the Trustee may use
     CUSIP 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.

                                     A1-6
<PAGE>

          (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
     GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND WITHOUT GIVING
     EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
     APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

Mueller Holdings (N.A.), Inc.
110 Corporate Drive, Suite 10
Portsmouth, New Hampshire 03801
Facsimile No.:  (603) 422-8035
Attention:  General Counsel

                                     A1-7
<PAGE>

                                ASSIGNMENT FORM

     To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: _________________________________
                                                (Insert assignee's legal name)

_______________________________________________________________________________
                 (Insert assignee's soc. sec. or tax I.D. no.)

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________
             (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        _______________________________________________________

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:  _______________

                                        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).

                                     A1-8
<PAGE>

                       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 4.14 of the Indenture, check the appropriate box below:

                     [ ] Section 4.10    [ ] Section 4.14

     If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 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 (or other
signature guarantor acceptable to the Trustee).

                                     A1-9
<PAGE>

            SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

     The following 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:

<TABLE>
<CAPTION>
<C>                        <C>                    <C>                      <C>                   <C>
                                                                           Principal Amount
                                                                          at maturity of this
                           Amount of decrease    Amount of increase in        Global Note           Signature of
                           in Principal Amount      Principal Amount        following such       authorized officer
                             at maturity of          at maturity of            decrease             of Trustee or
    Date of Exchange        this Global Note        this Global Note         (or increase)            Custodian
</TABLE>

* This schedule should be included only if the Note is issued in global form.

<PAGE>

                  [Face of Regulation S Temporary Global Note]
-------------------------------------------------------------------------------

FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS
$483.033, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $516.967, THE ISSUE DATE IS
APRIL 29, 2004 AND THE YIELD TO MATURITY IS 15.01598% PER ANNUM.

[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]

                                                          CUSIP/CINS __________
                     14.75% Senior Discount Notes due 2014

No. ___                                                             $__________

                         MUELLER HOLDINGS (N.A.), INC.

promises to pay to ________ or registered assigns,

the principal sum of ___________________________________________________
DOLLARS on April 15, 2014.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

Dated: _______________, 20_

                                        MUELLER HOLDINGS (N.A.), INC.

                                        By:  __________________________________
                                             Name:
                                             Title:

This is one of the Notes referred to in the within-mentioned Indenture:

LAW DEBENTURE TRUST COMPANY OF NEW YORK,
  as Trustee

By:  __________________________________
          Authorized Signatory

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

                                     A2-1
<PAGE>

                  [Back of Regulation S Temporary Global Note]
                     14.75% Senior Discount Notes due 2014

[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 Temporary Regulation S Legend, if applicable pursuant to the
provisions of the Indenture]

     Capitalized terms used herein have the meanings assigned to them in this
Indenture referred to below unless otherwise indicated.

          (1) INTEREST. Mueller Holdings (N.A.), Inc., a Delaware corporation
     (the "Company"), promises to pay interest on the principal amount of this
     Note at 14.75% per annum from April 15, 2009 until maturity as set forth
     below and shall pay the Additional Interest, if any, payable pursuant to
     Section 5 of the Registration Rights Agreement referred to below. No
     interest will accrue on the Notes prior to April 15, 2009 (the "Full
     Accretion Date"). Instead. the Accreted Value of each Note will increase
     (representing amortization of original issue discount) between the date of
     original issuance and April 15, 2009 at a rate of 14 3/4% calculated on a
     semi-annual bond equivalent basis using a 360-day year comprised of twelve
     30-day months (as more fully set forth in the Indenture), such that the
     Accreted Value on April 15, 2009 will be equal to the full principal
     amount at maturity of the Notes. Beginning on the Full Accretion Date,
     cash interest on the Notes will accrue at the rate of 14 3/4% per annum
     and will be payable semi-annually in arrears on April 15 and October 15 of
     each year, or if any such day is not a Business Day, on the next
     succeeding Business Day (each, an "Interest Payment Date"). Interest on
     the Notes will accrue from the most recent date to which interest has been
     paid or, if no interest has been paid, from April 15, 2009; provided that
     if there is no existing Default in the payment of interest, and 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; provided, further, that the
     first Interest Payment Date shall be October 15, 2009. The Company will
     pay interest (including post-petition interest in any proceeding under any
     Bankruptcy Law) on overdue principal and premium, if any, from time to
     time on demand at a rate that is 1% per annum in excess of the rate then
     in effect to the extent lawful; it will pay interest (including
     post-petition interest in any proceeding under any Bankruptcy Law) on
     overdue installments of interest and Additional Interest, if any, (without
     regard to any applicable grace periods) from time to time on demand at the
     same rate to the extent lawful. Interest will be computed on the basis of
     a 360-day year of twelve 30-day months.

