Document:

<PAGE>   1
                                                                     EXHIBIT 4.3
                              CONDOR SYSTEMS, INC.

                       WARRANT FOR THE PURCHASE OF CLASS C
                      COMMON STOCK OF CONDOR SYSTEMS, INC.

NO. ____                                                     WARRANT TO PURCHASE
                                         SHARES EQUAL TO HOLDER'S WARRANT AMOUNT
                                 (AS DEFINED IN THE 2001 SUBSCRIPTION AGREEMENT)

        THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
        AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
        EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS SUBJECT TO ADDITIONAL
        RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INVESTORS' AGREEMENT (AS
        HEREIN DEFINED), COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM THE
        COMPANY OR ANY SUCCESSOR THERETO.

                                                Date of Issuance: April 12, 2001

        FOR VALUE RECEIVED, CONDOR SYSTEMS, INC., a California corporation (the
"COMPANY"), hereby certifies that [       ], its successor or permitted assigns
(the "HOLDER"), is entitled, subject to the provisions of this Warrant, to
purchase from the Company a number of fully paid and non-assessable shares of
Class C Common Stock of the Company, par value $0.001 per share (the "WARRANT
SHARES") equal to the Holder's Warrant Amount (as defined in the 2001
Subscription Agreement), at a purchase price per share equal to the Exercise
Price (as hereinafter defined). The number of Warrant Shares to be received upon
the exercise of this Warrant and the Exercise Price are subject to adjustment
from time to time as hereinafter set forth.

        This Warrant is one of one or more warrants (each individually, a
"WARRANT" and, collectively, the "WARRANTS") of the same form and having the
same terms as this Warrant issued pursuant to the 2001 Securities Subscription
Agreement, entitling the holders thereof to purchase initially up to an
aggregate of [ ] shares of Class C Common Stock. The Warrants have been issued
pursuant to the 2001 Subscription Agreement providing for the purchase and
issuance of the Warrants. The Holder is entitled to certain benefits and is
subject to certain obligations as set forth in the Investors Agreement (as
defined below). The Company shall keep a copy of the 2001 Subscription Agreement
and the Investors Agreement, and any amendments thereto, at its principal
executive

<PAGE>   2

office and shall furnish, without charge, copies thereof to the Holder upon
request.

        (a)    DEFINITIONS.

               (1)    The following terms, as used herein, have the following
        meanings:

        "2001 SUBSCRIPTION AGREEMENT" means the Securities Subscription
Agreement dated as of April 12, 2001 among the Company and the purchasers of
Securities (as defined therein) listed on the signature pages thereto.

        "AFFILIATE" shall have the meaning given to such term in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934, as amended.

        "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.

        "CLASS C COMMON STOCK" means the Class C Common Stock of the Company,
par value $0.001 per share, or any other security for which this Warrant may be
exercised pursuant to the terms hereof.

        "DULY ENDORSED" means duly endorsed in blank by the Person or Persons in
whose name a stock certificate is registered or accompanied by a duly executed
stock assignment separate from the certificate, in each case, with the
signature(s) thereon guaranteed by a commercial bank or trust company or a
member of a national securities exchange or of the National Association of
Securities Dealers, Inc.

        "EXERCISE PRICE" means $0.01 per Warrant Share, as such Exercise Price
is adjusted from time to time as provided herein.

        "EXPIRATION DATE" means March 30, 2011 at 5:00 p.m. New York City time.

        "FAIR MARKET VALUE" means, with respect to one share of Class C Common
Stock, on any date, the Current Market Price per share of Class C Common Stock
as defined in paragraph (h)(6) hereof.

        "INVESTORS AGREEMENT" means the Investors' Agreement dated as of April
15, 1999 among the Company and the Shareholders (as defined therein), as amended
from time to time.

                                       2
<PAGE>   3

        "PERSON" means an individual, partnership, corporation, limited
liability company, trust, joint stock company, association, joint venture, or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

        (b)    EXERCISE OF WARRANT.

               (1)    The Holder is entitled to exercise this Warrant in whole
        or in part at any time, or from time to time, until 5:00 p.m. (New York
        City time) on the Expiration Date or, if such day is not a Business Day,
        then until such time on the next succeeding day that shall be a Business
        Day. To exercise this Warrant, the Holder shall execute and deliver to
        the Company a Warrant Subscription Form forming a part hereof duly
        executed by the Holder and payment of the applicable Exercise Price for
        each Warrant Share subject to such exercise. Upon such delivery and
        payment, the Holder shall be deemed to be the holder of record of the
        Warrant Shares subject to such exercise, notwithstanding that the stock
        transfer books of the Company shall then be closed or that certificates
        representing such Warrant Shares shall not then be actually delivered to
        the Holder. Notwithstanding anything herein to the contrary, in lieu of
        payment in cash of the applicable Exercise Price, the Holder may elect
        (i) to receive upon exercise of this Warrant, the number of Warrant
        Shares otherwise to be acquired reduced by a number of shares of Class C
        Common Stock having the aggregate Fair Market Value equal to the
        aggregate Exercise Price for the Warrant Shares otherwise to be
        acquired, (ii) to deliver as payment, in whole or in part of the
        aggregate Exercise Price, shares of Class C Common Stock having the
        aggregate Fair Market Value equal to the aggregate Exercise Price for
        the Warrant Shares in respect of which the Exercise Price is not being
        paid in cash or (iii) to deliver as payment, in whole or in part of the
        aggregate Exercise Price, such number of Warrants which, if exercised,
        would result in a number of shares of Class C Common Stock having an
        aggregate Fair Market Value equal to (x) the aggregate Exercise Price
        for the Warrant Shares in respect of which the Exercise Price is not
        being paid in cash plus (y) the Exercise Price of the Warrants so
        delivered.

               (2)    The Exercise Price may be paid in cash or by certified or
        official bank check or bank cashier's check payable to the order of the
        Company or by any combination of such cash or check. The Company shall
        pay any and all documentary, stamp or similar issue or transfer taxes
        payable in respect of the issue or delivery of the Warrant Shares.

               (3)    If the Holder exercises this Warrant in part, this Warrant
        shall be surrendered by the Holder to the Company and a new Warrant of
        the same tenor and for the unexercised number of Warrant Shares shall be
        executed by the Company. The Company shall register the new Warrant in
        the name of the Holder or in such name or names of its transferee
        pursuant to paragraph (f) hereof as may be directed in writing by the
        Holder and

                                       3
<PAGE>   4

        deliver the new Warrant to the Person or Persons entitled to receive the
        same.

               (4)    Upon surrender of this Warrant in conformity with the
        foregoing provisions, the Company shall transfer to the Holder of this
        Warrant (or its transferee) appropriate evidence of ownership of shares
        of Class C Common Stock or other securities or property (including any
        money) to which the Holder is entitled, registered or otherwise placed
        in, or payable to the order of, the name or names of the Holder or such
        transferee as may be directed in writing by the Holder.

        (c)    RESTRICTIVE LEGENDS. Certificates representing shares of Class C
Common Stock issued pursuant to this Warrant shall bear legends substantially in
the form of the legends set forth on the first page of this Warrant to the
extent that and for so long as such legends are required pursuant to the
Investors' Agreement, the 2001 Subscription Agreement or applicable securities
laws.

