Document:

EXECUTION COPY

$275,000,000

TransDigm
Inc.

73⁄4%  Senior Subordinated Notes due 2014

PURCHASE
AGREEMENT

June 20,
2006

BANC OF AMERICA SECURITIES LLC (“Banc of America”)

CREDIT SUISSE SECURITIES (USA) LLC (“Credit Suisse”)
   As representatives of the
several initial purchasers

c/o Banc of America
Securities LLC

Nine West 57th Street

New York, N.Y. 10019

and

c/o Credit Suisse
Securities (USA) LLC

Eleven Madison Avenue,

New York, N.Y. 10010-3629

Dear Sirs:

1. TransDigm
Inc., a Delaware corporation (the “Company”),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several initial purchasers named in Schedule A hereto
(collectively, the “Purchasers”)
U.S.$275,000,000 principal amount of its 73⁄4%  Senior Subordinated Notes due 2014 (the “Offered Securities”) to be issued under an indenture (the “Indenture”) to be entered into among the Company, TransDigm
Group Incorporated (“TD Group”), the
subsidiaries of the Company to be named therein (TD Group and such subsidiaries
being referred to herein collectively as the “Guarantors”)
and The Bank of New York, as trustee (the “Trustee”).
The United States Securities Act of 1933, as amended, is herein referred to as
the “Securities Act.”

The holders of the Offered
Securities will be entitled to the benefits of a Registration Rights Agreement
to be entered into on the Closing Date (as defined herein) among the Company,
the Guarantors and Banc of America and Credit Suisse, as representatives of the
several Purchasers (the “Registration Rights
Agreement”), pursuant to which, and subject to the terms and
conditions set forth therein, the Company shall agree to file a registration
statement with the Securities and Exchange Commission (the “Commission”) registering the resale of the
Offered Securities under the Securities Act.

Simultaneously with the purchase, sale and delivery of
the Offered Securities, the Company or TD Group, as applicable, will (i) accept
for purchase and purchase all of the issued and outstanding 83¤8%
Senior Subordinated Notes due 2011 of the Company (the “83¤8%
Senior Subordinated Notes”) and accept all consents delivered in connection
therewith with respect to the amendments to the indenture governing such notes
to eliminate the restrictive covenants and certain event of default provisions
contained therein, in each case that have been validly tendered or delivered,
as the case may be, and not withdrawn upon the Closing Date (the offer to
purchase the 83¤8%
Senior Subordinated Notes, together with the consent solicitation being
referred to collectively herein as the “Tender Offer”),
(ii) repay in full any and all amounts borrowed

 

 

 

pursuant to the terms of the
amended and restated credit agreement (the “Credit
Agreement”), dated as of April 1, 2004, as amended as of November 10,
2005, among the Company, TransDigm Holding Company, the lenders thereto and
Credit Suisse, as administrative agent and as collateral agent, (iii) enter
into a new credit agreement (the “New Credit Agreement”)
among the Company, TD Group, each subsidiary of the Company from time to time
party thereto, the lenders party thereto and Credit Suisse as administrative
agent and collateral agent, whereby the lenders party thereto agree to extend
credit in the form of term loans in an aggregate principal amount not in excess
of $650,000,000 and revolving loans, swingline loans and letters of credit in
an aggregate principal amount at any time outstanding not in excess of
$150,000,000 and (iv) pay a dividend to TransDigm Holding Company, which
in turn will pay a dividend to TD Group, which in turn will use all such
proceeds to repay in full any and all amounts borrowed by it pursuant to the
terms of that certain Loan Agreement, dated as of November 10, 2005, by
and among TD Group, Banc of America Bridge LLC, as administrative agent, and
the lenders and other agents named therein.

The Company and the Guarantors
hereby agree with the Purchasers as follows:

2. Representations
and Warranties of the Company and the Guarantors. The Company and
the Guarantors, jointly and severally, represent and warrant to, and agree
with, the Purchasers that:

(a)  A preliminary offering
circular (the “Preliminary Offering Circular”)
relating to the Offered Securities to be offered by the Purchasers and a final
offering circular (the “Final Offering Circular”) disclosing the offering price and other final
terms of the Offered Securities and dated as of the date of this Agreement
(even if finalized and issued subsequent to the date of this Agreement) have
been or will be prepared by the Company. “General Disclosure Package”
means the Preliminary Offering Circular, together with any Issuer Free Writing
Communication (as hereinafter defined) existing at the Applicable Time (as
hereinafter defined) and the information which is intended for general
distribution to prospective investors, as evidenced by its being specified in Schedule
B to this Agreement (including the term
sheet listing the final terms of the Offered Securities and their offering,
included in Schedule C to this Agreement, which is referred to as the “Terms Communication”). “Applicable Time”
means 5:45 p.m. (New York City time) on the date of this Agreement. As of
the date of this Agreement, the Final Offering Circular does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the Applicable
Time, neither (i) the General Disclosure Package, nor (ii) any
individual Supplemental Marketing Material (as hereinafter defined), when
considered together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding two sentences do not apply
to statements in or omissions from the Preliminary Offering Circular, the Final
Offering Circular, the General Disclosure Package or any Supplemental Marketing
Material based upon written information furnished to the Company by any
Purchaser through Banc of America specifically for use therein, it being
understood and agreed that the only such information is that described as such
in Section 8(b) hereof.

“Free Writing Communication” means a written communication (as such term is defined in Rule 405
under the Securities Act) that constitutes an offer to sell or a solicitation
of an offer to buy the Offered Securities and is made by means other than the
Preliminary Offering Circular or the Final Offering Circular. “Issuer Free Writing Communication” means a Free Writing
Communication prepared by or on behalf of the Company, used or referred to by
the Company or containing a description of the final terms of the Offered
Securities or of their offering, in the form retained in the Company’s records.
“Supplemental Marketing Material” means
any Issuer Free Writing Communication other than any Issuer Free Writing
Communication specified in Schedule B to this Agreement.

 

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(b)  Each of the Company and
TD Group has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the General Disclosure Package; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business, properties or results of operations of the
Company and its subsidiaries, taken as a whole (“Material
Adverse Effect”).

(c)  Each subsidiary of the
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the General Disclosure Package; and each subsidiary of
the Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; all of
the issued and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and defects,
except for liens, encumbrances or defects on the capital stock of the
subsidiaries (direct and indirect) of the Company granted in favor of the lenders
under or related to the Credit Agreement or granted in favor of the lenders
under or related to the New Credit Agreement.

(d)  The Indenture has been
duly authorized; the Offered Securities have been duly authorized; and when the
Offered Securities are delivered and paid for pursuant to this letter agreement
(this “Agreement”) on the Closing Date (as
defined below), the Indenture will have been duly executed and delivered, such
Offered Securities will have been duly executed, authenticated, issued and
delivered, will be consistent in all material respects with the information in
the General Disclosure Package and will conform in all material respects to the
description thereof contained in the Final Offering Circular and the Indenture, and such Offered Securities
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.

(e) Except as disclosed in
the General Disclosure Package, there are no contracts, agreements or
understandings between the Company or the Guarantors, on the one hand, and any
person, on the other hand, that would give rise to a valid claim against the
Company or any Purchaser for a brokerage commission, finder’s fee or other like
payment.

(f)  No consent, approval,
authorization, or order of, or filing with, any governmental agency or body or
any court is required for the consummation by the Company or the Guarantors of
the transactions contemplated by this Agreement, or the Registration Rights
Agreement, except for the order of the Commission declaring effective the
Exchange Offer Registration Statement or, if required, the Shelf Registration
Statement (each as defined in the Registration Rights Agreement).

(g)  The execution, delivery and performance of the
Indenture and this Agreement by the Company and the Guarantors, the consummation
by the Company and the Guarantors of the transactions herein contemplated and
transactions contemplated by the Registration Rights Agreement, and the
issuance and sale of the Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, (1) any statute or any
rule, regulation or order of any governmental agency 

 

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or body or any court, domestic or foreign, having jurisdiction over the Company,
TD Group or any subsidiary of TD Group or any of their properties, (2) assuming
that the Financing Transaction (as defined in the Preliminary Offering
Circular) has been consummated, any agreement or instrument to which the
Company, TD Group or any such subsidiary is a party or by which the Company, TD
Group or any such subsidiary is bound or to which any of the properties of the
Company, TD Group or any such subsidiary is subject or (3) the charter or
by-laws of the Company, TD Group or any such subsidiary, except in the case of
clauses (1) and (2), for breaches, violations and defaults that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement.

(h)  This Agreement has been
duly authorized, executed and delivered by the Company and the Guarantors.

(i) The Registration Rights
Agreement has been duly authorized by the Company and the Guarantors and, upon
its execution and delivery by the Company and the Guarantors, will be duly
executed and delivered by the Company and the Guarantors and enforceable
against the Company and the Guarantors in accordance with its terms, except that
(1) the enforcement thereof may be subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles and (2) any rights to indemnity or contribution thereunder may
be limited by federal and state securities laws and public policy
considerations.

(j)  Except as disclosed in the General Disclosure
Package, the Company, TD Group and its subsidiaries have good and marketable
title to all material real properties and all other material properties and
material assets owned by them, in each case, and except as disclosed in the
General Disclosure Package, free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with the use
made or to be made thereof by them; and except as disclosed in the General
Disclosure Package, the Company, TD Group and their subsidiaries hold any
material leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made or to be
made thereof by them.

(k)  The Company, TD Group
and their subsidiaries possess adequate certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to conduct the
business now operated by them and have not received any written notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate reasonably be expected to
have a Material Adverse Effect.

(l)  No
labor dispute with the employees of the Company, TD Group or any subsidiary
thereof exists or, to the knowledge of the Company, is imminent that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(m)  The
Company, TD Group and their subsidiaries own, possess (including by license or
other agreement) or can acquire on reasonable terms, adequate trademarks, trade
names and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property (collectively, “Intellectual Property Rights”) necessary to conduct the
business now operated by them, or presently employed by them, and have not
received any written notice of infringement of or conflict with asserted rights
of others with respect to any Intellectual Property Rights that, if determined
adversely to the Company, TD Group or any of their subsidiaries, would
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(n)  Except as
disclosed in the General Disclosure Package, neither the Company, nor TD Group,
nor any of their subsidiaries (i) is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, (iii) is liable for any off-site disposal or contamination pursuant
to any Environmental Laws, or (iv) is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and to the Company’s knowledge, there are no pending
investigations which could reasonably be expected to lead to such a claim.

(o)  Except as disclosed in the General Disclosure
Package, there are no pending actions, suits or proceedings against or
affecting the Company, TD Group, any of their subsidiaries or any of their
respective properties that would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under the
Indenture, this Agreement or the Registration Rights Agreement, or which are
otherwise material in the context of the sale of the Offered Securities; to the
Company’s knowledge, no such actions, suits or proceedings are threatened
against the Company, TD Group any of their subsidiaries or any of their
respective properties.

(p)  The financial statements included in the General
Disclosure Package present
fairly in all material respects the financial position of TD Group (or, if
applicable, TransDigm Holding Company) and its consolidated subsidiaries as of
the dates shown and their results of operations and cash flows for the periods
shown, and, except as otherwise disclosed in the General Disclosure Package,
such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis.

(q)  Except as disclosed in the General Disclosure
Package, since the date of the latest audited financial statements included in
the General Disclosure Package there has been no material adverse change, nor
any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of TD Group and its subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the General Disclosure Package, there has been
no dividend or distribution of any kind declared, paid or made by TD Group on
any class of its capital stock.

(r) TD Group is subject to the reporting requirements
of either Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended ( the “Exchange Act”),
and files reports with the Commission on the Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system.

(s) Neither the Company nor TD Group is an open-end investment
company, unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States Investment
Company Act of 1940, as amended (the “Investment Company Act”);
and neither the Company nor TD Group is and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds
thereof as described in the General Disclosure Package, neither the Company nor
TD Group will be an “investment company” as defined in the Investment Company
Act.

(t)  TD
Group maintains disclosure controls and procedures (as such term is defined in Rule 13a-15
(e) under the Exchange Act) that comply in all material respects with the
requirements of the Exchange Act; such disclosure controls and procedures have
been designed to ensure that material information relating to TD Group and its
subsidiaries is made known to TD Group’s principal executive officer and
principal financial officer by others within those entities.

 

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(u)  No securities of the same class (within the
meaning of Rule 144A(d)(3) under the Securities Act) as the Offered
Securities are listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system.

(v)  The offer and sale of the Offered
Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereof, Regulation D thereunder
and Regulation S thereunder; and it is not necessary to qualify an indenture in
respect of the Offered Securities under the United States Trust Indenture Act
of 1939, as amended (the “Trust Indenture Act”).

(w)  Except in connection with the consummation of the
transactions contemplated by this Agreement, neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf (i) has, within
the six-month period prior to the date hereof, offered or sold in the United
States or to any U.S. person (as such terms are defined in Regulation S
under the Securities Act (“Regulation S”))
the Offered Securities or any security of the same class or series as the
Offered Securities or (ii) has offered or will offer or sell the Offered
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S, by means of any directed selling
efforts within the meaning of Rule 902(c) of Regulation S. The
Company, its affiliates and any person acting on its or their behalf have complied
in all material respects and will comply in all material respects with the
offering restriction requirements of Regulation S. The Company has not entered
into and will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities, except for this Agreement. Notwithstanding
anything contained herein to the contrary, neither the Company nor any
Guarantor makes any representation or warranty pursuant to this clause (v) with
respect to any actions taken by the Purchasers in connection with the
transactions contemplated by this Agreement.

3. Purchase,
Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth herein, on the Closing Date, the Company agrees to sell to
the several Purchasers, and each such Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 98% of the
principal amount thereof, plus accrued interest from June 23, 2006 to the
Closing Date, the principal amount of Offered Securities set forth opposite the
name of such Purchaser in Schedule A hereto.

The Company will deliver against
payment of the purchase price the Offered Securities in the form of one or more
permanent global certificates in definitive form (the “Global
Securities”) deposited with the Trustee as custodian for The
Depository Trust Company (“DTC”) and
registered in the name of Cede & Co., as nominee for DTC. Interests in
any permanent Global Securities will be held only in book-entry form through
DTC, except in the limited circumstances described in the Final Offering
Circular. Payment for the Offered Securities shall be made by the Purchasers in
Federal (same day) funds by wire transfer to an account specified by the
Company in writing to Banc of America, with such payment being made on June 23,
2006, or at such other time not later than seven full business days thereafter
as Banc of America and the Company determine, such time being herein referred
to as the “Closing Date”, against delivery to
the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities purchased pursuant to the terms hereof. The Global
Securities will be made available for checking at the office of  Latham &
Watkins LLP, New York, New York at least 24 hours prior to the Closing Date.

4. Representations
by Purchasers; Resale by Purchasers. (a)   Each
Purchaser severally represents and warrants to the Company that it is an “accredited
investor” within the meaning of Regulation D under the Securities Act.

(b) Each Purchaser severally
acknowledges that the Offered Securities have not been registered under the
Securities Act and may not be offered or sold within the United States or to,
or

 

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for the account or benefit of, U.S. persons except in accordance with
Regulation S or pursuant to an exemption from the registration requirements of
the Securities Act. Each Purchaser severally represents and agrees that it has
offered and sold the Offered Securities, and will offer and sell the Offered
Securities (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 or Rule 144A under the
Securities Act (“Rule 144A”). Accordingly,
neither such Purchaser nor its affiliates, nor any persons acting on its or
their behalf, have engaged or will engage in any directed selling efforts with
respect to the Offered Securities, and such Purchaser, its affiliates and all
persons acting on its or their behalf have complied and will comply with the
offering restriction requirements of Regulation S. Each Purchaser severally
agrees that, at or prior to confirmation of sale of the Offered Securities,
other than a sale pursuant to Rule 144A, such Purchaser will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases the Offered Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the date of the commencement of the offering
and the closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meanings given to them by Regulation S.”

Terms used in this subsection (b) have
the meanings given to them by Regulation S.

(c)  Each Purchaser
severally agrees that it and each of its affiliates has not entered into and
will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for any such arrangements with
the other Purchaser or affiliates of the other Purchaser or with the prior written
consent of the Company.

(d)  Each Purchaser
severally agrees that it and each of its affiliates will not offer or sell the
Offered Securities in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or (ii) any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising. Each Purchaser severally agrees, with respect to resales
made in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to settlement of
such resale a notice to the effect that the resale of such Offered Securities
has been made in reliance upon the exemption from the registration requirements
of the Securities Act provided by Rule 144A.

(e) Each of the
Purchasers severally represents and agrees that (i) it has not offered or
sold and prior to the expiry of a period of six months from the Closing Date,
will not offer or sell any Offered Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes
of their businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii) it has
only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and
Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or
sale of any Offered Securities in circumstances in which section 21(1) of
the FSMA does not apply to the Company or any Guarantor;

 

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and (iii) it
has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Offered Securities in, from
or otherwise involving the United Kingdom

5. Certain Agreements of the Company and the Guarantors. The
Company and, as applicable, the Guarantors agree with the Purchasers that:

(a)  The Company will advise
Banc of America promptly of any proposal to amend or supplement the Preliminary
Offering Circular or the Final Offering Circular and will not effect such
amendment or supplementation without Banc of America’s consent, which consent
shall not be unreasonably withheld or delayed. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers, there
occurs an event or development as a result of which the Preliminary Offering
Circular, the Final Offering Circular, any document included within the General
Disclosure Package or any Supplemental Marketing Material included or would
include an untrue statement of a material fact or omitted or would omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at such time, not misleading, or if
it is necessary at any such time to amend or supplement the Preliminary
Offering Circular, the Final Offering Circular, any document included within
the General Disclosure Package or any Supplemental Marketing Material, the
Company promptly will notify Banc of America of such event and promptly will
prepare, at its own expense, an amendment or supplement which will correct such
statement or omission. Neither Banc of America’s consent to, nor the Purchasers’
delivery to offerees or investors of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7. This
subsection does not apply to statements in or omissions from the Preliminary
Offering Circular, the Final Offering Circular, any document included within
the General Disclosure Package or any Supplemental Marketing Material made in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Banc of America specifically for use therein,
it being understood and agreed that the only such information is that described
as such in Section 8(b) hereof.

(b)  The Company will
furnish to Banc of America copies of the Preliminary Offering Circular, each
other document comprising a part of the General Disclosure Package, the Final
Offering Circular, all amendments and supplements to such documents and each
item of Supplemental Marketing Material, in each case as soon as available and
in such quantities as Banc of America may reasonably request, and the Company
will furnish to Banc of America on the date hereof three copies of each of the
foregoing documents, one of which in the case of the Preliminary Offering
Circular and the Final Offering Circular will include the independent
accountants’ reports manually signed by such independent accountants. At any
time when neither the Company nor  TD
Group is subject to Section 13 or 15(d) of the Exchange Act, the
Company will promptly furnish or cause to be furnished to Banc of America and,
upon request of holders and prospective purchasers of the Offered Securities,
to such holders and purchasers, copies of the information required to be
delivered to holders and prospective purchasers of the Offered Securities
pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with Rule 144A
in connection with resales by such holders of the Offered Securities. The
Company will pay the expenses of printing and distributing to the Purchasers
all such documents.

(c)  The Company will use
its commercially reasonable efforts to arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility for
investment under the laws of such
jurisdictions in the United States and Canada as Banc of America may reasonably
designate and will use its commercially reasonable efforts to continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Purchasers, provided 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

 

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qualified as of the date hereof or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise
subject as of the date hereof.

(d)  During the period of
two years after the Closing Date, the Company will, upon request, furnish to
Banc of America and Credit Suisse and any holder of Offered Securities a copy
of the restrictions on transfer applicable to the Offered Securities.

(e)  During the period of
two years after the Closing Date, neither TD Group, nor the Company nor the
Guarantors will, and will permit any of their subsidiaries to resell any of the
Offered Securities that have been reacquired by any of them.

(f)  During the period of
two years after the Closing Date, neither the Company nor any of the Guarantors
will be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under Section 8
of the Investment Company Act.

(g)  The Company will pay all expenses incidental to
the performance of its obligations under this Agreement, the Indenture and the
Registration Rights Agreement,
including (i) the fees and expenses of the Trustee and its professional advisers; (ii) all expenses
incurred by it in connection with the execution, issuance, authentication,
packaging and initial delivery of the Offered Securities and, as applicable,
the Exchange Securities (as defined in the Registration Rights Agreement), the
preparation and printing of this Agreement, the Registration Rights Agreement, the Offered Securities, the Indenture, the Preliminary Offering
Circular, any other documents comprising any part of the General Disclosure
Package, the Final Offering Circular, all amendments and supplements thereto,
each item of Supplemental Marketing Material and any other document relating to
the issuance, offer, sale and delivery of the Offered Securities and, as
applicable, the Exchange Securities; (iii) the cost of qualifying the
Offered Securities for trading in The PortalSM Market (“PORTAL”) and any reasonable expenses incidental thereto; (iv) the
cost of any advertising approved by the Company in connection with the issue of
the Offered Securities; (v) for any expenses (including fees and
disbursements of counsel) incurred by the Company in connection with the
qualification of the Offered Securities or the Exchange Securities for sale
under the laws of such states in the United States and Canada as Banc of
America may reasonably designate (subject to the other terms set forth in this
Agreement) and the printing of memoranda relating thereto; (vi) any fees
charged by investment rating agencies for the rating of the Securities or the
Exchange Securities; and (vii) any expenses incurred in distributing to
the Purchasers the Preliminary Offering Circular, any other documents
comprising any part of the General Disclosure Package, the Final Offering
Circular (including any amendments and supplements thereto) and any
Supplemental Marketing Material. The Company will also pay or reimburse the
Purchasers (to the extent incurred by them) for all reasonable travel expenses
of the Purchasers and the Company’s officers and employees and any other
reasonable expenses of the Purchasers and the Company incurred in connection
with attending or hosting meetings with prospective purchasers of the Offered
Securities.

(h)  In connection with the
offering, until Banc of America shall have notified the Company of the
completion of the resale of the Offered Securities, none of TD Group, the
Company or any of its subsidiaries has or will, either alone or with one or
more other persons, bid for or purchase for any account in which TD Group, the
Company or any of its subsidiaries has a beneficial interest any Offered
Securities or attempt to induce any person to purchase any Offered Securities;
and neither TD Group, the Company nor any of its subsidiaries will make bids or
purchases for the purpose of creating actual, or apparent, active trading in,
or of raising the price of, the Offered Securities.

(i)  Simultaneously with the
consummation of the transactions contemplated by this Agreement, TD Finance
Corporation will merge with and into the Company, and the Company will be the
surviving entity of such merger. In addition, on or prior to the second
business day following

 

 9
 

 

 

the Closing Date, TransDigm Holding Company shall be merged with and
into the Company, and the Company will be the surviving entity of such merger
and, if for any reason such merger does not become effective on or prior to the
second business day following the Closing Date, then TransDigm Holding Company
shall execute and deliver a supplemental indenture to the Indenture, in form
and substance reasonably satisfactory to Banc of America, pursuant to which it
shall agree to become a guarantor under the terms of the Indenture for all
purposes thereof.

(j)  In conjunction
with the consummation of the transactions contemplated by this Agreement, the
Tender Offer shall have been consummated and the Company, the guarantors and
the trustee party to the indenture governing the 83¤8% Senior
Subordinated Notes (the “Existing Indenture”)
shall have entered into a supplemental indenture to the Existing Indenture
implementing the terms of the consent solicitation undertaken in connection
with the Tender Offer.

6. Free Writing Communications. (a) The Company represents
and agrees that, unless it obtains the prior consent of Banc of America, and
Banc of America represents and agrees that, unless it obtains the prior consent
of the Company, it has not made and will not make any offer relating to the
Offered Securities that would constitute an Issuer Free Writing Communication.

(b)  The Company consents to
the use by any Purchaser of a Free Writing Communication that (i) contains
only (A) information describing the preliminary terms of the Offered
Securities or their offering or (B) information that describes the final
terms of the Offered Securities or their offering and that is included in the
Terms Communication (which Terms Communication constitutes a Free Writing
Communication) or is included in or is subsequently included in the Final
Offering Circular or (ii) does not contain any material information about
the Company or its securities that was provided by or on behalf of the Company,
it being understood and agreed that any such Free Writing Communication
referred to in clause (i) or (ii) shall not be an Issuer Free Writing
Communication for purposes of this Agreement.

7. Conditions of the Obligations of the Purchasers.  The obligations of the several Purchasers to
purchase and pay for the Offered Securities will be subject to the accuracy of
the representations and warranties on the part of the Company herein, to the
accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance, in all material respects, by the Company
of its obligations hereunder and to the following additional conditions
precedent:

(a)  The Purchasers shall
have received a letter, dated the date of this Agreement, of Deloitte &
Touche USA LLP confirming that they are independent public accountants within
the meaning of the Securities Act and the applicable published rules and
regulations thereunder (“Rules and Regulations”)
and to the effect that in their opinion the financial statements examined by
them and included in the Preliminary Offering Circular and the Final Offering
Circular comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related published Rules and
Regulations.

(b) The Purchasers shall
have also received a letter, dated the date of this Agreement, of Ernst &
Young LLP confirming that they are independent public accountants within the
meaning of the Securities Act and the applicable published Rules and
Regulations and to the effect that:

(i)  in their opinion the
financial statements examined by them and included in the Preliminary Offering
Circular and the Final Offering Circular comply as to form in all material
respects with the applicable accounting requirements of the Securities Act and
the related published Rules and Regulations;

 

 10

 

(ii) they have performed the
procedures specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in Statement of
Auditing Standards No. 100, Interim Financial Information, on the unaudited
financial statements included in the Preliminary Offering Circular and the
Final Offering Circular;

(iii) on the basis of the
review referred to in clause (ii) above, a reading of the latest available
interim financial statements of TD Group, inquiries of officials of TD Group
who have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them to
believe that:

(A)  (x) the unaudited
financial statements included in the Preliminary Offering Circular and the
Final Offering Circular do not comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the related
published Rules and Regulations or (y) any material modifications
should be made to such unaudited financial statements for them to be in
conformity with GAAP;

 (B) the unaudited consolidated net sales,
net operating income and net income amounts for the 26-week periods ended
April 1, 2006 and April 2, 2005 included in the Preliminary Offering
Circular and the Final Offering Circular do not agree with the amounts set
forth in the unaudited consolidated financial statements for those same periods
or were not determined on a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;

(C) at the date of the
latest available balance sheet read by such accountants, or at a subsequent
specified date not more than three business days prior to the date of this
Agreement, (i) there was any change in the capital stock or any increase
in short-term indebtedness or long-term debt of TD Group and its consolidated
subsidiaries or, at the date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net current assets or net
assets, as compared with amounts shown on the latest balance sheet included in
the Final Offering Circular; or

(D) for the period from the
closing date of the latest income statement included in the Final Offering
Circular to the closing date of the latest available income statement read by
such accountants there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding length ended
the date of the latest income statement included in the Final Offering
Circular, in consolidated net sales, net operating income, or in the ratio of earnings to fixed charges;

except in all cases set forth in clauses (B), (C) and (D) above
for changes, increases or decreases which are described in such letter; and

(iv) they have compared
specified dollar amounts (or percentages derived from such dollar amounts) and
other financial information contained in the Preliminary Offering Circular,
each other document comprising any part of the General Disclosure Package, the
Final Offering Circular and each item of Supplemental Marketing Material (in each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting records of
TD Group and its subsidiaries subject to the internal 

 11
 

 

controls of TD Group’s accounting system or are derived directly from
such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such results, except as
otherwise specified in such letter.

(c)  Subsequent to the
execution and delivery of this Agreement, there shall not have occurred (i) any
change, or any development or event involving a prospective change, in the
condition (financial or other), business, properties or results of operations
of the Company and its subsidiaries taken as one enterprise which, in the
judgment of Banc of America and Credit Suisse, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the offering
or the sale of and payment for the Offered Securities; (ii) any
downgrading in the rating of any debt securities of the Company by any “nationally
recognized statistical rating organization” (as defined for purposes of Rule 436(g) under
the Securities Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the Company
(other than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating) or any
announcement that the Company has been placed on negative outlook, except in
each case for any of the foregoing relating solely to any 8 3/8% Senior
Subordinated Notes that are not tendered in connection with the Tender Offer; (iii) any
change in U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the reasonable judgment of
Banc of America and Credit Suisse, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered Securities,
whether in the primary market or in respect of dealings in the secondary
market; (iv) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange; (v) any suspension of trading of any
securities of TD Group on any exchange or in the over-the-counter market; (vi) any
banking moratorium declared by U.S. Federal or New York authorities; (vii) any
major disruption of settlements of securities or clearance services in the
United States; (viii) any attack on, outbreak or escalation of hostilities
or act of terrorism involving the United States or, any declaration of war by
Congress or any other national or international calamity or emergency if, in
the reasonable judgment of Banc of America and Credit Suisse, the effect of any
such attack, outbreak, escalation, act, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Offered Securities.

(d)  The Purchasers shall
have received an opinion, dated the Closing Date, of Willkie Farr &
Gallagher LLP, Baker & Hostetler LLP or other local counsel to the
Company, as applicable, substantially to the effect that:

(i)  Each of the Company and TD
Group has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware , with corporate power
and authority to own its properties and conduct its business as described in
the General Disclosure Package, except where the failure to have such power and
authority would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and each of the Company and TD Group is duly
qualified to do business as a foreign corporation in good standing in the
jurisdictions, if any, listed on a schedule to such opinion;

(ii) Each subsidiary of the Company listed on Schedule D
hereto has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the General Disclosure Package, except where the
failure to have such power and authority would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in the jurisdictions listed on a schedule to such
opinion; all of the issued and outstanding capital stock of each such
subsidiary 

 12
 

 

of the Company has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each such subsidiary owned by
the Company, directly or through subsidiaries, is, to the knowledge of such
counsel, owned free from liens, encumbrances and defects, except for liens,
encumbrances and defects on the capital stock of the subsidiaries (direct and
indirect) of the Company granted in favor of the lenders under or related to
the Credit Agreement or granted in favor of the lenders under or related to the
New Credit Agreement.

(iii)                 The Indenture
has been duly authorized, executed and delivered; the Offered Securities have
been duly authorized, executed, authenticated, issued and delivered, are
consistent in all material respects with the information in the General
Disclosure Package and conform in all material respects to the description
thereof contained in the Final Offering Circular; and the Indenture and the
Offered Securities constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles;

(iv)                No consent,
approval, authorization or order of, or filing with, any governmental agency or
body or any court is required to be obtained or made by the Company for the
consummation of the transactions contemplated by this Agreement, and the
Registration Rights Agreement in connection with the issuance or sale of the
Offered Securities by the Company, except such as may be required under state
securities or blue sky laws except for the order of the Commission declaring
effective the Exchange Offer Registration Statement or, if required, the Shelf
Registration Statement or where the failure to obtain or make any of the
foregoing would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;

(v) To our knowledge, except as set forth in the General Disclosure
Package, there are no pending actions, suits or proceedings against the
Company, TD Group, any of their subsidiaries or any of their respective properties
in any New York or Federal court that, would individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or which are
otherwise material in the context of the sale of the Offered Securities;

(vi)                The execution,
delivery and performance of the Indenture, this Agreement and the Registration
Rights Agreement, the consummation of the transactions herein contemplated and
the issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(1) any Federal or New York statute or any rule, regulation or order, in
each case known to such counsel to be customarily applicable to transactions of
the type contemplated by this Agreement or, to such counsel’s knowledge, any
order, judgment or decree specifically naming the Company or any of its
subsidiaries of any governmental agency or body or any court having
jurisdiction over the Company or any such subsidiary or any of their
properties, (2) any agreement or instrument to which the Company, TD Group
or any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or any
such subsidiary is subject and which is listed on Schedule E hereto, or (3) the
charter or by-laws of the Company or any such subsidiary, except in the case of
clauses (1) and (2), for breaches, violations and defaults that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and the Company has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby;

 13
 

 

(vii)               Such counsel
have no reason to believe that the Final Offering Circular, or any amendment or
supplement thereto, as of the date hereof and as of the Closing Date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; such
counsel have no reason to believe that the documents specified in a schedule to
such counsel’s letter, consisting of those included in the General Disclosure
Package, as of the Applicable Time and as of the Closing Date, when considered
together with the information set forth in the schedules to this Agreement,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no opinion as to
the financial statements, related schedules and other financial and accounting
information contained in the General Disclosure Package or the Final Offering
Circular;

(viii) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors;

(ix)                The
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company and the Guarantors and will be enforceable against the Company
and the Guarantors in accordance with its terms, except that (1) the
enforcement thereof may be subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles and
(2) any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations

(ix)                 It is not
necessary in connection with (i) the offer, sale and delivery of
the—Offered Securities by the Company to the Purchasers pursuant to this
Agreement or (ii) the resales of the Offered Securities by the Purchasers
in the manner contemplated by this Agreement, to register the Offered
Securities under the Securities Act or to qualify an indenture in respect
thereof under the Trust Indenture Act.

(e)  The Purchasers shall have received from Latham &
Watkins LLP, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the validity of
the Offered Securities, the Final Offering Circular and the General Disclosure
Package, the exemption from registration for the offer and sale of the Offered
Securities by the Company to the Purchasers and the resales by the Purchasers
as contemplated hereby and other related matters as Banc of America and Credit
Suisse may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.