          (2) METHOD OF PAYMENT. The Company will pay interest on the Notes
     (except defaulted interest) and Additional Interest, if any, to the
     Persons who are registered Holders of Notes at the close of business on
     the April 1 or October 1 next preceding the Interest Payment Date, even if
     such Notes are canceled after such record date and on or before such
     Interest Payment Date, except as provided in Section 2.12 of the Indenture
     with respect to defaulted interest. The Notes will be payable as to
     principal, premium and Additional Interest, if any, and interest 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 by check
     mailed to the Holders at their addresses set forth in the register of
     Holders; provided that payment by wire transfer of immediately available
     funds will be required with respect to principal of and interest, premium
     and Additional Interest, if any, on, all Global Notes and all other Notes
     the Holders of which will have provided wire transfer

                                     A2-2
<PAGE>

     instructions to the Company or the Paying Agent. Such payment will 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, Law Debenture Trust
     Company of New York, the Trustee under the Indenture, will 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.

          (4) INDENTURE. The Company issued the Notes under an Indenture dated
     as of April 29, 2004 (the "Indenture") among 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 TIA. 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 unsecured
     obligations of the Company initially limited to $223.0 million in
     aggregate principal amount at maturity. Subject to Article 4 of the
     Indenture, the Company may issue Additional Notes that shall constitute
     part of the same series as the Notes initially issued under the Indenture.

          (5) OPTIONAL REDEMPTION.

               (a) At any time on or prior to April 15, 2007, the Company may
          redeem up to 35% of the aggregate principal amount of Notes from time
          to time originally issued under this Indenture in cash at a
          redemption price of 114.75% of the Accreted Value thereof, plus
          accrued and unpaid interest and Additional Interest, if any, thereon
          to the redemption date, with the net cash proceeds of one or more
          Public Equity Offerings; provided that:

                    (1) at least 65% of the aggregate principal amount at
               maturity of Notes from time to time originally issued under this
               Indenture remains outstanding immediately after the occurrence
               of the redemption; and

                    (2) the redemption shall occur within 90 days of the date
               of the closing of any such Public Equity Offering.

               (b) Except pursuant to the preceding paragraph, the Notes will
          not be redeemable at the Company's option prior to April 15, 2007.

                    (c) On and after April 15, 2009, the Notes will be subject
               to redemption at any time at the option of the Company, in whole
               or in part, upon not less than 30 nor more than 60 days' notice
               to each Holder and the Trustee, in cash at the redemption prices
               (expressed as percentages of principal amount) set forth below,
               plus accrued and unpaid interest and Additional Interest, if
               any, thereon to the applicable redemption date, if redeemed
               during the twelve-month period beginning on April 15, 2009 of
               the years indicated below:

               Year                                                  Percentage
               ----                                                  ----------
               2009 .............................................      107.375%
               2010 .............................................      104.917%

                                     A2-3
<PAGE>

               2011 .............................................      102.458%
2012 and thereafter .............................................      100.000%

     (d) Any redemption shall be made pursuant to the provisions of Sections
3.01 through 3.06 of the Indenture.

          (6) Mandatory Redemption.

     The Company is not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.

          (7) REPURCHASE AT THE OPTION OF HOLDER.