        (d)    RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of its authorized but unissued shares of Class C Common
Stock as will be sufficient to permit the exercise in full of this Warrant. All
such shares shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid and non-assessable, free and clear of all liens,
security interests, charges and other encumbrances or restrictions on sale and
free and clear of all preemptive rights, except to the extent set forth in the
Investors' Agreement.

        (e)    FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant and in lieu
of delivery of any such fractional share upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the Current Market Price per share of Class C Common Stock (as defined in
paragraph (h)(6)) at the date of such exercise.

        The Company further agrees that it will not change the par value of the
Class C Common Stock from $0.001 per share to any higher par value which exceeds
the Exercise Price then in effect, and will reduce the par value of the Class C
Common Stock upon any event described in paragraph (h) that would, but for this
provision, reduce the Exercise Price below the par value of the Common Stock.

        (f)    EXCHANGE, TRANSFER OR ASSIGNMENT OF WARRANT.

               (1)    This Warrant and the Warrant Shares are subject to the
        provisions of the Investors' Agreement, including the applicable
        restrictions

                                       4
<PAGE>   5

        on transfer. Each holder of this Warrant by holding the same, consents
        and agrees that the registered holder hereof may be treated by the
        Company and all other persons dealing with this Warrant as the absolute
        owner hereof for any purpose and as the person entitled to exercise the
        rights represented hereby.

               (2)    Subject to compliance with the transfer restrictions set
        forth in the Investors' Agreement and with applicable securities laws,
        upon surrender of this Warrant to the Company, together with the
        attached Warrant Assignment Form duly executed, the Company shall,
        without charge, execute and deliver a new Warrant in the name of the
        assignee or assignees named in such instrument of assignment and, if the
        Holder's entire interest is not being assigned, in the name of the
        Holder and this Warrant shall promptly be canceled.

        (g)    LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the Company of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

        (h)    ANTI-DILUTION PROVISIONS. The Exercise Price of this Warrant and
the number of Class C Common Stock for which this Warrant may be exercised shall
be subject to adjustment from time to time upon the occurrence of certain events
as provided in this paragraph (h).

               (1)    In case the Company shall at any time after the date
        hereof (i) declare a dividend or make a distribution on Class C Common
        Stock payable in shares of Class C Common Stock, (ii) subdivide or split
        the outstanding shares of Class C Common Stock, (iii) combine or
        reclassify the outstanding shares of Class C Common Stock into a smaller
        number of shares, or (iv) issue any shares of its capital stock in a
        reclassification of shares of Class C Common Stock (including any such
        reclassification in connection with a consolidation or merger in which
        the Company is a party), the Exercise Price in effect at the time of the
        record date for such dividend or distribution or of the effective date
        of such subdivision, split, combination or reclassification shall be
        proportionately adjusted so that, giving effect to paragraph (h)(9), the
        exercise of this Warrant after such time shall entitle the holder to
        receive the aggregate number of shares of Class C Common Stock (or other
        securities into which such shares of Class C Common Stock have been
        reclassified pursuant to clause (iii) or (iv) above) which, if this
        Warrant had been exercised entirely with cash immediately prior to such
        time, such holder would have owned upon such exercise and been entitled
        to receive by virtue of such dividend, distribution, subdivision, split,
        combination or reclassification. Such adjustment shall be made
        successively whenever any event listed above shall occur.

                                       5
<PAGE>   6

               (2)    In case the Company shall issue or sell any shares of
        Class C Common Stock (other than shares of Class C Common Stock issued
        (I) upon exercise of the Warrants, (II) pursuant to any stock option,
        co-investment or other stock related employee compensation plan of the
        Company approved by the Company's Board of Directors, (III) upon
        exercise or conversion of any security the issuance of which caused an
        adjustment under paragraphs (h)(3) or (h)(4) hereof or (IV) in any bona
        fide registered public offering), the Exercise Price to be in effect
        after such issuance or sale shall be determined by multiplying the
        Exercise Price in effect immediately prior to such issuance or sale by a
        fraction, the numerator of which shall be the sum of (x) the number of
        shares of Class C Common Stock outstanding immediately prior to the time
        of such issuance or sale multiplied by the Current Market Price per
        share of Class C Common Stock immediately prior to such issuance or sale
        and (y) the aggregate consideration, if any, to be received by the
        Company upon such issuance or sale, and the denominator of which shall
        be the product of the aggregate number of shares of Class C Common Stock
        outstanding immediately after such issuance or sale and the Current
        Market Price Per share of Class C Common Stock immediately prior to such
        issuance or sale but in no event will such fraction exceed 1. In case
        any portion of the consideration to be received by the Company shall be
        in a form other than cash, the fair market value of such noncash
        consideration shall be utilized in the foregoing computation. Such fair
        market value shall be determined by the Board of Directors of the
        Company.

               (3)    In case the Company shall fix a record date for the
        issuance of rights, options or warrants to the holders of its Class C
        Common Stock or other securities entitling such holders to subscribe for
        or purchase for a period expiring within 60 days of such record date
        shares of Class C Common Stock (or securities convertible into Class C
        Common Stock) at a price per share of Class C Common Stock (or having a
        conversion price per share of Class C Common Stock, if a security
        convertible into Class C Common Stock) less than the Current Market
        Price per share of Class C Common Stock on such record date, the maximum
        number of shares of Class C Common Stock issuable upon exercise of such
        rights, options or warrants (or conversion of such convertible
        securities) shall be deemed to have been issued and outstanding as of
        such record date and the Exercise Price shall be adjusted pursuant to
        paragraph (h)(2) hereof, as though such maximum number of shares of
        Class C Common Stock had been so issued for the aggregate consideration
        payable by the holders of such rights, options, warrants or convertible
        securities prior to their receipt of such shares of Class C Common
        Stock. In case any portion of such consideration shall be in a form
        other than cash, the fair market value of such noncash consideration
        shall be determined as set forth in paragraph (h)(2) hereof. Such
        adjustment shall be made successively whenever such record date is
        fixed; and in the event that such rights, options or warrants are not so
        issued

                                       6
<PAGE>   7

        or expire unexercised, or in the event of a change in the number of
        shares of Class C Common Stock to which the holders of such rights,
        options or warrants are entitled (other than pursuant to adjustment
        provisions therein which are no more favorable in their entirety than
        those contained in this paragraph (h)), the Exercise Price shall again
        be adjusted to be the Exercise Price which would then be in effect if
        such record date had not been fixed, in the former event, or the
        Exercise Price which would then be in effect if such holder had
        initially been entitled to such changed number of shares of Class C
        Common Stock, in the latter event.