(f)     The Purchasers shall
have received a certificate, dated the Closing Date, of the Chief Executive
Officer, the President or any Vice President and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation, shall state that the representations
and warranties of the Company in this Agreement are true and correct, that the
Company has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date, and that, subsequent to the  date of the most recent financial statements
in the General Disclosure Package there has been no material adverse change,
nor any development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole except as set
forth in the General Disclosure Package or as described in such certificate.

 14
 

 

              (g) The
Purchasers shall have received letters, dated the Closing Date, of Deloitte &
Touche USA LLP and Ernst & Young LLP which meet the requirements of
subsections (a) and (b), respectively, of this Section, except that the
specified dates referred to in such subsections will be a date not more than
three days prior to the Closing Date for the purposes of this subsection.

The
Company will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. Banc of America may in its sole discretion waive on behalf of the
Purchasers compliance with any conditions to the obligations of the Purchasers
hereunder.

8. Indemnification and Contribution. (a)  The Company and
the Guarantors will, jointly and severally, indemnify and hold harmless each
Purchaser, its officers, partners, members, directors and its affiliates and
each person, if any, who controls such Purchaser within the meaning of Section 15
of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Preliminary Offering Circular or the Final Offering
Circular, in each case as amended or supplemented, or any Issuer Free Writing
Communication, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that neither the Company nor the Guarantors
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Purchaser through Banc of America specifically for use
therein, it being understood and agreed that the only such information consists
of the information described as such in subsection (b) below.

(b) Each
Purchaser will severally and not jointly indemnify and hold harmless the
Company and the Guarantors, their directors and officers and each person, if
any, who controls the Company or the Guarantors within the meaning of Section 15
of the Securities Act, against any losses, claims, damages or liabilities to
which the Company or the Guarantors, as the case may be, may become subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Preliminary Offering Circular or the Final
Offering Circular, in each case as amended or supplemented, or any Issuer Free
Writing Communication or arise out of or are based upon the omission or the
alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Purchaser through Banc of America specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company or the Guarantors in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred, it being understood and agreed that the only such information
furnished by any Purchaser consists of the following information in the
Preliminary Offering Circular and the Final Offering Circular furnished on
behalf of each Purchaser: under the caption “Plan of Distribution” paragraphs
5, 8 and 9; provided, however, that the Purchasers shall not be liable for any
losses, claims, damages or liabilities arising out of or based upon the Company’s
or the Guarantors’ failure to perform their obligations under Section 5(a) of
this Agreement.

(c) 
Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the
failure to notify the indemnifying party shall not relieve it from any
liability that it may 

 15
 

 

have under subsection (a) or
(b) above except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and
provided further that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have to an indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or failure to
act by or on behalf of any indemnified party. No indemnifying party shall be
liable for any settlement or compromise of, or consent to the entry of judgment
with respect to, any such action or claim effected without its consent, unless
such indemnifying party has failed, upon request by the indemnified party
pursuant to this Section 8, to reimburse the indemnified party for legal
expenses due pursuant to this Section 8 within thirty days of such
request.

(d) 
If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Guarantors on the one hand and the Purchasers on the other
from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Guarantors on the one hand and the Purchasers on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company compared to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Purchasers and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the
Offered Securities purchased by it were resold exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers’ obligations in this subsection (d) to contribute are several
in proportion to their respective purchase obligations and not joint.

(e) 
The obligations of the Company and the Guarantors under this Section shall
be in addition to any liability which the Company or the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Purchaser within the meaning of the Securities
Act or the Exchange Act; and the obligations of the Purchasers under this Section shall
be in 

 16
 

 

addition to any liability which
the respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the Company or the
Guarantors within the meaning of the Securities Act or the Exchange Act.

9. Default of Purchasers. If any Purchaser or Purchasers
default in their obligations to purchase—Offered Securities hereunder and the
aggregate principal amount of Offered Securities that such defaulting Purchaser
or Purchasers agreed but failed to purchase does not exceed 10% of the
total—principal amount—of Offered Securities, Banc of America and Credit Suisse
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Purchasers, but if no
such arrangements are made by the Closing Date, the non-defaulting Purchasers
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Purchasers
agreed but failed to purchase. If any Purchaser or Purchasers so default and
the aggregate—principal amount of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount of Offered
Securities and arrangements satisfactory to Banc of America and Credit Suisse
and the Company for the purchase of such Offered Securities by other persons
are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser or the
Company, except as provided in Section 10. As used in this Agreement, the
term “Purchaser” includes any person substituted for a Purchaser under this
Section. Nothing herein will relieve a defaulting Purchaser from liability for
its default.

10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the Purchasers set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Purchaser, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement
is terminated pursuant to Section 9 or if for any reason the purchase of
the Offered Securities by the Purchasers is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5
and the respective obligations of the Company and the Purchasers pursuant to Section 8
shall remain in effect. If the purchase of the Offered Securities by the
Purchasers is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 9 or the occurrence of
any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section 7(c),
the Company will reimburse the Purchasers for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.

11. Notices. All communications hereunder will be in writing
and, if sent to the Purchasers will be mailed, delivered or telegraphed and
confirmed to the Purchasers, c/o Banc of America Securities LLC, Nine West 57th Street,
New York, NY 10019, Attention: Legal Department, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 1301
East 9th Street, Suite 3710,
Cleveland, OH 44114, Attention: Chief Financial Officer; provided, however,
that any notice to a Purchaser pursuant to Section 8 will be mailed,
delivered or telegraphed and confirmed to such Purchaser.

12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
persons referred to in Section 8, and no other person will have any right
or obligation hereunder, except that holders of Offered Securities shall be
entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if
such holders were parties thereto.

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

 17
 

 

14. Absence of Fiduciary Relationship. The
Company acknowledges and agrees that:

 (a) the Purchasers have been retained
solely to act as initial purchasers in connection with the initial purchase,
offering and resale of the Offered Securities and that no fiduciary, advisory
or agency relationship between the Company and the Purchasers has been created
in respect of any of the transactions contemplated by this Agreement, the
Preliminary Offering Circular or the Final
Offering Circular, irrespective of whether any Purchaser has advised or is
advising the Company on other matters;

 (b)  the purchase price of the Offered
Securities set forth in this Agreement was established by the Company following
discussions and arms-length negotiations with the Purchasers and the Company is
capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement;

 (c) the Company has been advised that the
Purchasers and their affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and that the
Purchasers have no obligation to disclose such interests and transactions to
Company by virtue of any fiduciary, advisory or agency relationship; and

 (d) the Company waives, to the fullest
extent permitted by law, any claims it may have against the Purchasers for
breach of fiduciary duty or alleged breach of fiduciary duty and agrees that
the Purchasers shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person asserting a
fiduciary duty claim on behalf of or in right of the Company, including
stockholders, employees or creditors of the Company.

15. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.

The Company and the Purchasers
hereby submit to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.

 

 18

If
the foregoing is in accordance with the Purchasers’ understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Purchasers in accordance with its terms.

	
  

  	
   

  	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TransDigm Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TransDigm Group Incorporated

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Avionic Instruments Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Skurka Aerospace Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  DAC Realty Corp.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

 19
 

 

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Champion Aerospace Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  MarathonNorco Aerospace Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ZMP, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Adams Rite Aerospace, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Christie Electric Corp.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Sweeney Engineering Corp.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory Rufus

  
	
   

  	
   

  	
   

  	
  Name: Gregory Rufus

  
	
   

  	
   

  	
   

  	
  Title: Secretary and Treasurer

  

 

 20

 

The
foregoing Purchase Agreement

is hereby confirmed and accepted

as of the date first above written.

	
  BANC OF AMERICA SECURITIES LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John McCusker

  	
   

  	
   

  
	
   

  	
  Name: John McCusker

  	
   

  
	
   

  	
  Title: Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CREDIT SUISSE SECURITIES
  (USA) LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edward L. Neuburg

  	
   

  	
   

  
	
   

  	
  Name: Edward L. Neuburg

  	
   

  
	
   

  	
  Title: Director

  	
   

  

 

Acting on behalf of themselves

and as the Representatives of

the several Purchasers

 

 21
 

 

 

SCHEDULE A

	
   

  	
  Purchaser

  	
   

  	
   

  	
  Principal Amount of

  Offered Securities

  	
   

  
	
  Banc of America
  Securities LLC.

  	
   

  	
  $

  	
  130,625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Credit Suisse
  Securities (USA) LLC

  	
   

  	
  130,625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  UBS Investment Bank

  	
   

  	
  6,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Barclays Capital

  	
   

  	
  6,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  275,000,000

  	
   

  

 

 

 22

 

SCHEDULE B

1- 
Terms Communication attached as Schedule C hereto.

 

 23
 

 

 

SCHEDULE C

$275,000,000

TransDigm
Inc.

7 3⁄4% Senior Subordinated
Notes due 2014

June 20,
2006

Pricing
Supplement dated June 20, 2006 to Preliminary Offering Memorandum dated June 19,
2006 of TransDigm Inc. (“TransDigm”)

This Pricing Supplement is qualified in its entirety
by reference to the Preliminary Offering Memorandum.

The information in this Pricing Supplement supplements
the Preliminary Offering Memorandum and supersedes the information in the
Preliminary Offering Memorandum to the extent inconsistent with the information
in the Preliminary Offering Memorandum.

The notes have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) and are being offered
only (1) to “qualified institutional buyers” as defined in Rule 144A
under the Securities Act and (2) outside the United States to non-U.S.
persons in compliance with Regulation S under the Securities Act. 

	
  Principal Amount:

  	
   

  	
  $275,000,000

  
	
  Title of Securities:

  	
   

  	
  7 3⁄4% Senior Subordinated Notes due 2014

  
	
  Final Maturity Date:

  	
   

  	
  July 15, 2014

  
	
  Issue Price:

  	
   

  	
  100%, plus accrued interest, if any

  
	
  Coupon:

  	
   

  	
  7 3⁄4%

  
	
  Interest Payment Dates:

  	
   

  	
  January 15 and July 15

  
	
  First Interest Payment Date:

  	
   

  	
  January 15, 2007

  
	
  Optional Redemption:

  	
   

  	
  On or after July 15, 2009, TransDigm may redeem
  all or a part of the notes upon not less than 30 nor more than 60 days’
  notice, at the redemption prices (expressed as percentages of principal
  amount) set forth below plus accrued and unpaid interest, if any, on the
  notes redeemed, to the applicable redemption date, if redeemed during the
  twelve-month period beginning on July 15 of the years indicated below:

  
	
   

  	
   

  	
   

  
	
  Year

  	
   

  	
  Price

  
	
  2009

  	
   

  	
  105.813%

  
	
  2010

  	
   

  	
  103.875%

  
	
  2011

  	
   

  	
  101.938%

  
	
  2012 and thereafter

  	
   

  	
  100.000%

  

 

At any time prior to
July 15, 2009, the TransDigm may redeem all or a part of the Notes (which
includes Additional Notes, if any), upon not less than 30 nor more than 60
days’ prior notice mailed by first-class mail to the registered address of each
Holder of Notes, at a redemption price equal to 100% of the principal amount of
Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest, if any, to the date of redemption (the ‘‘Redemption Date’’), subject
to the rights of Holders of Notes on the relevant record date to receive
interest due on the relevant interest payment date.

 

 24
 

 

 

‘‘Applicable Premium’’
means, with respect to any Notes on any Redemption Date, the greater of:

(1) 1.0% of the
principal amount of the Note; or

(2) the excess, if
any, of: (a) the present value at such Redemption Date of (i) the
redemption price of the Note at July 15, 2009, plus (ii) all required
interest payments due on such Note through July 15, 2009 (excluding accrued
but unpaid interest to the Redemption Date), computed using a discount rate
equal to the Treasury Rate as of such redemption date plus 50 basis points;
over (b) the principal amount of such Note.

 

	
  Optional Redemption with

  Equity Proceeds:

  	
   

  	
  At any time prior to July 15, 2009, TransDigm
  may on any one or more occasions redeem up to 35% of the aggregate principal
  amount of notes issued under the indenture at a redemption price equal to
  107.750% of the principal amount, plus accrued and unpaid interest, if any,
  to the redemption date.

  
	
   

  	
   

  	
   

  
	
  Initial Purchasers:

  	
   

  	
  Principal
  Amount of Notes

  
	
  Banc of America Securities LLC

  	
   

  	
  $130,625,000

  
	
  Credit Suisse

  	
   

  	
  130,625,000

  
	
  UBS Securities LLC

  	
   

  	
  6,875,000

  
	
  Barclays Capital Inc.

  	
   

  	
  6,875,000

  
	
   

  	
   

  	
   

  
	
  Trade Date:

  	
   

  	
  June 20, 2006

  
	
  Settlement Date:

  	
   

  	
  June 23, 2006 (T+ 3)

  
	
  Distribution:

  	
   

  	
  144A and Regulation S with registration rights as
  set forth in the Preliminary Offering Memorandum

  
	
   

  	
   

  	
   

  
	
  Use of Proceeds:

  	
   

  	
  The net proceeds from this offering will be used,
  together with the initial borrowings under the New Senior Secured Credit
  Facility and a portion of TransDigm’s existing cash balances, to repay the
  entire $288.4 million of principal amount outstanding under the Existing
  Senior Secured Credit Facility, to repay the entire $200 million of principal
  amount outstanding under the TD Group Loan Facility, to purchase all of the
  $400 million of aggregate principal amount of TransDigm’s 8 3⁄8% Senior
  Subordinated Notes that are tendered in connection with the tender offer that
  was commenced in connection with this offering, to pay accrued and unpaid
  interest on all such indebtedness and to pay all premiums and transaction
  expenses associated with this transaction.

  

 

 25
 

 

 

SCHEDULE D

LIST OF CERTAIN SUBSIDIARIES

	
  Name of Subsidiary

  	
   

  	
  State or Jurisdiction of Incorporation

  
	
   

  	
   

  	
   

  
	
  MarathonNorco Aerospace, Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  ZMP, Inc.

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Adams Rite Aerospace, Inc.

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Champion Aerospace Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Christie Electric Corp.

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Avionic Instruments, Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Skurka Aerospace Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  DAC Realty Corp.

  	
   

  	
  New Jersey

  
	
   

  	
   

  	
   

  
	
  Sweeney Engineering Corp.

  	
   

  	
  California

  

 

 26
 

 

 

SCHEDULE E

LIST OF CERTAIN AGREEMENTS

1.                  Stockholders’
Agreement, dated as of July 22, 2003, by and among TD Holding Corporation,
Warburg Pincus Private Equity VIII, L.P., the other institutional investors
whose names and addresses are set forth on Schedule I thereto and the employees
of TransDigm Inc. and certain of its subsidiaries whose names and addresses are
set forth on Schedule II thereto.

2.                  Registration
Rights Agreement, dated as of July 22, 2003, among the institutional
investors whose names and addresses are set forth on Schedule I thereto, the
employees of TransDigm Inc. and certain of its subsidiaries whose names and
addresses are set forth on Schedule II thereto and TD Holding Corporation.

3.                  Tax
Sharing Agreement, dated as of July 22, 2003, by and among TD Holding
Corporation, TransDigm Holding Company, TransDigm Inc. and such direct and indirect
subsidiaries of TD Holding Corporation that are listed on Exhibit A
thereto.

4.                  Standard
Industrial/Commercial Single-Tenant Lease — Net, dated as of December 31,
2004, between VHEM, LLC, d/b/a H&M Properties, and Skurka Aerospace Inc.

5.                    Guaranty
of Lease, dated as of December 31, 2004, by TransDigm Inc. in favor of
VHEM, LLC, d/b/a H&M Properties.

 

 27Execution Version

 

TRANSDIGM INC.,

TRANSDIGM GROUP INCORPORATED,

THE GUARANTORS named herein

and

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

INDENTURE

Dated as of June 23, 2006

73⁄4% Senior Subordinated Notes due 2014

 

 

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

  	
   

  	
   

  
	
   

  	
  (i)(b)

  	
   

  	
  7.10

  	
   

  	
   

  
	
   

  	
  (ii)(c)

  	
   

  	
  N.A.

  	
   

  	
   

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  7.11

  	
   

  	
   

  
	
   

  	
  (iii)(c)

  	
   

  	
  N.A.

  	
   

  	
   

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  13.03

  	
   

  	
   

  
	
   

  	
  (iv)(c)

  	
   

  	
  13.03

  	
   

  	
   

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  	
   

  	
   

  
	
   

  	
  (b)(2)

  	
   

  	
  7.07

  	
   

  	
   

  
	
   

  	
  (v)(c)

  	
   

  	
  7.06; 13.02

  	
   

  	
   

  
	
   

  	
  (vi)(d)

  	
   

  	
  7.06

  	
   

  	
   

  
	
  314

  	
  (a)

  	
   

  	
  4.03; 13.02

  	
   

  	
   

  
	
   

  	
  (c)(1)

  	
   

  	
  13.04

  	
   

  	
   

  
	
   

  	
  (c)(2)

  	
   

  	
  13.04

  	
   

  	
   

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  	
   

  	
   

  
	
   

  	
  (f)

  	
   

  	
  NA

  	
   

  	
   

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  7.05, 13.02

  	
   

  	
   

  
	
   

  	
  (A)(c)

  	
   

  	
  7.01

  	
   

  	
   

  
	
   

  	
  (d)

  	
   

  	
  7.01

  	
   

  	
   

  
	
   

  	
  (e)

  	
   

  	
  6.11

  	
   

  	
   

  
	
  316

  	
  (a)(1)(A)

  	
   

  	
  6.05

  	
   

  	
   

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  	
   

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  6.07

  	
   

  	
   

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  	
   

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  	
   

  	
   

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  	
   

  	
   

  
	
   

  	
  (c)

  	
   

  	
  13.01

  	
   

  	
   

  
							

 

	
  ______________

  	
   

  	
   

  	
   

  	
   

  
	
  N.A. means not applicable.

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  

 

 

 

Table of Contents

	
  

  	
   

  	
  ARTICLE 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Definitions and
  Incorporation by Reference

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
   

  	
  Definitions.

  	
   

  	
  1

  
	
  SECTION 1.02.

  	
   

  	
  Other Definitions.

  	
   

  	
  25

  
	
  SECTION 1.03.

  	
   

  	
  Trust Indenture Act Definitions.

  	
   

  	
  25

  
	
  SECTION 1.04.

  	
   

  	
  Rules of Construction.

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Notes

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  Form and Dating.

  	
   

  	
  26

  
	
  SECTION 2.02.

  	
   

  	
  Execution and Authentication.

  	
   

  	
  27

  
	
  SECTION 2.03.

  	
   

  	
  Registrar and Paying Agent.

  	
   

  	
  27

  
	
  SECTION 2.04.

  	
   

  	
  Paying Agent to Hold Money in Trust.

  	
   

  	
  28

  
	
  SECTION 2.05.

  	
   

  	
  Holder Lists.

  	
   

  	
  28

  
	
  SECTION 2.06.

  	
   

  	
  Transfer and Exchange.

  	
   

  	
  29

  
	
  SECTION 2.07.

  	
   

  	
  Replacement Notes.

  	
   

  	
  30

  
	
  SECTION 2.08.

  	
   

  	
  Outstanding Notes.

  	
   

  	
  30

  
	
  SECTION 2.09.

  	
   

  	
  Treasury Notes.

  	
   

  	
  31

  
	
  SECTION 2.10.

  	
   

  	
  Temporary Notes.

  	
   

  	
  31

  
	
  SECTION 2.11.

  	
   

  	
  Cancellation.

  	
   

  	
  31

  
	
  SECTION 2.12.

  	
   

  	
  Defaulted Interest.

  	
   

  	
  31

  
	
  SECTION 2.13.

  	
   

  	
  CUSIP or ISIN Numbers.

  	
   

  	
  32

  
	
  SECTION 2.14.

  	
   

  	
  Issuance of Additional Notes.

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 3

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Redemption and
  Prepayment

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
   

  	
  Notices to Trustee.

  	
   

  	
  32

  
	
  SECTION 3.02.

  	
   

  	
  Selection of Notes to Be Redeemed.

  	
   

  	
  33

  
	
  SECTION 3.03.

  	
   

  	
  Notice of Redemption.

  	
   

  	
  33

  
	
  SECTION 3.04.

  	
   

  	
  Effect of Notice of Redemption.

  	
   

  	
  34

  
	
  SECTION 3.05.

  	
   

  	
  Deposit of Redemption Price.

  	
   

  	
  34

  
	
  SECTION 3.06.

  	
   

  	
  Notes Redeemed in Part.

  	
   

  	
  34

  
	
  SECTION 3.07.

  	
   

  	
  Optional Redemption.

  	
   

  	
  34

  
	
  SECTION 3.08.

  	
   

  	
  Mandatory Redemption; Open Market Purchases.

  	
   

  	
  35

  
	
  SECTION 3.09.

  	
   

  	
  Offer to Purchase by Application of Net Proceeds
  Offer Amount.

  	
   

  	
  35

  

 

 ii
 

 

 

	
   

  	
   

  	
  ARTICLE 4

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Covenants

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  Payment of Notes.

  	
   

  	
  38

  
	
  SECTION 4.02.

  	
   

  	
  Maintenance of Office or Agency.

  	
   

  	
  38

  
	
  SECTION 4.03.

  	
   

  	
  Reports.

  	
   

  	
  39

  
	
  SECTION 4.04.

  	
   

  	
  Compliance Certificate.

  	
   

  	
  40

  
	
  SECTION 4.05.

  	
   

  	
  [Intentionally Omitted].

  	
   

  	
  40

  
	
  SECTION 4.06.

  	
   

  	
  Stay, Extension and Usury Laws.

  	
   

  	
  40

  
	
  SECTION 4.07.

  	
   

  	
  Restricted Payments.

  	
   

  	
  40

  
	
  SECTION 4.08.

  	
   

  	
  Dividend and Other Payment Restrictions Affecting
  Subsidiaries.

  	
   

  	
  45

  
	
  SECTION 4.09.

  	
   

  	
  Incurrence of Indebtedness.

  	
   

  	
  46

  
	
  SECTION 4.10.

  	
   

  	
  Asset Sales.

  	
   

  	
  46

  
	
  SECTION 4.11.

  	
   

  	
  Transactions with Affiliates.

  	
   

  	
  49

  
	
  SECTION 4.12.

  	
   

  	
  Liens.

  	
   

  	
  50

  
	
  SECTION 4.13.

  	
   

  	
  Conduct of Business.

  	
   

  	
  50

  
	
  SECTION 4.14.

  	
   

  	
  Corporate Existence.

  	
   

  	
  50

  
	
  SECTION 4.15.

  	
   

  	
  Offer to Repurchase upon Change of Control.

  	
   

  	
  51

  
	
  SECTION 4.16.

  	
   

  	
  No Senior Subordinated Debt.

  	
   

  	
  52

  
	
  SECTION 4.17.

  	
   

  	
  Additional Guarantees.

  	
   

  	
  52

  
	
  SECTION 4.18.

  	
   

  	
  Limitation on Preferred Stock of Restricted
  Subsidiaries.

  	
   

  	
  53

  
	
  SECTION 4.19.

  	
   

  	
  Suspension of Covenants.

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 5

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Successors

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
   

  	
  Merger, Consolidation, or Sale of Assets.

  	
   

  	
  55

  
	
  SECTION 5.02.

  	
   

  	
  Successor Corporation Substituted.

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 6

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Defaults and
  Remedies

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  Events of Default.

  	
   

  	
  58

  
	
  SECTION 6.02.

  	
   

  	
  Acceleration.

  	
   

  	
  59

  
	
  SECTION 6.03.

  	
   

  	
  Other Remedies.

  	
   

  	
  60

  
	
  SECTION 6.04.

  	
   

  	
  Waiver of Past Defaults.

  	
   

  	
  60

  
	
  SECTION 6.05.

  	
   

  	
  Control by Majority.

  	
   

  	
  60

  
	
  SECTION 6.06.

  	
   

  	
  Limitation on Suits.

  	
   

  	
  61

  
	
  SECTION 6.07.

  	
   

  	
  Rights of Holders of Notes to Receive Payment.

  	
   

  	
  61

  
	
  SECTION 6.08.

  	
   

  	
  Collection Suit by Trustee.

  	
   

  	
  61

  
	
  SECTION 6.09.

  	
   

  	
  Trustee May File Proofs of Claim.

  	
   

  	
  62

  
	
  SECTION 6.10.

  	
   

  	
  Priorities.

  	
   

  	
  62

  

 

 iii
 

 

 

	
  SECTION 6.11.

  	
   

  	
  Undertaking for Costs.

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 7

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
   

  	
  Duties of Trustee.

  	
   

  	
  63

  
	
  SECTION 7.02.

  	
   

  	
  Rights of Trustee.

  	
   

  	
  64

  
	
  SECTION 7.03.

  	
   

  	
  Individual Rights of Trustee.

  	
   

  	
  65

  
	
  SECTION 7.04.

  	
   

  	
  Trustee’s Disclaimer.

  	
   

  	
  65

  
	
  SECTION 7.05.

  	
   

  	
  Notice of Defaults.

  	
   

  	
  66

  
	
  SECTION 7.06.

  	
   

  	
  Reports by Trustee to Holders of the Notes.

  	
   

  	
  66

  
	
  SECTION 7.07.

  	
   

  	
  Compensation and Indemnity.

  	
   

  	
  66

  
	
  SECTION 7.08.

  	
   

  	
  Replacement of Trustee.

  	
   

  	
  67

  
	
  SECTION 7.09.

  	
   

  	
  Successor Trustee by Merger, etc.

  	
   

  	
  68

  
	
  SECTION 7.10.

  	
   

  	
  Eligibility; Disqualification.

  	
   

  	
  68

  
	
  SECTION 7.11.

  	
   

  	
  Preferential Collection of Claims Against Company.

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 8

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Legal Defeasance
  and Covenant Defeasance Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
   

  	
  Option to Effect Legal Defeasance or Covenant
  Defeasance.

  	
   

  	
  69

  
	
  SECTION 8.02.

  	
   

  	
  Legal Defeasance and Discharge.

  	
   

  	
  69

  
	
  SECTION 8.03.

  	
   

  	
  Covenant Defeasance.

  	
   

  	
  70

  
	
  SECTION 8.04.

  	
   

  	
  Conditions to Legal or Covenant Defeasance.

  	
   

  	
  70

  
	
  SECTION 8.05.

  	
   

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

  	
   

  	
  72

  
	
  SECTION 8.06.

  	
   

  	
  Satisfaction and Discharge.

  	
   

  	
  72

  
	
  SECTION 8.07.

  	
   

  	
  Repayment to Company.

  	
   

  	
  73

  
	
  SECTION 8.08.

  	
   

  	
  Reinstatement.

  	
   

  	
  73

  
	
  SECTION 8.09.

  	
   

  	
  Survival.

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 9

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amendment,
  Supplement and Waiver

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
   

  	
  Without Consent of Holders of Notes.

  	
   

  	
  73

  
	
  SECTION 9.02.

  	
   

  	
  With Consent of Holders of Notes.

  	
   

  	
  74

  
	
  SECTION 9.03.

  	
   

  	
  Compliance with Trust Indenture Act.

  	
   

  	
  76

  
	
  SECTION 9.04.

  	
   

  	
  Revocation and Effect of Consents.

  	
   

  	
  76

  
	
  SECTION 9.05.

  	
   

  	
  Notation on or Exchange of Notes.

  	
   

  	
  76

  
	
  SECTION 9.06.

  	
   

  	
  Trustee to Sign Amendments, etc.

  	
   

  	
  77

  

 

 iv
 

 

 

	
  

  	
   

  	
  ARTICLE 10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Subordination

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
   

  	
  Agreement to Subordinate.

  	
   

  	
  77

  
	
  SECTION 10.02.

  	
   

  	
  Liquidation, Dissolution, Bankruptcy.

  	
   

  	
  77

  
	
  SECTION 10.03.

  	
   

  	
  Default on Senior Debt of the Company.

  	
   

  	
  78

  
	
  SECTION 10.04.

  	
   

  	
  Acceleration of Payment of Notes.

  	
   

  	
  79

  
	
  SECTION 10.05.

  	
   

  	
  When Distribution Must Be Paid Over.

  	
   

  	
  79

  
	
  SECTION 10.06.

  	
   

  	
  Subrogation.

  	
   

  	
  79

  
	
  SECTION 10.07.

  	
   

  	
  Relative Rights.

  	
   

  	
  79

  
	
  SECTION 10.08.

  	
   

  	
  Subordination May Not Be Impaired by Company.

  	
   

  	
  79

  
	
  SECTION 10.09.

  	
   

  	
  Rights of Trustee and Paying Agent.

  	
   

  	
  79

  
	
  SECTION 10.10.

  	
   

  	
  Distribution or Notice to Representative.

  	
   

  	
  80

  
	
  SECTION 10.11.

  	
   

  	
  Not To Prevent Events of Default or Limit Right To
  Accelerate.

  	
   

  	
  80

  
	
  SECTION 10.12.

  	
   

  	
  Trust Moneys Not Subordinated.

  	
   

  	
  80

  
	
  SECTION 10.13.

  	
   

  	
  Trustee Entitled To Rely.

  	
   

  	
  81

  
	
  SECTION 10.14.

  	
   

  	
  Trustee To Effectuate Subordination.

  	
   

  	
  81

  
	
  SECTION 10.15.

  	
   

  	
  Trustee Not Fiduciary for Holders of Senior Debt of
  the Company.

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
   

  	
  Guarantees.

  	
   

  	
  82

  
	
  SECTION 11.02.

  	
   

  	
  Limitation on Liability.

  	
   

  	
  83

  
	
  SECTION 11.03.

  	
   

  	
  Successors and Assigns.

  	
   

  	
  84

  
	
  SECTION 11.04.

  	
   

  	
  No Waiver.

  	
   

  	
  84

  
	
  SECTION 11.05.

  	
   

  	
  Modification.

  	
   

  	
  84

  
	
  SECTION 11.06.

  	
   

  	
  [Intentionally Omitted].

  	
   

  	
  84

  
	
  SECTION 11.07.

  	
   

  	
  Release of Guarantor.

  	
   

  	
  84

  
	
  SECTION 11.08.

  	
   

  	
  Contribution.

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 12

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Subordination of
  Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
   

  	
  Agreement To Subordinate.

  	
   

  	
  85

  
	
  SECTION 12.02.

  	
   

  	
  Liquidation, Dissolution, Bankruptcy.

  	
   

  	
  85

  
	
  SECTION 12.03.

  	
   

  	
  Default on Senior Debt of Guarantor.

  	
   

  	
  86

  
	
  SECTION 12.04.

  	
   

  	
  Demand for Payment.

  	
   

  	
  87

  
	
  SECTION 12.05.

  	
   

  	
  When Distribution Must Be Paid Over.

  	
   

  	
  87

  
	
  SECTION 12.06.

  	
   

  	
  Subrogation.

  	
   

  	
  87

  
	
  SECTION 12.07.

  	
   

  	
  Relative Rights.

  	
   

  	
  87

  

 

 v
 

 

 

	
  SECTION 12.08.

  	
   

  	
  Subordination May Not Be Impaired by Company.

  	
   

  	
  88

  
	
  SECTION 12.09.

  	
   

  	
  Rights of Trustee and Paying Agent.

  	
   

  	
  88

  
	
  SECTION 12.10.

  	
   

  	
  Distribution or Notice to Representative.

  	
   

  	
  88

  
	
  SECTION 12.11.

  	
   

  	
  Article 12 Not To Prevent Events of Default or
  Limit Right To Demand Payment.

  	
   

  	
  89

  
	
  SECTION 12.12.

  	
   

  	
  Trustee Entitled To Rely.

  	
   

  	
  89

  
	
  SECTION 12.13.

  	
   

  	
  Trustee To Effectuate Subordination.

  	
   

  	
  89

  
	
  SECTION 12.14.

  	
   

  	
  Trustee Not Fiduciary for Holders of Senior Debt of
  Guarantor.

  	
   

  	
  89

  
	
  SECTION 12.15.

  	
   

  	
  Reliance by Holders of Senior Debt of Holdings or
  Guarantors on Subordination Provisions.

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE 13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Miscellaneous

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
   

  	
  Trust Indenture Act Controls.

  	
   

  	
  90

  
	
  SECTION 13.02.

  	
   

  	
  Notices.

  	
   

  	
  90

  
	
  SECTION 13.03.

  	
   

  	
  Communication by Holders of Notes with Other Holders
  of Notes.

  	
   

  	
  91

  
	
  SECTION 13.04.

  	
   

  	
  Certificate and Opinion as to Conditions Precedent.

  	
   

  	
  91

  
	
  SECTION 13.05.

  	
   

  	
  Statements Required in Certificate or Opinion.

  	
   

  	
  92

  
	
  SECTION 13.06.

  	
   

  	
  Rules by Trustee and Agents.

  	
   

  	
  92

  
	
  SECTION 13.07.

  	
   

  	
  No Personal Liability of Directors, Officers,
  Employees and Stockholders.

  	
   

  	
  92

  
	
  SECTION 13.08.

  	
   

  	
  Governing Law.

  	
   

  	
  92

  
	
  SECTION 13.09.

  	
   

  	
  No Adverse Interpretation of Other Agreements.

  	
   

  	
  93

  
	
  SECTION 13.10.

  	
   

  	
  Successors.

  	
   

  	
  93

  
	
  SECTION 13.11.

  	
   

  	
  Severability.

  	
   

  	
  93

  
	
  SECTION 13.12.