               (a) If there is a Change of Control, the Company will be
          required to make an offer (a "Change of Control Offer") to each
          Holder to repurchase all or any part (equal to $1,000 or an integral
          multiple of $1,000) of that Holder's Notes at a purchase price in
          cash equal to 101% of the aggregate Accreted Value of Notes
          repurchased plus accrued and unpaid interest and Additional Interest,
          if any, on the Notes repurchased to the date of repurchase, the
          "Change of Control Payment"). Within 90 days following any Change of
          Control, the Company will mail a notice to each Holder describing the
          transaction or transactions that constitute the Change of Control as
          required by the Indenture.

               (b) If the Company or a Restricted Subsidiary of the Company
          consummates any Asset Sales, within five days of each date on which
          the aggregate amount of Excess Proceeds exceeds $10.0 million, the
          Company will commence an offer to all Holders of Notes (an "Asset
          Sale Offer") pursuant to Section 3.09 of the Indenture to purchase
          the maximum principal amount of Notes 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 the purchase price for aggregate amount of Notes tendered
          pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
          Company (or such Restricted Subsidiary) may use such deficiency for
          any purpose not otherwise prohibited by the Indenture. If the
          aggregate Accreted Value of Notes tendered into such Asset Sale Offer
          exceeds the amount of Excess Proceeds, the Trustee shall select the
          Notes to be purchased on a pro rata basis. Holders of Notes that are
          the subject of an offer to purchase will 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" attached to the Notes.

          (8) NOTICE OF REDEMPTION. Notice of redemption will 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, except
     that redemption notices may be mailed more than 60 days prior to a
     redemption date if the notice is issued in connection with a defeasance of
     the Notes or a satisfaction or discharge of the Indenture. 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.

          (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
     form without coupons in denominations of $1,000 principal amount at
     maturity and integral multiples of

                                     A2-4
<PAGE>

     $1,000 principal amount at maturity. 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.

          (10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
     treated as its owner for all purposes.

          (11) 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 aggregate principal amount of the
     then outstanding Notes voting as a single class, and any existing Default
     or Event or Default (other than a Default or Event of Default in the
     payment of the principal of, premium or Additional Interest, if any, or
     interest on, the Notes, except a payment default resulting from an
     acceleration that has been rescinded) or compliance with any provision of
     the Indenture or the Notes may be waived with the consent of the Holders
     of a majority in aggregate 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, to provide for uncertificated Notes in
     addition to or in place of certificated Notes, to provide for the
     assumption of the Company's obligations to Holders of the Notes in case of
     a merger or consolidation, to make any change that would provide any
     additional rights or benefits to the Holders of the Notes or that does not
     materially adversely affect the legal rights under the Indenture of any
     such Holder, to comply with the requirements of the SEC in order to effect
     or maintain the qualification of the Indenture under the TIA or to conform
     the text of the Indenture or the Notes to any provision of the
     "Description of Notes" section of the Company's Offering Memorandum dated
     April 22, 2004, relating to the initial offering of the Notes.

          (12) DEFAULTS AND REMEDIES. Events of Default include: (i) default
     for 30 days in the payment when due of interest on, or Additional
     Interest, if any, with respect to the Notes; (ii) default in the payment
     when due of the principal of, or premium, if any, on, the Notes when the
     same becomes due and payable (at maturity, upon redemption (including in
     connection with an offer to purchase) or otherwise), (iii) failure by the
     Company or any of its Restricted Subsidiaries for 30 days after receipt of
     notice to the Company by the Trustee or the Holders of at least 25% in
     aggregate principal amount of the Notes then outstanding voting as a
     single class to comply with Section 4.07, 4.09, 4.10, 4.14 or 5.01 of the
     Indenture; (iv) failure by the Company or any of its Restricted
     Subsidiaries for 60 days after notice to the Company by the Trustee or the
     Holders of at least 25% in aggregate principal amount of the Notes then
     outstanding to comply with any of the other agreements in the Indenture or
     the Notes; (v) default under certain other agreements relating to
     Indebtedness of the Company which default results in the acceleration of
     such Indebtedness prior to its express maturity; (vi) certain final
     judgments for the payment of money that remain undischarged for a period
     of 60 days; and (vii) certain events of bankruptcy or insolvency with
     respect to the Company or any of its Restricted Subsidiaries that is a
     Significant Subsidiary. If any Event of Default occurs and is continuing,
     the Holders of at least 25% in aggregate principal amount at maturity of
     the then outstanding Notes may direct the Trustee to declare the Accreted
     Value of all the Notes and all accrued and unpaid interest and Additional
     Interest, if any, to be due and payable immediately. Notwithstanding the
     foregoing, in the case of