               (4)    In case the Company shall sell or issue rights, options
        (other than options issued pursuant to a plan described in clause II of
        paragraph (h)(2)) or warrants entitling the holders thereof to subscribe
        for or purchase shares of Class C Common Stock (or securities
        convertible into shares of Class C Common Stock) or shall issue
        convertible securities and the price per share of Class C Common Stock
        of such rights, options, warrants or convertible securities (including,
        in the case of rights, options, warrants or convertible securities, the
        price at which they may be exercised or converted) is less than the
        Current Market Price per share of Class C Common Stock, the maximum
        number of shares of Class C Common Stock issuable upon exercise of such
        rights, options or warrants or upon conversion of such convertible
        securities shall be deemed to have been issued and outstanding as of the
        date of such sale or issuance, and the Exercise Price shall be adjusted
        pursuant to paragraph (h)(2) hereof as though such maximum number of
        shares of Class C Common Stock had been so issued for an aggregate
        consideration equal to the aggregate consideration paid for such rights,
        options, warrants or convertible securities and the aggregate
        consideration payable by the holders of such rights, options, warrants
        or convertible securities prior to their receipt of such shares of Class
        C Common Stock. In case any portion of such consideration shall be in a
        form other than cash, the fair market value of such noncash
        consideration shall be determined as set forth in paragraph (h)(2)
        hereof. Such adjustment shall be made successively whenever such rights,
        options, warrants or convertible securities are issued; and in the event
        that such rights, options or warrants expire unexercised, or in the
        event of a change in the number of shares of Class C Common Stock to
        which the holders of such rights, options, warrants or convertible
        securities are entitled (other than pursuant to adjustment provisions
        therein which are no more favorable in their entirety than those
        contained in this paragraph (h)), the Exercise Price shall again be
        adjusted to be the Exercise Price which would then be in effect if such
        rights, options, warrants or convertible securities had not been issued,
        in the former event, or the Exercise Price which would then be in effect
        if such holders had initially been entitled to such changed number of
        shares of Class C Common Stock, in the latter event. No adjustment of
        the Exercise Price shall be made pursuant to this paragraph (h)(4) to
        the extent that the Exercise Price shall have been adjusted pursuant to
        paragraph (h)(3)

                                       7
<PAGE>   8

        upon the setting of any record date relating to such rights, options,
        warrants or convertible securities and such adjustment fully reflects
        the number of shares of Class C Common Stock to which the holders of
        such rights, options, warrants or convertible securities are entitled
        and the price payable therefor.

               (5)    In case the Company shall fix a record date for the making
        of a distribution to holders of shares of Class C Common Stock
        (including any such distribution made in connection with a consolidation
        or merger in which the Company is a party) of evidences of indebtedness,
        cash, assets or other property (other than dividends payable in shares
        of Class C Common Stock or rights, options or warrants referred to in,
        and for which an adjustment is made pursuant to, paragraphs (h)(1),
        (h)(3) or (h)(4) hereof), the Exercise Price to be in effect after such
        record date shall be determined by multiplying the Exercise Price in
        effect immediately prior to such record date by a fraction, the
        numerator of which shall be the Current Market Price per share of Class
        C Common Stock on such record date, less the fair market value
        (determined as set forth in paragraph (h)(2) hereof) of the portion of
        the assets, cash, other property or evidence of indebtedness so to be
        distributed which is applicable to one share of Class C Common Stock,
        and the denominator of which shall be such Current Market Price per
        share of Class C Common Stock. Such adjustments shall be made
        successively whenever such a record date is fixed; and in the event that
        such distribution is not so made, the Exercise Price shall again be
        adjusted to be the Exercise Price which would then be in effect if such
        record date had not been fixed.

               (6)    For the purpose of any computation under paragraph (e) or
        paragraph (h)(2), (3), (4) or (5) hereof, on any determination date, the
        Current Market Price per share of Class C Common Stock shall be deemed
        to be the average (weighted by daily trading volume) of the Daily Prices
        (as defined below) per share of Class C Common Stock for the 20
        consecutive trading days ending three days prior to such date. "DAILY
        PRICE" means (1) if the shares of Class C Common Stock then are listed
        and traded on the New York Stock Exchange, Inc. ("NYSE"), the closing
        price on such day as reported on the NYSE Composite Transactions Tape;
        (2) if the shares of Class C Common Stock then are not listed and traded
        on the NYSE, the closing price on such day as reported by the principal
        national securities exchange on which the shares are listed and traded;
        (3) if the shares of Class C Common Stock then are not listed and traded
        on any such securities exchange, the last reported sale price on such
        day on the National Market of the National Association of Securities
        Dealers, Inc. Automated Quotation System ("NASDAQ"); (4) if the shares
        of Class C Common Stock then are not listed and traded on any such
        securities exchange and not traded on the NASDAQ National Market, the
        average of the highest reported bid and lowest reported asked price on
        such day as reported by NASDAQ; or (5) if such shares are not listed and
        traded on any such securities exchange, not

                                       8
<PAGE>   9

        traded on the NASDAQ National Market and bid and asked prices are not
        reported by NASDAQ, then the average of the closing bid and asked
        prices, as reported by The Wall Street Journal for the over-the-counter
        market. If on any determination date the shares of Class C Common Stock
        are not quoted by any such organization, the Current Market Price per
        shares of Class C Common Stock shall be the fair market value of such
        shares on such determination date as determined by the Board of
        Directors, without regard to considerations of the lack of liquidity,
        applicable regulatory restrictions or any of the transfer restrictions
        or other obligations imposed on such shares set forth in the Investors'
        Agreement. For purposes of any computation under this paragraph (h), the
        number of shares of Class C Common Stock outstanding at any given time
        shall not include shares owned or held by or for the account of the
        Company.

               (7)    No adjustment in the Exercise Price shall be required
        unless such adjustment would require an increase or decrease of at least
        one percent in such price; provided that any adjustments which by reason
        of this paragraph (h)(7) are not required to be made shall be carried
        forward and taken into account in any subsequent adjustment. All
        calculations under this paragraph (h) shall be made to the nearest one
        hundredth of a cent or to the nearest hundredth of a share, as the case
        may be.

               (8)    In the event that, at any time as a result of the
        provisions of this Warrant, the holder of this Warrant upon subsequent
        exercise shall become entitled to receive any shares of capital stock or
        other securities of the Company other than shares of Class C Common
        Stock, the number of such other shares so receivable upon exercise of
        this Warrant shall thereafter be subject to adjustment from time to time
        in a manner and on terms as nearly equivalent as practicable to the
        provisions contained herein.

               (9)    Upon each adjustment of the Exercise Price as a result of
        the calculations made in paragraphs (h)(1), (2), (3), (4) or (5) hereof,
        the number of shares of Class C Common Stock for which this Warrant is
        exercisable immediately prior to the making of such adjustment shall
        thereafter evidence the right to purchase, at the adjusted Exercise
        Price, that number of shares of Class C Common Stock obtained by (i)
        multiplying the number of shares covered by this Warrant immediately
        prior to this adjustment of the number of shares by the Exercise Price
        in effect immediately prior to such adjustment of the Exercise Price and
        (ii) dividing the product so obtained by the Exercise Price in effect
        immediately after such adjustment of the Exercise Price.

               (10)   The Company shall notify all Holders of (x) the fixing of
        a record date for the purpose of payment of a cash dividend to holders
        of shares of Class C Common Stock, and (y) the record date or effective
        date, as the case may be, of any action which requires or might require
        an adjustment or readjustment pursuant to this paragraph (h), in each
        case as

                                       9
<PAGE>   10

        soon as reasonably practicable, but in no event less than 20 days prior
        to any such record date or effective date.

               (11)   Not less than 10 nor more than 30 days prior to the record
        date or effective date, as the case may be, of any action which requires
        or might require an adjustment or readjustment pursuant to this
        paragraph (h), the Company shall forthwith file in the custody of its
        Secretary or an Assistant Secretary at its principal executive office
        and with its stock transfer agent or its warrant agent, if any, an
        officers' certificate showing the adjusted Exercise Price determined as
        herein provided, setting forth in reasonable detail the facts requiring
        such adjustment and the manner of computing such adjustment. Each such
        officers' certificate shall be signed by the chairman, president or
        chief financial officer of the Company and by the secretary or any
        assistant secretary of the Company. Each such officers' certificate
        shall be made available at all reasonable times for inspection by the
        Holder or any holder of a Warrant executed and delivered pursuant to
        paragraph (f) and the Company shall, forthwith after each such
        adjustment, mail a copy, by first-class mail, of such certificate to the
        Holder.