  	
   

  	
  Counterpart Originals.

  	
   

  	
  93

  
	
  SECTION 13.13.

  	
   

  	
  Table of Contents, Headings, etc.

  	
   

  	
  93

  
	
  SECTION 13.14.

  	
   

  	
  Waiver of Trial by Jury.

  	
   

  	
  93

  

 

APPENDIX AND EXHIBITS

RULE 144A/REGULATION S APPENDIX

Exhibit A                FORM OF
INITIAL NOTE

Exhibit B                FORM OF
EXCHANGE NOTE

 

 vi

 

INDENTURE dated as of
June 23, 2006 among TransDigm Inc., a Delaware corporation (the “Company”), TransDigm Group Incorporated, a Delaware
corporation (“Holdings”), the Guarantors (as
herein defined) and The Bank of New York Trust Company, N.A., a national
banking association, as trustee (the “Trustee”).

The Company, Holdings,
the Guarantors and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Notes:

ARTICLE 1

Definitions and
Incorporation by Reference

SECTION 1.01.                                                                 Definitions.

 “Acquired Indebtedness”
means Indebtedness of a Person or any of its Subsidiaries existing at the time
such Person becomes a Restricted Subsidiary of the Company or at the time it
merges or consolidates with or into the Company or any of its Subsidiaries or
that is assumed in connection with the acquisition of assets from such Person,
including Indebtedness incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Company or such acquisition, merger or consolidation.

“Additional
Interest” means all additional interest then owing pursuant to
Section 6 of the Registration Rights Agreement.

“Additional
Notes” means, subject to the Company’s compliance with
Section 4.03, 73⁄4% Senior Subordinated Notes due 2014 issued from time to
time after the Issue Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other
than Exchange Notes or Private Exchange Notes issued pursuant to an exchange
offer for other Notes outstanding under this Indenture).

“Affiliate”
means, with respect to any specified Person, any other Person who directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified Person. The term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative of the foregoing. Notwithstanding the
foregoing, no Person (other than the Company or any Subsidiary of the Company)
in whom a Securitization Entity makes an Investment in connection with a
Qualified Securitization Transaction shall be deemed to be an Affiliate of the
Company or any of its Subsidiaries solely by reason of such investment.

“Applicable
Premium” means, with respect to any Notes on any Redemption Date,
the greater of:

(1) 1.0% of the
principal amount of the Note; or

 

 

(2) the excess, if
any, of:

a)              the
present value at such Redemption Date of (i) the redemption price of the
Note at July 15, 2009 (such redemption price being set forth in the table
appearing below under “Optional Redemption”), plus
(ii) all required interest payments due on such Note through July 15,
2009 (excluding accrued but unpaid interest to the Redemption Date), computed
using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over

b)             the
principal amount of such Note.

“Asset
Acquisition” means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or (b) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) other
than in the ordinary course of business.

“Asset Sale”
means any direct or indirect sale, issuance, conveyance, transfer, lease (other
than operating leases entered into in the ordinary course of business),
assignment or other transfer for value by the Company or any of its Restricted
Subsidiaries (including, any Sale and Leaseback Transaction) to any Person
other than the Company or a Restricted Subsidiary of the Company of:  (a) any Capital Stock of any Restricted
Subsidiary of the Company or (b) any other property or assets of the
Company or any Restricted Subsidiary of the Company other than in the ordinary
course of business; provided, however,
that Asset Sales or other dispositions shall not include (i) a transaction
or series of related transactions for which the Company or its Restricted
Subsidiaries receive aggregate consideration of less than $1.0 million, (ii) the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted by Section 5.01 hereof or
any disposition that constitutes a Change of Control, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) disposals or replacements of obsolete equipment
in the ordinary course of business, (v) the sale, lease, conveyance,
disposition or other transfer by the Company or any Restricted Subsidiary of
assets or property to one or more Restricted Subsidiaries in connection with
Investments permitted by Section 4.07 hereof or pursuant to any Permitted
Investment, (vi) sales of accounts receivable, equipment and related
assets (including, contract rights) of the type specified in the definition of “Qualified
Securitization Transaction” to a Securitization Entity for the fair market
value thereof, including cash in an amount at least equal to 75% of the fair
market value thereof as determined in accordance with GAAP (for the purposes of
this clause (vi), Purchase Money Notes shall be deemed to be cash), (vii) dispositions
of cash or Cash Equivalents; and (viii) the creation of a Lien (but not
the sale or other disposition of the property subject to such Lien).

“Bank
Indebtedness” means all Obligations pursuant to the Credit Facility.

 2
 

 

 

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

“Board of
Directors” means, (i)  with respect to a corporation, the board
of directors of the corporation, (ii) with respect to a partnership, the
board of directors of the general partnership, and (iii) with respect to
any other Person, the board or committee of such Person serving a similar
function.

“Board Resolution”
means, with respect to any Person, a copy of a resolution certified by the
Secretary or an Assistant Secretary of such Person to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification.

“Business Day”
means any day other than a Legal Holiday.

“Capital
Stock” means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock, of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.

“Capitalized
Lease Obligations” means, as to any Person, the obligations of such
Person under a lease that are required to be classified and accounted for as
capital lease obligations under GAAP and, for purposes of this definition, the
amount of such obligations at any date shall be the capitalized amount of such
obligations at such date, determined in accordance with GAAP.

“Cash
Equivalents” means: (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States
of America, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by any State of the
United States of America or any political subdivision of any such State or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the three
highest ratings obtainable from either S&P or Moody’s; (iii) commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from S&P or
at least P-1 from Moody’s; (iv) certificates of deposit or bankers’
acceptances maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America or
any state thereof or the District of Columbia or any U.S. branch of a foreign
bank or by a bank organized under the laws of any foreign country recognized by
the United States of America, in each case having at the date of acquisition
thereof combined capital and surplus of not less than $250.0 million (or the
foreign currency equivalent thereof); (v) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments
in money market funds which invest substantially all their assets in securities
of the types described in clauses (i) through (v) above.

 3
 

 

 

“Change of
Control” means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or Holdings to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a “Group”), other than to the Company (in the case of the
assets of Holdings), the Permitted Holders or their Related Parties or any
Permitted Group; (ii) the approval by the holders of Capital Stock of the
Company, of any plan or proposal for the liquidation or dissolution of the
Company (whether or not otherwise in compliance with the provisions of this
Indenture); (iii) any Person or Group (other than the Permitted Holders or
their Related Parties or any Permitted Group) shall become the beneficial
owner, directly or indirectly, of shares representing more than 50% of the
total ordinary voting power represented by the issued and outstanding Capital
Stock of the Company or Holdings; or (iv) the first day on which a
majority of the members of the Board of Directors of the Company or Holdings
are not Continuing Directors.

“Common Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or non-voting) of
such Person’s common stock, whether outstanding on the Issue Date or issued
after the Issue Date, and includes, without limitation, all series and classes
of such common stock.

“Company” means
the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.

“Consolidated
EBITDA” means, with respect to any Person, for any period, the sum
(without duplication) of such Person’s (i) Consolidated Net Income; and (ii) to
the extent Consolidated Net Income has been reduced thereby:  (A) all income taxes and foreign
withholding taxes and taxes based on capital and commercial activity (or
similar taxes) of such Person and its Restricted Subsidiaries paid or accrued
in accordance with GAAP for such period; (B) Consolidated Interest
Expense; (C) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period (other than normal accruals
in the ordinary course of business), all as determined on a consolidated basis
for such Person and its Restricted Subsidiaries in accordance with GAAP; (D) restructuring
costs, facilities relocation costs and acquisition integration costs and fees,
including, without limitation, cash severance payments made in connection with
acquisitions; (E) any expenses or charges related to any Equity Offering,
Permitted Investment, acquisition, disposition, recapitalization or the
incurrence of Indebtedness permitted to be incurred by the Indenture including
a refinancing thereof (whether or not successful) and any amendment or
modification to the terms of any such transactions, including such fees,
expenses or charges related to the Transactions; (F) any write offs, write
downs or other non-cash charges, excluding any such charge that represents an
accrual or reserve for a cash expenditure for a future period; (G) the
amount of any expense related to minority interests; (H) the amount of
management, monitoring, consulting and advisory fees and related expenses paid
(or any accruals related to such fees or related expenses) during such period
to the Sponsors to the extent permitted under Section 4.11; (I) the
amount of any earn out payments or deferred purchase price in conjunction with
acquisitions; (J) any costs or expenses

 4
 

 

 

incurred by the
Company or a Restricted Subsidiary pursuant to any management equity plan or
stock option plan or any other management or employee benefit plan or agreement
or any stock subscription or stockholders agreement, to the extent that such
costs or expenses are funded with cash proceeds contributed to the capital of
the Company or net cash proceeds of issuance of Qualified Capital Stock of the
Company (other than Disqualified Stock that is Preferred Stock) in each case,
solely to the extent that such cash proceeds are excluded from the calculation
set forth in clauses (w) and (x) of Section 4.07(ii); and (K) the
one-time special bonus payments in an amount not in excess of $6.23 million by
the Company to members of management on November 10, 2005; and (iii) decreased
by (without duplication) non-cash gains increasing Consolidated Net Income of
such Person for such period, excluding any gains that represent the reversal of
any accrual of, or cash reserve for, anticipated cash charges in any prior
period (other than such cash charges that have been added back to Consolidated
Net Income in calculating Consolidated EBITDA in accordance with this
definition).

“Consolidated
Fixed Charge Coverage Ratio” means, with respect to any Person, the
ratio of Consolidated EBITDA of such Person during the four full fiscal
quarters (the “Four-Quarter Period”) ending
prior to the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio for which internal financial
statements are available (the “Transaction Date”)
to Consolidated Fixed Charges of such Person for the Four-Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the incurrence or repayment of any Indebtedness or the
issuance of any Designated Preferred Stock of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness or the issuance or redemption of other Preferred Stock (and
the application of the proceeds thereof), other than the incurrence or
repayment of Indebtedness in the ordinary course of business for working
capital purposes pursuant to revolving credit facilities, occurring during the
Four-Quarter Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment or issuance or redemption, as the case may be (and the
application of the proceeds thereof), had occurred on the first day of the
Four-Quarter Period; and (ii) any Asset Sales or other dispositions or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale or other disposition and without regard to
clause (vi) of the definition of Consolidated Net Income), investments,
mergers, consolidations and disposed operations (as determined in accordance
with GAAP) occurring during the Four-Quarter Period or at any time subsequent to
the last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such Asset Sale or other disposition or Asset Acquisition
(including the incurrence or assumption of any such Acquired Indebtedness), investment, merger, consolidation or
disposed operation, occurred on the first day of the Four-Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence

 5
 

 

 

of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such other Indebtedness that was so
guaranteed.

Furthermore, in
calculating “Consolidated Fixed Charges” for purposes of determining the
denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage
Ratio”:  (i) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (ii) notwithstanding
clause (i) of this paragraph, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements
relating to Interest Swap Obligations, shall be deemed to accrue at the rate
per annum resulting after giving effect to the operation of such agreements.

For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of the Company. In
addition, any such pro forma calculation may include adjustments appropriate,
in the reasonable determination of the Company as set forth in an Officers’
Certificate, to reflect operating expense reductions reasonably expected to
result from any acquisition or merger.

“Consolidated
Fixed Charges” means, with respect to any Person for any period, the
sum of, without duplication:  (i) Consolidated
Interest Expense; plus (ii) the product of (x) the amount of all cash
dividend payments on any series of Preferred Stock of such Person times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state and local income
tax rate of such Person, expressed as a decimal (as estimated in good faith by
the chief financial officer of the Company, which estimate shall be
conclusive); plus (iii) the product of (x) the amount of all dividend
payments on any series of Permitted Subsidiary Preferred Stock times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state and local income
tax rate of such Person, expressed as a decimal (as estimated in good faith by
the chief financial officer of the Company, which estimate shall be
conclusive); provided that with respect to any
series of Preferred Stock that did not pay dividends during such period but
that is eligible to pay cash dividends during any period prior to the maturity
date of the Notes, cash dividends shall be deemed to have been paid with
respect to such series of Preferred Stock during such period for purposes of
this clause (iii).

“Consolidated
Interest Expense” means, with respect to any Person for any period,
the sum of, without duplication, (i) the aggregate of all cash and
non-cash interest expense (net of interest income) with respect to all
outstanding Indebtedness of such Person and its Restricted Subsidiaries,
including the net costs associated with Interest Swap Obligations, for such
period determined on a consolidated basis in conformity with GAAP, but
excluding (A) amortization or write-off of debt issuance costs, deferred
financing fees, commissions, fees and expenses, (B) any expensing of
bridge, commitment and other financing fees, (C) commissions, discounts,
yield and other fees and charges (including any interest expense) related to
any Qualified

 6
 

 

 

Securitization
Transaction and (D) any redemption premium paid in connection with the
redemption of the Existing Notes; (ii) the consolidated interest expense
of such Person and its Restricted Subsidiaries that was capitalized during such
period; and (iii) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.

“Consolidated
Net Income” means, for any period, the aggregate net income (or
loss) of the Company and its Restricted Subsidiaries for such period on a
consolidated basis, determined in accordance with GAAP and without any
deduction in respect of Preferred Stock dividends; provided that
there shall be excluded therefrom to the extent otherwise included, without
duplication:  (i) gains and losses
from Asset Sales (without regard to the $1.0 million limitation set forth in
the definition thereof) and the related tax effects according to GAAP; (ii) gains
and losses due solely to fluctuations in currency values and the related tax
effects according to GAAP; (iii) all extraordinary, unusual or
non-recurring charges, gains and losses (including, without limitation, all
restructuring costs, facilities relocation costs, acquisition integration costs
and fees, including cash severance payments made in connection with
acquisitions, and any expense or charge related to the repurchase of Capital
Stock or warrants or options to purchase Capital Stock), and the related tax
effects according to GAAP; (iv) the net income (or loss) from disposed or
discontinued operations or any net gains or losses on disposal of disposed or
discontinued operations, and the related tax effects according to GAAP; (v) any
impairment charge or asset write-off, in each cash pursuant to GAAP, and the
amortization of intangibles arising pursuant to GAAP; (vi) the net income (or loss) of any Person
acquired in a pooling of interests transaction accrued prior to the date it
becomes a Restricted Subsidiary of the Company or is merged or consolidated
with or into the Company or any Restricted Subsidiary of the Company; (vii) solely for the purpose of determining the
amount available for Restricted Payments under clause (ii) of Section 4.07,
the net income (but not loss) of any Restricted Subsidiary of the
Company (other than a Guarantor) to
the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of the Company of that income is not at the date of determination wholly permitted without any prior
governmental approval (which has not been obtained) or, directly or indirectly,
by the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule, or governmental regulation applicable
to that Restricted Subsidiary or its stockholders, unless such restriction with
respect to the payment of dividends or similar distributions has been legally
waived; provided that Consolidated Net Income of the Company will be increased
by the amount of dividends or other distributions or other payments actually
paid in cash (or to the extent converted into cash) to the Company or a
Restricted Subsidiary thereof in respect of such period, to the extent not
already included therein; (viii) the net loss of any Person, other
than a Restricted Subsidiary of the Company; (ix) the net income of any
Person, other than a Restricted Subsidiary of the Company, except to the extent
of cash dividends or distributions paid to the Company or a Restricted
Subsidiary of the Company by such Person; (x) in the case of a successor
to the referent Person by consolidation or merger or as a transferee of the
referent Person’s assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets; (xi) any non-cash
compensation charges and deferred compensation charges, including any arising
from existing stock options resulting from any merger or recapitalization
transaction; provided, however, that Consolidated
Net Income for any

 7
 

 

 

period shall be
reduced by any cash payments made during such period by such Person in
connection with any such deferred compensation, whether or not such reduction
is in accordance with GAAP; and (xii) inventory purchase accounting  adjustments and amortization and impairment
charges resulting from other purchase accounting adjustments with respect to
acquisition transactions. For purposes of clause (ii)(v) of the first
paragraph of Section 4.07 hereof, Consolidated Net Income shall be reduced
by any cash dividends paid with respect to any series of Designated Preferred
Stock.

“Consolidated
Non-cash Charges” means, with respect to any Person, for any period,
the aggregate depreciation, amortization and other non-cash charges,
impairments and expenses of such Person and its Restricted Subsidiaries
reducing Consolidated Net Income of such Person and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges that require an accrual of or a reserve for cash
payments for any future period other than accruals or reserves associated with
mandatory repurchases of equity securities). For clarification purposes,
purchase accounting adjustments with respect to inventory will be included in
Consolidated Non-cash Charges.

“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors of the Company or Holdings who (i) was a member of such
Board of Directors on the Issue Date; or (ii) was nominated for election
or elected to such Board of Directors by any of the Permitted Holders or with
the approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.

“Corporate
Trust Office of the Trustee” shall be at the address of the Trustee
specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.

“Credit
Facility” means the credit agreement dated as of the Issue Date
among the Company, the lenders party thereto in their capacities as lenders
thereunder, Credit Suisse Securities (USA) LLC, as joint bookrunner, joint lead
arranger, administrative agent and collateral agent, Banc of America Securities
LLC, as joint bookrunner and joint lead arranger, Bank of America, N.A., as
syndication agent, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), and any
amendments, supplements, modifications, extensions, replacements, renewals,
restatements, refundings or refinancings thereof and any indentures or credit
facilities or commercial paper facilities with banks or other institutional
lenders or investors that extend, replace, refund, refinance, renew or defease
any part of the loans, notes, other credit facilities or commitments
thereunder, including any such replacement, refunding or refinancing facility
or indenture that increases the amount borrowable thereunder or alters the
maturity thereof (provided that such increase in borrowings is permitted under Section 4.09).

“Currency
Agreement” means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.

 8
 

 

 

“Default”
means an event or condition the occurrence of which is, or with the lapse of
time or the giving of notice or both would be, an Event of Default.

“Description
of Notes” means the “Description of Notes” section of the final
offering memorandum dated June 20, 2006 with respect to the offering of
the Notes.

“Designated
Non-cash Consideration” means any non-cash consideration received by
the Company or one of its Restricted Subsidiaries in connection with an Asset
Sale that is designated as Designated Non-cash Consideration pursuant to an
Officers’ Certificate executed by the principal executive officer and the
principal financial officer of the Company or such Restricted Subsidiary at the
time of such Asset Sale. Any particular item of Designated Non-cash
Consideration will cease to be considered to be outstanding once it has been
sold for cash or Cash Equivalents.

“Designated
Preferred Stock” means Preferred Stock that is so designated as
Designated Preferred Stock, pursuant to an Officers’ Certificate executed by
the principal executive officer and the principal financial officer of the
Company, on the issuance date thereof, the cash proceeds of which are excluded
from the calculation set forth in clause (ii)(w) of the first paragraph of
Section 4.07 hereof.

“Designated
Senior Debt” means (i) the Indebtedness under the Credit
Facility and (ii) any other Indebtedness constituting Senior Debt which,
at the time of determination, has an aggregate principal amount of at least
$25.0 million and is specifically designated in the instrument evidencing such
Senior Debt as “Designated Senior Debt” by the Company.

“Disqualified
Capital Stock” means with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable at the option of the holder) or upon the
happening of any event, (i) matures or is mandatorily redeemable, (other
than redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise, (ii) is
convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Capital Stock, or (iii) is mandatorily redeemable or must be
purchased upon the occurrence of certain events or otherwise, in whole or in
part; in each case on or prior to the final maturity date of the Notes; provided, however, that any Capital Stock that would not
constitute Disqualified Capital Stock but for provisions thereof giving holders
thereof the right to require such Person to purchase or redeem such Capital
Stock upon the occurrence of an “asset sale” or “change of control” occurring
prior to the final maturity date of the Notes shall not constitute Disqualified
Capital Stock if:  (A) the “asset
sale” or “change of control” provisions applicable to such Capital Stock are
not more favorable to the holders of such Capital Stock than the terms
applicable to the Notes and described in Sections 4.10 and 4.15 hereof,
respectively; and (B) any such requirement only becomes operative after
compliance with such terms applicable to the Notes, including the purchase of
any Notes tendered pursuant thereto.

“Domestic
Restricted Subsidiary” means any direct or indirect Restricted
Subsidiary of the Company that is incorporated under the laws of the United
States of America, any State thereof or the District of Columbia.

 9
 

 

 

“Equity
Offering” means any offering of Qualified Capital Stock of Holdings
or the Company; provided that (i) in the
event of an offering by Holdings, Holdings contributes to the capital of the
Company the portion of the net cash proceeds of such offering necessary to pay
the aggregate redemption price (plus accrued interest to the Redemption Date)
of the Notes to be redeemed pursuant to Section 3.07(b) hereof; and (ii) in
the event such equity offering is not in the form of a public offering
registered under the Securities Act, the proceeds received by the Company
directly or indirectly from such offering are not less than $10.0 million.

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor statute
or statutes thereto.

“Exchange
Notes” has the meaning set forth in the Appendix hereto.

“Excluded
Contribution” means net cash proceeds, Marketable Securities or
Qualified Proceeds received by the Company from (i) contributions to its
common equity capital, and (ii)         the
sale (other than to a Subsidiary of the Company or to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement of the Company) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of the Company, in each case designated as Excluded Contributions pursuant to an officers’
certificate executed by an executive vice president and the principal financial
officer of the Company on the date such capital contributions are made or the
date such Capital Stock is sold, as the case may be, which are excluded from
the calculation set forth in clause (ii) of Section 4.07.

“Existing
Notes” means the Company’s 8 3⁄8% Senior Subordinated Notes due
2011 issued under that certain Indenture, dated as of July 22, 2003, among
the Company, TransDigm Holding Company and the other guarantors party thereto.

“fair market
value” means, with respect to any asset or property, the price which
could be negotiated in an arm’s-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith.

“Foreign Restricted Subsidiary”
means any Restricted Subsidiary of the Company that is not a Domestic
Restricted Subsidiary.

“Four-Quarter
Period” has the meaning specified in the definition of Consolidated
Fixed Charge Coverage Ratio.

“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
may be approved by a significant segment of the accounting profession of the
United States of America, as in effect as of the Issue Date.

 10
 

 

 

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

“Group”
has the meaning specified in the definition of Change of Control.

“Guarantee”
means (i) the guarantee of the Notes by Holdings and the Domestic
Restricted Subsidiaries of the Company in accordance with the terms of this
Indenture; and (ii) the guarantee of the Notes by any Restricted Subsidiary
required under the terms of Section 4.17 hereof.

“Guarantor”
means any Restricted Subsidiary that incurs a Guarantee; provided
that upon the release and discharge of any such Restricted Subsidiary from its
Guarantee in accordance with Section 11.07 hereof, such Restricted
Subsidiary shall cease to be a Guarantor.

“Hedging
Agreement” means any agreement with respect to the hedging of price
risk associated with the purchase of commodities used in the business of the
Company and its Restricted Subsidiaries, so long as any such agreement has been
entered into in the ordinary course of business and not for purposes of
speculation.

“Holder”
means a Person in whose name a Note is registered.

“Immaterial
Domestic Restricted Subsidiary” means, at any date of determination,
any Restricted Subsidiary of the Company that (i) contributed 2.5% or less
of Consolidated EBITDA of the Company for the period of four fiscal quarters
most recently ended more than forty-five (45) days prior to the date of
determination and (ii) had consolidated assets representing 2.5% or less
of Total Assets on the last day of the most recent fiscal quarter ended more
than forty-five (45) days prior to the date of determination.

“Indebtedness”
means with respect to any Person, without duplication, (i) all Obligations
of such Person for borrowed money, (ii) all Obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
Capitalized Lease Obligations of such Person, (iv) all Obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business), (v) all Obligations for the
reimbursement of any obligor on any letter of credit, banker’s acceptance or
similar credit transaction, (vi) guarantees and other contingent
obligations in respect of Indebtedness referred to in clauses (i) through (v) above
and clause (viii) below, (vii) all Obligations of any other Person of
the type referred to in clauses (i) through (vi) which are secured by
any Lien on any property or asset of such Person, the amount of such Obligation
being deemed to be the lesser of the fair market value of such property or
asset and the amount of the Obligation so secured, (viii) all Obligations
under Currency Agreements and interest swap agreements of such Person, and (ix) all
Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any.

 

 11

 

Notwithstanding the
foregoing, in connection with the purchase by the Company or any Restricted
Subsidiary of any business, the term “Indebtedness” will exclude post-closing
payment adjustments to which the seller may become entitled to the extent such
payment is determined by a final closing balance sheet or such payment depends
on the performance of such business after the closing; provided,
however, that, at the time of closing, the amount of any such
payment is not determinable and, to the extent such payment thereafter becomes
fixed and determined, the amount is paid within 60 days thereafter. For
clarification purposes, the liability of the Company or any Restricted
Subsidiary to make periodic payments to licensors in consideration for the
license of patents and technical information under license agreements in
existence on the Issue Date and any amount payable in respect of a settlement
of disputes with respect to such payments thereunder shall not constitute
Indebtedness.

For purposes hereof, the “maximum
fixed repurchase price” of any Disqualified Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to the Indenture, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall
be determined reasonably and in good faith by the Board of Directors of the
issuer of such Disqualified Capital Stock. For the purposes of calculating the
amount of Indebtedness of a Securitization Entity outstanding as of any date,
the face or notional amount of any interest in receivables or equipment that is
outstanding as of such date shall be deemed to be Indebtedness but any such
interests held by Affiliates of such Securitization Entity shall be excluded
for purposes of such calculation.

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

“Initial
Notes” has the meaning set forth in the Appendix hereto.

“Interest
Swap Obligations” means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated
by applying a fixed or a floating rate of interest on the same notional amount
and shall include, without limitation, interest rate swaps, caps, floors,
collars and similar agreements.

“Investment”
means, with respect to any Person, any direct or indirect loan or other
extension of credit (including, without limitation, a guarantee) or capital
contribution to (by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others), or
any purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
Person. “Investment” shall exclude extensions of trade credit by the Company
and its Restricted Subsidiaries in accordance with normal trade practices of
the Company or such Restricted Subsidiary, as the case may be. Except as
otherwise provided herein, the amount of an Investment shall be its fair market
value at the time the Investment is made and without giving effect to
subsequent changes in its fair market value.

 12
 

 

 

“Investment
Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s and BBB-
(or the equivalent) by S&P, or an equivalent rating by any other Rating
Agency.

“Issue Date”
means the date hereof.

“Legal
Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
on such payment for the intervening period.

“Lien”
means any lien, mortgage, deed of trust, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).

“Marketable
Securities” means publicly traded debt or equity securities that are
listed for trading on a national securities exchange and that were issued by a
corporation whose debt securities are rated in one of the three highest rating
categories by either S&P or Moody’s.

 “Moody’s” means
Moody’s Investors Service, Inc. or any successor thereto

“Net Cash
Proceeds” means, with respect to any Asset Sale, the proceeds in the
form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents
(other than the portion of any such deferred payment constituting interest)
received by the Company or any of its Restricted Subsidiaries from such Asset
Sale net of:  (i) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales commissions
and title and recording tax expenses); (ii) all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale; (iii) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale (iv) all distributions and other payments required to be
made to minority interest holders in Restricted Subsidiaries as a result of
such Asset Sale; and (v) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Sale, in accordance with the terms
of any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary consent
to such Asset Sale, or by applicable law, be repaid out of the proceeds from
such Asset Sale.

“Notes”
means, collectively, the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class of securities, as amended or 

 13
 

 

supplemented from
time to time in accordance with the terms hereof, that are issued pursuant to
this Indenture.

“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

“Officer”
means, with respect to any Person (other than the Trustee), the Chairman of the
Board, 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 by two Officers of the
Company, one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the
Company, that meets the requirements of Sections 13.04 and 13.05 hereof.

“Opinion of
Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or any Subsidiary of the Company.

“Permitted
Business” means any business (including stock or assets) that
derives a majority of its revenues from the business engaged in by the Company
and its Restricted Subsidiaries on the Issue Date and/or activities that are
reasonably similar, ancillary or related to, or a reasonable extension,
development or expansion of, the businesses in which the Company and its
Restricted Subsidiaries are engaged on the Issue Date.

“Permitted
Group” means any group of investors that is deemed to be a “person”
(as such term is used in Section 13(d)(3) of the Exchange Act) by
virtue of the Stockholders’ Agreements, as the same may be amended, modified or
supplemented from time to time, provided that
no single Person (together with its Affiliates), other than the Permitted
Holders and their Related Parties, is the “beneficial owner” (as such term is
used in Section 13(d) of the Exchange Act), directly or indirectly,
of more than 50% of the voting power of the issued and outstanding Capital
Stock of the Company or Holdings (as applicable) that is “beneficially owned”
(as defined above) by such group of investors.

“Permitted
Holders” means Warburg Pincus Private Equity VIII, L.P. and its
Affiliates and any general or limited partners of Warburg Pincus Private Equity
VIII, L.P., TD Group Holdings, LLC and its Affiliates and any members of TD
Group Holdings, LLC.

“Permitted
Indebtedness” means, without duplication, each of the following:

(i)  Indebtedness under the Notes (other than any Additional
Notes);

(ii)  Indebtedness of the Company or any of its Restricted
Subsidiaries incurred pursuant to the Credit Facility in an aggregate principal
amount at any 

 14
 

 

time outstanding not to exceed $1,050.0 million, less:  (A) the aggregate amount of Indebtedness
of Securitization Entities at the time outstanding, (B) the amount of all
mandatory principal payments actually made by the Company or any such
Restricted Subsidiary since the Issue Date with the Net Cash Proceeds of an
Asset Sale in respect of term loans under a Credit Facility (excluding any such
payments to the extent refinanced at the time of payment), and (C) further
reduced by any repayments of revolving credit borrowings under a Credit
Facility with the Net Cash Proceeds of an Asset Sale that are accompanied by a
corresponding commitment reduction thereunder; provided
that the amount of Indebtedness permitted to be incurred pursuant to the Credit
Facility in accordance with this clause (ii) shall be in addition to any
Indebtedness permitted to be incurred pursuant to a Credit Facility in reliance
on, and in accordance with, clauses (vii), (xiii), (xiv) and (xv) below;

(iii)  other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid or
permanent reductions therein;

(iv)  Interest Swap Obligations of the Company or any of its Restricted
Subsidiaries covering Indebtedness of the Company or any of its Restricted
Subsidiaries; provided that any Indebtedness to
which any such Interest Swap Obligations correspond is otherwise permitted to
be incurred under this Indenture; provided, further,
that such Interest Swap Obligations are entered into, in the judgment of the
Company, to protect the Company or any of its Restricted Subsidiaries from
fluctuation in interest rates on its outstanding Indebtedness;

(v)  Indebtedness of the Company or any Restricted Subsidiary
under Hedging Agreements and Currency Agreements;

(vi)  the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
such Restricted Subsidiaries; provided, however,
that: (a) if the Company is the obligor on such Indebtedness and the payee
is a Restricted Subsidiary that is not a Guarantor, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all Obligations
with respect to the Notes and (b) (1) any subsequent issuance or
transfer of Capital Stock that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary thereof and (2) any
sale or other transfer of any such Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary thereof (other than by way of granting a
Lien permitted under this Indenture or in connection with the exercise of
remedies by a secured creditor) shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause (vi);

(vii)  Indebtedness (including Capitalized Lease Obligations)
incurred by the Company or any of its Restricted Subsidiaries to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
person owning such assets) in an aggregate principal amount outstanding not to
exceed $10.0 million;

 15
 

 

 

(viii)  Refinancing Indebtedness (other than Refinancing
Indebtedness with respect to Indebtedness incurred pursuant to clause (ii) of
this definition);

(ix)   guarantees by the
Company and its Restricted Subsidiaries of each other’s Indebtedness; provided that such Indebtedness is permitted to be incurred
under this Indenture; provided, further,
that in the event such Indebtedness (other than Acquired Indebtedness) is
incurred pursuant to the Consolidated Fixed Charge Coverage Ratio, such
guarantees are by the Company or a Guarantor only;

(x)  Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification, adjustment
of purchase price, earn out or other similar obligations, in each case,
incurred or assumed in connection with the disposition of any business, assets
or a Restricted Subsidiary of the Company, 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 such
acquisition; provided that the maximum
assumable liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds actually received by the Company and its Restricted Subsidiaries
in connection with such disposition;

(xi)  obligations in respect of
performance and surety bonds and completion guarantees provided by the Company
or any Restricted Subsidiary of the Company in the ordinary course of business;

(xii)  the incurrence by a
Securitization Entity of Indebtedness in a Qualified Securitization Transaction
that is non recourse to the Company or any Subsidiary of the Company (except
for Standard Securitization Undertakings);

(xiii)  Indebtedness incurred by
the Company or any of the Guarantors in connection with the acquisition of a
Permitted Business; provided that
on the date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof and the use of proceeds therefrom, either (A) the
Company would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio or (B) the
Consolidated Fixed Charge Coverage Ratio of the Company would be greater than
the Consolidated Fixed Charge Coverage Ratio of the Company immediately prior
to the incurrence of such Indebtedness;

(xiv)  additional Indebtedness of
the Company and the Guarantors (which amount may, but need not, be incurred in
whole or in part under a credit facility) (it being understood that any Indebtedness
incurred pursuant to this clause (xiv) shall cease to be deemed incurred or
outstanding for purposes of this clause (xiv) but shall be deemed incurred
pursuant to the first paragraph of this covenant from and after the first date
on which the Company or such Restricted Subsidiary could have incurred such
Indebtedness pursuant to the first paragraph of this covenant without reliance
on this clause (xiv)) in an aggregate principal amount that does not exceed
$75.0 million at any one time outstanding;

(xv)  additional Indebtedness of
the Foreign Restricted Subsidiaries in an aggregate principal amount which
(when combined with the liquidation value of 

 16
 

 

all series of outstanding Permitted Subsidiary Preferred Stock) does
not exceed $15.0 million at any one time outstanding (which amount may, but
need not, be incurred in whole or in part under a Credit Facility); (it being
understood that any Indebtedness incurred pursuant to this clause (xv) shall
cease to be deemed incurred or outstanding for purposes of this clause (xv) but
shall be deemed incurred pursuant to the first paragraph of this covenant from
and after the first date on which the Company or such Restricted Subsidiary
could have incurred such Indebtedness pursuant to the first paragraph of this
covenant without reliance on this clause (xv));

(xvi)  Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished
within five business days of incurrence; and

(xvii)  Indebtedness of the
Company or any of its Restricted Subsidiaries represented by letters of credit
for the account of the Company or such Restricted Subsidiary, as the case may
be, issued in the ordinary course of business of the Company or such Restricted
Subsidiary, including, without limitation, in order to provide security for
workers’ compensation claims or payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business and
other Indebtedness with respect to workers’ compensation claims, self-insurance
obligations, performance, surety and similar bonds and completion guarantees
provided by the Company or any Restricted Subsidiary of the Company in the
ordinary course of business.