                                     A2-5
<PAGE>

     an Event of Default arising from certain events of bankruptcy or
     insolvency, all the Accreted Value of outstanding Notes and all accrued
     and unpaid interest and Additional Interest, if any, will become due and
     payable immediately without further 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 aggregate
     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 or premium or Additional Interest, if any,) if it determines that
     withholding notice is in their interest. The Holders of 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, rescind an
     acceleration or 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 premium or Additional Interest, if
     any, 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 Default
     or Event of Default, to deliver to the Trustee a statement specifying such
     Default or Event of Default.

          (13) 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.

          (14) NO RECOURSE AGAINST OTHERS. No past, present or future director,
     officer, employee, incorporator or stockholder of the Company, will have
     any liability for any obligations of the Company under the Notes or the
     Indenture or for any claim based on, in respect of, or by reason of, such
     obligations or their creation. Each Holder 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.

          (15) AUTHENTICATION. This Note will not be valid until authenticated
     by the manual signature of the Trustee or an authenticating agent.

          (16) 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 right of
     survivorship and not as tenants in common), CUST (= Custodian), and
     U/G/M/A (= Uniform Gifts to Minors Act).

          (17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
     RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
     of Notes under the Indenture, Holders of Restricted Global Notes and
     Restricted Definitive Notes will have all the rights set forth in the
     Registration Rights Agreement dated as of April 29, 2004, among the
     Company and the other parties named on the signature pages thereof or, in
     the case of Additional Notes, Holders of Restricted Global Notes and
     Restricted Definitive Notes will have the rights set forth in one or more
     registration rights agreements, if any, among the Company and the other
     parties thereto, relating to rights given by the Company to the purchasers
     of any Additional Notes (collectively, the "Registration Rights
     Agreement").

          (18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
     Committee on Uniform Security Identification Procedures, the Company has
     caused CUSIP numbers to be printed on the Notes, and the Trustee may use
     CUSIP numbers in notices of redemption as a

                                     A2-6
<PAGE>

     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.

          (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
     GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND WITHOUT GIVING
     EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
     APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

Mueller Holdings (N.A.), Inc.
110 Corporate Drive, Suite 10
Portsmouth, New Hampshire 03801
Facsimile No.: (603) 422-8035
Attention:  General Counsel

                                     A2-7
<PAGE>

                                ASSIGNMENT FORM

     To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: _________________________________
                                                (Insert assignee's legal name)

_______________________________________________________________________________
                 (Insert assignee's soc. sec. or tax I.D. no.)

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________
             (Print or type assignee's name, address and zip code)

and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:  _______________

                                    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).

                                     A2-8
<PAGE>

                       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 4.14 of the Indenture, check the appropriate box below:

                     [ ] Section 4.10    [ ] Section 4.14

     If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 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 (or other
signature guarantor acceptable to the Trustee).

                                     A2-9
<PAGE>

  SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE

     The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:

<TABLE>
<CAPTION>
<C>                        <C>                   <C>                       <C>                   <C>
                                                                           Principal Amount
                                                                          at maturity of this
                           Amount of decrease    Amount of increase in        Global Note           Signature of
                           in Principal Amount      Principal Amount        following such       authorized officer
                             at maturity of          at maturity of            decrease             of Trustee or
    Date of Exchange        this Global Note        this Global Note         (or increase)            Custodian
</TABLE>

                                     A2-10
<PAGE>

                                                                      EXHIBIT B

                        FORM OF CERTIFICATE OF TRANSFER

Mueller Holdings (N.A.), Inc.
110 Corporate Drive, Suite 10
Portsmouth, New Hampshire 03801
Facsimile No.: (603) 422-8035
Attention: General Counsel

Law Debenture Trust Company of New York
767 Third Avenue, 31st Floor
New York, New York 10017
Facsimile No.: 212-750-1361
Attention: Patrick Healy