               (12)   The Holder shall, at its option, be entitled to receive,
        in lieu of the adjustment pursuant to paragraph (h)(5) otherwise
        required thereof, on the date of exercise of the Warrants, the evidences
        of indebtedness, other securities, cash, property or other assets which
        such Holder would have been entitled to receive if it had exercised its
        Warrants for shares of Class C Common Stock immediately prior to the
        record date with respect to such distribution. The Holder may exercise
        its option under this paragraph (h)(12) by delivering to the Company a
        written notice of such exercise within seven Business Days of its
        receipt of the certificate of adjustment required pursuant to paragraph
        (h)(11) to be delivered by the Company in connection with such
        distribution.

               (i)    CONSOLIDATION, MERGER, OR SALE OF ASSETS. In case of any
        consolidation of the Company with, or merger of the Company into, any
        other Person, any merger of another Person into the Company (other than
        a merger which does not result in any reclassification, conversion,
        exchange or cancellation of outstanding shares of Class C Common Stock)
        or any sale or transfer of all or substantially all of the assets of the
        Company or of the Person formed by such consolidation or resulting from
        such merger or which acquires such assets, as the case may be, the
        Holder shall have the right thereafter to exercise this Warrant for the
        kind and amount of securities, cash and other property receivable upon
        such consolidation, merger, sale or transfer by a holder of the number
        of shares of Class C Common Stock for which this Warrant may have been
        exercised immediately prior to such consolidation, merger, sale or
        transfer, assuming (i) such holder of shares of Class C Common Stock is
        not a Person with which the Company consolidated or into which the
        Company merged or

                                       10
<PAGE>   11

        which merged into the Company or to which such sale or transfer was
        made, as the case may be ("CONSTITUENT PERSON"), or an Affiliate of a
        constituent Person and (ii) in the case of a consolidation, merger, sale
        or transfer which includes an election as to the consideration to be
        received by the holders, such holder of shares of Class C Common Stock
        failed to exercise its rights of election, as to the kind or amount of
        securities, cash and other property receivable upon such consolidation,
        merger, sale or transfer (provided that if the kind or amount of
        securities, cash and other property receivable upon such consolidation,
        merger, sale or transfer is not the same for each share of Class C
        Common Stock held immediately prior to such consolidation, merger, sale
        or transfer by a Person other than a constituent Person or an Affiliate
        thereof and in respect of which such rights of election shall not have
        been exercised ("NON-ELECTING SHARE"), then for the purpose of this
        paragraph (i) the kind and amount of securities, cash and other property
        receivable upon such consolidation, merger, sale or transfer for each
        non-electing share shall be deemed to be the kind and amount so
        receivable per share by a plurality of the non-electing shares).
        Adjustments for events subsequent to the effective date of such a
        consolidation, merger and sale of assets shall be as nearly equivalent
        as may be practicable to the adjustments provided for in this Warrant.
        In any such event, effective provisions shall be made in the certificate
        or articles of incorporation of the resulting or surviving corporation,
        in any contract of sale, conveyance, lease or transfer, or otherwise so
        that the provisions set forth herein for the protection of the rights of
        the Holder shall thereafter continue to be applicable; and any such
        resulting or surviving corporation shall expressly assume the obligation
        to deliver, upon exercise, such shares of stock, other securities, cash
        and property. The provisions of this paragraph (i) shall similarly apply
        to successive consolidations, mergers, sales, leases or transfers.

               (j)    NOTICES. Any notice, demand or delivery authorized by this
        Warrant shall be in writing and shall be given to the Holder or the
        Company as the case may be, at its address (or telecopier number) set
        forth below, or such other address (or telecopier number) as shall have
        been furnished to the party giving or making such notice, demand or
        delivery:

        If to the Company:  Condor Systems, Inc.
                            2133 Samaritan Drive
                            San Jose, California 95124
                            Attention: Chief Financial Officer
                            Fax: (408) 377-4421

        If to the Holder:   To the address of such holder set forth on the
                            signature page hereof.

        Each such notice, demand or delivery shall be effective (i) if given by
Telecopy, when such telecopy is transmitted to the telecopy number specified

                                       11
<PAGE>   12

herein and the intended recipient confirms the receipt of such telecopy or (ii)
if given by any other means, when received at the address specified herein.

               (k)    RIGHTS OF THE HOLDER. Prior to the exercise of any
        Warrant, the Holder shall not, by virtue hereof, be entitled to any
        rights of a shareholder of the Company, including, without limitation,
        the right to vote, to receive dividends or other distributions or to
        receive any notice of meetings of shareholders or any notice of any
        proceedings of the Company except as may be specifically provided for
        herein.

               (l)    REGISTRATION RIGHTS. The Holder of this Warrant is
        entitled to the registration rights, if any, which may be available to
        such Holder of Warrants and Warrant Shares under the Investors'
        Agreement.

               (m)    GOVERNING LAW. THIS WARRANT AND ALL RIGHTS ARISING
        HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE LAWS
        OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS RULES
        OF SUCH STATE.

               (n)    AMENDMENTS; WAIVERS. Any provision of this Warrant may be
        amended or waived if, and only if, such amendment or waiver is in
        writing and signed, in the case of an amendment, by the Holder and the
        Company, or in the case of a waiver, by the party against whom the
        waiver is to be effective. No failure or delay by either party in
        exercising any right, power or privilege hereunder shall operate as a
        waiver thereof nor shall any single or partial exercise thereof preclude
        any other or further exercise thereof or the exercise of any other
        right, power or privilege. The rights and remedies herein provided shall
        be cumulative and not exclusive of any rights or remedies provided by
        law.

                                       12
<PAGE>   13

        IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of the day and year
first written above.

                                        CONDOR SYSTEMS, INC.

                                        By: _______________________
                                            Name:
                                            Title:

Acknowledged and Agreed:

DLJ MERCHANT BANKING PARTNERS II, L.P.,
     a Delaware Limited Partnership

By:  DLJ Merchant Banking II, Inc.,
      as managing general partner

By:  _______________________________
     Name:
     Title:
     Address: c/o DLJ Merchant Banking II, Inc.
     277 Park Avenue
     New York, NY 10172
     Fax: 212-892-7272

                                       13
<PAGE>   14

                            WARRANT SUBSCRIPTION FORM

To:  Condor Systems, Inc.

        The undersigned irrevocably exercises the Warrant for the purchase of
___________ shares of Class C Common Stock (the "SHARES"), par value $0.001 per
share, of Condor Systems, Inc. (the "COMPANY") at $_____ per Share (the Exercise
Price currently in effect pursuant to the Warrant) and herewith makes payment of
$___________ (such payment being made in cash or by certified or official bank
or bank cashier's check payable to the order of the Company or by any permitted
combination of such cash or check), all on the terms and conditions specified in
the within Warrant, surrenders this Warrant and all right, title and interest
therein to the Company and directs that the Shares deliverable upon the exercise
of this Warrant be registered or placed in the name and at the address specified
below and delivered thereto.