For purposes of
determining compliance with Section 4.09 hereof, in the event that an item
of Indebtedness meets the criteria of more than one of the categories of
Permitted Indebtedness described in clauses (i) through (xvii) above or is
entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage
Ratio provisions of Section 4.09 hereof, the Company shall, in its sole
discretion, divide and classify (or later redivide and reclassify) such item of
Indebtedness in any manner that complies with Section 4.09 hereof. Accrual
of interest, accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital Stock will
not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Capital Stock for purposes of Section 4.09 hereof.

“Permitted
Investments” means: (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the
Company (other than a Restricted Subsidiary of the Company in which an
Affiliate of the Company that is not a Restricted Subsidiary of the Company
holds a minority interest) (whether existing on the Issue Date or created
thereafter) or any other Person (including by means of any transfer of cash or
other property) if as a result of such Investment such other Person shall
become a Restricted Subsidiary of the Company (other than a Restricted
Subsidiary of the Company in which an Affiliate of the Company that is not a Restricted
Subsidiary of the Company holds a minority interest) or that will merge with or
consolidate into the Company or a Restricted Subsidiary of the Company and 

 17
 

 

 

Investments in the
Company by the Company or any Restricted Subsidiary of the Company; (ii) investments
in cash and Cash Equivalents; (iii) loans and advances (including payroll,
travel and similar advances) to employees and officers of the Company and its
Restricted Subsidiaries for bona fide business purposes incurred in the
ordinary course of business or consistent with past practice or to fund such
person’s purchase of Capital Stock of the Company or any direct or indirect
parent of the Company pursuant to compensatory plans approved by the Board of
Directors in good faith; (iv) Currency Agreements, Hedging Agreements and
Interest Swap Obligations entered into in the ordinary course of business and
otherwise in compliance with this Indenture; (v) Investments in securities
of trade creditors or customers received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers or in good faith settlement of delinquent obligations of
such trade creditors or customers; (vi) Investments made by the Company or
its Restricted Subsidiaries as a result of consideration received in connection
with an Asset Sale made in compliance with Section 4.10 hereof; (vii) Investments
existing on the Issue Date; (viii) accounts receivable created or acquired
in the ordinary course of business; (ix) guarantees by the Company or a
Restricted Subsidiary of the Company permitted to be incurred under this
Indenture; (x) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause (x) that
are at that time outstanding, not to exceed the greater of (A) $50.0
million and (B) 4% of the Company’s Total Assets; (xi) any Investment by
the Company or a Subsidiary of the Company in a Securitization Entity or any
Investment by a Securitization Entity in any other Person in connection with a
Qualified Securitization Transaction; provided that
any Investment in a Securitization Entity is in the form of a Purchase Money
Note or an equity interest; (xii) Investments the payment for which
consists exclusively of Qualified Capital Stock of the Company; and (xiii) any
Investment in any Person to the extent it consists of prepaid expenses,
negotiable instruments held for collection and lease, utility and workers’
compensation, performance and other similar deposits made in the ordinary
course of business.

“Permitted
Subsidiary Preferred Stock” means any series of Preferred Stock of a
Foreign Restricted Subsidiary that constitutes Qualified Capital Stock, the
liquidation value of all series of which, when combined with the aggregate
amount of outstanding Indebtedness of the Foreign Restricted Subsidiaries
incurred pursuant to clause (xv) of the definition of Permitted Indebtedness,
does not exceed $5.0 million.

“Permitted
Transaction Payments” means, without duplication, the following
payments: (i) payments at closing to consummate the Transactions; (ii) payments
required to defease the Existing Notes in accordance with the terms of the
indenture governing those notes and (iii) the payment of fees and expenses
relating to the Transactions.

“Person”
means an individual, partnership, corporation, limited liability company,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.

“Preferred
Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation.

 18
 

 

 

“Private Exchange Notes”
has the meaning set forth in the Appendix hereto.

“Productive
Assets” means assets (including Capital Stock) that are used or
usable by the Company and its Restricted Subsidiaries in Permitted Businesses.

“Purchase
Money Note” means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company in connection with a Qualified Securitization
Transaction to a Securitization Entity, which note shall be repaid from cash
available to the Securitization Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, and principal and amounts paid in connection with the
purchase of newly generated receivables or newly acquired equipment.

“Qualified
Capital Stock” means any Capital Stock that is not Disqualified
Capital Stock.

“Qualified
Proceeds” means assets that are used or useful in, or Capital Stock
of any Person engaged in, a Permitted Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the Board of
Directors of the Company in good faith.

“Qualified
Securitization Transaction” means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell,
convey or otherwise transfer to (i) a Securitization Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries); and (ii) any
other Person (in the case of a transfer by a Securitization Entity), or may
grant a security interest in any accounts receivable or equipment (whether now
existing or arising or acquired in the future) of the Company or any of its
Restricted Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable and equipment, all
contracts and contract rights and all guarantees or other obligations in
respect of such accounts receivable and equipment, proceeds of such accounts
receivable and equipment and other assets (including contract rights) which are
customarily transferred or in respect of which security interests are
customarily granted in connection with assets securitization transactions
involving accounts receivable and equipment.

“Rating
Agencies” means Moody’s and S&P or if Moody’s or S&P or both
shall not make a rating on the Notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected
by the Company that shall be substituted for Moody’s or S&P or both, as the
case may be.

“Refinance”
means, in respect of any security or Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. “Refinanced” and “Refinancing” shall have correlative
meanings.

“Refinancing
Indebtedness” means any Refinancing, modification, replacement,
restatement, refunding, deferral, extension, substitution, supplement, 

 19
 

 

reissuance or
resale of existing or future Indebtedness (other than intercompany
Indebtedness), including any additional Indebtedness incurred to pay interest
or premiums required by the instruments governing such existing or future Indebtedness
as in effect at the time of issuance thereof (“Required
Premiums”) and fees in connection therewith; provided
that any such event shall not (i) directly or indirectly result in an
increase in the aggregate principal amount of Permitted Indebtedness (except to
the extent such increase is a result of a simultaneous incurrence of additional
Indebtedness (A) to pay Required Premiums and related fees or (B) otherwise
permitted to be incurred under this Indenture); and (ii) create
Indebtedness with a Weighted Average Life to Maturity at the time such
Indebtedness is incurred that is less than the Weighted Average Life to
Maturity at such time of the Indebtedness being refinanced, modified, replaced,
renewed, restated, refunded, deferred, extended, substituted, supplemented,
reissued or resold.

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as
of the Issue Date by and among the Company, Holdings, the Guarantors and Banc
of America Securities LLC and Credit Suisse Securities (USA) LLC, as
representatives of the initial purchasers.

“Related
Party” with respect to any Permitted Holder means (i)(A) any
spouse, sibling, parent or child of such Permitted Holder; or (B) the
estate of any Permitted Holder during any period in which such estate holds
Capital Stock of the Company for the benefit of any Person referred to in
clause (i)(A) or (ii) any trust, corporation, partnership, limited
liability company or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially owning an interest of more than 50% of which
consist of, or the sole managing partner or managing member of which is, one or
more Permitted Holders and/or such other Persons referred to in the immediately
preceding clause (i).

“Representative”
means the indenture trustee or other trustee, agent or representative in
respect of any Designated Senior Debt; provided that
if, and for so long as, any Designated Senior Debt lacks such a representative,
then the Representative for such Designated Senior Debt shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Debt in respect of any Designated Senior Debt.

“Required Premiums”
has the meaning set forth in the definition of Refinancing Indebtedness.

“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) located at the Corporate Trust Office of the Trustee who
has direct responsibility for the administration of this Indenture and for the
purposes of Sections 7.01(c)(ii) and 7.05(b) 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
Subsidiary” of any Person means any Subsidiary of such Person which
at the time of determination is not an Unrestricted Subsidiary.

 20
 

 

 

“S&P”
means Standard & Poor’s, a division of the McGraw-Hill Companies, Inc.,
or any successor thereto.

“Sale and
Leaseback Transaction” means any direct or indirect arrangement with
any Person or to which any such Person is a party, providing for the leasing to
the Company or a Restricted Subsidiary of any property, whether owned by the
Company or any Restricted Subsidiary at the Issue Date or later acquired, which
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such Property.

“SEC”
means the U.S. Securities and Exchange Commission.

“Secured Debt”
means any Indebtedness secured by a Lien.

“Securities
Act” means the Securities Act of 1933, as amended.

“Securitization
Entity” means a Wholly Owned Subsidiary of the Company (or another
Person in which the Company or any Subsidiary of the Company makes an
Investment and to which the Company or any Subsidiary of the Company transfers
accounts receivable or equipment and related assets) which engages in no
activities other than in connection with the financing of accounts receivable
or equipment and which is designated by the Board of Directors of the Company
(as provided below) as a Securitization Entity (i) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (A) is
guaranteed by the Company or any Restricted Subsidiary of the Company
(excluding guarantees of Obligations (other than the principal of, and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings); (B) is
recourse to or obligates the Company or any Restricted Subsidiary of the
Company in any way other than pursuant to Standard Securitization Undertakings;
or (C) subjects any property or asset of the Company or any Restricted
Subsidiary of the Company, directly or indirectly, contingently or otherwise,
to the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings; (ii) with which neither the Company nor any Restricted
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing receivables of such
entity; and (iii) to which neither the Company nor any Restricted
Subsidiary of the Company has any obligations to maintain or preserve such
entity’s financial condition or cause such entity to achieve certain levels of
operating results.

Any such designation by
the Board of Directors of the Company shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the Board Resolution of the Company
giving effect to such designation and an Officers’ Certificate certifying that
such designation complied with the foregoing conditions.

“Senior Debt”
means the principal of, premium, if any, and interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, Holdings

 

 21

 

or any Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall be subordinate or pari passu in right of payment to the Notes or the
Guarantees, as the case may be. Without limiting the generality of the
foregoing, “Senior Debt” shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of:  (x) all monetary obligations of every
nature of the Company, Holdings or any Guarantor under the Credit Facility,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Swap Obligations (and guarantees thereof),
and (z) all obligations (and guarantees thereof) under Currency Agreements
and Hedging Agreements, in each case whether outstanding on the Issue Date or
thereafter incurred.

Notwithstanding the
foregoing, “Senior Debt” shall not include (i) any Indebtedness of the
Company, Holdings or a Guarantor to the Company, Holdings or to a Subsidiary of
the Company, (ii) any Indebtedness of the Company, Holdings or any Guarantor
to, or guaranteed by the Company, Holdings or any Guarantor on behalf of, any
shareholder, director, officer or employee of the Company, Holdings or any
Subsidiary of the Company (including, without limitation, amounts owed for
compensation) other than a shareholder who is also a lender (or an Affiliate of
a lender) under the Credit Facility, (iii) any amounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities but
excluding secured purchase money obligations); (iv) Indebtedness
represented by Disqualified Capital Stock, (v) any liability for Federal,
state, local or other taxes owed or owing by the Company, Holdings or any of
the Guarantors, (vi) that portion of any Indebtedness incurred in
violation of Section 4.09 hereof (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause (vi) if the
holder(s) of such obligation or their representative and the Trustee shall
have received an Officers’ Certificate of the Company to the effect that the
incurrence of such Indebtedness does not (or in the case of revolving credit
indebtedness, that the incurrence of the entire committed amount thereof at the
date on which the initial borrowing thereunder is made would not) violate such
provisions of this Indenture), (vii) Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to the Company, Holdings or any of the
Guarantors, as applicable, and (viii) any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of
the Company, Holdings or any of the Guarantors.

“Senior
Subordinated Debt” means with respect to a Person, the Notes (in the
case of the Company), a Guarantee (in the case of a Guarantor or Holdings) and
any other Indebtedness of such Person that specifically provides that such
Indebtedness is to rank pari passu with
the Notes or such Guarantee, as the case may be, in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of such Person which is not Senior Debt of such Person.

 22
 

 

 

“Significant
Subsidiary,” with respect to any Person, means any Restricted
Subsidiary of such Person that satisfies the criteria for a “significant
subsidiary” set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.

“Sponsor”
means Warburg Pincus LLC and its Affiliates.

“Standard
Securitization Undertakings” means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which are reasonably customary, as determined in good faith by the
Board of Directors of the Company, in an accounts receivable or equipment
transaction.

“Stockholders’
Agreement” means the Stockholders’ Agreement dated as of July 22,
2003, by and among TD Holding Corporation (now known as TransDigm Group
Incorporated) and the other parties named therein.

“Subsidiary”
with respect to any Person, means (i) any corporation of which the
outstanding Capital Stock having at least a majority of the votes entitled to
be cast in the election of directors under ordinary circumstances shall at the
time be owned, directly or indirectly, by such Person; or (ii) any other
Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.

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

“Total Assets”
means, as of any date, the total consolidated assets of the Company and its
Restricted Subsidiaries, as set forth on the Company’s most recently available
internal consolidated balance sheet as of such date.

“Transaction
Date” has the meaning set forth in the definition of Consolidated
fixed Change Coverage ratio.

“Transactions”
means the offering of the Notes being offered
hereby and issued on the Issue Date, the tender offer for the Existing Notes,
borrowings made on the Issue Date pursuant to the Credit Facility and the
repayment of Indebtedness of the Company and Holdings with the proceeds of such
borrowings and issuance of the Notes (including the tender offer).

“Treasury Rate” means, as of any Redemption
Date, the yield to maturity as of such Redemption Date of United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H. 15 (519) that has become
publicly available at least two Business Days prior to the Redemption Date (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
Redemption Date to July 15, 2009; provided,
however, that if the period from
the Redemption Date to July 15, 2009, is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to
a constant maturity of one year will be used.

 23
 

 

 

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

“Unrestricted
Subsidiary” of any Person means (i ) any Subsidiary of such Person
that at the time of determination shall be or continue to be designated an
Unrestricted Subsidiary by the Board of Directors of such Person in the manner
provided below; and (ii) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of
the Company may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, the Company
or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated or another Unrestricted Subsidiary; provided that (i) the Company certifies to the Trustee
that such designation complies with Section 4.07 hereof, and (ii) each
Subsidiary to be so designated and each of its Subsidiaries has not at the time
of designation, and does not thereafter, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries. The Board of Directors of
the Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such
designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.09
hereof and (y) immediately before and immediately after giving effect to
such designation, no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors of the Company shall
be evidenced by a Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.

Actions taken by an
Unrestricted Subsidiary shall not be deemed to have been taken, directly or
indirectly, by the Company or any Restricted Subsidiary.

“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (i) the then
outstanding aggregate principal amount of such Indebtedness into (ii) the
sum of the total of the products obtained by multiplying:  (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof by (B) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.

“Wholly Owned
Subsidiary” of any Person means any Subsidiary of such Person of
which all the outstanding voting securities (other than in the case of a
Restricted Subsidiary that is incorporated in a jurisdiction other than a State
in the United States of America or the District of Columbia, directors’
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly Owned Subsidiary of such Person.

 24
 

 

 

SECTION 1.02.                                                                 Other
Definitions.

	
  Term

  	
   

  	
   

  	
   

  	
  Defined in 

  Section

  
	
  “Acceleration
  Notice”

  	
   

  	
  6.02

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.11

  
	
  “Appendix”

  	
   

  	
  2.01

  
	
  “Authentication
  Order”

  	
   

  	
  2.02

  
	
  “Blockage
  Notice”

  	
   

  	
  10.03, 12.03

  
	
  “Change
  of Control Offer”

  	
   

  	
  4.15

  
	
  “Change
  of Control Payment Date”

  	
   

  	
  4.15

  
	
  “Covenant
  Defeasance”

  	
   

  	
  8.03

  
	
  “Covenant
  Suspension Event”

  	
   

  	
  4.19

  
	
  “Event
  of Default”

  	
   

  	
  6.01

  
	
  “Guaranteed
  Obligations”

  	
   

  	
  11.01

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Initial
  Lien”

  	
   

  	
  4.12

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  
	
  “Net Proceeds
  Offer”

  	
   

  	
  4.10

  
	
  “Net
  Proceeds Offer Amount”

  	
   

  	
  4.10

  
	
  “Net
  Proceeds Offer Payment Date”

  	
   

  	
  4.10

  
	
  “Net
  Proceeds Offer Trigger Date”

  	
   

  	
  4.10

  
	
  “Offer
  Period”

  	
   

  	
  3.09

  
	
  “pay
  the Notes”

  	
   

  	
  12.03

  
	
  “pay
  its Guarantee”

  	
   

  	
  10.03

  
	
  “Paying
  Agent”

  	
   

  	
  2.03

  
	
  “Payment
  Blockage Period”

  	
   

  	
  10.03, 12.03

  
	
  “Payment
  Default”

  	
   

  	
  10.03, 12.03

  
	
  “Purchase
  Date”

  	
   

  	
  3.09

  
	
  “Reference
  Date”

  	
   

  	
  4.07

  
	
  “Refunding
  Capital Stock”

  	
   

  	
  4.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payment”

  	
   

  	
  4.07

  
	
  “Retired
  Capital Stock”

  	
   

  	
  4.07

  
	
  “Surviving
  Entity”

  	
   

  	
  5.01

  
	
  “Suspended
  Covenants”

  	
   

  	
  4.19

  
	
  “Suspension
  Date”

  	
   

  	
  4.19

  

 

SECTION 1.03.                                                                 Trust
Indenture Act Definitions.

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;

 25
 

 

 

“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 and the Guarantees means the Company, Holdings and the Guarantors,
respectively, and any successor obligor upon the Notes and the Guarantees,
respectively.

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)           provisions apply to successive events
and transactions;

(6)           references to sections of or rules under
the Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time; and

(7)           references in this Indenture, in any
context, to any interest or other amount payable on or with respect to the
Notes shall be deemed to include any Additional Interest that is payable
pursuant to the Registration Rights Agreement.

ARTICLE 2

THE NOTES

SECTION 2.01.                                                                 Form and
Dating.

Provisions relating to
the Initial Notes, the Private Exchange Notes and the Exchange Notes are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in and expressly
made part of this Indenture. The Initial Notes and the Trustee’s certificate of
authentication with respect thereto shall be substantially in the form of Exhibit A
to the Appendix, which is hereby incorporated in and expressly made a part of
this Indenture. The Exchange Notes, the Private Exchange Notes and the Trustee’s
certificate of authentication with respect 

 26
 

 

thereto shall be
substantially in the form of Exhibit B to the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company). Each
Note shall be dated the date of its authentication. The terms of the Notes set
forth in the Appendix and Exhibits A and B to the Appendix are part of the
terms of this Indenture.

SECTION 2.02.                                                                 Execution
and Authentication.

Two Officers shall sign
the Notes for the Company by manual or facsimile signature.

If an Officer whose signature
is on a Note no longer holds that office at the time the Trustee authenticates
the Note, the Note shall be valid nevertheless.

A Note shall not be valid
until an authorized signatory of the Trustee manually signs the certificate of
authentication on the Note. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

On the Issue Date, the
Trustee shall authenticate and deliver $275 million of 73⁄4% Senior
Subordinated Notes due 2014 and, at any time and from time to time thereafter,
the Trustee shall authenticate and deliver Notes for original issue in an
aggregate principal amount specified in such order, in each case upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Secretary of the Company (each an “Authentication Order”).
Such order shall specify the amount of the Notes to be authenticated and the
date on which the original issue of Notes is to be authenticated, whether the
Notes are to be Initial Notes, Additional Notes, Exchange Notes or Private
Exchange Notes, or such other information as the Trustee shall reasonably
request and, in the case of an issuance of Additional Notes pursuant to Section 2.14
after the Issue Date, shall certify that such issuance is in compliance with Section 4.09.

The Notes shall be issued
only in registered form, without coupons and only in denominations of $1,000
and any integral multiple thereof.

The Trustee may appoint
an authenticating agent acceptable to the Company to authenticate the Notes. Unless
limited by the terms of such appointment, 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 the Registrar, or any
Paying Agent or agent for service of notices and demands.

SECTION 2.03.                                                                 Registrar
and Paying Agent.

The Company shall
maintain an office or agency where Notes may be presented for registration of transfer
or for exchange (the “Registrar”) and
an office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the
Notes and of their registration of transfer and exchange. The Company may have
one or more additional paying agents. The term “Paying Agent”

 27
 

 

includes any
additional paying agent. The Company may change any Paying Agent or the
Registrar without notice to any Holder.

The Company shall enter
into an appropriate agency agreement with the Registrar or any Paying Agent not
a party to this Indenture, which shall incorporate the terms of the TIA. The
agency agreement shall implement the provisions of this Indenture that relate
to such agent. The Company shall notify the Trustee in writing of the name and
address of any such agent. If the Company fails to appoint or maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company
or any Wholly Owned Subsidiary incorporated or organized within the United
States of America may act as Paying Agent, Registrar or transfer agent.

The Company initially
appoints the Depository (as defined in the Appendix) to act as depositary with
respect to the Global Notes (as defined in the Appendix).

The Company initially
appoints the Trustee as Registrar and Paying Agent in connection with the Notes.
The Registrar and Paying Agent shall be entitled to the rights and immunities
of the Trustee hereunder.

SECTION 2.04.                                                                 Paying
Agent to Hold Money in Trust.

Prior to 10:00 a.m.,
New York time, on or prior to each due date of the principal, premium, if any,
and interest on any Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium and interest when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of,
premium, if any, or interest on the Notes and shall notify the Trustee in
writing of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary of the Company) shall have no further
liability for the money delivered to the Trustee. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.

SECTION 2.05.                                                                 Holder
Lists.

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders and shall otherwise
comply with TIA § 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee, at least 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 Holders and the Company shall otherwise comply with
TIA §312(a).

 28
 

 

 

SECTION 2.06.                                                                 Transfer
and Exchange.

(a)           The Notes shall be
issued in registered form and shall be transferable only upon the surrender of
a Note being transferred for registration of transfer. When a Note is presented
to the Registrar with a request to register a transfer, such Registrar shall register
the transfer as requested if the requirements of this Indenture and Section 8-401(a) of
the Uniform Commercial Code are met. When Notes are presented to the Registrar
with a request to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, 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
other similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.09, 4.10, 4.15 or 9.05 hereof).

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

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

(d)           The Company shall not
be required (A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days before the
day of the mailing of notice of redemption under Section 3.03 hereof and
ending at the close of business on such day, (B) to register the transfer
of or to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part or (c) to
register the transfer of or to exchange a Note between a record date and the
next succeeding Interest Payment Date.

(e)           Any Holder of a
Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Note may be effected only through a
book-entry system maintained by (a) the Holder of such Global Note (or its
agent or the person on whose behalf the Global Note is held) or (b) any
Holder of a beneficial interest in such Global Note, and that ownership of
beneficial interest in such Global Note shall be required to be reflected in a
book entry.

(f)            Prior to due
presentment for the registration of a transfer of any Note, the Trustee, any
Paying Agent, the Registrar 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, premium, if any, and interest on
such Notes and for all other purposes, and none of the Trustee, any Paying
Agent, the Registrar or the Company shall be affected by notice to the
contrary.

(g)           None of the Company,
the Trustee, any agent of the Company or the Trustee (including any Paying
Agent or Registrar) will have any responsibility or liability for any aspect of
the records relating to or payments made on account of 

 29
 

 

beneficial
ownership interests of a global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

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

SECTION 2.07.                                                                 Replacement
Notes.

If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the requirements of Section 8-405
of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity or a security bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent and the Registrar from any loss which any of them may
suffer if a Note is replaced. The Company and the Trustee may charge the Holder
for their expenses in replacing a Note.

Every replacement Note is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionally with all other Notes duly
issued hereunder.

SECTION 2.08.                                                                 Outstanding
Notes.

Notes outstanding at any
time are all Notes authenticated by the Trustee except for those canceled by
it, those reductions in the interest in a Global Note effected by the Trustee
in accordance with the provisions of this Indenture, those delivered to it for
cancellation and those described in this Section 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.

If a Note is replaced
pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced
Note is held by a bona fide purchaser.

If the principal amount
of any Note is considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases to accrue.

If the Paying Agent
(other than the Company, a Subsidiary or an Affiliate of any thereof)
segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal,
premium, if any, and interest payable on that date with respect to the Notes
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Notes (or portions thereof) shall cease to be
outstanding and interest on them shall cease to accrue.

 30
 

 

 

SECTION 2.09.                                                                 Treasury
Notes.

In determining whether
the Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
the Trustee knows are so owned shall be so disregarded.

SECTION 2.10.                                                                 Temporary
Notes.

Until Definitive Notes
are ready for delivery, the Company may prepare and the Trustee, upon receipt
of an Authentication Order,  shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Notes and deliver them in exchange for temporary
Notes. Holders of temporary Notes shall 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 the Paying
Agent shall forward to the Trustee any Notes surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel
(subject to the record retention requirements of the Exchange Act) all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation in accordance with its customary procedures and, if requested in
writing, deliver a certificate of such destruction to the Company unless the
Company directs the Trustee in writing to deliver canceled Notes to the Company.
The Company may not issue new Notes to replace Notes that it has redeemed, 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, the Company shall pay defaulted interest
(plus interest on such defaulted interest at the applicable interest rate on
the Notes to the extent lawful) in any lawful manner. The Company may pay the
defaulted interest to the Persons who are Holders on a subsequent special
record date. The Company shall fix or cause to be fixed any such special record
date and payment date to the reasonable satisfaction of the Trustee (provided
that no such special record date shall be less than 10 days prior to the
related payment date for such defaulted interest) and shall promptly mail or
cause to be mailed to each Holder a notice that states the special record date,
the related payment date and the amount of defaulted interest to be paid.

 

 31

 

SECTION 2.13.                                                                 CUSIP
or ISIN Numbers.

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

SECTION 2.14.                                                                 Issuance
of Additional Notes.

The Company shall be
entitled, subject to its compliance with Section 4.09, to issue Additional
Notes under this Indenture which shall have identical terms as the Initial
Notes issued on the Issue Date, other than with respect to the date of issuance
and issue price. The Initial Notes issued on the Issue Date, any Additional
Notes and all Exchange Notes or Private Exchange Notes issued in exchange
therefor shall be treated as a single class for all purposes under this
Indenture.

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

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

(2)  the issue
price, the issue date and the “CUSIP”, “ISIN” or other similar identification
numbers of such Additional Notes; provided, however,
that no Additional Notes may be issued at a price that would cause such
Additional Notes to have “original issue discount” within the meaning of Section 1273
of the Code; and

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

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 shall furnish to the Trustee, at least 45 days but not more
than 60 days before a redemption date, an Officers’ Certificate setting forth (i) the
clause of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the redemption price and (iv) the “CUSIP”, “ISIN”
or other similar identification numbers of the Notes to be redeemed.

 32
 

 

 

SECTION 3.02.                                                                 Selection
of Notes to Be Redeemed.

If less than all of the
Notes are to be redeemed or purchased in an offer to purchase at any time, the
Trustee shall select the Notes to be redeemed or purchased among the Holders of
the Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis,
by lot or in accordance with any other method the Trustee considers fair and appropriate.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.

The Trustee shall
promptly notify the Company in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal
amount to be redeemed. Notes and portions of Notes selected shall be in amounts
of $1,000 or whole multiples of $1,000. The provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.

SECTION 3.03.                                                                 Notice
of Redemption.

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 shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.

The notice shall identify
the Notes to be redeemed, including “CUSIP”, “ISIN” or other similar
identification numbers, if any, and shall state:

(a)           the redemption date;

(b)           the redemption
price;

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

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

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

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

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

 33
 

 

 

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

At the Company’s request,
the Trustee shall give the notice of redemption in the Company’s name and at
its expense; provided, however, that the
Company shall have 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 Price.

Prior to 10 a.m. New
York Time on the redemption date, the Company shall deposit with the Trustee or
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date. The Trustee or the
Paying Agent shall 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 price of, and accrued interest on, all Notes to be
redeemed.

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

SECTION 3.06.                                                                 Notes
Redeemed in Part.

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

SECTION 3.07.                                                                 Optional
Redemption.

(a)           Except as provided
in this Section 3.07, the Notes shall not be redeemable at the Company’s
option prior to July 15, 2009.

At any time prior to July 15, 2009, the Company may redeem all or
a part of the Notes (which includes Additional Notes, if any), upon not less
than 30 nor more 

 34
 

 

than 60 days’
prior notice mailed by first-class mail to the registered address of each
Holder of Notes, at a redemption price equal to 100% of the principal amount of
Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest, if any, to the date of redemption (the “Redemption Date”), subject to
the rights of Holders of Notes on the relevant record date to receive interest
due on the relevant interest payment date.

On and after July 15,
2009, the Company may redeem the Notes (which includes Additional Notes, if
any) at its option, in whole or in part, upon not less than 30 nor more than 60
days’ notice, at the following redemption prices (expressed as percentages of
the principal amount thereof) if redeemed during the twelve-month period
commencing on July 15 of the year set forth below:

	
  Year

  	
   

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  105.813

  	
  %

  
	
  2010

  	
   

  	
  103.875

  	
  %

  
	
  2011

  	
   

  	
  101.938

  	
  %

  
	
  2012 and
  thereafter

  	
   

  	
  100.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  

 

(b)           Notwithstanding the
foregoing, prior July 15, 2009, the Company may at its option on one or
more occasions redeem Notes (which includes Additional Notes, if any) in an
aggregate principal amount not to exceed 35% of the aggregate principal amount
of the Notes (which includes Additional Notes, if any) originally issued at a
redemption price (expressed as a percentage of principal amount) of 107.750%,
plus accrued and unpaid interest to the Redemption Date, with the net cash
proceeds from one or more Equity Offerings; provided, however,
that (1) at least $150.0 million of such aggregate principal amount of
Notes (which includes Additional Notes, if any) remains outstanding immediately
after the occurrence of each such redemption (other than Notes held, directly
or indirectly, by the Company or its Affiliates); and (2) each such
redemption occurs within 90 days after the date of the related Equity Offering.

(c)           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; Open Market Purchases.

The Company shall not be
required to make any mandatory redemption or sinking fund payments with respect
to the Notes. The Company may at any time and from time to time purchase Notes
in the open market or otherwise.

SECTION 3.09.                                                                 Offer
to Purchase by Application of Net Proceeds Offer Amount.

In the event that,
pursuant to Section 4.10 hereof, the Company shall be required to commence
a Net Proceeds Offer (as defined in Section 4.10 hereof), it shall follow
the procedures specified below.

The Net Proceeds Offer
shall remain open for a period of 20 Business Days following its commencement
or such longer period as may be required by applicable law (the “Offer Period”). No later than five Business Days after the

 35
 

 

termination of the
Offer Period (the “Purchase Date”),
the Company shall purchase the Net Proceeds Offer Amount or, if less than the
Net Proceeds Offer Amount has been tendered, all Notes tendered in response to
the Net Proceeds Offer. Payment for any Notes so purchased shall 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 shall be paid to the Person in
whose name a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Notes
pursuant to the Net Proceeds Offer.