     Re: 14.75% Senior Discount Notes due 2014

     Reference is hereby made to the Indenture, dated as of April 29, 2004 (the
"Indenture"), among Mueller Holdings (N.A.), Inc., as issuer (the "Company"),
and Law Debenture Trust Company of New York, 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 at maturity 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:

                             [CHECK ALL THAT APPLY]

          1. [ ] Check if Transferee will take delivery of a beneficial
     interest in the 144A Global Note or a Restricted Definitive Note pursuant
     to Rule 144A. The Transfer is being effected pursuant to and in accordance
     with Rule 144A under the 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 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 Restricted Definitive Note and in the Indenture and
     the Securities Act.

          2. [ ] Check if Transferee will take delivery of a beneficial
     interest in the Regulation S Temporary Global Note, the Regulation S
     Permanent Global Note or a Restricted Definitive Note pursuant to
     Regulation S. The Transfer is being effected pursuant to and in accordance
     with (A) 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

                                      B-1
<PAGE>

     with a buyer in the United States, (ii) no directed selling efforts have
     been made in contravention of the requirements of Rule 903(b) or Rule
     904(b) of Regulation S under the Securities Act and, (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 Restricted 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 prior to expiration of the
     Restricted Period, 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 Temporary Global Note and/or
     the Restricted Definitive Note and in the Indenture and the Securities Act
     or (B) Rule 144 under the Securities Act.

          3. [ ] Check and complete if Transferee will take delivery of a
     beneficial interest in a Restrictive 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 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) [ ] such Transfer is being effected pursuant to and in
          accordance with Rule 144 under the Securities Act;

                                       or

               (b) [ ] such Transfer is being effected to the Company or a
          subsidiary thereof;

                                       or

               (c) [ ] 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) [ ] such Transfer is being effected pursuant to an exemption
          from the registration requirements of the Securities Act other than
          Rule 144A, Rule 144, Rule 903 or Rule 904. The undersigned is
          providing an opinion of counsel and a letter containing appropriate
          representations, and such other evidence as may be required by the
          Company to evidence such exemption. 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 Restricted Definitive Notes and in the
          Indenture and the Securities Act.

     4. [ ] Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.

     (a) [ ] 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 Indenture, the transferred beneficial interest or

                                      B-2
<PAGE>

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) [ ] 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) [ ] 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
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

     1. The Transferor owns and proposes to transfer the following:

                           [CHECK ONE OF (a) OR (b)]

                    (a) [ ] a beneficial interest in the:

                         (i) [ ] 144A Global Note (CUSIP _________), or

                         (ii) [ ] Regulation S Global Note (CUSIP _________).

                    (b) [ ] a Restricted Definitive Note.

     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) [ ] Unrestricted Global Note (CUSIP _________).

                    (b) [ ] a Restricted Definitive Note; or

                    (c) [ ] an Unrestricted Definitive Note,

                    in accordance with the terms of the Indenture.

                                      B-4
<PAGE>

                        FORM OF CERTIFICATE OF EXCHANGE

Mueller Holdings (N.A.), Inc.
110 Corporate Drive, Suite 10
Portsmouth, New Hampshire 03801
Facsimile No.: (603) 422-8035
Attention: General Counsel

Law Debenture Trust Company of New York
767 Third Avenue, 31st Floor
New York, New York 10017
Facsimile No.: 212-750-1361
Attention: Patrick Healy

     Re: 14.75% Senior Discount Notes due 2014

                              (CUSIP ____________)

     Reference is hereby made to the Indenture, dated as of April 23, 2004 (the
"Indenture"), among Mueller Holdings (N.A.), Inc., as issuer (the "Company"),
and Law Debenture Trust Company of New York, 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 at maturity 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) [ ] 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
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) [ ] 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

<PAGE>

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) [ ] 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) [ ] 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) [ ] 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 at maturity, 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) [ ] 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 with an equal principal amount at
maturity, 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.

     This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                      F-2
<PAGE>

                                        [Insert Name of Transferor]

                                        By:  __________________________________
                                             Name:
                                             Title:

Dated:  ______________________

                                      F-3

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