                                      -OR-

        The undersigned irrevocably exercises the Warrant for the purchase of
___________ shares of Class C Common Stock (the "SHARES"), par value $0.001 per
share, of Condor Systems, Inc. (the "COMPANY") at $_____ per Share (the Exercise
Price currently in effect pursuant to the Warrant) (provided that in lieu of
payment of $_________, the undersigned will receive a number of Shares reduced
by a number of shares of Class C Common Stock having an aggregate Fair Market
Value (as defined in the Warrant) equal to the aggregate Exercise Price for the
Shares), all on the terms and conditions specified in the within Warrant,
surrenders this Warrant and all right, title and interest therein to the Company
and directs that the Shares deliverable upon the exercise of this Warrant be
registered or placed in the name and at the address specified below and
delivered thereto.

                                      -OR-

        The undersigned irrevocably exercises the Warrant for the purchase of
__________ shares of Class C Common Stock (the "SHARES"), par value $0.001 per
share, of Condor Systems, Inc. (the "COMPANY") at $_______ per Share (the
Exercise Price currently in effect pursuant to the Warrant), and herewith makes
payment of $_____ of the aggregate Exercise Price for the Shares in cash,
certified or official bank or bank cashier's check (or a combination of cash and
check), and herewith delivers as payment of $____ of the aggregate Exercise
Price that number of shares of Class C Common Stock having an aggregate Fair
Market Value (as defined in the Warrant) equal to such non-cash portion of the
aggregate Exercise Price for the Shares, all on the terms and conditions
specified in the within Warrant, surrenders this Warrant and all right, title
and interest therein to the Company and directs that the Shares deliverable upon
the exercise

                                       14
<PAGE>   15

of this Warrant be registered or placed in the name and at the address specified
below and delivered thereto.

                                      -OR-

        The undersigned irrevocably exercises the Warrant for the purchase of
__________ shares of Class C Common Stock, par value $0.001 per share, of Condor
Systems, Inc. (the "COMPANY") at $____ per share (the Exercise Price currently
in effect pursuant to the Warrant), and herewith makes payment of $_____ of the
aggregate Exercise Price for the Shares in cash, certified or official bank or
bank cashier's check (or a combination of cash and check), and herewith delivers
as payment of $____ of the aggregate Exercise Price that number of Warrants
which, if exercised, would result in a number of shares of Class C Common Stock
having an aggregate Fair Market Value (as defined in the Warrant) equal to (x)
such non-cash portion of the aggregate Exercise Price for the Shares, plus (y)
the Exercise Price currently in effect of the Warrants delivered herewith, all
on the terms and conditions specified in the within Warrant, surrenders this
Warrant and all right, title and interest therein to the Company and directs
that the Shares deliverable upon the exercise of this Warrant be registered or
placed in the name and at the address specified below and delivered thereto.

                                       15
<PAGE>   16

        Date: __________ __, ____.

                                        ________________________________________
                                            (Signature of Owner)

                                        ________________________________________
                                            (Street Address)

                                        ________________________________________
                                            (City) (State) (Zip Code)

                                       16
<PAGE>   17

        Securities and/or check to be issued to:

        Please insert social security or identifying number:

        Name:

        Street Address:

        City, State and Zip Code:

        Any unexercised portion of the Warrant evidenced by the

        within Warrant to be issued to:

        Please insert social security or identifying number:

        Name:

        Street Address:

        City, State and Zip Code:

                                       17
<PAGE>   18

                             WARRANT ASSIGNMENT FORM

                                                               Dated____________

               FOR VALUE RECEIVED, _______________________________

               hereby sells, assigns and transfers unto,

               _______________________________________ (the "ASSIGNEE"),
               (please type or print in block letters)

               ______________________________________________________
               (insert address)

               its right to purchase up to _____ shares of Class C Common Stock
               represented by this Warrant and does hereby irrevocably
               constitute and appoint _______________________ Attorney, to
               transfer the same on the books of the Company, with full power of
               substitution in the premises.

                    Signature __________________________<PAGE>   1
                                                                     EXHIBIT 4.4
================================================================================

                              CONDOR SYSTEMS, INC.

                       15% SENIOR DISCOUNT NOTES DUE 2011

                  Guaranteed to the extent set forth herein by
                                CEI SYSTEMS, INC.

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

                                    INDENTURE

                                 Dated as of [ ]

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

                                [NAME OF TRUSTEE]

                                   as TRUSTEE

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

<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                       <C>                                                      <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.................................1

        SECTION 1.01      DEFINITIONS................................................1

        SECTION 1.02      OTHER DEFINITIONS.........................................16

        SECTION 1.03      INCORPORATION OF TIA PROVISIONS...........................17

        SECTION 1.04      RULES OF CONSTRUCTION.....................................17

ARTICLE 2 THE NOTES.................................................................18

        SECTION 2.01      FORM AND DATING...........................................18

        SECTION 2.02      EXECUTION AND AUTHENTICATION..............................18

        SECTION 2.03      REGISTRAR AND PAYING AGENT................................19

        SECTION 2.04      PAYING AGENT TO HOLD MONEY IN TRUST.......................19

        SECTION 2.05      HOLDER LISTS..............................................19

        SECTION 2.06      TRANSFER AND EXCHANGE.....................................19

        SECTION 2.07      REPLACEMENT NOTES.........................................22

        SECTION 2.08      OUTSTANDING NOTES.........................................22

        SECTION 2.09      TREASURY NOTES............................................22

        SECTION 2.10      TEMPORARY NOTES...........................................23

        SECTION 2.11      CANCELLATION..............................................23

        SECTION 2.12      DEFAULTED INTEREST........................................23

        SECTION 2.13      CUSIP NUMBERS.............................................23

ARTICLE 3 REDEMPTION AND PREPAYMENT.................................................24

        SECTION 3.01      NOTICES TO TRUSTEE........................................24

        SECTION 3.02      SELECTION OF NOTES TO BE REDEEMED.........................24

        SECTION 3.03      NOTICE OF REDEMPTION......................................24

        SECTION 3.04      EFFECT OF NOTICE OF REDEMPTION............................25

        SECTION 3.05      DEPOSIT OF REDEMPTION PRICE...............................25

        SECTION 3.06      NOTES REDEEMED IN PART....................................26

        SECTION 3.07      OPTIONAL REDEMPTION.......................................26

        SECTION 3.08      MANDATORY REDEMPTION......................................26

        SECTION 3.09      OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.......26

        SECTION 3.10      RESTRICTIONS ON REDEMPTION................................28

ARTICLE 4 COVENANTS.................................................................28
</TABLE>

                                       i
<PAGE>   3

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                       <C>                                                      <C>
        SECTION 4.01      PAYMENT OF NOTES..........................................28

        SECTION 4.02      MAINTENANCE OF OFFICE OR AGENCY...........................29

        SECTION 4.03      REPORTS...................................................29

        SECTION 4.04      COMPLIANCE CERTIFICATE....................................30

        SECTION 4.05      TAXES.....................................................30

        SECTION 4.06      STAY, EXTENSION AND USURY LAWS............................30

        SECTION 4.07      RESTRICTED PAYMENTS.......................................31

        SECTION 4.08      DIVIDEND AND OTHER PAYMENT RESTRICTIONS
                          AFFECTING SUBSIDIARIES....................................35

        SECTION 4.09      INCURRENCE OF INDEBTEDNESS AND ISSUANCE
                          OF PREFERRED STOCK........................................36