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

(a)           that the Net Proceeds Offer is being
made pursuant to this Section 3.09 and Section 4.10 hereof and the
length of time the Net Proceeds Offer shall remain open and, if the Net
Proceeds Offer is also made to holders of other Senior Subordinated Debt of the
Company or a Restricted Subsidiary of the Company pursuant to Section 4.10
hereof, the notice shall identify such Senior Subordinated Debt and state that
the Net Proceeds Offer is also made to holders of such Senior Subordinated
Debt;

(b)           the Net Proceeds Offer Amount, the
purchase price and the Purchase Date;

(c)           that any Note not tendered or
accepted for payment shall continue to accrue interest;

(d)           that, unless the Company defaults in
making such payment, any Note accepted for payment pursuant to the Net Proceeds
Offer shall cease to accrue interest after the Purchase Date;

(e)           that Holders electing to have a
portion of a Note purchased pursuant to a Net Proceeds Offer may only elect to
have such Note purchased in integral multiples of $1,000;

(f)            that Holders electing to have a Note
purchased pursuant to any Net Proceeds Offer shall be required to surrender the
Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, or transfer by book-entry transfer, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase Date;

(g)           that Holders shall be entitled to
withdraw their election if the Company, the depositary or the Paying Agent, as
the case may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile 

 36
 

 

transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Note purchased;

(h)           that, if the aggregate principal
amount of Notes surrendered by Holders and other Senior Subordinated Debt
surrendered by the holders thereof exceeds the Offer Amount, the Company shall
select the Notes and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company to be purchased on a pro rata basis (based
on the amounts of Notes and such other Senior Subordinated Debt tendered and
with such adjustments as may be deemed appropriate by the Company so that only
Notes or other Senior Subordinated Debt in denominations of $1,000, or integral
multiples thereof, shall be purchased); and

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

On or before the Purchase
Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Net Proceeds
Offer Amount of Notes and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company or portions thereof tendered pursuant to
the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has been
tendered, all Notes and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company or portions thereof tendered, and shall
deliver to the Trustee an Officers’ Certificate stating that such Notes or such
other Senior Subordinated Debt or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09. The Company,
the Depository or the Paying Agent, as the case may be, shall 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 shall promptly issue a new Note, and the Trustee, upon written request
from the Company shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Net Proceeds 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.

To the extent that the
provisions of any securities laws or regulations conflict with this Section 3.09
or Section 4.10 hereof, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 3.09 or Section 4.10 hereof.

 37
 

 

 

ARTICLE 4

COVENANTS

SECTION 4.01.                                                                 Payment
of Notes.

The Company shall pay or cause to be paid the
principal amount, premium, if any, and interest on the Notes on the dates and
in the manner provided in the Notes. Principal amount, premium, if any, and
interest shall 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. New York
time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal amount, premium,
if any, and interest then due. The Company shall pay all Additional Interest,
if any, in the same manner on the same dates and in the amounts set forth in
the Registration Rights Agreement.

The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at a rate equal to the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including postpetition interest in
any proceeding under any Bankruptcy Law) on overdue installments of 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 shall maintain in the Borough of
Manhattan, the City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee or any Registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the 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 shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.

The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03 hereof.

 38
 

 

 

SECTION 4.03.                                                                 Reports.

(a)           Whether or not
required by the rules and regulations of the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes (i) 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 such forms, including a “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” that describes
the financial condition and results of operations of the Company and its
consolidated Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in Management’s
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company’s certified independent
accountants and (ii) all current reports that would be required to be
filed with the SEC on Form 8-K if the Company were required to file
such reports, in each case, within the time periods specified in the SEC’s rules and
regulations. For so long as Holdings or another direct or indirect parent
company of the Company is a guarantor of the Notes, the Indenture will permit
the Company to satisfy its obligations under the first sentence of this Section 4.03(a) by
furnishing financial information relating to Holdings; provided that the same
is accompanied by consolidating information that explains in reasonable detail
the differences between the information relating to Holdings, on the one hand,
and the information relating to the Company and its Restricted Subsidiaries on
a stand-alone basis, on the other hand. In addition, following the
consummation of the Registered Exchange Offer (as defined in the Appendix),
whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports 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 such
information available to securities analysts and prospective investors upon
request.

(b)           The Company shall at
all times comply with TIA § 314(a).

(c)             For so long as any Notes remain outstanding,
the Company and the Guarantors shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

(d)           Should the Company
deliver to the Trustee any such information, reports or certificates or any
annual reports, information, documents and other reports pursuant to
TIA § 314(a), delivery of such information, reports or certificates
or any annual reports, information, documents and other reports to the Trustee
is for informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).

 39
 

 

 

SECTION 4.04.                                                                 Compliance
Certificate.

(a)           The Company and each
Guarantor (to the extent that such Guarantor is so required under the TIA)
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 shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this paragraph, such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this Indenture.

(b)           The Company shall,
so long as any of the Notes are outstanding, 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.                                                                 [Intentionally
Omitted].

SECTION 4.06.                                                                 Stay,
Extension and Usury Laws.

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

SECTION 4.07.                                                                 Restricted
Payments.

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

(1)  declare or pay any dividend or make any
distribution on or in respect of shares of the Company or any Restated
Subsidiary’s Capital Stock to holders of such Capital Stock (other than
dividends or distributions payable in Qualified Capital Stock of the Company
and dividends or distributions payable to the Company or a Restricted

 40
 

 

 Subsidiary and other than pro rata dividends
or other distributions made by a Subsidiary that is not a Wholly Owned
Subsidiary to minority stockholders (or owners of an equivalent interest in the
case of a Subsidiary that is an entity other than a corporation));

(2)  purchase, redeem or otherwise acquire or retire
for value any Capital Stock of the Company or of any direct or indirect parent
of the Company or of a Restricted Subsidiary of the Company held by any
Affiliate of the Company (other than a Restricted Subsidiary of the Company) or
any warrants, rights or options to purchase or acquire shares of any class of
such Capital Stock;

(3)  make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Company, or of any Guarantor, that is
subordinate or junior in right of payment to the Notes or any Guarantee, as
applicable (other than (x) any Indebtedness permitted under clause (vi) of
the definition of “Permitted Indebtedness” and (y) the purchase,
defeasance or other acquisition of such Indebtedness purchased in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of such purchase, defeasance or
other acquisition); or

(4)  make any Investment (other than Permitted
Investments)

(each of the foregoing
actions set forth in clauses (1), (2), (3) and (4) being referred to
as a “Restricted Payment”); if at the time of
such Restricted Payment or immediately after giving effect thereto:

(i)  a Default or an Event of Default shall have
occurred and be continuing; or

(ii)  the aggregate amount of Restricted Payments
(including such proposed Restricted Payment) made subsequent to the Issue Date
(other than Restricted Payments made pursuant to clauses (2), (3), (4), (5),
(6), (7), (8), (9), (10) and (12) of the following paragraph) shall exceed
the sum of, without duplication:

(v)  50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of
the Company earned subsequent to April 1, 2006 and on or prior to the date
the Restricted Payment occurs (the “Reference Date”)
(treating such period as a single accounting period); plus

(w) 100% of the aggregate net cash proceeds (including the fair
market value of property (as determined by the Company in good faith) other
than cash that would constitute Marketable Securities or a Permitted Business)
received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and on or
prior to the Reference Date of Qualified Capital Stock of the Company (other
than Excluded Contributions); plus

(x) without duplication of any amounts included in clause (ii)(w) above,
100% of the aggregate net cash proceeds of any equity contribution received 

 

 41

 

subsequent to
the Issue Date by the Company from a holder of the Company’s Capital Stock; plus

(y) the amount by which Indebtedness of the Company is reduced on
the Company’s balance sheet upon the conversion or exchange subsequent to the
Issue Date of any Indebtedness of the Company for Qualified Capital Stock of
the Company (less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or exchange); provided, however, that the foregoing amount shall not
exceed the net cash proceeds received by the Company or any Restricted
Subsidiary from the sale of such Indebtedness (excluding net cash proceeds from
sales to a Subsidiary of the Company or to an employee stock ownership plan or
a trust established by the Company or any of its Subsidiaries for the benefit
of their employees); plus

(z) an amount equal to the sum of (I) 100% of the aggregate
net proceeds (including the fair market value of property other than cash that
would constitute Marketable Securities or a Permitted Business) received by the
Company or any Restricted Subsidiary (A) from any sale or other
disposition of any Investment (other than a Permitted Investment) in any Person
(including an Unrestricted Subsidiary) made by the Company and its Restricted
Subsidiaries and (B) representing the return of capital or principal
(excluding dividends and distributions otherwise included in Consolidated Net
Income) with respect to such Investment, and (II) the portion
(proportionate to the Company’s equity interest in an Unrestricted Subsidiary)
of the fair market value of the net assets of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that, in the case of item (II), the foregoing
sum shall not exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made (and treated as a
Restricted Payment) by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.

Notwithstanding the foregoing, the provisions set
forth in the immediately preceding paragraph shall not prohibit:

(1)  the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice;

(2)  any Restricted Payment made out of the net cash proceeds of
the substantially concurrent sale of, or made by exchange for, Qualified
Capital Stock of the Company (other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit of their
employees and other than Designated Preferred Stock) or a substantially
concurrent cash capital contribution received by the Company from its
shareholders; provided, however, that the net
cash proceeds from such sale or such cash capital contribution (to the extent
so used for such Restricted Payment) shall be excluded from the calculation of
amounts under clauses (ii)(w) and (ii)(x) of the immediately
preceding paragraph;

 42
 

 

 

(3)  the acquisition of any Indebtedness of the Company or a
Guarantor that is a Subsidiary of the Company that is subordinate or junior in
right of payment to the Notes or the applicable Guarantee through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Company) of Refinancing Indebtedness that is
subordinate or junior in right of payment to the Notes or the applicable
Guarantee;

(4)  payments to a direct or indirect parent of the Company for
the purpose of permitting, any of such entities to redeem or repurchase common
equity or options in respect thereof, in each case in connection with the
repurchase provisions of employee stock option or stock purchase agreements or
other agreements to compensate management employees or upon the death, disability,
retirement, severance or termination of employment of management employees; provided that all such redemptions or repurchases pursuant
to this clause (4) shall not exceed in any fiscal year the sum of (A) $5.0
million (with unused amounts in any calendar year carried over to succeeding
calendar years subject to a maximum (without giving effect to the following
clause (B) of $10 million in any calendar year) plus (B) any amounts
not utilized in any preceding fiscal year following the Issue Date that were
otherwise available under this clause for such purchases (which aggregate
amount shall be increased by the amount of any net cash proceeds received from
the sale since the Issue Date of Capital Stock (other than Disqualified Capital
Stock) to members of the Company’s management team that have not otherwise been
applied to the payment of Restricted Payments pursuant to the terms of clause (ii) of
the immediately preceding paragraph or clause (2) of this paragraph
and by the cash proceeds of any “key-man” life insurance policies which are
used to make such redemptions or repurchases); provided,
further, that the cancellation of Indebtedness owing to the Company
from members of management of the Company or any of its Restricted Subsidiaries
in connection with any repurchase of Capital Stock of such entities (or
warrants or options or rights to acquire such Capital Stock) will not be deemed
to constitute a Restricted Payment under this Indenture;

(5)  the declaration and payment of dividends by the Company to, or
the making of loans to, its direct parent company in amounts required for the
Company’s direct or indirect parent companies to pay (A) franchise taxes
and other fees, taxes and expenses required to maintain their corporate
existence, (B)         Federal, state and local income taxes, to the
extent such income taxes are attributable to the income of the Company and the
Restricted Subsidiaries and, to the extent of the amount actually received from
its Unrestricted Subsidiaries, in amounts required to pay such taxes to the
extent attributable to the income of such Unrestricted Subsidiaries; provided,
however, that the amount of such payments in any fiscal year do not exceed the
amount that the Company and its consolidated Subsidiaries would be required to
pay in respect of Federal, state and local taxes for such fiscal year were the
Company to pay such taxes as a stand-alone taxpayer, (C) customary
salary, bonus and other benefits payable to officers and employees of any
direct or indirect parent company of the Company to the extent such salaries,
bonuses and other benefits are attributable to the ownership or operation of
the Company and the Restricted Subsidiaries, (D) general corporate
overhead expenses of any direct or indirect payment company of the Company to the
extent such expenses are attributable to the ownership or operation of the
Company and the Restricted Subsidiaries, and (E) reasonable fees and expenses
incurred in connection with any

 43
 

 

 

unsuccessful debt or equity offering by such direct or indirect parent
company of the Company;

(6)  repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of the
exercise price thereof;

(7)  additional Restricted Payments in an aggregate amount not to
exceed $75.0 million;

(8)  Permitted Transaction Payments;

(9)  payments of dividends on Disqualified Capital Stock issued in
compliance with Section 4.09 hereof;

(10)  Restricted Payments made with Net Cash Proceeds from Asset
Sales remaining after application thereof as required by Section 4.10
hereof (including after the making by the Company of any Net Proceeds Offer
required to be made by the Company pursuant to such Section and the
application of the Net Proceeds Offer Amount to purchase all Notes and other
Senior Subordinated Debt of the Company or a Restricted Subsidiary of the
Company tendered therein);

(11)  upon occurrence of a Change
of Control and within 60 days after the completion of the Change of Control
Offer pursuant to Section 4.15 hereof (including the purchase of all Notes
tendered), any purchase or redemption of Obligations of the Company that are
subordinate or junior in right of payment to the Notes required pursuant to the
terms thereof as a result of such Change of Control at a purchase or redemption
price not to exceed 101% of the outstanding principal amount thereof, plus
accrued and unpaid interest thereon, if any; provided,
however, that (A) at the time of such purchase or redemption,
no Default or Event of Default shall have occurred and be continuing (or would
result therefrom) and (B) such purchase or redemption is not made,
directly or indirectly, from the proceeds of (or made in anticipation of) any
issuance of Indebtedness by the Company or any Subsidiary; and

(12) Restricted Payments that are made with Excluded Contributions. Notwithstanding
any of the foregoing to the contrary, the Company and its Restricted
Subsidiaries may make any Restricted Payment so long as (1) no Default or
Event of Default has occurred and is continuing and (2) at the time of
such Restricted Payment and after giving pro forma effect thereto, the Company’s
Consolidated Fixed Charge Coverage Ratio would exceed 2.0 and 1.0; provided,
however, that if at any time the criteria set forth in clause (2) of the preceding
sentence cease to be satisfied, all Restricted Payments made by the Company or
any of its

 44
 

 

 

Restricted
Subsidiaries occurring on or after the date on which such criteria ceased to be
satisfied shall be required to be made, to the extent permitted thereby, in
compliance with the preceding paragraphs of this covenant, and the amount
available for Restricted Payments pursuant to clause (ii) of the
immediately preceding paragraph of this covenant on or after the date on which
such criteria ceases to be satisfied shall be equal to the amount that would
have been available for Restricted Payments pursuant to such clause (ii) on
such date without giving effect to any Restricted Payments made through such
date pursuant to and in compliance with this paragraph; provided, further, that
if the Company or any of its Restricted Subsidiaries become contractually
obligated to make any Restricted Payment at the time criteria set forth in
clauses (1) and (2) of the preceding sentence continues to be
satisfied, then the Company or such Restricted Subsidiary, as the case may be,
may continue to make such Restricted Payments, even if the criteria in clauses (1) and
(2) of the preceding sentence ceases to be satisfied at the time such
Restricted Payment is actually made, notwithstanding the limitation set forth
in the preceding proviso, and the amount available for Restricted Payments
pursuant to clause (ii) of the immediately preceding paragraph of this
covenant on or after the date on which such criteria ceases to be satisfied
shall be equal to the amount that would have been available for Restricted
Payments pursuant to such clause (ii) on such date without giving effect
to any Restricted Payments made on such date pursuant to and in compliance with
this proviso.

The Board of Directors of the Company may designate
any Restricted Subsidiary of the Company to be an Unrestricted Subsidiary as
specified in the definition of “Unrestricted Subsidiary”. For purposes of
making such determination, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
so designated shall be deemed to be Restricted Payments at the time of the
designation and shall reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All of those outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
fair market value of the Investments at the time of such designation. Such
designation shall only be permitted if the Restricted Payment would be
permitted at the time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.

SECTION 4.08.                                                                 Dividend
and Other Payment Restrictions Affecting Subsidiaries.

The Company shall not, and shall not cause or permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary of the Company to: (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or
advances or pay any Indebtedness or other obligation owed to the Company or any
Guarantor; or (c) transfer any of its property or assets to the Company or
any Guarantor, except, with respect to clauses (a), (b) and (c), for such
encumbrances or restrictions existing under or by reason of: (1) applicable
law, rule, regulation or order; (2) this Indenture, the Notes and the
Guarantees; (3) non-assignment provisions of any contract or any lease of
any Restricted Subsidiary of the Company entered into in the ordinary course of
business; (4) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person or the properties or assets of
the Person so acquired; (5) the Credit Agreement as entered into on the
Issue Date or any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof; provided that any restrictions imposed pursuant to any such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing are ordinary and customary with respect to
syndicated bank loans (under the relevant circumstances); (6) agreements
existing on the Issue Date to the extent and in the manner such agreements are
in effect on the Issue Date, including the Existing Notes; (7) restrictions
on the

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transfer of assets
subject to any Lien permitted under this Indenture imposed by the holder of
such Lien; (8) restrictions imposed by any agreement to sell assets or
Capital Stock permitted under this Indenture to any Person pending the closing
of such sale; (9) any agreement or instrument governing Capital Stock of
any Person that is acquired; (10) any Purchase Money Note or other
Indebtedness or other contractual requirements of a Securitization Entity in
connection with a Qualified Securitization Transaction; provided
that such restrictions apply only to such Securitization Entity; (11) other
Indebtedness or Permitted Subsidiary Preferred Stock outstanding on the Issue
Date or permitted to be issued or incurred under this Indenture; provided that any such restrictions are ordinary and
customary with respect to the type of Indebtedness being incurred or Preferred
Stock being issued (under the relevant circumstances); (12) restrictions on
cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business; (13) any encumbrances or
restrictions imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through (4) and
(6) through (12) above; provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of the
Company’s Board of Directors (evidenced by a Board Resolution) whose judgment
shall be conclusively binding, not materially more restrictive with respect to
such dividend and other payment restrictions than those contained in the
dividend or other payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing; (14) customary provisions in joint venture and other similar
agreements; and (15) customary provisions in leases and other agreements
entered into in the ordinary course of business.

SECTION 4.09.                                                                 Incurrence
of Indebtedness.

The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee, acquire, become liable, contingently or otherwise, with
respect to, or otherwise become responsible for payment of (collectively, “incur”)
any Indebtedness (other than Permitted Indebtedness); provided, however, that
the Company and any Restricted Subsidiary of the Company may incur Indebtedness
(including, without limitation, Acquired Indebtedness), in each case if on the
date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company
would have been greater than 2.0 to 1.0; provided, however, that the amount of
Indebtedness (including Acquired Indebtedness) that may be incurred pursuant to
the foregoing by Restricted Subsidiaries that are not Guarantors shall not
exceed $50 million at any one time outstanding.

SECTION 4.10.                                                                 Asset
Sales.

The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Company); (ii) at least 75% of the consideration received by the
Company or the Restricted Subsidiary, as the case may be, from such Asset Sale
shall be in the form of cash or Cash Equivalents; provided
that the amount of:

 46
 

 

 

(a) any liabilities
(as shown on the Company’s or such Restricted Subsidiary’s most recent balance
sheet) of the Company or any such Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Notes) that are assumed by the
transferee of any such assets; (b) any notes or other obligations received
by the Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 180
days of the receipt thereof (to the extent of the cash received); and (c) any
Designated Non-cash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to
exceed the greater of $50 million and 5% of Total Assets at the time of the
receipt of such Designated Non-cash Consideration (with the fair market value
of each item of Designated Non-cash Consideration being measured at the time
received and without giving effect to subsequent changes in value), shall, in
each of (a), (b) and (c) above, be deemed to be cash for the purposes
of this provision or for purposes of the second paragraph of this Section 4.10;
and (iii) upon the consummation of an Asset Sale, the Company shall apply,
or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 365 days of receipt thereof either (A) to prepay
any Senior Debt or Indebtedness of a Restricted Subsidiary that is not a
Guarantor and, in the case of any such Indebtedness under any revolving credit
facility, effect a corresponding reduction in the availability under such
revolving credit facility (or effect a permanent reduction in the availability
under such revolving credit facility regardless of the fact that no prepayment
is required in order to do so (in which case no prepayment should be
required)), (B) to reinvest in Productive Assets (provided that this
requirement shall be deemed satisfied if the Company or such Restricted
Subsidiary by the end of such 365-day period has entered into a binding
agreement under which it is contractually committed to reinvest in Productive
Assets and such investment is consummated within 120 days from the date on
which such binding agreement is entered into and, with respect to the amount of
such investment, the reference to the 366th day after an Asset Sale in the second
following sentence shall be deemed to be a reference to the 121st day after the date on which such binding
agreement is entered into (but only if such 121st day occurs later than such 366th day)), or (C) a combination of prepayment
and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). Pending
the final application of any such Net Cash Proceeds, the Company or such
Restricted Subsidiary may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Cash Proceeds in Cash
Equivalents. On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines by Board Resolution not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of
the next preceding sentence (each, a “Net Proceeds Offer Trigger
Date”), such aggregate amount of Net Cash Proceeds which have not
been applied on or before such Net Proceeds Offer Trigger Date as permitted in
clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding
sentence (each a “Net Proceeds Offer Amount”) shall
be applied by the Company or such Restricted Subsidiary to make an offer to
purchase (the “Net Proceeds Offer”) on a date
(the “Net Proceeds Offer Payment Date”) not
less than 30 nor more than 60 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders and holders of any other Senior Subordinated
Debt of the Company or a Restricted Subsidiary of the Company requiring the
making of such an offer, on a pro rata basis,
the maximum amount of Notes and such other Senior Subordinated Debt that may be
purchased with

 47
 

 

 

the Net Proceeds Offer
Amount at a price equal to 100% of their principal amount (or, in the event
such other Senior Subordinated Debt was issued with significant original issue
discount, 100% of the accreted value thereof), plus accrued and unpaid interest
thereon, if any, to the date of purchase (or, in respect of such other Senior
Subordinated Debt, such lesser price, if any, as may be provided for by the
terms of such Senior Subordinated Debt); provided, however,
that if at any time any non-cash consideration (including any Designated
Non-cash Consideration) received by the Company or any Restricted Subsidiary of
the Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest received
with respect to any such non-cash consideration), then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.10.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than
$20.0 million, the application of the Net Cash Proceeds constituting such
Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such
time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger
Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by
the Company and its Restricted Subsidiaries aggregates at least $20.0 million,
at which time the Company or such Restricted Subsidiary shall apply all Net
Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so
deferred to make a Net Proceeds Offer (the first date the aggregate of all such
deferred Net Proceeds Offer Amounts is equal to $20.0 million or more shall be
deemed to be a Net Proceeds Offer Trigger Date).

Notwithstanding the immediately preceding paragraph,
the Company and its Restricted Subsidiaries shall be permitted to consummate an
Asset Sale without complying with such paragraph to the extent that: (i) at
least 75% of the consideration for such Asset Sale constitutes Productive
Assets, cash, Cash Equivalents and/or Marketable Securities; and (ii) such
Asset Sale is for fair market value; provided that
any consideration consisting of cash, Cash Equivalents and/or Marketable
Securities received by the Company or any of its Restricted Subsidiaries in
connection with any Asset Sale permitted to be consummated under this paragraph
shall constitute Net Cash Proceeds subject to the provisions of the preceding
paragraph.

Notice of each Net Proceeds Offer will be mailed to
the record Holders as shown on the register of Holders within 30 days following
the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall
comply with the procedures set forth in Section 3.09 hereof. To the extent
that the aggregate amount of Notes and other Senior Subordinated Debt tendered
pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount,
the Company may use any remaining Net Proceeds Offer Amount for general
corporate purposes or for any other purpose not prohibited by this Indenture.
Upon completion of any such Net Proceeds Offer, the Net Proceeds Offer Amount
shall be reset at zero.

The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of this Section 4.10, the Company shall comply

 48
 

 

 

with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.10 by virtue thereof.

SECTION 4.11.                                                                 Transactions
with Affiliates.

(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to occur any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (an “Affiliate Transaction”) involving
aggregate payment or consideration in excess of $10.0 million, unless (i) such
Affiliate Transaction is on terms that are not materially less favorable to the
Company or the relevant Restricted Subsidiary than those that might reasonably
have been obtained in a comparable transaction at such time on an arm’s-length
basis from a Person that is not an Affiliate of the Company; and (ii) the
Company delivers to the Trustee with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate payments or
consideration in excess of $30.0 million, a Board Resolution adopted by the
majority of the members of the Board of Directors of the Company approving such
Affiliate Transaction and set forth in an officers’ certificate certifying that
such Affiliate Transaction complies with clause (i) above.

(b)           The restrictions set
forth in Section 4.11(a) hereof shall not apply to: (i) reasonable
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Restricted Subsidiary
of the Company as determined in good faith by the Company’s Board of Directors
or senior management; (ii) transactions between or among the Company and
any of its Restricted Subsidiaries or between or among such Restricted
Subsidiaries, provided such transactions are
not otherwise prohibited by this Indenture; (iii) any agreement as in
effect as of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) or by any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders in any material respect
than the original agreement as in effect on the Issue Date as determined in
good faith by the Company; (iv) Restricted Payments or Permitted
Investments permitted by this Indenture; (v) transactions effected as part
of a Qualified Securitization Transaction; (vi) the payment of customary
annual management, consulting and advisory fees and related expenses to the
Permitted Holders and their Affiliates made pursuant to any financial advisory,
financing, underwriting or placement agreement or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures which are approved by the Board of Directors
of the Company or such Restricted Subsidiary in good faith; (vii) payments
or loans to employees or consultants that are approved by the Board of Directors
of the Company in good faith; (viii) sales of Qualified Capital Stock; (ix) the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, any stockholders’ agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter; provided, however,
that the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of obligations under, any future amendment to any such
existing agreement or under any similar agreement entered into after the Issue
Date shall only be

 49
 

 

permitted by
this clause (ix) to the extent that the terms of any such amendment or new
agreement are not disadvantageous to the Holders of Notes in any material
respect; (x) transactions permitted by, and complying with, the provisions
of Article 5 hereof, (xi) any issuance of securities or other payments,
awards, grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by
the Board of Directors of the Company, (xii) investments by the Permitted
Holders in securities of the Company or any of its Restricted Subsidiaries so
long as (i) the investment is being offered generally to other investors
on the same or more favorable terms and (ii) the investment constitutes
less than 5.0% of the proposed or outstanding issue amount of such class of securities;
and (xiii) transactions in which the Company or any Restricted Subsidiary, as
the case may be, receives an opinion from a nationally recognized investment
banking, appraisal or accounting firm that such Affiliate Transaction is either
fair, from a financial standpoint, to the Company or such Restricted Subsidiary
or is on terms not materially less favorable than those that might reasonably
have been obtained in a comparable transaction at such time on an arm’s length
basis from a Person that is not an Affiliate of the Company.

SECTION 4.12.                                                                 Liens.

The Company shall not, and shall not cause or permit
any Guarantor to, incur any Secured Debt that is not Senior Debt of such
Person, unless contemporaneously therewith such Person makes effective provision
to secure the Notes or the relevant Guarantee, as applicable, equally and
ratably with such Secured Debt for so long as such Secured Debt is secured by a
Lien (the “Initial Lien”); provided,
however, that the Company will be permitted to defease on the Issue
Date the Existing Notes in accordance with the terms of the indenture governing
those notes without having to comply with this Section 4.12 in connection
therewith. Any Lien created for the benefit of the Holders of the Notes
pursuant to the preceding sentence shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged upon the
release and discharge of the Lien securing the other Secured Debt and that
holders of such other Secured Debt may exclusively control the disposition of
property subject to the Initial Lien.

SECTION 4.13.                                                                 Conduct
of Business.

The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any businesses a majority of whose
revenues are not derived from businesses that are the same or reasonably
similar, ancillary or related to, or a reasonable extension, development or
expansion of, the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date (which shall include, without
limitation, engineered components businesses not within the aerospace
industry).

SECTION 4.14.                                                                 Corporate
Existence.

Subject to Article 5 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (ii) the rights

 50
 

 

 

(charter and statutory),
licenses and franchises of the Company and its Restricted 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 Restricted 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 Restricted Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to
the Holders of the Notes.

SECTION 4.15.                                                                 Offer
to Repurchase upon Change of Control.

(a)           If a Change of
Control occurs, each Holder shall have the right to require that the Company
purchase all or a portion of such Holder’s Notes pursuant to the offer
described below (the “Change of Control Offer”),
at a purchase price equal to 101% of the principal amount thereof plus accrued
interest to the date of purchase. Within 30 days following the date upon
which the Change of Control occurred, the Company must send, by first class
mail, a notice to the Trustee and each Holder, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state, among other things,
the purchase date, which must be no earlier than 30 days nor later than 60 days
from the date such notice is mailed, other than as may be required by law (the “Change of Control Payment Date”). Holders electing to have a
Note purchased pursuant to a Change of Control Offer shall be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business
Day prior to the Change of Control Payment Date.

(b)           On the Change of
Control Payment Date, the Company shall, to the extent lawful, (1) accept
for payment all Notes or portions thereof properly tendered pursuant to the
Change of Control Offer, (2) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the applicable
Trustee the Notes so accepted together with an Officers’ Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail or deliver (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that
each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.

Prior to the mailing of the notice referred to in Section 4.15(a) above,
but in any event within 30 days following any Change of Control, the Company
shall: (i) repay in full all Indebtedness under the Credit Agreement and
all other Senior Debt the terms of which require repayment upon a Change of
Control; or (ii) obtain the requisite consents under the Credit Agreement
and all such other Senior Debt to permit the repurchase of the Notes as
provided below. The Company’s failure to comply with the covenant described in
the immediately preceding sentence shall constitute an Event of Default
described in clause (c) and not in clause (b) under Section 6.01
hereof.

 

 51

 

(c)           The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act to
the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the Company complies with the provisions of any such securities laws or
regulations, the Company shall not be deemed to have breached its obligations
under this Section 4.15.

(d)           Notwithstanding
anything to the contrary in this Section 4.15, the Company shall not be required
to make a Change of Control Offer upon a Change of Control if a third party
makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 4.15 hereof and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

SECTION 4.16.                                                           No
Senior Subordinated Debt.

The Company shall not, and shall not permit any
Guarantor to, incur or suffer to exist Indebtedness that is senior in right of
payment to the Notes or such Guarantor’s Guarantee, as the case may be, and
subordinate in right of payment to any other Indebtedness of the Company or
such Guarantor, as the case may be.

SECTION 4.17.                                                           Additional
Guarantees.

The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create or acquire another Domestic Restricted
Subsidiary unless such Domestic Restricted Subsidiary executes and delivers a
supplemental indenture to the Indenture, providing for a senior subordinated
guarantee of payment of the Notes by such Domestic Restricted Subsidiary; provided, however, that such Domestic Restricted Subsidiary
need not execute and deliver such a supplemental indenture for so long as such
Domestic Restricted Subsidiary is an Immaterial Domestic Restricted Subsidiary;
provided, further, however, that the Company shall cause a Domestic Restricted
Subsidiary that was an Immaterial Domestic Restricted Subsidiary but has ceased
to qualify as an Immaterial Domestic Restricted Subsidiary to execute and deliver
a supplemental indenture to the Indenture, providing for a senior subordinated
guarantee of payment of the Notes by such Domestic Restricted Subsidiary no
later than 20 business days after the end of the most recently ended fiscal
quarter of the Company in which such Domestic Restricted Subsidiary ceased to
be an Immaterial Domestic Restricted Subsidiary; provided, further, however,
that if at any time, Domestic Restricted Subsidiaries that are not Guarantors
because they are Immaterial Domestic Restricted Subsidiaries constitute in the
aggregate more than 5% of Total Assets as of the end of the most recently ended
fiscal quarter of the Company or more than 5% of Consolidated EBITDA of the
Company for the period of four consecutive fiscal quarters as of the end of the
most recently ended fiscal quarter of the Company, then the Company shall cause
one or more such Domestic Restricted Subsidiaries to become Guarantors
(notwithstanding that such Domestic Restricted Subsidiaries are, individually,
Immaterial Domestic Restricted Subsidiaries), no later than 20 business days
after the end of the most recently ended fiscal quarter in which such
requirement was triggered, such that the foregoing condition ceases to be true.

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SECTION 4.18.                                                           Limitation
on Preferred Stock of Restricted Subsidiaries.

The Company shall not permit any of its Restricted
Subsidiaries to issue any Preferred Stock (other than to the Company or to a
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Restricted Subsidiary of the Company) to own any Preferred Stock
of any Restricted Subsidiary of the Company, other than Permitted Subsidiary
Preferred Stock. The provisions of this Section 4.18 will not apply to (w) any
of the Guarantors, (x) any transaction as a result of which neither the
Company nor any of its Restricted Subsidiaries will own any Capital Stock of
the Restricted Subsidiary whose Preferred Stock is being issued or sold and (y) Preferred
Stock that is Disqualified Capital Stock and is issued in compliance with Section 4.09
hereof.

SECTION 4.19.                                                           Suspension
of Covenants.

(a)           During any period of
time following the Issue Date that (i) the Notes have Investment Grade
Ratings from both Rating Agencies, and (ii) no Default has occurred and is
continuing under the Indenture (the occurrence of the events described in the
foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), the Company and its Restricted
Subsidiaries shall not be subject to the following provisions of the Indenture:

(1)           Section 4.07;

(2)           Section 4.08;

(3)           Section 4.09;

(4)           Section 4.10;

(5)           Section 4.11;

(6)           Section 4.13;

(7)           Section 4.16;

(8)           Section 4.17;

(9)           Section 4.18;
and

(10)         clause (ii) of
the first paragraph of Section 5.01

(collectively, the “Suspended Covenants”). Upon the occurrence of a Covenant
Suspension Event, the amount of Net Cash Proceeds with respect to any
applicable Net Proceeds Offer Trigger Date shall be set at zero at such date
(the “Suspension Date”). In addition, in the
event that the Company and the Restricted Subsidiaries are not subject to the
Suspended Covenants for any period of time as a result of the foregoing, and on
any subsequent date (the “Reversion Date”)
one or both of the Rating Agencies withdraws its Investment Grade Rating or
downgrades the rating assigned to the Notes below an Investment Grade Rating or
a Default or Event of Default occurs and is continuing, then the Company and
the Restricted Subsidiaries shall thereafter again be subject to the 

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Suspended Covenants with
respect to future events. The period of time between the Suspension Date and
the Reversion Date is referred to in this description as the “Suspension Period.” Within 30 days of the Reversion Date,
any Restricted Subsidiary that would have been required during the Suspension
Period but for the Suspended Covenants by Section 4.17 to execute a
supplemental indenture shall execute such supplemental indenture required by
such covenant. Notwithstanding that the Suspended Covenants may be reinstated,
no Default or Event of Default will be deemed to have occurred as a result of a
failure to comply with the Suspended Covenants during the Suspension Period (or
upon termination of the Suspension Period or after that time based solely on
events that occurred during the Suspension Period).

(b)           On the Reversion
Date, all Indebtedness incurred during the Suspension Period will be classified
to have been incurred or issued pursuant to Section 4.09 to the extent
such Indebtedness would be permitted to be incurred or issued thereunder as of
the Reversion Date and after giving effect to Indebtedness incurred or issued
prior to the Suspension Period and outstanding on the Reversion Date. To the
extent such Indebtedness would not be so permitted to be incurred or issued
pursuant to Section 4.09, such Indebtedness will be deemed to have been
outstanding on the Issue Date, so that it is classified as permitted under
clause (b) of the definition of Permitted Indebtedness. Restricted
Payments made during the Suspension Period will be deemed to have been made
pursuant to the first paragraph of Section 4.07.

(c)           If (i) a Change
of Control occurs that results in either (a) the sale, lease, exchange or
other transfer of all or substantially all of the assets of the Company to any
Person or Group (as defined in the definition of Change of Control) other than
an Affiliate of the Company or (b) any Person or Group other than an
Affiliate of the Company becomes the beneficial owner, directly or indirectly,
of shares representing 100% of the total ordinary voting power represented by
the issued and outstanding Capital Stock of the Company or Holdings and (ii) such
Person or Group acquiring control pursuant to clause (i) above is subject
to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, then the Company shall not be subject to Section 4.03(a) from
that time if and for so long as such Person or Group maintains Investment Grade
Ratings from both Rating Agencies.

(d)           The Company shall
give the Trustee prompt (and in any event not later than five business days
after a Covenant Suspension Event) written notice of any Covenant Suspension
Event. In the absence of such notice, the Trustee shall assume the Suspended
Covenants apply and are in full force and effect. The Company shall give the
Trustee prompt (and in any event not later than five business days after a
Covenant Suspension Event) written notice of any occurrence of a Reversion Date.
After any such notice of the occurrence of a Reversion Date, the Trustee shall
assume the Suspended Covenants apply and are in full force and effect.

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ARTICLE 5

SUCCESSORS

SECTION 5.01.                                                           Merger,
Consolidation, or Sale of Assets.

(a)           The Company shall
not, in a single transaction or series of related transactions, consolidate or
merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Restricted Subsidiary of the
Company to sell, assign, transfer, lease, convey or otherwise dispose of) all
or substantially all of the Company’s assets (determined on a consolidated
basis for the Company and the Company’s Restricted Subsidiaries) to any Person
unless (i) either: (a) the Company shall be the surviving or
continuing corporation; or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company’s
Restricted Subsidiaries substantially as an entirety (the “Surviving
Entity”): (x) shall be a corporation organized and validly
existing under the laws of the United States of America or any State thereof or
the District of Columbia; and (y) shall expressly assume, by supplemental
indenture (in form and substance satisfactory to the Trustee), executed and
delivered to the Trustee, the due and punctual payment of the principal of,
premium, if any, and interest on all of the Notes and the performance of every
covenant of the Notes, this Indenture and the Registration Rights Agreement to
be performed or observed on the part of the Company; (ii) except in the
case of a merger of the Company with or into a Restricted Subsidiary of the
Company and except in the case of a merger entered into solely for the purpose
of reincorporating the Company in another jurisdiction, immediately after
giving effect to such transaction and the assumption contemplated by clause
(i)(b)(y) above (including giving effect to any Indebtedness and Acquired
Indebtedness incurred in connection with or in respect of such transaction),
the Company or such Surviving Entity, as the case may be, shall be able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.09 hereof or the Consolidated Fixed
Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries
on a consolidated basis would be greater than such ratio for the Company and
the Restricted Subsidiaries immediately prior to such transaction; (iii) except
in the case of a merger of the Company with or into a Restricted Subsidiary of
the Company and except in the case of a merger entered into solely for the
purpose of reincorporating the Company in another jurisdiction, immediately
after giving effect to such transaction and the assumption contemplated by
clause (i)(b)(y) above (including, without limitation, giving effect to
any Indebtedness and Acquired Indebtedness incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; and (iv) the Company or the
Surviving Entity shall have delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.

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(b)           Each Guarantor shall
not, and the Company shall not permit any such Guarantor to, consolidate or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of, in a single transaction or series of related transactions, all or
substantially all of its assets to any Person unless:

(1)                                 (except
in the case of such Guarantor that has been disposed of in its entirety to
another Person (other than to the Company or an Affiliate of the Company),
whether through a merger, consolidation or sale of Capital Stock or through the
sale of all or substantially all of its assets (such sale constituting the
disposition of such Guarantor in its entirety), if in connection therewith the
Company provides an Officers’ Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 4.10 hereof in
respect of such disposition) the resulting, surviving or transferee Person (if
not such Guarantor) shall be a Person organized and validly existing under the
laws of the jurisdiction under which such Guarantor was organized or under the
laws of the United States of America, any State thereof or the District of
Columbia, and such Person shall expressly assume, by a supplemental indenture
(in form and substance satisfactory to the Trustee), executed and delivered to
the Trustee, all the obligations of such Guarantor, if any, under its
Guarantee;

(2)                                 except
in the case of a merger of such Guarantor with or into the Company or another
Guarantor of the Company and except in the case of a merger entered into solely
for the purpose of reincorporating such Guarantor in another jurisdiction,
immediately after giving effect to such transaction and the assumption contemplated
by the immediately preceding clause (b)(1) (including, without limitation,
giving effect to any Indebtedness and Acquired Indebtedness incurred and any
Lien granted in connection with or in respect of the transaction), no Default
or Event of Default shall have occurred and be continuing; and

(3)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in the Indenture relating to such transaction
have been satisfied.

(c)           Holdings shall not
consolidate or merge with or into, or sell, assign, transfer, lease or
otherwise dispose of, in a single transaction or series of related
transactions, all or substantially all of its assets to any Person unless:

(1)                                 the
resulting, surviving or transferee Person (if not Holdings) shall be a Person
organized and validly existing under the laws of the

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                                                United
States of America, any State thereof or the District of Columbia, and such
Person shall expressly assume, by a supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
all the obligations of Holdings, if any, under its Guarantee;

(2)                                 except
in the case of a merger entered into solely for reincorporating Holdings in
another jurisdiction, immediately after giving effect to such transaction and
the assumption contemplated by the immediately preceding clause (c)(1) (including,
without limitation, giving effect to any Indebtedness and Acquired Indebtedness
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred and be
continuing; and

(3)                                 the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in the Indenture relating to such transaction
have been satisfied.

In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Guarantee of the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the
Restricted Subsidiary, such successor Person shall succeed to and be
substituted for the Restricted Subsidiary with the same effect as if it had
been named herein as a Restricted Subsidiary. Such successor Person thereupon
may cause to be signed any or all of the Guarantees of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Guarantees had been issued at the date of the
execution hereof.

For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the Company,
shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company. However, transfer of assets between or
among the Company and its Restricted Subsidiaries will not be subject to this Section 5.01.

Notwithstanding anything in this Section 5.01 to
the contrary, (x) the merger of TD Finance Corporation with and into the
Company on the date hereof and (y) the merger of TransDigm Holding Company
with and into the Company, as long as such merger occurs on or before the
second Business Day following the Issue Date, shall 

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be permitted under this
Indenture without complying with the requirements of this Section 5.01.

SECTION 5.02.                                                           Successor
Corporation Substituted.

Upon any consolidation,
combination or merger, or any transfer of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, in which the
Company is not the continuing corporation, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
lease or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of the Company under this Indenture and the
Notes with the same effect as if such surviving entity had been named as such
and that, in the event of a conveyance or transfer (but not a lease), the
conveyor or transferor (but not a lessor) shall be released from the provisions
of this Indenture.

ARTICLE 6

DEFAULTS AND
REMEDIES

SECTION 6.01.                                                           Events
of Default.

“Event of Defaults” are:

(a)           the failure to pay interest on any
Notes when the same becomes due and payable if the default continues for a
period of 30 days (whether or not such payment shall be prohibited by Article 10
or Article 12 hereof);

(b)           the failure to pay the principal on
any Notes when such principal becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to purchase
Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer on
the date specified for such payment in the applicable offer to purchase)
(whether or not such payment shall be prohibited by Article 10 or Article 12
hereof);

(c)           a default in the observance or
performance of any other covenant or agreement contained herein if the default
continues for a period of 60 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes (except in the case of a default with respect to Section 5.01
hereof, which will constitute an Event of Default with such notice requirement
but without such passage of time requirement);

(d)           the failure to pay at final stated
maturity (giving effect to any applicable grace periods and any extensions
thereof) the principal amount of any Indebtedness of the Company or any
Significant Subsidiary of the Company (other than a Securitization Entity), or
the acceleration of the final stated maturity of any such Indebtedness, if the aggregate
principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated, aggregates $20.0 million or more at any
time;

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(e)           one or more judgments in an aggregate
amount in excess of $20.0 million shall have been rendered against the
Company or any of its Significant Subsidiaries and such judgments remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;

(f)            the Company or any of its
Significant Subsidiaries pursuant to or within the meaning of Bankruptcy Law:

(i) 
commences a voluntary case,

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

(iii) 
consents to the appointment of a custodian of it or for all or substantially
all of its property, or

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

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

(i)  is
for relief against the Company or any of its Significant Subsidiaries;

(ii) 
appoints a custodian of the Company or any of its Significant Subsidiaries or
for all or substantially all of the property of the Company or any of its
Significant Subsidiaries; or

(iii) 
orders the liquidation of the Company or any of its Significant Subsidiaries;

and the order or decree remains unstayed and in effect
for 60 consecutive days.

SECTION 6.02.                                                           Acceleration.

If any Event of Default
(other than an Event of Default specified in clause (f) or (g) of Section 6.01
hereof with respect to the Company) occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare the principal of and accrued interest on all the Notes to be due
and payable immediately by notice in writing to the Company and the Trustee
specifying the respective Event of Default and that it is a “notice of
acceleration” (the “Acceleration Notice”),
and the same (i) shall become immediately due and payable or (ii) if
there are any amounts outstanding under the Credit Agreement, shall become
immediately due and payable upon the first to occur of an acceleration under
the Credit Agreement or five Business Days after receipt by the Company and the
Representative under the Credit Agreement of such Acceleration Notice but only
if such Event of Default is then continuing. If an Event of Default specified
in clause (f) or (g) of Section 6.01 hereof with respect to the
Company occurs and is continuing, then all unpaid principal of, and premium, if
any, and accrued and unpaid interest on all the outstanding Notes shall ipso

 59
 

 

 facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

At any time after a
declaration of acceleration with respect to the Notes as described in the
preceding paragraph, the Holders of a majority in principal amount of the Notes
may rescind and cancel such declaration and its consequences (i) if the
rescission would not conflict with any judgment or decree, (ii) if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration, (iii) to
the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid, (iv) if the
Company has paid the Trustee its reasonable compensation and reimbursed the
Trustee for its expenses, disbursements and advances; and (v) in the event
of the cure or waiver of an Event of Default of the type described in clause (f) or
(g) of Section 6.01 hereof, the Trustee shall have received an
Officers’ Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.

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, 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 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 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
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any

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remedy available
to the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Holders of Notes or that may involve the Trustee in personal
liability.

SECTION 6.06.                                                           Limitation
on Suits.

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

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

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

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

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

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

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

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 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 (a) or (b) 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 amount of, premium 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.

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SECTION 6.09.                                                                 Trustee
May File Proofs of Claim.

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

SECTION 6.10.                                                                 Priorities.

Any money collected by
the Trustee pursuant to this Article and any other money or property
distributable in respect of the Company’s obligations under this Indenture
after an Event of Default shall be applied in the following order:

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

Second: to Holders of Notes for
amounts due and unpaid on the Notes for principal amount, premium and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal amount, premium 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.

 

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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 does not
apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.

ARTICLE 7

TRUSTEE

SECTION 7.01.                                                                 Duties
of Trustee.

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

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

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

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

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

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

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

 

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

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

(e)           No provision of this
Indenture shall require the Trustee to expend or risk its own funds or incur
any liability. The Trustee shall be under no obligation to exercise any of its
rights and powers under this Indenture at the request of any Holders, unless
such Holder shall have offered to the Trustee security and indemnify
satisfactory to it against any loss, liability or expense.

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

SECTION 7.02.                                                                 Rights
of Trustee.

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

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

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

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

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

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

 

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

(h)           The rights,
privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

(i)            The permissive
right of the Trustee to take or refrain from taking any actions enumerated in
this Indenture shall not be construed as a duty.

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

(k)           Anything in this
Indenture notwithstanding, in no event shall the Trustee be liable for special,
indirect, punitive or consequential loss or damage of any kind whatsoever
(including but not limited to loss of profit), even if the Company has been
advised as to the likelihood of such loss or damage and regardless of the form
of action.

SECTION 7.03.                                                                 Individual
Rights of Trustee.

The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. 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 or
resign. The Registrar or any Paying Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

SECTION 7.04.                                                                 Trustee’s
Disclaimer.

The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company’s use
of the proceeds from the Notes or any money paid to the Company or upon the
Company’s direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any 

 

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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.

(a)           The Trustee shall
not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of such a Default or Event of Default is received by the Trustee
at the Corporate Trust Office of the Trustee, and such notice references the
Notes and this Indenture.

(b)           Within 90 days after
the occurrence of a Default or an Event of Default, the Trustee shall mail to
Holders of Notes, as their names and addresses appear in the security register
for the Notes, a notice of the Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived. Except in the case of a Default or Event of Default in payment of principal
of, premium, 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.

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

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

SECTION 7.07.                                                                 Compensation
and Indemnity.

The Company, Holdings and
the Guarantors shall pay to the Trustee from time to time such compensation for
its acceptance of this Indenture and services hereunder as the parties shall
agree from time to time. The Trustee’s compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company, Holdings and
the Guarantors shall 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 shall include the
reasonable compensation, disbursements and expenses of the Trustee’s agents and
counsel.

The Company, Holdings and
the Guarantors shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys’ fees and 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 

 

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

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

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

In addition, and without
prejudice to the rights provided to the Trustee under any of the provisions of
this Indenture, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) 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.

“Trustee” for purposes of
this Section shall include any predecessor Trustee and the Trustee in each
of its capacities hereunder and each agent, custodian and other person employed
to act hereunder; provided, however, that the
negligence, willful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.

The Trustee shall comply
with the provisions of TIA § 313(b)(2) to the extent applicable.

SECTION 7.08.                                                                 Replacement
of Trustee.

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

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

 

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

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

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

(d)           the Trustee becomes incapable of
acting.

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

If a successor Trustee
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company, or the Holders of Notes of at least
10% in principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

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

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

SECTION 7.09.                                                                 Successor
Trustee by Merger, etc.

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

SECTION 7.10.                                                                 Eligibility;
Disqualification.

There shall at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any State thereof, that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a 

 

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combined capital
and surplus of at least $100.0 million as set forth in its most recent published
annual report of condition.

This Indenture shall
always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and
(5). The Trustee is subject to TIA § 310(b).

SECTION 7.11.                                                                 Preferential
Collection of Claims Against Company.

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

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION

SECTION 8.01.                                                                 Option
to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at the
option of its Board of Directors evidenced by a resolution set forth in an
Officers’ Certificate, at any time, elect to have either Section 8.02 or
8.03 hereof applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 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 shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its 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 shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b) below,
and to have satisfied all its other obligations under such Notes 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 shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to
receive solely from the trust fund described in Section 8.04 hereof, and
as more fully set forth in such Section, payments in respect of the principal
amount of, premium, if any, and interest on such Notes when such payments are
due, (b) the Company’s obligations with respect to such Notes under Article 2
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company’s obligations in connection
therewith and (d) the provisions of this Article 8 with respect to
Legal Defeasance. 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.

 

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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 shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from its obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall 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 shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(d) and 6.01(e) hereof shall not constitute Events of
Default.

SECTION 8.04.                                                                 Conditions
to Legal or Covenant Defeasance.

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

In order to exercise
either Legal Defeasance or Covenant Defeasance:

(a)           the Company must irrevocably deposit
with the Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal amount at maturity
of, premium and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be;

(b)           in the case of an election under Section 8.02
hereof, the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States of America reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for Federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal 

 

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income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;

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

(d)           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 incurrence of Indebtedness all
or a portion of the proceeds of which will be used to defease the Notes
pursuant to this Article 8 concurrently with such incurrence and the grant
of a Lien to secure such Indebtedness) or insofar as Section 6.01 (f) or
6.01(g) hereof is concerned, at any time in the period ending on the 91st
day after the date of deposit;

(e)           such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a
default under this Indenture (other than a Default or an Event of Default
resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing) or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;

(f)            the Company shall have delivered to
the Trustee an Opinion of Counsel (which may be subject to customary
exceptions) to the effect that (A) the trust funds will not be subject to
any rights of holders of Senior Debt including, without limitation, those
arising under this Indenture, and (B) after the 91st day following the deposit, the trust funds
will not be subject to the effect of the preference provisions of Section 547
of the United States Federal Bankruptcy Code;

(g)           the Company shall have delivered to
the Trustee an Officers’ Certificate stating that the deposit was not made by
the Company with the intent of preferring the Holders over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others;

(h)           the Company shall have delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and

(i)            the Company shall have paid or duly
provided for payment of all amounts then due to the Trustee pursuant to Section 7.07
hereof.

Notwithstanding the
foregoing, the Opinion of Counsel required by clause (b) above with
respect to a Legal Defeasance need not be delivered if all Notes not

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therefor delivered
to the Trustee for cancellation (A) have become due and payable, or (B) will
become due and payable on the maturity date within one year under arrangements
satisfactory to the Trustee for giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company.

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

Provisions.

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

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

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

SECTION 8.06.                                                                 Satisfaction
and Discharge.

This Indenture shall be
discharged and shall cease to be of further effect (except as to surviving
rights or registration of transfer or exchange of the Notes, as expressly
provided for in this Indenture) as to all outstanding Notes when (i) either
(a) all the Notes theretofore authenticated and delivered (except lost,
stolen or destroyed Notes which 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 not theretofore delivered to the Trustee for cancellation have become due
and payable, pursuant to an optional redemption notice or otherwise, and the
Company has irrevocably deposited or caused to be deposited with the Trustee
funds in an amount sufficient to pay and discharge the entire Indebtedness on
the Notes not theretofore delivered to the Trustee for cancellation, for
principal of, premium, if any, and interest on the Notes to the date of deposit
together with irrevocable instructions from the Company directing the Trustee
to apply such funds to the payment thereof at maturity or redemption, as the
case may be; (ii) the Company has paid all other sums payable 

 

 

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under this
Indenture by the Company; and (iii) the Company has delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel stating that all
conditions precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.

SECTION 8.07.                                                                 Repayment
to Company.

Any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in for two years
after such principal and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
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 shall 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 8.08.                                                                 Reinstatement.

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

SECTION 8.09.                                                                 Survival.

The Trustee’s rights
under this Article 8 shall survive termination of this Indenture or the
resignation or removal of the Trustee.

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, the Guarantees or the Notes without the consent of any Holder of a
Note:

 

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(a)           to cure any ambiguity, defect or
inconsistency;

(b)           to provide for uncertificated Notes
in addition to or in place of certificated Notes or to alter the provisions of Article 2
or the Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not materially adversely affect any Holder;

(c)           to provide for the assumption of the
Company’s, Holdings’ or a Guarantor’s obligations to the Holders of the Notes
by a successor to the Company, Holdings or a Guarantor pursuant to Article 5
or Article 11 hereof,

(d)           to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;

(e)           to comply with requirements of the
SEC in order to effect or maintain the qualification of this Indenture under
the TIA;

(f)            to provide for the issuance of Notes
issued after the Issue Date in accordance with the limitations set forth in
this Indenture;

(g)           to allow any Guarantor to execute a
supplemental indenture and/or a Guarantee with respect to the Notes;

(h)           to provide for the issuance of
Exchange Notes or Private Exchange Notes; or

(i)            to conform the text of the
Indenture, the Guarantees or the Notes to any provision of the Description of
the Notes to the extent that such provision in the Description of the Notes was
intended to be a verbatim recitation of a provision of the Indenture, the
Guarantees or 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
shall join with the Company, Holdings and the Guarantors in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.

SECTION 9.02.                                                                 With
Consent of Holders of Notes.

Except as provided below
in this Section 9.02, this Indenture (including Sections 3.09, 4.10 and
4.15 hereof), the Guarantees and the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding voting as a single class (including 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 

 

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than a Default or
Event of Default in the payment of the principal of, premium, 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,
the Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including 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.

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 shall join with the Company
in the execution of such amended or supplemental Indenture unless such amended
or supplemental Indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.

It shall 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 or waiver, but it shall be
sufficient if such consent approves the substance thereof.

After an amendment,
supplement or waiver under this Section becomes effective, the Company
shall 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, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver. Subject
to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate
principal amount 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 or waiver under this Section 9.02 may not (with
respect to any Notes held by a non-consenting Holder):

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

(b)           reduce the principal of or change or
have the effect of changing the fixed maturity of any Note, or change the date
on which any Note may be subject to redemption or reduce the redemption price
therefor;

(c)           reduce the rate of or change or have
the effect of changing the time for payment of interest, including defaulted
interest, on any Note;

(d)           waive a Default or Event of Default
in the payment of principal of or premium, 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);

 

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(e)           make
any Notes payable in money other than that stated in the Notes;

(f)            make any change in the provisions of
this Indenture protecting the right of each Holder to receive payment of
principal of and interest on such Note on or after the due date thereof or to
bring suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;

(g)           after the Company’s obligation to
purchase Notes arises thereunder, amend, change or modify in any material
respect the obligation of the Company to make and consummate a Change of
Control Offer in the event of a Change of Control or modify any of the
provisions or definitions with respect thereto after a Change of Control has occurred;

(h)           modify or change any provision of
this Indenture or the related definitions affecting the subordination or
ranking of the Notes or the Guarantees in a manner which adversely affects the
Holders; or

(i)            make any change in the foregoing
amendment and waiver provisions.

An amendment under this Section may
not make any change that adversely affects the rights under Article 10 or
12 hereof or any supplemental indenture to this Indenture providing for a
Guarantee of the Notes by a Restricted Subsidiary of the Company of any holder
of Senior Debt of the Company, Holdings or of a Guarantor then outstanding
(including any such change of this paragraph of this Section 9.02) unless
the holders of such Senior Debt (or their Representative) consent to such change.

SECTION 9.03.                                                                 Compliance
with Trust Indenture Act.

Every amendment or
supplement to this Indenture or the Notes shall 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 waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.

SECTION 9.05.                                                                 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 

 

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for all Notes may
issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment, supplement or waiver.

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

SECTION 9.06.                                                                 Trustee
to Sign Amendments, etc.

The Trustee shall sign
any amended or supplemental Indenture authorized pursuant to this Article 9
if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 7.01 hereof) shall be fully protected
in relying upon, in addition to the documents required by Section 13.04
hereof, an Officer’s 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

SUBORDINATION

SECTION 10.01.                                                           Agreement
to Subordinate.

The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment of all Senior Debt of
the Company and that the subordination is for the benefit of and enforceable by
the holders of such Senior Debt. The Notes shall in all respects rank pari passu with all other Senior Subordinated Debt of the
Company and only Indebtedness of the Company which is Senior Debt of the Company
shall rank senior to the Notes in accordance with the provisions set forth
herein. All provisions of this Article 10 shall be subject to Section 10.12.

SECTION 10.02.                                                           Liquidation,
Dissolution, Bankruptcy.

Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:

(1) holders of Senior
Debt of the Company shall be entitled to receive payment in full in cash of
such Senior Debt before Holders shall be entitled to receive any payment; and

(2) until the Senior
Debt of the Company is paid in full in cash, any payment or distribution to
which Holders would be entitled but for this Article 10 shall be made to
holders of such Senior Debt as their interests may appear, except that Holders
may receive shares of stock and any debt securities that are subordinated to
such Senior Debt to at least the same extent as the Notes.

 

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SECTION 10.03.                                                           Default
on Senior Debt of the Company.

The Company shall not pay
the principal of, premium, if any, or interest on the Notes or make any deposit
pursuant to Section 8.04 and may not purchase, redeem or otherwise retire
any Notes (collectively, “pay the Notes”)
if either of the following (a “Payment Default”)
occurs (1) any Designated Senior Debt of the Company is not paid in full
in cash when due; or (2) any other default on Designated Senior Debt of
the Company occurs and the maturity of such Designated Senior Debt is
accelerated in accordance with its terms unless, in either case, the Payment
Default has been cured or waived and any such acceleration has been rescinded
or such Designated Senior Debt has been paid in full in cash; provided, however, that the Company shall be entitled to pay
the Notes without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of any
Designated Senior Debt with respect to which the Payment Default has occurred
and is continuing. During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Debt of the Company pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, the Company shall not pay the
Notes for a period (a “Payment Blockage Period”)
commencing upon the receipt by the Trustee of (with a copy to the Company)
written notice (a “Blockage Notice”)
of such default from the Representative of such Designated Senior Debt
specifying an election to effect a Payment Blockage Period and ending
179 days thereafter. The Payment Blockage Period shall end earlier if such
Payment Blockage Period is terminated (1) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice; (2) because
the default giving rise to such Blockage Notice is cured, waived or otherwise
no longer continuing; or (3) because such Designated Senior Debt has been
discharged or repaid in full in cash. Notwithstanding the provisions described
in the immediately preceding two sentences (but subject to the provisions
contained in the first sentence of this Section), unless the holders of such
Designated Senior Debt or the Representative of such Designated Senior Debt
shall have accelerated the maturity of such Designated Senior Debt, the Company
shall be entitled to resume payments on the Notes after termination of such
Payment Blockage Period. The Notes shall not be subject to more than one
Payment Blockage Period in any consecutive 360-day period, irrespective
of the number of defaults with respect to Designated Senior Debt of the Company
during such period; provided, however,
that if any Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Debt of the Company (other than the
Bank Indebtedness), the Representative of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; provided further, however, that in no event shall the total
number of days during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360-day consecutive
period, and there must be 181 days during any 360-day consecutive period
during which no Payment Blockage Period is in effect. For purposes of this
Section, no default or event of default which existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Debt of the Company initiating such Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Payment
Blockage Period by the Representative of such Designated Senior Debt, whether
or not within a period of 360 consecutive days, unless such default or
event of default shall have been cured or waived for a period of not less than
90 consecutive days.

 

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SECTION 10.04.                                                           Acceleration
of Payment of Notes.

If payment of the Notes
is accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of the Designated Senior Debt of the Company (or
their Representatives) of the acceleration.

SECTION 10.05.                                                           When
Distribution Must Be Paid Over.

If a distribution is made
to Holders that because of this Article 10 should not have been made to
them, the Holders who receive the distribution shall hold it in trust for
holders of Senior Debt of the Company and pay it over to them as their
interests may appear. If any Designated Senior Debt of the Company is
outstanding, the Company shall not pay the Notes until five Business Days after
the Representatives of all the issues of Designated Senior Debt of the Company
receive notice of such acceleration and, thereafter, shall be entitled to pay
the Notes only if this Article 10 otherwise permits payment at that time.

SECTION 10.06.                                                           Subrogation.

After all Senior Debt of
the Company is paid in full and until the Notes are paid in full, Holders shall
be subrogated to the rights of holders of such Senior Debt to receive
distributions applicable to such Senior Debt. A distribution made under this Article 10
to holders of such Senior Debt which otherwise would have been made to Holders
is not, as between the Company and Holders, a payment by the Company on such
Senior Debt.

SECTION 10.07.                                                           Relative
Rights.

This Article 10
defines the relative rights of Holders and holders of Senior Debt of the
Company. Nothing in this Indenture shall:

(1) impair, as
between the Company and Holders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms; or

(2) prevent the
Trustee or any Holder from exercising its available remedies upon a Default,
subject to the rights of holders of Senior Debt of the Company to receive
distributions otherwise payable to Holders.

SECTION 10.08.                                                           Subordination
May Not Be Impaired by Company.

No right of any holder of
Senior Debt of the Company to enforce the subordination of the Indebtedness
evidenced by the Notes shall be impaired by any act or failure to act by the
Company or by its failure to comply with this Indenture.

SECTION 10.09.                                                           Rights
of Trustee and Paying Agent.

Notwithstanding anything
in this Article 10, the Trustee or Paying Agent shall continue to make
payments on the Notes and shall not be charged with knowledge of the existence
of facts that under this Article 10 would prohibit the making of any
payments to or by the Trustee unless and until, not less than two Business Days
prior to 

 

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the date of such
payment, a Responsible Officer of the Trustee receives written notice
satisfactory to it that such payments are prohibited by this Article 10. The
Company, a Representative or a holder of Senior Debt of the Company shall be
entitled to give the notice; provided, however,
that, if an issue of Senior Debt of the Company has a Representative, only the
Representative shall be entitled to give the notice. Prior to the receipt of
any such written notice, the Trustee shall be entitled in all respects
conclusively to presume that no such fact exists. Unless the Trustee shall have
received the notice provided for in the preceding sentence, the Trustee shall have
full power any authority to receive such payment and to apply the same to the
purpose for which it was received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date. The foregoing
shall not apply to any Affiliate of the Company acting as Paying Agent.

The Trustee in its
individual or any other capacity shall be entitled to hold Senior Debt of the
Company with the same rights it would have if it were not Trustee. The
Registrar and the Paying Agent shall be entitled to do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this Article 10
with respect to any Senior Debt of the Company which may at any time be held by
it, to the same extent as any other holder of such Senior Debt; and nothing in Article 7
shall deprive the Trustee of any of its rights as such holder. Notwithstanding
anything in this Article 10 to the contrary, all amounts owed to the
Trustee (including amounts owed pursuant to Section 7.07 hereof) in each
of its capacities hereunder shall not be subordinated to any Senior Debt of the
Company or otherwise.

SECTION 10.10.                                                           Distribution
or Notice to Representative.

Whenever any Person is to
make a distribution or give a notice to holders of Senior Debt of the Company,
such Person shall be entitled to make such distribution or give such notice to
their Representative (if any).

SECTION 10.11.                                                           Not
To Prevent Events of Default or Limit Right To Accelerate.

The failure to make a
payment pursuant to the Notes by reason of any provision in this Article 10
shall not be construed as preventing the occurrence of a Default. Nothing in
this Article 10 shall have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Notes.

SECTION 10.12.                                                           Trust
Moneys Not Subordinated.

Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of
Government Securities held in trust under Article 8 hereof by the Trustee
for the payment of principal of and interest on the Notes shall not be
subordinated to the prior payment of any Senior Debt of the Company or subject
to the restrictions set forth in this Article 10 if the provisions of this
Article 10 were not violated at the time funds were deposited in trust
with the Trustee pursuant to Article 8 hereof, and none of the Holders
shall be obligated to pay over any such amount to the Company or any holder of
Senior Debt of the Company or any other creditor of the Company.

 

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SECTION 10.13.                                                           Trustee
Entitled To Rely.

Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Holders
shall be entitled to rely (1) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in Section 10.02
hereof are pending, (2) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders or (3) upon the Representatives of Senior Debt of the Company
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such Senior Debt and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article 10.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt of
the Company to participate in any payment or distribution pursuant to this Article 10,
the Trustee shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article 10, and, if such evidence is not furnished, the
Trustee shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions
or omissions of actions by the Trustee pursuant to this Article 10.

SECTION 10.14.                                                           Trustee
To Effectuate Subordination.

Each Holder by accepting
a Note authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Holders and the holders of Senior Debt of the Company as provided
in this Article 10 and appoints the Trustee as attorney-in-fact for any
and all such purposes.

SECTION 10.15.                                                           Trustee
Not Fiduciary for Holders  of Senior Debt
of the Company.

The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt of the Company
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders or the Company or any other Person, money or assets to
which any holders of Senior Debt of the Company shall be entitled by virtue of
this Article 10 or otherwise.

SECTION 10.16.                                                           Reliance
by Holders of Senior Debt of the Company on Subordination Provisions.

Each Holder by accepting
a Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Debt of the Company, whether such Senior Debt was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Debt and such holder of such Senior Debt shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior Debt.

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ARTICLE 11

GUARANTEES

SECTION 11.01.                                                           Guarantees.

Holdings and each
Guarantor hereby unconditionally and irrevocably guarantees, jointly and
severally, to each Holder and to the Trustee and its successors and assigns (a) the
full and punctual payment of principal of and interest on the Notes when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Notes and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Notes (all the
foregoing being hereinafter collectively called the “Guaranteed
Obligations”). Holdings and each Guarantor further agree that the
Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice or further assent from Holdings or such Guarantor and that Holdings and
such Guarantor will remain bound under this Article 11 notwithstanding any
extension or renewal of any Guaranteed Obligation.