        SECTION 4.10      ASSET SALES...............................................38

        SECTION 4.11      TRANSACTIONS WITH AFFILIATES..............................40

        SECTION 4.12      LIENS.....................................................41

        SECTION 4.13      CORPORATE EXISTENCE.......................................41

        SECTION 4.14      OFFER TO REPURCHASE UPON CHANGE OF CONTROL................42

        SECTION 4.15      [INTENTIONALLY OMITTED]...................................43

        SECTION 4.16      LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.............43

        SECTION 4.17      PAYMENTS FOR CONSENT......................................43

ARTICLE 5 SUCCESSORS................................................................43

        SECTION 5.01      MERGER, CONSOLIDATION, OR SALE OF ASSETS..................43

        SECTION 5.02      SUCCESSOR CORPORATION SUBSTITUTED.........................44

ARTICLE 6 DEFAULTS AND REMEDIES.....................................................44

        SECTION 6.01      EVENTS OF DEFAULT.........................................44

        SECTION 6.02      ACCELERATION..............................................46

        SECTION 6.03      OTHER REMEDIES............................................46

        SECTION 6.04      WAIVER OF PAST DEFAULTS...................................47

        SECTION 6.05      CONTROL BY HOLDERS........................................47

        SECTION 6.06      LIMITATION ON SUITS.......................................47

        SECTION 6.07      RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.............48
</TABLE>

                                       ii
<PAGE>   4

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                       <C>                                                      <C>
        SECTION 6.08      COLLECTION SUIT BY TRUSTEE................................48

        SECTION 6.09      TRUSTEE MAY FILE PROOFS OF CLAIM..........................48

        SECTION 6.10      PRIORITIES................................................49

        SECTION 6.11      UNDERTAKING FOR COSTS.....................................49

ARTICLE 7 TRUSTEE...................................................................49

        SECTION 7.01      DUTIES OF TRUSTEE.........................................49

        SECTION 7.02      RIGHTS OF TRUSTEE.........................................50

        SECTION 7.03      INDIVIDUAL RIGHTS OF TRUSTEE..............................51

        SECTION 7.04      TRUSTEE'S DISCLAIMER......................................52

        SECTION 7.05      NOTICE OF DEFAULTS........................................52

        SECTION 7.06      REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES................52

        SECTION 7.07      COMPENSATION AND INDEMNITY................................52

        SECTION 7.08      REPLACEMENT OF TRUSTEE....................................53

        SECTION 7.09      SUCCESSOR TRUSTEE BY MERGER, ETC..........................54

        SECTION 7.10      ELIGIBILITY; DISQUALIFICATION.............................54

        SECTION 7.11      PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........55

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................................55

        SECTION 8.01      OPTION TO EFFECT LEGAL DEFEASANCE OR
                          COVENANT DEFEASANCE.......................................55

        SECTION 8.02      LEGAL DEFEASANCE AND DISCHARGE............................55

        SECTION 8.03      COVENANT DEFEASANCE.......................................56

        SECTION 8.04      CONDITIONS TO LEGAL OR COVENANT DEFEASANCE................56

        SECTION 8.05      DEPOSITED MONEY AND GOVERNMENT SECURITIES
                          TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.......57

        SECTION 8.06      REPAYMENT TO COMPANY......................................58

        SECTION 8.07      REINSTATEMENT.............................................58

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER..........................................59

        SECTION 9.01      WITHOUT CONSENT OF HOLDERS OF NOTES.......................59

        SECTION 9.02      WITH CONSENT OF HOLDERS OF NOTES..........................59
</TABLE>

                                      iii
<PAGE>   5

                               TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                       <C>                                                      <C>
        SECTION 9.03      COMPLIANCE WITH TRUST INDENTURE ACT.......................61

        SECTION 9.04      REVOCATION AND EFFECT OF CONSENTS.........................61

        SECTION 9.05      NOTATION ON OR EXCHANGE OF NOTES..........................61

        SECTION 9.06      TRUSTEE TO SIGN AMENDMENTS, ETC...........................61

ARTICLE 10 NOTE GUARANTEES..........................................................62

        SECTION 10.01     GUARANTEES................................................62

        SECTION 10.02     LIMITATION ON GUARANTOR LIABILITY.........................63

        SECTION 10.03     EXECUTION AND DELIVERY OF NOTE GUARANTEES.................63

        SECTION 10.04     GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS..........63

        SECTION 10.05     RELEASES FOLLOWING SALE FOR ASSETS........................64

        SECTION 10.06     TRUSTEE'S COMPENSATION NOT PREJUDICED.....................64

ARTICLE 11 MISCELLANEOUS............................................................64

        SECTION 11.01     TRUST INDENTURE ACT CONTROLS..............................64

        SECTION 11.02     NOTICES...................................................65

        SECTION 11.03     COMMUNICATION BY HOLDERS OF NOTES WITH
                          OTHER HOLDERS OF NOTES....................................66

        SECTION 11.04     CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........66

        SECTION 11.05     STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.............66

        SECTION 11.06     RULES BY TRUSTEE AND AGENTS...............................67

        SECTION 11.07     NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
                          AND SHAREHOLDERS; CONSENT TO SHAREHOLDER PAYMENT..........67

        SECTION 11.08     GOVERNING LAW.............................................67

        SECTION 11.09     NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.............67

        SECTION 11.10     SUCCESSORS................................................67

        SECTION 11.11     SEVERABILITY..............................................67

        SECTION 11.12     COUNTERPART ORIGINALS.....................................67

        SECTION 11.13     TABLE OF CONTENTS, HEADINGS, ETC..........................68
</TABLE>

                                       iv
<PAGE>   6

        INDENTURE dated as of [_______], among Condor Systems, Inc., a
California corporation (referred to herein as the "COMPANY"), CEI Systems, Inc.,
a Delaware corporation (the "GUARANTOR"), and [TRUSTEE], as trustee (the
"TRUSTEE").

        WHEREAS, pursuant to Section 6 of the Notes (as such term is defined
herein), the Company is required to cause this Indenture to be executed and
delivered by the Company, the Guarantor and the Trustee and to be qualified
under the TIA and, upon such execution and delivery, the Notes are to deemed to
be one of an issue of Notes of the Company issued under this Indenture.

        The Company, Guarantor 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.

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

        "ACCRETED VALUE" means, for any Note, as of any date of determination,
(i) the sum of (a) the Issue Price of such Note and (b) the portion of the
excess of the Principal Amount at Maturity of such Note over the Issue Price of
such Note which shall have been accreted thereon through such date, such amount
to be so accreted on a daily basis at a rate of 15% per annum of the Issue Price
of such Note, compounded semi-annually on each April 1 and October 1 from April
12, 2001 through the date of determination, computed on the basis of a 360-day
year of twelve 30-day months and (ii) on and after April 1, 2005, the Principal
Amount at Maturity of such Note.

        "ACQUIRED INDEBTEDNESS" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien
encumbering an asset acquired by such specified Person at the time such asset is
acquired by such specified Person.

        "ACQUISITION" means the merger of WDC Acquisition Corp., a California
corporation, with and into the Company pursuant to the terms of the Acquisition
Agreement.

        "ACQUISITION AGREEMENT" means that certain Agreement and Plan of Merger
dated as of March 8, 1999 among the Company, WDC Acquisition Corp. and certain
of the shareholders of the Company referred to therein.