Holdings and each
Guarantor waives presentation to, demand of, payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest
for nonpayment. Holdings and each Guarantor waive notice of any default under the
Notes or the Guaranteed Obligations. The obligations of Holdings and each
Guarantor hereunder shall not be affected by (a) the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Notes or any
other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms
or provisions of this Indenture, the Notes or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or any of them; (e) the failure of any Holder or the Trustee
to exercise any right or remedy against any other guarantor of the Obligations;
or (f) except as set forth in Section 11.07, any change in the
ownership of Holdings or such Guarantor.

Holdings and each
Guarantor further agree that its Guarantee herein constitutes a guarantee of
payment, performance and compliance when due (and not a guarantee of
collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Guaranteed
Obligations.

Each Guarantee is, to the
extent and in the manner set forth in Article 12 hereof, subordinated and
subject in right of payment to the prior payment in full of the principal of
and premium, if any, and interest on all Senior Debt of Holdings or such
Guarantor, as the case may be, and each Guarantee is made subject to such
provisions of this Indenture.

Except as expressly set
forth in Sections 11.02 and 11.07 hereof, the obligations of Holdings and
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of 

 

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the invalidity,
illegality or unenforceability of the Guaranteed Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of Holdings and each
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any remedy under this Indenture, the Notes or any other agreement, by
any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of such Holdings or such
Guarantor or would otherwise operate as a discharge of Holdings or such
Guarantor as a matter of law or equity.

Holdings and each
Guarantor further agrees that its Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.

In furtherance of the
foregoing and not in limitation of any other right which any Holder or the
Trustee has at law or in equity against Holdings or any Guarantor by virtue
hereof, upon the failure of the Company to pay the principal of or interest on
any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, Holdings and each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount
equal to the sum of (1) the unpaid amount of such Guaranteed Obligations, (2) accrued
and unpaid interest on such Guaranteed Obligations (but only to the extent not
prohibited by law) and (3) all other monetary Guaranteed Obligations of
the Company to the Holders and the Trustee.

Holdings and each
Guarantor agree that it shall not be entitled to any right of subrogation in
respect of any Guaranteed Obligations until payment in full of all Guaranteed
Obligations and all obligations to which the Guaranteed Obligations are
subordinated as provided in Article 12. Holdings and each Guarantor
further agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations
may be accelerated as provided in Article 6 for the purposes of Holdings’
or such Guarantor’s Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations, and (y) in the event of any declaration of acceleration of
such Guaranteed Obligations as provided in Article 6, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due and
payable by Holdings or such Guarantor for the purposes of this Section.

Holdings and each
Guarantor also agree to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section.

SECTION 11.02.                                                           Limitation
on Liability.

Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Obligations guaranteed hereunder by any 

 

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Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.

SECTION 11.03.                                                           Successors
and Assigns.

This Article 11
shall be binding upon Holdings and each Guarantor and its successors and
assigns and shall enure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Notes shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.

SECTION 11.04.                                                           No
Waiver.

Neither a failure nor a
delay on the part of either the Trustee or the Holders in exercising any right,
power or privilege under this Article 11 shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and
benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article 11 at law, in equity, by statute or
otherwise.

SECTION 11.05.                                                           Modification.

No modification, amendment or waiver of any provision
of this Article 11, nor the consent to any departure by Holdings or any
Guarantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Holdings or any Guarantor in any case shall entitle such
Guarantor to any other or further notice or demand in the same, similar or
other circumstances.

SECTION 11.06.                                                           [Intentionally
Omitted].

SECTION 11.07.                                                           Release
of Guarantor.

Upon the sale (including any sale pursuant to any
exercise of remedies by a holder of Senior Debt of the Company or of any
Guarantor) or other disposition (including by way of consolidation or merger)
of a Guarantor or the sale or disposition of all or substantially all the
assets of such Guarantor (in each case other than a sale or disposition to the
Company or an Affiliate of the Company and if in connection therewith the
Company provides an Officers’ Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 4.10 hereof in
respect of such disposition), or upon designation of a Guarantor as an
Unrestricted Subsidiary pursuant to the terms of this Indenture, such Guarantor
shall be deemed released from all obligations under this Article 11
without any further action required on the part of the Trustee or any Holder. If
the Company exercises its Legal Defeasance option or its Covenant Defeasance
option in accordance with the provisions of Article 8 hereof or if its 

 

 84
 

 

obligations under this
Indenture are discharged in accordance with Section 8.06 hereof, Holdings
and each Guarantor shall be released from all obligations under this Article 11
without any further action required on the part of the Trustee or any Holder. At
the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing the release of a Guarantor pursuant to this Section 11.07.

SECTION 11.08.                                                           Contribution.

Holdings and each
Guarantor that makes a payment under its Guarantee shall be entitled upon
payment in full of all Guaranteed Obligations to contribution from Holdings and
each Guarantor, as applicable, in an amount equal to Holdings’ or such
Guarantor’s pro rata portion of such payment based
on the respective net assets of all the Guarantors at the time of such payment
determined in accordance with GAAP (for purposes hereof, Holdings’ net assets
shall be those of all its Consolidated Subsidiaries other than the Guarantors).

ARTICLE 12

SUBORDINATION OF GUARANTEES

SECTION 12.01.                                                           Agreement
To Subordinate.

Holdings and each
Guarantor agree, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by Holdings’ or such Guarantor’s Guarantee (as the case
may be) is subordinated in right of payment, to the extent and in the manner
provided in this Article 12, to the prior payment of all Senior Debt of
Holdings or such Guarantor (as applicable) and that the subordination is for
the benefit of and enforceable by the holders of such Senior Debt. The
Guaranteed Obligations of Holdings or a Guarantor (as applicable) shall in all
respects rank pari passu with all other Senior
Subordinated Debt of Holdings or such Guarantor and only Senior Debt of
Holdings or such Guarantor (including Holdings or such Guarantor’s Guarantee of
Senior Debt of the Company) shall rank senior to the Guaranteed Obligations of
Holdings or such Guarantor (as the case may be) in accordance with the provisions
set forth herein.

SECTION 12.02.                                                           Liquidation,
Dissolution, Bankruptcy.

Upon any payment or
distribution of the assets of Holdings or any Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of Holdings or
such Guarantor (as the case may be) or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to Holdings or such
Guarantor (as the case may be) or its property:

(1) holders of
Senior Debt of Holdings or such Guarantor (as the case may be) shall be
entitled to receive payment in full in cash of such Senior Debt before Holders
shall be entitled to receive any payment pursuant to the Guarantee of Holdings
or such Guarantor (as the case may be); and

(2) until the Senior
Debt of Holdings or any Guarantor is paid in full in cash, any payment or
distribution to which Holders would be entitled but for this Article 12
shall be made to holders of such Senior Debt as their interests may appear,
except that 

 

 85
 

 

Holders may
receive shares of stock and any debt securities of Holdings or such Guarantor
(as the case may be) that are subordinated to such Senior Debt to at least the
same extent as its Guarantee.

SECTION 12.03.                                                           Default
on Senior Debt of Guarantor.

Neither   Holdings nor any Guarantor shall make any
payment on its Guarantee or purchase, redeem or otherwise retire or defease any
Notes or other Guaranteed Obligations (collectively, “pay its
Guarantee”) if either of the following (a “Payment
Default”) occurs (1) any Designated Senior Debt of Holdings or
such Guarantor (as the case may be) is not paid in full in cash when due; or (2) any
other default on Designated Senior Debt of Holdings or such Guarantor (as the
case may be) occurs and the maturity of such Designated Senior Debt is accelerated
in accordance with its terms; unless, in either case, the Payment Default has
been cured or waived and any such acceleration has been rescinded or such
Designated Senior Debt has been paid in full in cash; provided,
however, that Holdings or any Guarantor shall be entitled to pay its
Guarantee without regard to the foregoing if Holdings or such Guarantor (as the
case may be) and the Trustee receive written notice approving such payment from
the Representative of any Designated Senior Debt with respect to which the
Payment Default has occurred and is continuing. During the continuance of any
default (other than a Payment Default) with respect to any Designated Senior
Debt of Holdings or such Guarantor (as the case may be) pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration
of any applicable grace periods, Holdings or such Guarantor (as the case may
be) shall not pay its Guarantee for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Trustee of
(with a copy to Holdings or such Guarantor (as the case may be)) written notice
(a “Blockage Notice”) of such default from
the Representative of such Designated Senior Debt specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter. The
Payment Blockage Period shall end earlier if such Payment Blockage Period is
terminated (1) by written notice to the Trustee and Holdings or such
Guarantor (as the case may be) from the Person or Persons who gave such
Blockage Notice; (2) because the default giving rise to such Blockage
Notice is cured, waived or otherwise no longer continuing; or (3) because
such Designated Senior Debt has been discharged or repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of
this Section), unless the holders of such Designated Senior Debt giving such Payment
Notice or the Representative of such Designated Senior Debt shall have
accelerated the maturity of such Designated Senior Debt, Holdings or any
Guarantor shall be entitled to resume payments pursuant to its Guarantee after
termination of such Payment Blockage Period. Neither Holdings nor any Guarantor
shall be subject to more than one Blockage Period in any consecutive 360-day  period, irrespective of the number of
defaults with respect to Designated Senior Debt of Holdings or such Guarantor
(as the case may be) during such period; provided, however,
that if any Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Debt of Holdings or such Guarantor
(as the case may be) (other than the Bank Indebtedness), the Representative of
the Bank Indebtedness shall be entitled to give another Blockage Notice within
such period; provided further, however, that
in no event shall the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the 

 

 86
 

 

aggregate during
any 360-day consecutive period, and there must be 181 days during any 360-day
consecutive period during which no Payment Blockage Period is in effect. For
purposes of this Section, no default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Debt of Holdings or such Guarantor (as the
case may be) initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Debt, whether or not within a period
of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive
days.

SECTION 12.04.                                                           Demand
for Payment.

If a demand for payment
is made on Holdings or a Guarantor pursuant to Article 11 hereof, the
Trustee shall promptly notify the holders of the Designated Senior Debt of
Holdings or such Guarantor (as the case may be) (or their Representatives) of
such demand.

SECTION 12.05.                                                           When
Distribution Must Be Paid Over.

If a distribution is made
to Holders that because of this Article 12 should not have been made to
them, the Holders who receive the distribution shall hold it in trust for
holders of Senior Debt of Holdings or the applicable Guarantor (as the case may
be) and pay it over to them or their Representatives as their interests may
appear. If any Designated Senior Debt of Holdings or a Guarantor is
outstanding, Holdings or such Guarantor (as the case may be) shall not make a
payment on its Guarantee until five Business Days after the Representatives of
all the issuers of Designated Senior Debt of Holdings or such Guarantor (as the
case may be) receive notice of such acceleration and, thereafter, shall be
entitled to pay the Notes only if this Article 12 otherwise permits
payment at that time.

SECTION 12.06.                                                           Subrogation.

After all Senior Debt of
Holdings or a Guarantor is paid in full and until the Notes are paid in full,
Holders shall be subrogated to the rights of holders of such Senior Debt to
receive distributions applicable to Senior Debt of Holdings or such Guarantor
(as the case may be). A distribution made under this Article 12 to holders
of such Senior Debt which otherwise would have been made to Holders is not, as
between Holdings or the relevant Guarantor and Holders, a payment by Holdings
or such Guarantor on such Senior Debt.

SECTION 12.07.                                                           Relative
Rights.

This Article 12
defines the relative rights of Holders and holders of Senior Debt of Holdings
or a Guarantor. Nothing in this Indenture shall:

(1) impair, as
between Holdings or a Guarantor and Holders (as the case may be), the
obligation of Holdings or such Guarantor (as the case may be), which is
absolute and unconditional, to pay its Guarantee to the extent set forth in Article 11;
or

 

 87
 

 

(2) prevent the
Trustee or any Holder from exercising its available remedies upon a default by
Holdings or such Guarantor (as the case may be) under its Guarantee, subject to
the rights of holders of Senior Debt of Holdings or such Guarantor to receive
distributions otherwise payable to Holders.

SECTION 12.08.                                                           Subordination
May Not Be Impaired by Company.

No right of any holder of
Senior Debt of Holdings or any Guarantor to enforce the subordination of the
Guarantee of Holdings or such Guarantor (as the case may be) shall be impaired
by any act or failure to act by Holdings or such Guarantor (as the case may be)
or by its failure to comply with this Indenture.

SECTION 12.09.                                                           Rights
of Trustee and Paying Agent.

Notwithstanding anything
in this Article 12, the Trustee or Paying Agent shall continue to make
payments on any Guarantee and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any payments to or by the
Trustee unless and until, not less than two Business Days prior to the date of
such payment, a Responsible Officer of the Trustee receives written notice
satisfactory to it that such payments are prohibited by this Article 12. The
Company, Holdings or the relevant Guarantor, a Representative or a holder of
Senior Debt of Holdings or such Guarantor (as the case may be) shall be
entitled to give the notice; provided, however,
that, if an issue of Senior Debt of Holdings or any  Guarantor (as the case may be) has a
Representative, only the Representative shall be entitled to give the notice. Prior
to the receipt of any such written notice, the Trustee, shall be entitled in
all respects conclusively to presume that no such fact exists. Unless the
Trustee shall have received the notice provided for in the preceding sentence,
the Trustee shall have full power any authority to receive such payment and to
apply the same to the purpose for which it was received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. The foregoing shall not apply to any Affiliate of the Company acting
as Paying Agent.

The Trustee in its
individual or any other capacity shall be entitled to hold Senior Debt of
Holdings or any Guarantor with the same rights it would have if it were not the
Trustee. The Registrar and the Paying Agent may do the same with like rights. The
Trustee shall be entitled to all the rights set forth in this Article 12
with respect to any Senior Debt of Holdings or any Guarantor which may at any
time be held by it, to the same extent as any other holder of such Senior Debt;
and nothing in Article 7 shall deprive the Trustee of any of its rights as
such holder. Notwithstanding anything in this Article 12 to the contrary,
all amounts owed to the Trustee (including amounts owed pursuant to Section 7.07
hereof) in each of its capacities hereunder shall not be subordinated to any
Senior Debt of Holdings or a Guarantor or otherwise.

SECTION 12.10.                                                           Distribution
or Notice to Representative.

Whenever any Person is to
make a distribution or give a notice to holders of Senior Debt of Holdings or
any Guarantor, such Person shall be entitled to make such distribution or give
such notice to their Representative (if any).

 

 88
 

 

SECTION 12.11.                    Article 12
Not To Prevent Events of Default or Limit Right To Demand Payment.

The failure to make a
payment pursuant to a Guarantee by reason of any provision in this Article 12
shall not be construed as preventing the occurrence of a Default. Nothing in
this Article 12 shall have any effect on the right of the Holders or the
Trustee to make a demand for payment on Holdings or any Guarantor pursuant to
its Guarantee.

SECTION 12.12.                                                           Trustee
Entitled To Rely.

Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders
shall be entitled to rely (1) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (2) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (3) upon the Representatives for the holders of Senior Debt of
Holdings or any Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior Debt
and other indebtedness of Holdings or such Guarantor (as the case may be), the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. In
the event that the Trustee determines, in good faith, that evidence is required
with respect to the right of any Person as a holder of Senior Debt of Holdings
or any Guarantor to participate in any payment or distribution pursuant to this
Article 12, the Trustee shall be entitled to request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt of Holdings or such Guarantor (as the case may be) held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article 12, and, if such evidence is not furnished, the Trustee
shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.

SECTION 12.13.                                                           Trustee
To Effectuate Subordination.

Each Holder by accepting
a Note authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Holders and the holders of Senior Debt of Holdings or any Guarantor
as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.

SECTION 12.14.                                                           Trustee
Not Fiduciary for Holders of Senior Debt of Guarantor.

The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt of Holdings or
any Guarantor and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders or the Company or any other
Person, money or assets to which any holders of such Senior Debt shall be
entitled by virtue of this Article 12 or otherwise.

 

 89
 

 

SECTION 12.15.                    Reliance
by Holders of Senior Debt of Holdings or Guarantors on Subordination Provisions.

Each Holder by accepting
a Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Debt of Holdings or any Guarantor, whether such Senior Debt was created
or acquired before or after the issuance of the Notes, to acquire and continue
to hold, or to continue to hold, such Senior Debt and such holder of Senior
Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.

ARTICLE 13

MISCELLANEOUS

SECTION 13.01.                                                           Trust
Indenture Act Controls.

If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA §
318(c), the imposed duties shall control.

SECTION 13.02.                                                           Notices.

Any notice or
communication by the Company, Holdings, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others’ address:

If to the Company,
Holdings and/or any Guarantor:

TransDigm Inc.

1301 East 9th Street, Suite 3710

Cleveland, Ohio 44114

Facsimile No.:  (216) 706-2837

Attention:        Gregory Rufus,
                           Executive Vice
President and Chief Financial Officer

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Facsimile No.:       (212) 728-8111

Attention:              Cristopher Greer, Esq.

If to the Trustee:

The Bank of New York
Trust Company, N.A.

2 N. LaSalle Street, Suite 1020

Chicago, IL 60602

Facsimile No.:  312-827-8542

Attention:        Roxane Ellwanger

 

 90
 

 

With copies to:

Bryan Cave LLP

1290 Avenue of the Americas

New York, New York 10104

Facsimile No.:  (212) 904-0500

Attention:        Robert E. Pedersen, Esq.

The Company, Holdings,
any Guarantor 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 or the Trustee) shall 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 answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery. All notices
and communications sent to the Trustee shall be deemed to have been duly given
when actually received.

Any notice or
communication to a Holder shall 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 shall also be so mailed to any Person described in
TIA § 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.

If 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 shall mail a copy to the Trustee, each
Paying Agent and the Registrar at the same time.

SECTION 13.03.                                                           Communication
by Holders of Notes with Other Holders of Notes.

Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights
under this Indenture or the Notes. The Company, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).

SECTION 13.04.                                                           Certificate
and Opinion as to Conditions Precedent.

Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

(a)           an Officers’ Certificate (which shall
include the statements set forth in Section 13.05 hereof) stating that, in
the opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and

 91

 

(b)           an Opinion of Counsel (which shall
include the statements set forth in Section 13.05 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and covenants have
been complied with.

SECTION 13.05.                                                           Statements
Required in Certificate or Opinion.

Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than a certificate provided pursuant to
TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and
shall include:

(a)           a statement that the Person making
such certificate or opinion has read such covenant or condition;

(b)           a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;

(c)           a statement that, in the opinion of
such Person, he or she has or they have made such examination or investigation
as is necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been satisfied; and

(d)           a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been satisfied.

SECTION 13.06.                                                           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 13.07.                                                           No
Personal Liability of Directors, Officers, Employees and Stockholders.

No past, present or
future director, officer, employee, incorporator or stockholder of Holdings,
the Company or any Subsidiary of the Company (other than the Company, Holdings
or any Subsidiary of the Company that is a Guarantor), as such, shall have any
liability for any obligations of the Company, Holdings or any Subsidiary of the
Company under the Notes, the Guarantees, this 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 issuance of the Notes.

SECTION 13.08.                                                           Governing
Law.

THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE GUARANTEES 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.

 

 92
 

 

SECTION 13.09.                                                           No
Adverse Interpretation of Other Agreements.

This Indenture may not be
used to interpret any other indenture, loan or debt agreement of the Company,
its Subsidiaries, Holdings or of any other Person. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

SECTION 13.10.                                                           Successors.

All agreements of the
Company, Holdings and the Guarantors in this Indenture and the Notes shall bind
their respective successors. All agreements of the Trustee in this Indenture
shall bind its successors.

SECTION 13.11.                                                           Severability.

In case any provision in
this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

SECTION 13.12.                                                           Counterpart
Originals.

The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.

SECTION 13.13.                                                           Table
of Contents, Headings, etc.

The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

SECTION 13.14.                                                           Waiver
of Trial by Jury.

EACH PARTY HERETO AND
EACH HOLDER BY ITS ACCEPTANCE OF A NOTE HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS INDENTURE.

 

 93
 

 

IN WITNESS
WHEREOF, the parties have caused this Indenture to be duly executed as of the
date first written above.

	
   

  	
  TRANSDIGM INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRANSDIGM GROUP INCORPORATED,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AVIONIC INSTRUMENTS INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SKURKA AEROSPACE INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAC REALTY CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHAMPION AEROSPACE INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

 94
 

 

 

	
   

  	
  MARATHONNORCO AEROSPACE, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ZMP, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADAMS RITE AEROSPACE, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHRISTIE ELECTRIC CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ W.
  NICHOLAS HOWLEY

  
	
   

  	
   

  	
  Name: W. Nicholas Howley

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SWEENEY ENGINEERING CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ GREGORY
  RUFUS

  
	
   

  	
   

  	
  Name: Gregory Rufus

  
	
   

  	
   

  	
  Title: Secretary and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  
	
   

  	
  COMPANY, N.A.,

  
	
   

  	
  as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ ROXANE
  ELLWANGER

  
	
   

  	
   

  	
  Name: Roxane Ellwanger

  
	
   

  	
   

  	
  Title: Assistant Vice President

  

 

 95
 

 

PROVISIONS RELATING TO INITIAL SECURITIES,

PRIVATE EXCHANGE SECURITIES

AND EXCHANGE SECURITIES

1.  Definitions

1.1  Definitions

For the purposes
of this Appendix the following terms shall have the meanings indicated below:

“Definitive
Note” means a certificated Initial Note or Exchange Note or
Private Exchange Note bearing, if required, the restricted securities legend
set forth in Section 2.3(e).

“Depository”
means The Depository Trust Company, its nominees and their respective
successors.

“Distribution
Compliance Period”, with respect to any Notes, means the
period of 40 consecutive days beginning on and including the later of (i) the
day on which such Notes are first offered to Persons other than distributors
(as defined in Regulation S under the Securities Act) in reliance on
Regulation S and (ii) the issue date with respect to such Notes.

“Exchange
Notes” means (1) the 73⁄4% Senior Subordinated Notes due
2014 issued pursuant to the Indenture in connection with the Registered
Exchange Offer pursuant to the Registration Rights Agreement, and (2) Additional
Notes, if any, issued pursuant to a registration statement filed with the SEC
under the Securities Act.

“Initial
Purchasers” means (1) with respect to the Initial Notes
issued on the Issue Date, Banc of America Securities LLC, Credit Suisse
Securities (USA) LLC,  UBS Securities LLC
and Barclays Capital Inc. and (2) with respect to each issuance of
Additional Notes, the Persons purchasing or underwriting such Additional Notes
under the related Purchase Agreement.

“Initial
Notes” means (1) $275,000,000 aggregate principal amount
of 73⁄4% Senior Subordinated Notes due 2014 issued on the Issue Date, and (2) Additional
Notes, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.

“Private
Exchange” means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Notes held by the
Initial Purchaser as part of its initial distribution, a like aggregate principal
amount of Private Exchange Notes.

“Private
Exchange Notes” means any 73⁄4% Senior Subordinated Notes due
2014 issued in connection with a Private Exchange.

“Purchase
Agreement” means with (1) respect to the Initial Notes
issued on the Issue Date, the Purchase Agreement dated June 20, 2006,
among the Company, 

 

 96
 

 

Holdings, the Guarantors
and the Initial Purchasers, and (2) with respect to each issuance of
Additional Notes, the purchase agreement or underwriting agreement among the
Company and the Persons purchasing or underwriting such Additional Notes.

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

“Registered
Exchange Offer” means the offer by the Company, pursuant to
the Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for the Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.

“Registration
Rights Agreement” means (1) with respect to the Initial
Notes issued on the Issue Date, the Registration Rights Agreement dated June 23,
2006, among the Company, Holdings, the Guarantors and the Initial Purchasers,
and (2) with respect to each issuance of Additional Notes issued in a
transaction exempt from the registration requirements of the Securities Act,
the registration rights agreement, if any, among the Company, Holdings, the
Guarantors and the Persons purchasing such Additional Notes under the related
Purchase Agreement.

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

“Notes”
means the Initial Notes, the Exchange Notes and the Private Exchange Notes,
treated as a single class.

“Securities
Custodian” means the custodian with respect to a Global Note
(as appointed by the Depository), or any successor Person thereto and shall
initially be the Trustee.

“Shelf
Registration Statement” means the registration statement
issued by the Company in connection with the offer and sale of Initial Notes or
Private Exchange Notes pursuant to a Registration Rights Agreement.

“Transfer
Restricted Notes” means Notes that bear or are required to
bear the legend set forth in Section 2.3(e) hereof.

1.2  Other Definitions

 

	
  

  	
  Term

  	
   

  	
   

  	
  Defined

  in Section:

  
	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Global Notes

  	
   

  	
  2.1(a)

  
	
  “Permanent
  Regulation S Global Note”

  	
   

  	
  2.1(a)

  
	
  “Regulation S”

  	
   

  	
  2.1(a)

  
	
  “Regulation S
  Global Notes

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A
  Global Note”

  	
   

  	
  2.1(a)

  
	
  “Temporary
  Regulation S Global Note”

  	
   

  	
  2.1(a)

  

 

 97
 

 

2.             The Notes.

2.1  (a)  Form and Dating. The
Initial Notes will be offered and sold by the Company pursuant to a Purchase
Agreement. The Initial Notes will be resold initially only to (i) QIBs in
reliance on Rule 144A under the Securities Act (“Rule 144A”)
and (ii) Persons other than U.S. Persons (as defined in Regulation S)
in reliance on Regulation S under the Securities Act (“Regulation S”).
Initial Notes may thereafter be transferred to, among others, QIBs and
purchasers in reliance on Regulation S, in each case, subject to the
restrictions on transfer set forth herein. Initial Notes initially resold
pursuant to Rule 144A shall be issued initially in the form of one or more
permanent global Notes in definitive, fully registered form (collectively, the “Rule 144A Global Note”) and Initial Notes initially
resold pursuant to Regulation S shall be issued initially in the form of
one or more temporary global notes in fully registered form (collectively, the “Temporary Regulation S Global Note”), in each case without
interest coupons and with the global notes legend and restricted notes legend
set forth in Exhibit A hereto, which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Notes Custodian, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture. Except as set forth in this Section 2.1(a), beneficial
ownership interests in the Temporary Regulation S Global Note (x) will
not be exchangeable for interests in the Rule 144A Global Note, a
permanent global note (the “Permanent Regulation S
Global Note” and, together with the Temporary Regulation S
Global Notes, the “Regulation S Global Notes”),
or any other Note prior to the expiration
of the Distribution Compliance Period and (y) then, after the expiration
of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A
Global Note or the Permanent Regulation S Global Note only upon certification
that beneficial ownership interests in such Temporary Regulation S Global Note
are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the Securities
Act.

Beneficial
interests in Temporary Regulation S Global Notes may be exchanged for interests
in Rule 144A Global Notes if (1) such exchange occurs in connection
with a transfer of Securities in compliance with Rule 144A, and (2) the
transferor of the beneficial interest in the Temporary Regulation S Global Note
first delivers to the Trustee a written certificate (in a form satisfactory to
the Trustee) to the effect that the beneficial interest in the Temporary
Regulation S Global Note is being transferred to a Person (a) who the
transferor reasonably believes to be a QIB, (b) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of Rule 144A,
and (c) in accordance with all applicable securities laws of the States of
the United States and other jurisdictions.

Beneficial
interest in a Rule 144A Global Note may be transferred to a Person who
takes delivery in the form of an interest in a Regulation S Global Note,
whether before or after the expiration of the Distribution Compliance Period,
only if the transferor first delivers to the Trustee a written certificate (in
the form provided n the Indenture) to the effect that such transfer is being
made in accordance with Rule 903 or 904 of Regulation S or Rule 144
(if applicable).

 

 98
 

 

The Rule 144A
Global Note, the Temporary Regulation S Global Note and the Permanent
Regulation S Global Note are collectively referred to herein as “Global Notes”. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depository and the Notes Custodian as
hereinafter provided.

(b)  Book-Entry
Provisions. This Section 2.1(b) shall apply only to a Global Note
deposited with or on behalf of the Depository.

The Company shall
execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall
be registered in the name of the Depository for such Global Note or Global Notes
or the nominee of such Depository and (b) shall be delivered by the
Trustee to such Depository or pursuant to such Depository’s instructions or
held by the Notes Custodian.

Members of, or
participants in, the Depository (“Agent Members”)
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository or by the Notes Custodian or under such
Global Note, and the Company, the Trustee and any agent of the Company or the
Trustee shall be entitled to treat the Depository as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial interest in any
Global Note.

(c)  Certificated
Notes. Except as provided in this Section 2.1 or Sections 2.3 or
2.4, owners of beneficial interests in Global Notes shall not be entitled to
receive physical delivery of Definitive Notes.

2.2  Authentication.
The Trustee shall authenticate and deliver: 
(1) on the Issue Date, an aggregate principal amount of
$275.0 million 73⁄4% Senior Subordinated Notes due 2014; and (2) any
Additional Notes for an original issue in an aggregate principal amount
specified in the written order of the Company pursuant to Section 2.02 of
the Indenture and (3) Exchange Notes or Private Exchange Notes for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to a Registration Rights Agreement, for a like principal amount of
Initial Notes, in each case upon a written order of the Company signed by two
Officers. Such order shall specify the amount of the Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated and,
in the case of any issuance of Additional Notes pursuant to Section 2.14
of the Indenture, shall certify that such issuance is in compliance with Section 4.09
of the Indenture.

2.3  Transfer
and Exchange. (a)  Transfer and Exchange of Definitive Notes.
When Definitive Notes are presented to a Registrar with a request:

(x) to register the
transfer of such Definitive Notes; or

 

 99
 

 

(y) to exchange such
Definitive Notes for an equal principal amount of Definitive Notes of other
authorized denominations,

the Registrar shall register
the transfer or make the exchange as requested if its reasonable requirements
for such transaction are met; provided, however,
that the Definitive Notes surrendered for transfer or exchange:

(i) shall be duly
endorsed or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and

(ii) if such
Definitive Notes are required to bear a restricted securities legend, they are
being transferred or exchanged pursuant to an effective registration statement
under the Securities Act, pursuant to Section 2.3(b) or pursuant to
clause (A), (B) or (C) below, and are accompanied by the following
additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered
to the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or

(B) if such Definitive Notes are being transferred
to the Company, a certification to that effect; or

(C) if such Definitive Notes are being
transferred (x) pursuant to an exemption from registration in accordance
with Rule 144A, Regulation S or Rule 144 under the Securities Act; or
(y) in reliance upon another exemption from the requirements of the
Securities Act: (x) a certification to that effect (in the form set forth
on the reverse of the Note) and (y) if the Company so requests, an opinion
of counsel or other evidence reasonably satisfactory to it as to the compliance
with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

(b)  Restrictions
on Transfer of a Definitive Note for a Beneficial Interest in a Global Security.
A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A
Global Security or a Permanent Regulation S Global Note except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Note, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:

(i) certification,
in the form set forth on the reverse of the Note, that such Definitive Note is
either (A) being transferred to a QIB in accordance with Rule 144A or
(B) is being transferred after expiration of the Distribution Compliance
Period by a Person who initially purchased such Note in reliance on
Regulation S to a buyer who elects to hold its interest in such Note in
the form of a beneficial interest in the Permanent Regulation S Global Note;
and

(ii) written
instructions directing the Trustee to make, or to direct the Notes Custodian to
make, an adjustment on its books and records with respect to such Rule 144A
Global Note (in the case of a transfer pursuant to clause 

 

 100
 

 

(b)(i)(A)) or Permanent Regulation S Note (in the case
of a transfer pursuant to clause (b)(i)(B)) to reflect an increase in the
aggregate principal amount of the Notes represented by the Rule 144A
Global Note or Permanent Regulation S Global Note, as applicable, such
instructions to contain information regarding the Depository account to be
credited with such increase,

then the Trustee shall
cancel such Definitive Note and cause, or direct the custodian for the Notes to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the custodian for the Notes, the aggregate principal
amount of Notes represented by the Rule 144A Global Note or Permanent
Regulation S Global Note, as applicable, to be increased by the aggregate
principal amount of the Definitive Note to be exchanged and shall credit or
cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Rule 144A Global Note or
Permanent Regulation S Global Note, as applicable, equal to the principal
amount of the Definitive Note so canceled. If no Rule 144A Global Notes or
Permanent Regulation S Global Notes, as applicable, are then outstanding,
the Company shall issue and the Trustee shall authenticate, upon written order
of the Company in the form of an Officers’ Certificate, a new Rule 144A
Global Note or Permanent Regulation S Global Note, as applicable, in the
appropriate principal amount.

(c)  Transfer
and Exchange of Global Notes. (i)  The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Note
shall deliver to the Registrar a written order given in accordance with the
Depository’s procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the Global
Note. The Registrar shall, in accordance with such instructions, instruct the
Depository to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Note and to debit the account
of the Person making the transfer the beneficial interest in the Global Note
being transferred.

(ii)  If the
proposed transfer is a transfer of a beneficial interest in one Global Note to
a beneficial interest in another Global Note, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of the
Global Note to which such interest is being transferred in an amount equal to
the principal amount of the interest to be so transferred, and the Registrar
shall reflect on its books and records the date and a corresponding decrease in
the principal amount of the Global Note from which such interest is being
transferred.