        "ACQUISITION FINANCING" means (i) the issuance and sale by the Company
of senior subordinated increasing rate notes, and (ii) the execution and
delivery by the Company and

<PAGE>   7

certain of its subsidiaries of the New Credit Facility and the borrowing of
loans, if any, and the issuance of the letters of credit thereunder to fund the
Acquisition or related transactions, including without limitation, the payment
of fees and expenses and the refinancing of the Company's and its subsidiaries'
outstanding indebtedness.

        "AFFILIATE" of any specified Person means any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

        "AGENT" means any Registrar, Paying Agent or co-registrar.

        "ASSET SALE" means (a) the sale, lease, conveyance, disposition or other
transfer (a "disposition") of any properties, assets or rights (including,
without limitation, by way of a sale and leaseback) (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries taken as a whole will be governed by the
Sections 4.14 and/or 5.01 and not by the provisions of Section 4.10), and (b)
the issuance, sale or transfer by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, in the case of either clause (a) or (b), whether in a single
transaction or a series of related transactions (i) that have a fair market
value in excess of $2.0 million or (ii) for net proceeds in excess of $2.0
million. Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales: (a) dispositions in the ordinary course of business; (b) a
disposition of assets by the Company to a Restricted Subsidiary or by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary; (c) a
disposition of Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary; (d) the sale and leaseback of any assets within
90 days of the acquisition thereof; (e) foreclosures on assets; (f) any exchange
of like property pursuant to Section 1031 of the Internal Revenue Code of 1986,
as amended, for use in a Permitted Business; (g) any sale of Equity Interests
in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (h) a
Permitted Investment or a Restricted Payment that is permitted by Section 4.07
hereof; and (i) sales of accounts receivable, or participations therein, in
connection with any Receivables Facility.

        "ATTRIBUTABLE INDEBTEDNESS" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including, without limitation, period for which such lease has been extended or
may, at the option of the lessor, be extended).

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

        "BEHRMAN CAPITAL" means Behrman Capital II L.P. and its related funds.

        "BOARD OF DIRECTORS" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.

                                       2
<PAGE>   8

        "BUSINESS DAY" means any day other than a Legal Holiday.

        "CAPITAL EXPENDITURE INDEBTEDNESS" means Indebtedness incurred by any
Person to finance the purchase or construction or any property or assets
acquired or constructed by such Person which have a useful life of more than one
year so long as (a) the purchase or construction price for such property or
assets is included in "addition to property, plant or equipment" in accordance
with GAAP, (b) the acquisition or construction of such property or assets is not
part of any acquisition of a Person or line of business and (c) such
Indebtedness is incurred within 90 days of the acquisition or completion of
construction of such property or assets.

        "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.

        "CAPITAL STOCK" means (a) in the case of a corporation, corporate stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

        "CASH EQUIVALENTS" means (i) Government Securities, (ii) any certificate
of deposit maturing not more than 365 days after the date of acquisition issued
by, or demand deposit or time deposit of, an Eligible Institution or any lender
under the New Credit Facility, (iii) commercial paper maturing not more than 365
days after the date of acquisition of an issuer (other than an Affiliate of the
Company) with a rating, at the time as of which any investment therein is made,
of "A-3" (or higher) according to S&P or "P-2" (or higher) according to Moody's
or carrying an equivalent rating by a nationally recognized rating agency if
both of the two named rating agencies cease publishing ratings of investments,
(iv) any bankers acceptances or money market deposit accounts issued by an
Eligible Institution, (v) any fund investing exclusively in investments of the
types described in clauses (i) through (iv) above and (vi) in the case of any
Subsidiary organized or having its principal place of business outside the
United States, investments denominated in the currency of the jurisdiction in
which such Subsidiary is organized or has its principal place of business which
are similar to the items specified in clauses (i) through (v) above (including,
without limitation, any deposit with a bank that is a lender to any Restricted
Subsidiary).

        "CHANGE OF CONTROL" means the occurrence of any of the following: (a)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, to any "person" or "group" (as such terms are used in Section 13(d) of
the Exchange Act), other than the Principals and their Related Parties; (b) the
adoption of a plan for the liquidation or dissolution of the Company; (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d) of the Exchange Act), other than the Principals
and their Related Parties, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of 50% or more of the voting
power of the outstanding voting equity interests of

                                       3
<PAGE>   9

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

        "COMMISSION" means the Securities and Exchange Commission.

        "COMPANY" means Condor Systems, Inc., a California corporation, until a
successor corporation shall have become such pursuant to Section 5.02 and
thereafter "Company" shall mean such successor corporation.

        "CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period plus, to the extent deducted in computing
Consolidated Net Income, (a) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, (b) Fixed Charges
of such Person for such period, (c) depreciation, amortization (including,
without limitation, amortization of goodwill and other intangibles) and all
other non-cash charges (excluding any such non-cash charge, other than the First
Quarter Plant Closing Charge, to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period, (d) net periodic post-retirement benefits, (e)
other income or expense net as set forth on the face of such Person's statement
of operations, (f) expenses and charges of the Company related to the
Acquisition (including, without limitation, any purchase price adjustment or any
other payments made pursuant to the Acquisition Agreement or the Financial
Advisory Agreements or the Termination Agreements) and Acquisition Financing,
the New Credit Facility and the application of the proceeds thereof, and (g) any
non-capitalized transaction costs incurred in connection with actual, proposed
or abandoned financings, acquisitions or divestitures (including, but not
limited to, financing and refinancing fees and costs incurred in connection with
the Acquisition and Acquisition Financing), in each case, on a consolidated
basis and determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, the Fixed Charges of, and
the depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of a Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that Net
Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.

        "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication, (a) the interest expense of such
Person and its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including, without limitation, amortization
of original issue discount, non-cash interest payments, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Indebtedness, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations; provided
that in no event shall any amortization of deferred financing costs be included
in Consolidated Interest Expense); and (b) the consolidated capitalized interest
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued; provided, however, that Receivables Fees shall be deemed not to
constitute Consolidated Interest Expense. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary that is
not a Wholly Owned Restricted Subsidiary shall be included

                                       4
<PAGE>   10

only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income.

        "CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (a) the Net Income (or loss) of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (b) the Net Income (or loss) of any Restricted Subsidiary other than a
Subsidiary organized or having its principal place of business outside the
United States shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income (or loss) is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary, (c) the Net Income (or loss) of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (d) the cumulative effect of a change in
accounting principles shall be excluded.

        "CONTINUING MEMBERS" means, as of any date of determination, any member
of the board of directors of the Company who (a) was a member of such board of
directors immediately after consummation of the Acquisition and the Acquisition
Financing or (b) was nominated for election or elected to such board of
directors with the approval of, or whose election to the board of directors was
ratified by, at least a majority of the Continuing Members who were members of
such board of directors at the time of such nomination or election or was
proposed by DLJMB.

        "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.

        "CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

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

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

        "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable), or upon the happening of any event (other than any event solely
within the control of the issuer thereof), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, is exchangeable for

                                       5
<PAGE>   11

Indebtedness (except to the extent exchangeable at the option of such Person
subject to the terms of any debt instrument to which such Person is a party) or
redeemable at the option of the Holder thereof, in whole or in part, on or prior
to the date on which the Notes mature; provided that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof; and
provided further that, if such Capital Stock is issued to any plan for the
benefit of employees of the Company or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations.