(iii)  Notwithstanding
any other provisions of this Appendix (other than the provisions set forth in Section 2.4),
a Global Note may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.

(iv)  In the
event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4
of this Appendix prior to the consummation of a Registered Exchange Offer or
the effectiveness of a Shelf Registration Statement 

 

 101
 

 

with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Notes
intended to ensure that such transfers comply with Rule 144A or Regulation
S, as the case may be) and such other procedures as may from time to time be
adopted by the Company.

(d)  Restrictions
on Transfer of Temporary Regulation S Global Notes. During the
Distribution Compliance Period, beneficial ownership interests in Temporary
Regulation S Global Notes may only be sold, pledged or transferred only (i) to
the Company, (ii) in an offshore transaction in accordance with
Regulation S (other than a transaction resulting in an exchange for
interest in a Permanent Regulation S Global Note), or (iii) pursuant
to an effective registration statement under the Act, in each case in
accordance with any applicable securities laws of any state of the
United States.

(e)  Legend.

(i)  Except as
permitted by the following paragraphs (ii), (iii) and (iv), each Note
certificate evidencing the Global Notes (and all Notes issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially the
following form:

THIS NOTE (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE
COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT
TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (V) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (VI) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH

 102

 

(VI) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

Each Definitive Note will also bear the following
additional legend:

IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

(ii)  Upon
any sale or transfer of a Transfer Restricted Note (including any Transfer
Restricted Note represented by a Global Note) pursuant to Rule 144 under
the Securities Act, the Registrar shall permit the transferee thereof to
exchange such Transfer Restricted Note for a certificated Note that does not
bear the legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Note, if the transferor thereof certifies in writing
to the Registrar that such sale or transfer was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the Note).

(iii)  After a
transfer of any Initial Notes or Private Exchange Notes pursuant to and during
the period of the effectiveness of a Shelf Registration Statement with respect
to such Initial Notes or Private Exchange Notes, as the case may be, all
requirements pertaining to legends on such Initial Note or such Private
Exchange Note will cease to apply, the requirements requiring any such Initial
Note or such Private Exchange Note issued to certain Holders be issued in
global form will cease to apply, and a certificated Initial Note or Private
Exchange Note or an Initial Note or Private Exchange Note in global form, in
each case without restrictive transfer legends, will be available to the
transferee of the Holder of such Initial Notes or Private Exchange Notes upon
exchange of such transferring Holder’s certificated Initial Note or Private
Exchange Note or appropriate directions to transfer such Holder’s interest in
the Global Note, as applicable.

(iv)  Upon the
consummation of a Registered Exchange Offer with respect to the Initial Notes,
all requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and
Exchange Notes in certificated or global form, in each case without the
restrictive securities legend set forth in Exhibit A hereto will be
available to Holders that exchange such Initial Notes in such Registered
Exchange Offer.

(v)  Upon the
consummation of a Private Exchange with respect to the Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and
Private

 103
 

 

 

Exchange Notes in global form with the global
securities legend and the Restricted Notes Legend set forth in Exhibit A
hereto will be available to Holders that exchange such Initial Notes in such
Private Exchange.

(f)  Cancellation
or Adjustment of Global Note. At such time as all beneficial interests in a
Global Note have either been exchanged for Definitive Notes, redeemed,
purchased or canceled, such Global Note shall be returned to the Depository for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
certificated Notes, redeemed, purchased or canceled, the principal amount of
Notes represented by such Global Note shall be reduced and an adjustment shall
be made on the books and records of the Trustee (if it is then the custodian
for such Global Note) with respect to such Global Note, by the Trustee or the
Custodian for the Notes, to reflect such reduction.

(g) 
No Obligation of the Trustee.

(i)  The
Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Note, a member of, or a participant in the Depository or other Person
with respect to the accuracy of the records of the Depository or its nominee or
of any participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under or
with respect to such Notes. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Notes shall be given
or made only to or upon the order of the registered Holders (which shall be the
Depository or its nominee in the case of a Global Note). The rights of
beneficial owners in any Global Note shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its members,
participants and any beneficial owners.

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

2.4  Certificated
Notes.

(a)  A Global
Note deposited with the Depository or with the Trustee as custodian for the
Depository pursuant to Section 2.1 shall be transferred to the beneficial
owners thereof in the form of Definitive Notes in an aggregate principal amount
equal to the principal amount of such Global Note, in exchange for such Global
Note, only if such transfer complies with Section 2.3 hereof and (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Note or if at any

 104
 

 

 

time such Depository
ceases to be a “clearing agency” registered under the Exchange Act and, in
either case, a successor Depository is not appointed by the Company within
90 days of such notice, (ii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture or (iii) an Event of Default has
occurred and is continuing.

(b)  Any
Global Note that is transferable to the beneficial owners thereof pursuant to
this Section shall be surrendered by the Depository to the Trustee located
at its principal corporate trust office in the Borough of Manhattan, The City
of New York, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations. Any portion of a Global
Note transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct. Any
Definitive Note delivered in exchange for an interest in the Transfer
Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof,
bear the restricted securities legend and definitive note legend set forth in Exhibit A
hereto.

(c)  Subject
to the provisions of Section 2.4(b) hereof, the registered Holder of
a Global Note shall be entitled to grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.

(d) 
In the event of the occurrence of one of the events specified in Section 2.4(a) hereof,
the Company shall promptly make available to the Trustee a reasonable supply of
Definitive Notes in definitive, fully registered form without interest coupons.

 

 105

 

EXHIBIT A

TO

RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF INITIAL NOTE]

[Global Notes Legend]

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.

TRANSFERS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

[FOR REGULATION S
GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION
OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES BY A DEALER
(AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN
IN ACCORDANCE WITH THE RULE 144A THEREUNDER.]

[Restricted Notes Legend]

THIS NOTE (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS
NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE
COMPANY, (II) IN THE UNITED

 1
 

 

 

STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (V) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (VI) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

[Temporary Regulation S Global Note Legend]

EXCEPT AS SET
FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT
REGULATION S GLOBAL NOTE OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN
THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING
RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY
DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(3) OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN
FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS
ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH
INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE
SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY
BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE
WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE, IF THEN APPLICABLE.

AFTER THE
EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN
A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION
WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A, AND (2) THE
TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST

 2
 

 

 

DELIVERS TO THE TRUSTEE A
WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE
EFFECT THAT THE REGULATION S GLOBAL NOTE BEING TRANSFERRED TO A PERSON (A) WHO
THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A (B) PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

BENEFICIAL
INTEREST IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO
TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL
SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE
TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE)
TO THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903
OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).

[Definitive Notes Legend]

IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

 3

 

CUSIP       

ISIN:       

TRANSDIGM
INC.

No.                                                                                                                                                  $

73⁄4%
SENIOR SUBORDINATED NOTE DUE 2014

TRANSDIGM
INC., a Delaware corporation, promises to pay to “Cede & Co.”, or
registered assigns, the principal sum of
[                            ]
($[          ]) on July 15,
2014.

Interest Payment
Dates: 
[                      ]
and [                      ].

Record Dates:   
[                      ]
and [                      ].

Dated:
[                      ].

Reference
is made to the further provisions of this Note contained herein, which will for
all purposes have the same effect as if set forth at this place.

 4
 

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
  TRANSDIGM INC.,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE BANK OF NEW YORK TRUST COMPANY, N.A., as
  Trustee, certifies that this is one of the Notes referred to in the
  within-mentioned Indenture.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

 5
 

 

 

[FORM OF
REVERSE SIDE OF INITIAL NOTE]

73⁄4% SENIOR
SUBORDINATED NOTES DUE 2014

Capitalized terms
used herein shall have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.

1.             INTEREST.
TransDigm Inc., a Delaware corporation (such corporation, and its successors
and assigns under the Indenture, being herein called the “Company”),
promises to pay interest on the principal amount of this Note at 73⁄4% per annum
from           ,
20   until maturity; provided that
if a Registration Default (as defined in the Registration Rights Agreement)
occurs, additional interest (the “Additional Interest”)
of $0.05 per week per $1,000 principal amount of Notes will accrue on the Notes
for the first 90-day period immediately following the occurrence of a
Registration Default (increasing by an additional $0.05 per week per $1,000
principal amount of Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum additional
interest rate of 1.00% per annum). The Company shall pay interest and
Additional Interest semi-annually on January 15 and July 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 the date of issuance; 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           ,
20  . The Company shall 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 equal to the
interest rate on the Note then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest (without regard to any
applicable grace 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 January 1 or July 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 interest and
Additional Interest, if any, 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, and 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 shall have provided wire transfer instructions to
the Company or the Paying Agent. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

 6
 

 

 

3.             PAYING
AGENT AND REGISTRAR. Initially, The Bank of New York Trust Company,
N.A., 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 June 23, 2006
(“Indenture”) among the Company, Holdings,
the Guarantors and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are obligations of the
Company.

5.             SUBORDINATION.
The Notes are subordinated to Senior Debt of the Company, as defined in the
Indenture. To the extent provided in the Indenture, Senior Debt of the Company
must be paid before the Notes may be paid. The Company agrees, and each Holder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.

6.             OPTIONAL
REDEMPTION.

Except as set forth below,
the Notes shall not be redeemable at the Company’s option prior to July 15,
2009.

At any time prior to July 15, 2009, the Company may redeem all or a part of the
Notes (which includes Additional Notes, if any), upon not less than 30 nor more
than 60 days’ prior notice mailed by first-class mail to the registered address
of each Holder of Notes, at a redemption price equal to 100% of the principal
amount of Notes redeemed plus the Applicable Premium as of, and accrued and
unpaid interest, if any, to the date of redemption (the “Redemption Date”),
subject to the rights of Holders of Notes on the relevant record date to
receive interest due on the relevant interest payment date.

On and after July 15,
2009, the Company may redeem the Notes (which includes Additional Notes,
if any) at its option, in whole or in part, upon not less than 30 nor more than
60 days’ notice, at the following redemption prices (expressed as percentages
of the principal amount thereof) if redeemed during the twelve-month period
commencing on July 15 of
the year set forth below:

	
  Year

  	
   

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  105.813

  	
  %

  
	
  2010

  	
   

  	
  103.875

  	
  %

  
	
  2011

  	
   

  	
  101.938

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

Notwithstanding the
foregoing, prior to July 15, 2009, the Company may at its option on one or
more occasions redeem Notes (which includes Additional Notes, if any) in an
aggregate principal amount not to exceed 35% of the aggregate principal amount
of

 7
 

 

 

the Notes (which includes Additional Notes, if any)
originally issued at a redemption price (expressed as a percentage of
principal amount) of 107.750%, plus accrued and unpaid interest, and Additional
Interest, if any, to the Redemption Date, with the net cash proceeds from one
or more Equity Offerings; provided,
however, that (1) at
least $150 million of such aggregate principal amount of Notes (which includes
Additional Notes, if any) remains outstanding immediately after the occurrence
of each such redemption (other than Notes held, directly or indirectly, by the
Company or its Affiliates); and (2) each such redemption occurs within 90
days after the date of the related Equity Offering.

7.             MANDATORY
REDEMPTION. The Company shall not be required to make
any mandatory redemption or sinking fund payments with respect to the Notes.

8.             REPURCHASE
AT OPTION OF HOLDER.

If a Change of Control occurs, each Holder shall
have the right to require that the Company purchase all or a portion of such
Holder’s Notes pursuant to the offer described in the Indenture (the “Change of Control Offer”), at a purchase price equal to 101%
of the principal amount thereof plus accrued interest and Additional Interest,
if any, to the date of purchase. Within 30 days following the date upon which
the Change of Control occurred, the Company must send, by first class mail, a
notice to each Holder, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state, among other things, the purchase date,
which must be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, other than as may be required by law (the “Change of Control Payment Date”). Holders electing to have a
Note purchased pursuant to a Change of Control Offer shall be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
prior to the Change of Control Payment Date.

If the Company or a
Restricted Subsidiary consummates any Asset Sales, under certain circumstances
the Company is required to commence an offer to all Holders of Notes (a “Net Proceeds Offer”) pursuant to Section 3.09 of the
Indenture. The Net Proceeds Offer may also be made to holders of other Senior
Subordinated Debt of the Company or a Restricted Subsidiary of the Company
requiring the making of such an offer. Pursuant to the Net Proceeds Offer, the
Company shall offer to purchase, on a pro rata basis, the maximum amount of
Notes and, if it so elects, such other Senior Subordinated Debt that may be
purchased with the Net Proceeds Offer Amount at a price equal to 100% of their
principal amount (or, in the event such other Senior Subordinated Debt was
issued with significant original issue discount, 100% of the accreted value
thereof) plus accrued and unpaid interest and Additional Interest thereon, if
any, to the date of purchase, in accordance with the procedures set forth in
the Indenture (or, in respect of such other Senior Subordinated Debt, such
lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Debt). To the extent that the aggregate amount of Notes or such
other Senior Subordinated Debt tendered pursuant to a Net Proceeds Offer is
less than the Net Proceeds Offer Amount, the Company may use such deficiency
for general corporate purposes or for any other purpose not prohibited by the
Indenture. If the aggregate principal amount of Notes or such other Senior
Subordinated Debt surrendered by holders thereof exceeds the amount of Net
Proceeds Offer Amount, 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 a Net Proceeds

 8
 

 

 

Offer from the Company prior to any related purchase
date and may elect to have such Notes purchased by completing the form entitled
“Option of Holder to Elect Purchase” on the reverse of the Notes.

9.             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. Notes in denominations larger
than $1,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

10.           DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons
in denominations of $1,000 and integral multiples of $1,000. 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 during a period
beginning at the opening of business 15 days before the day of the mailing
of notice of redemption and ending at the close of business on such day or
during the period between a record date and the next succeeding Interest
Payment Date.

11.           PERSONS
DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.

12.           AMENDMENT,
SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture,
the Guarantees or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, if any, voting as a single class, and any existing default or compliance
with any provision of the Indenture, the Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Guarantees 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 or to
alter the provisions of Article 2 of the Indenture or the Appendix to the
Indenture relating to the form of the Notes (including the related definitions)
in a manner that does not materially adversely affect any Holder, to provide
for the assumption of the Company’s, Holdings’ or any Guarantor’s obligations
to Holders of the Notes by a successor to the Company, Holdings or a Guarantor
pursuant to Section 5.01 of the Indenture, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not 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 Trust Indenture Act, to
provide for the issuance of Notes issued after the Issue Date in accordance
with the limitations set forth in the Indenture, to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes to provide for the issuance of exchange notes or private
exchange notes, to confirm the text of the Indenture, the Guarantees or the
Notes to any provision in the Description of Notes or to

 9
 

 

 

the extent that such
provision in the Description of Notes was intended to be a verbatim recitation
of a provision in the Indenture, the Guarantees or the Notes.

13.           DEFAULTS
AND REMEDIES. Events of
Default include: (i) the failure to pay interest or Additional Interest,
if any, on any Notes when the same becomes due and payable if the default
continues for a period of 30 days (whether or not such payment shall be
prohibited by Article 10 or Article 12 of the Indenture); (ii) the
failure to pay the principal on any Notes when such principal becomes due and
payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer on the date specified for such payment in the
applicable offer to purchase) (whether or not such payment shall be prohibited
by Article 10 or Article 12 of the Indenture); (iii) a default
in the observance or performance of any other covenant or agreement contained
in the Indenture if the default continues for a period of 60 days after
the Company receives written notice specifying the default (and demanding that
such default be remedied) from the Trustee or the Holders of at least 25% of
the outstanding principal amount of the Notes (except in the case of a default
with respect to Section 5.01 of the Indenture, which will constitute an
Event of Default with such notice requirement but without such passage of time
requirement); (iv) the failure to pay at final stated maturity (giving
effect to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness of the Company or any Significant
Subsidiary of the Company (other than a Securitization Entity), or the
acceleration of the final stated maturity of any such Indebtedness, if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal
at final maturity or which has been accelerated, aggregates $20.0 million
or more at any time; (v) one or more judgments in an aggregate amount in
excess of $20.0 million shall have been rendered against the Company or
any of its Significant Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; and (vi) certain events of bankruptcy
affecting the Company or any of its Significant Subsidiaries. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy with respect to the Company
or any of its Significant Subsidiaries, all outstanding Notes will become due
and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture and the Trust
Indenture Act. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest or Additional
Interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest (including 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

 10
 

 

 

any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or Event
of Default.

14.           GUARANTEE.
The payment by the Company of the principal of, and premium and
interest (including Additional Interest, if any) on, the Notes is fully and
unconditionally guaranteed on a joint and several senior subordinated basis by
Holdings and each of the Guarantors.

15.           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.

16.           NO
RECOURSE AGAINST OTHERS. A past, present or future director,
officer, employee, incorporator or stockholder of Holdings, the Company or any
Guarantor (other than the Company, Holdings or any Guarantor), as such, shall
not have any liability for any obligations of Holdings, the Company or such
Guarantor under the Notes, the Guarantees 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.

17.           AUTHENTICATION.
This Note shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.

18.           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).

19.           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 Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of June 23, 2006, among the Company, Holdings, the
Guarantors and the other parties named on the signature pages thereof. Each
Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including the obligations of
the Holders with respect to a registration and the indemnification of the
Company and other named persons to the extent provided therein.

20.           CUSIP and ISIN NUMBERS. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP and ISIN numbers to be printed on the
Notes and the Trustee may use CUSIP or ISIN 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.

 11
 

 

 

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:

TransDigm Inc.

1301 East 9th Street, Suite 3710

Cleveland, OH  44114

Attention:  Chief Financial Officer

 12
 

 

 

 

ASSIGNMENT FORM

To assign this Note, fill
in the form below:

I or we assign and
transfer this Note to

Assignee’s Legal Name,
Address, and Zip Code

Assignee’s soc. sec. or
tax I.D. No.

and irrevocably
appoint                           agent
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

___________________________________________________________

Date: ________________
Your Signature: ____________________

___________________________________________________________

Sign exactly as your name
appears on the other side of this Note.

In connection with any
transfer of any of the Notes evidenced by this certificate occurring prior to
the expiration of the period referred to in Rule 144(k) under the
Securities Act after the later of the date of original issuance of such
Notes and the last date, if any, on which such Notes were owned by the Company
or any Affiliate of the Company, the undersigned confirms that such Notes are
being transferred in accordance with its terms:

CHECK ONE BOX BELOW

	
  (1)

  	
   

  	
  o

  	
   

  	
  to the Company;
  or

  
	
  (2)

  	
   

  	
  o

  	
   

  	
  inside the
  United States to a “qualified institutional buyer” (as defined in
  Rule 144A under the Securities Act of 1933, as amended (the “Securities
  Act”) that purchases for its own account or for the account of a qualified
  institutional buyer to whom notice is given that such transfer is being made
  in reliance on Rule 144A, in each case pursuant to and in compliance
  with Rule 144A under the Securities Act; or

  
	
  (3)

  	
   

  	
  o

  	
   

  	
  outside the
  United States in an offshore transaction within the meaning of Regulation S
  under the Securities Act in compliance with Rule 904 under the
  Securities Act; or

  
	
  (4)

  	
   

  	
  o

  	
   

  	
  pursuant to the
  exemption from registration provided by Rule 144 under the Securities
  Act; or

  

 

 13
 

 

 

	
  (5)

  	
   

  	
  o

  	
   

  	
  pursuant to
  another available exemption from registration under the Securities Act; or

  
	
  (6)

  	
   

  	
  o

  	
   

  	
  pursuant to an
  effective registration statement under the Securities Act;

  

 

Unless one of the boxes is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any person other than the registered holder thereof; provided, however,
that if box (3), (4) or (5) is checked, the Trustee shall be entitled
to require, prior to registering any such transfer of the Notes , such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under
such Act.

________________________

 Signature

Signature
Guarantee:

____________________________                               _________________________

Signature
must be guaranteed                                       Signature

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 14
 

 

 

___________________________________________________________

TO BE COMPLETED BY
PURCHASER IF (2) ABOVE IS CHECKED.

The undersigned
represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

Dated:
________________                              _____________________________

NOTICE:  To be executed by an

executive officer

 

 15
 

 

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL NOTE

The following
increases or decreases in this Global Note have been made:

 

	
  Date of

  Exchange

  	
  Amount of decrease in Principal 
  amount of this Global Note

  	
  Amount of increase in Principal amount of this Global Note 

  	
  Principal amount of this Global Note following such decrease or
  increase)

  	
  Signature of authorized officer of Trustee or Custodian for the Notes

  

 

 16
 

 

 

OPTION OF HOLDER
TO ELECT PURCHASE

If you want to
elect to have this Note purchased by the Company pursuant to Section 4.10 
or 4.15 of the Indenture, check the box:

	
  

  

If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the
Indenture, state the amount in principal 
amount:  $

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name

  
	
   

  	
   

  	
   

  	
   

  	
  appears on the other side of

  
	
   

  	
   

  	
   

  	
   

  	
   this
  Security.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must
  be guaranteed)

  	
   

  	
   

  
							

 

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

 17

 

EXHIBIT B

TO

RULE 144A/REGULATIONS APPENDIX

CUSIP:

ISIN:

[FORM OF FACE
OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE] */**/

*/ If the Note is
to be issued in global form add the Global Notes Legend from Exhibit A to Rule 144A/Regulation
S Appendix and the attachment from such Exhibit A captioned - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL NOTE”.

**/
If the Note is a Private Exchange Note issued in a Private Exchange to an
Initial Purchaser holding an unsold portion of its initial allotment, add the
Restricted Notes Legend from Exhibit A to Rule 144A/Regulation S
Appendix and replace the Assignment Form included in this Exhibit B
with the Assignment Form included in such Exhibit A.

 

 1
 

 

 

TRANSDIGM INC.

	
  No

  	
   

  	
  $

  

73⁄4%
SENIOR SUBORDINATED NOTES DUE 2014

TRANSDIGM INC., a Delaware corporation promises to pay
to “Cede & Co.”, or registered assigns, the principal sum of
[                                ]
($[          ]) on July 15,
2014.

Interest Payment
Dates: 
[                 ]
and [             ].

Record Dates: 
[             ]
and
[             ].

Date:
[             ]

Reference is made to the further provisions of this
Note contained herein, which will for all purposes have the same effect as if
set forth at this place.

 

 2
 

 

 

	
  Dated:
  

  	
   

  
	
   

  	
   

  
	
  TRANSDIGM, INC.,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A.,

  as Trustee, certifies that this is one of

  the Notes referred to in the

  within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 3
 

 

 

[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE
EXCHANGE NOTE]

73⁄4% SENIOR SUBORDINATED NOTES DUE 2014

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

1.             INTEREST.
TransDigm Inc., a Delaware corporation (such corporation, and its successors
and assigns under the Indenture, being herein called the “Company”),
promises to pay interest on the principal amount of this Note at 73⁄4% per annum
from         , 20   until
maturity; provided that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional interest
(the “Additional Interest”) of $0.05 per week
per $1,000 principal amount of Notes will accrue on the Notes for the first 90-day
period immediately following the occurrence of a Registration Default
(increasing by an additional $0.05 per week per $1,000 principal amount of
Notes with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum additional interest rate
of 1.00% per annum). The Company shall pay interest and Additional Interest
semi-annually on January 15 and July 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 the date of issuance; 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
        , 20  . The Company
shall 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 equal to the interest rate on the Note then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest (without regard to any applicable grace 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 January 1 or July 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 interest and
Additional Interest, if any, 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, and 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 shall have provided wire transfer instructions to
the Company or the Paying Agent. Such payment shall be in

 

 4
 

 

 

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, The Bank of New York Trust Company,
N.A., 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 June 23, 2006
(“Indenture”) among the Company, Holdings,
the Guarantors and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are obligations of the
Company.

5.             SUBORDINATION.
The Notes are subordinated to Senior Debt of the Company, as defined in the
Indenture. To the extent provided in the Indenture, Senior Debt of the Company
must be paid before the Notes may be paid. The Company agrees, and each Holder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.

6.             OPTIONAL
REDEMPTION.

Except as set forth below, the Notes shall not be redeemable at the
Company’s option prior to July 15, 2009.

At any time prior
to July 15, 2009, the
Company may redeem all or a part of the Notes (which includes Additional Notes,
if any), upon not less than 30 nor more than 60 days’ prior notice mailed by
first-class mail to the registered address of each Holder of Notes, at a
redemption price equal to 100% of the principal amount of Notes redeemed plus
the Applicable Premium as of, and accrued and unpaid interest, if any, to the
date of redemption (the “Redemption Date”), subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant
interest payment date.

On and after July 15, 2009, the Company may
redeem the Notes (which includes Additional Notes, if any) at its option, in
whole or in part, upon not less than 30 nor more than 60 days’ notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) if redeemed during the twelve-month period commencing on July 15 of the year set forth
below:

	
  Year

  	
   

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  105.813

  	
  %

  
	
  2010

  	
   

  	
  103.875

  	
  %

  
	
  2011

  	
   

  	
  101.938

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

 5
 

 

 

Notwithstanding the foregoing prior to July 15,
2009, the Company may at its option on one or more occasions redeem Notes
(which includes Additional Notes, if any) in an aggregate principal amount not
to exceed 35% of the aggregate principal amount of the Notes (which includes
Additional Notes, if any) originally issued at a redemption price (expressed as
a percentage of principal amount) of 107.750%, plus accrued and unpaid
interest and Additional Interest, if any, to the Redemption Date, with the net
cash proceeds from one or more Equity Offerings; provided, however,
that (1) at least $150 million of such aggregate principal amount of Notes
(which includes Additional Notes, if any) remains outstanding immediately after
the occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (2) each such
redemption occurs within 90 days after the date of the related Equity Offering.

7.             MANDATORY
REDEMPTION. The Company shall not be required to make
any mandatory redemption or sinking fund payments with respect to the Notes.

8.             REPURCHASE
AT OPTION OF HOLDER.

If a Change of Control
occurs, each Holder shall have the right to require that the Company purchase
all or a portion of such Holder’s Notes pursuant to the offer described in the
Indenture (the “Change of Control Offer”), at a
purchase price equal to 101% of the principal amount thereof plus accrued
interest and Additional Interest, if any, to the date of purchase. Within 30
days following the date upon which the Change of Control occurred, the Company
must send, by first class mail, a notice to each Holder, which notice shall
govern the terms of the Change of Control Offer. Such notice shall state, among
other things, the purchase date, which must be no earlier than 30 days nor
later than 60 days from the date such notice is mailed, other than as may be
required by law (the “Change of Control Payment
Date”). Holders electing to have a Note purchased pursuant to a
Change of Control Offer shall be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day prior to the Change of Control
Payment Date.

If the Company or a
Restricted Subsidiary consummates any Asset Sales, under certain circumstances
the Company is required to commence an offer to all Holders of Notes (a “Net Proceeds Offer”) pursuant to Section 3.09 of the
Indenture. The Net Proceeds Offer may also be made to holders of other Senior
Subordinated Debt of the Company or a Restricted Subsidiary of the Company
requiring the making of such an offer. Pursuant to the Net Proceeds Offer, the
Company shall offer to purchase, on a pro rata basis, the maximum amount of
Notes and, if it so elects, such other Senior Subordinated Debt that may be
purchased with the Net Proceeds Offer Amount at a price equal to 100% of
their  principal amount (or, in the event
such other Senior Subordinated Debt was issued with significant original issue
discount, 100% of the accreted value thereof) plus accrued and unpaid interest
and Additional Interest thereon, if any, to the purchase date, in accordance
with the procedures set forth in the Indenture (or, in respect of such other
Senior Subordinated Debt, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Debt). To the extent that the aggregate
amount of Notes or such other Senior Subordinated Debt tendered pursuant to a
Net Proceeds Offer is less than the Net Proceeds Offer Amount, the Company may
use such deficiency for general corporate purposes or for any other purpose not
prohibited by the Indenture. If

 

 6
 

 

 

the aggregate principal amount of Notes or such
other Senior Subordinated Debt surrendered by holders thereof exceeds the
amount of Net Proceeds Offer Amount, 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 a Net Proceeds Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Notes.

9.             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. Notes in denominations larger
than $1,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

10.           DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons
in denominations of $1,000 and integral multiples of $1,000. 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 during a period
beginning at the opening of business 15 days before the day of the mailing
of notice of redemption and ending at the close of business on such day or
during the period between a record date and the next succeeding Interest
Payment Date.

11.           PERSONS
DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.

12.           AMENDMENT,
SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture,
the Guarantees or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, if any, voting as a single class, and any existing default or compliance
with any provision of the Indenture, the Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes, if any, voting as a single class. Without the consent of any
Holder of a Note, the Indenture, the Guarantees 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 or to
alter the provisions of Article 2 of the Indenture or the Appendix to the
Indenture relating to the form of the Notes (including the related definitions)
in a manner that does not materially adversely affect any Holder, to provide
for the assumption of the Company’s, Holdings’ or any Guarantor’s obligations
to Holders of the Notes by a successor to the Company, Holdings or a Guarantor
pursuant to Section 5.01 of the Indenture, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not 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 Trust Indenture Act, to
provide for the issuance of Notes issued after the Issue Date in accordance
with the

 

 7
 

 

 

limitations set
forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Guarantee with respect to the Notes to
provide for the issuance of exchange notes or private exchange notes, to
confirm the text of the Indenture, the Guarantees or the Notes to any provision
in the Description of Notes or to the extent that such provision in the
Description of Notes was intended to be a verbatim recitation of a provision in
the Indenture, the Guarantees or the Notes.

13.           DEFAULTS
AND REMEDIES. Events of
Default include: (i) the failure to pay interest or Additional Interest,
if any, on any Notes when the same becomes due and payable if the default
continues for a period of 30 days (whether or not such payment shall be
prohibited by Article 10 or Article 12 of the Indenture); (ii) the
failure to pay the principal on any Notes when such principal becomes due and
payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer on the date specified for such payment in the
applicable offer to purchase) (whether or not such payment shall be prohibited
by Article 10 or Article 12 of the Indenture); (iii) a default
in the observance or performance of any other covenant or agreement contained
in the Indenture if the default continues for a period of 60 days after
the Company receives written notice specifying the default (and demanding that
such default be remedied) from the Trustee or the Holders of at least 25% of
the outstanding principal amount of the Notes (except in the case of a default
with respect to Section 5.01 of the Indenture, which will constitute an Event
of Default with such notice requirement but without such passage of time
requirement); (iv) the failure to pay at final stated maturity (giving
effect to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness of the Company or any Significant
Subsidiary of the Company (other than a Securitization Entity) or the
acceleration of the final stated maturity of any such Indebtedness, if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal
at final maturity or which has been accelerated, aggregates $20.0 million
or more at any time; (v) one or more judgments in an aggregate amount in
excess of $20.0 million shall have been rendered against the Company or
any of its Significant Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; and (vi) certain events of bankruptcy
affecting the Company or any of its Significant Subsidiaries. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy with respect to the Company
or any of its Significant Subsidiaries, all outstanding Notes will become due
and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture and the Trust
Indenture Act. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest or Additional
Interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the

 

 8
 

 

 

payment of
interest (including 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.

14.           GUARANTEE.
The payment by the Company of the principal of, and premium and
interest (including Additional Interest, if any) on, the Notes is fully and
unconditionally guaranteed on a joint and several senior subordinated basis by
Holdings and each of the Guarantors.

15.           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.

16.           NO
RECOURSE AGAINST OTHERS. A past, present or future director,
officer, employee, incorporator or stockholder of Holdings, the Company or any
Guarantor (other than the Company, Holdings or any Subsidiary of the Company
that is a Guarantor), as such, shall not have any liability for any obligations
of Holdings, the Company or such Guarantor under the Notes, the Guarantees 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.

17.           AUTHENTICATION.
This Note shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.

18.           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).

[19.          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 Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of June 23, 2006, among the Company, Holdings, the
Guarantors and the other parties named on the signature pages thereof. Each
Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including the obligations of
the Holders with respect to a registration and the indemnification of the
Company and other named persons to the extent provided therein.](1)

20.           CUSIP and ISIN NUMBERS. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the

(1)   Delete if this Note is not being issued in
exchange for an Initial Note.

 

 9
 

 

 

Company has caused
CUSIP and ISIN numbers to be printed on the Notes and the Trustee may use CUSIP
or ISIN 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.

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:

TransDigm
Inc.

1301 East 9th Street, Suite 3710

Cleveland, OH 44114

Attention:  Chief Financial Officer

 

 10

 

 

	
   

  
	
   

  
	
  ASSIGNMENT FORM

  
	
   

  
	
  To assign this Note, fill in the form below:

  
	
   

  
	
  I or we assign and transfer this Note to

  
	
   

  
	
  Assignee’s Legal Name, Address, and Zip Code

  
	
   

  
	
   

  
	
   

  
	
  Assignee’s soc. Sec. or tax I.D. No.

  
	
   

  
	
  and irrevocably appoint                           agent
  to transfer this Note on t0he books of the

  Company. The agent may substitute another to act for him.

  
	
   

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
  Sign exactly as your name appears on the other side
  of this Note.

  

 

 11
 

 

 

OPTION OF HOLDER
TO ELECT PURCHASE

If you want to
elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the box:

	
  

  

If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the
Indenture, state the amount in principal amount:  $

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name

  appears on the other side of
 this Security.)

  

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
  (Signature must be
  guaranteed)

  	
   

  
				

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended

 

 12

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