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

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

        "11 7/8% NOTES" means the 11 7/8% Senior Subordinated Notes due 2009
issued by the Company pursuant to the 11 7/8% Notes Indenture.

        "11 7/8% NOTES INDENTURE" means the indenture dated April 15, 1999,
among the Company, the Guarantor and State Street Bank and Trust Company, as
trustee.

        "11 7/8% NOTES ORIGINAL ISSUANCE DATE" means April 15, 1999, the date on
which the 11% Notes were first issued and authenticated under the 11% Notes
Indenture.

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

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

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

        "EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the New Credit Facility)
in existence on the 11 7/8% Notes Original Issuance Date, until such amounts
are repaid.

        "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. Unless the TIA
otherwise requires, fair market value shall be determined by the

                                       6
<PAGE>   12

Board of Directors of the Company acting reasonably and in good faith and shall
be evidenced by a resolution of the Board of Directors of the Company delivered
to the Trustee.

        "FINANCIAL ADVISORY AGREEMENTS" means, collectively, that certain
Financial Advisory Agreement, dated March 8, 1999, between the Company and
Behrman Capital Management Corp., and that certain Financial Advisory Agreement,
dated March 4, 1999, among the Company, WDC Acquisition Corp. and Donaldson,
Lufkin & Jenrette Securities Corporation.

        "FIRST QUARTER PLANT CLOSING CHARGE" means the $0.9 million charge
recorded in the first fiscal quarter of 1999 in connection with the Company's
decision to close its facilities located in Sterling, Virginia.

        "FIXED CHARGES" means, with respect to any Person for any period, the
sum, without duplication, of (a) the Consolidated Interest Expense of such
Person for such period and (b) all dividend payments on any series of preferred
stock of such Person (other than dividends payable solely in Equity Interests
that are not Disqualified Stock), in each case, on a consolidated basis and in
accordance with GAAP.

        "FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
(exclusive of amounts attributable to discontinued operations, as determined in
accordance with GAAP, or operations and businesses disposed of prior to the
Calculation Date (as defined)) to the Fixed Charges of such Person for such
period (exclusive of amounts attributable to discontinued operations, as
determined in accordance with GAAP, or operations and businesses disposed of
prior to the Calculation). In the event that the referent Person or any of its
Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems preferred stock subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock and the use of the proceeds therefrom,
as if the same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of making the computation referred
to above, the Acquisition, the Sterling Plant Closure and acquisitions that have
been made by the Company or any of its Subsidiaries, including, without
limitation, all mergers or consolidations and any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated to include the
Consolidated Cash Flow of the acquired entities on a pro forma basis after
giving effect to cost savings reasonably expected to be realized in connection
with such acquisition, as determined in good faith by an officer of the Company
(regardless of whether such cost savings could then be reflected in pro forma
financial statements under GAAP, Regulation S-X promulgated by the Commission or
any other regulation or policy of the Commission) and without giving effect to
clause (c) of the proviso set forth in the definition of Consolidated Net
Income.

        "FOREIGN CREDIT FACILITIES" means one or more credit agreements, loan
agreements or other instruments under which indebtedness may be incurred by any
foreign restricted subsidiary

                                       7
<PAGE>   13

including without limitation, any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and, in
each case, as amended, modified, renewed, refunded, replaced or refinanced from
time to time, including, without limitation, any agreement (i) extending or
shortening the maturity of any Indebtedness incurred thereunder or contemplated
thereby, (ii) adding or deleting borrowers or guarantors thereunder, (iii)
increasing the amount of Indebtedness incurred thereunder or available to be
borrowed thereunder, provided that on the date such Indebtedness is incurred it
would not be prohibited by clause (i) of the second paragraph of Section 4.09
hereof or (iv) otherwise altering the terms and conditions thereof. Indebtedness
under the New Credit Facility outstanding on the 11 7/8% Notes Original Issuance
Date shall be deemed to have been incurred on such date in reliance on the first
paragraph of Section 4.09 hereof.

        "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the 11 7/8% Notes Original Issuance Date.

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

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

        "GUARANTOR" means CEI Systems, Inc.

        "GTP" means Global Technology Partners, LLC and its Affiliates.

        "GTP INVESTMENT" means the sale by the Company to GTP of its common
stock and the granting by the Company to GTP of options to purchase shares of
its common stock.

        "GTP LOANS" means one or more loans by the Company to GTP to the extent
the proceeds are used (or deemed used) solely to finance GTP's purchase of
capital stock of the Company.

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

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

        "INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or

                                       8
<PAGE>   14

representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable or
customer advances, if and to the extent any of the foregoing Indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of such Person (whether or
not such Indebtedness is assumed by such Person) and, to the extent not
otherwise included, the guarantee by such Person of any Indebtedness of any
other Person, provided that Indebtedness shall not include the pledge by the
Company of the Capital Stock of an Unrestricted Subsidiary of the Company to
secure Non-Recourse Debt of such Unrestricted Subsidiary. The amount of any
Indebtedness outstanding as of any date shall be (a) the accreted value thereof
(together with any interest thereon that is more than 30 days past due), in the
case of any Indebtedness that does not require current payments of interest, and
(b) the principal amount thereof, in the case of any other Indebtedness provided
that the principal amount of any Indebtedness that is denominated in any
currency other than United States dollars shall be the amount thereof, as
determined pursuant to the foregoing provision, converted into United States
dollars at the Spot Rate in effect on the date that such Indebtedness was
incurred (or, if such indebtedness was incurred prior to the 11 7/8% Notes
Original Issuance Date, the Spot Rate in effect on the 11 7/8% Notes Original
Issuance Date).

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

         "INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including, without limitation, guarantees by the referent Person
of, and Liens on any assets of the referent Person securing, Indebtedness or
other obligations of other Persons), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP, provided that an investment by the Company for
consideration consisting of common equity securities of the Company shall not be
deemed to be an Investment (other than for purposes of clause (iii) of the
definition of "Qualified Proceeds"). If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any direct
or indirect Restricted Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.

        "ISSUE PRICE" means, in connection with the original issuance of any
Note, the initial issue price at which such Note is sold, as set forth on the
face of such Note, calculated by discounting the Principal Amount at Maturity of
such Note at a rate of 15% per annum, compounded semi-annually on each April 1
and October 1, from April 1, 2011 to April 12, 2001.

        "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or 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

                                       9
<PAGE>   15

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, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including, without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).

        "NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (or
loss), together with any related provision for taxes on such gain (or loss),
realized in connection with (i) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (ii) the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and (b) any extraordinary or nonrecurring gain (or loss), together
with any related provision for taxes on such extraordinary or nonrecurring gain
(or loss); and (c) in the event that Condor's consolidated financial statements
are ever restated to reverse a write-off of in-process technology recorded prior
to July 1, 1999, the amortization of purchased technology.

        "NET PROCEEDS" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of, without duplication,
(a) the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions, recording
fees, title transfer fees and appraiser fees and cost of preparation of assets
for sale) and any relocation expenses incurred as a result thereof, (b) taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), (c) amounts required to
be applied to the repayment of Indebtedness (other than revolving credit
Indebtedness incurred pursuant to the New Credit Facility) secured by a Lien on
the asset or assets that were the subject of such Asset Sale and (d) any reserve
established in accordance with GAAP or any amount placed in escrow, in either
case for adjustment in respect of the sale price of such asset or assets until
such time as such reserve is reversed or such escrow arrangement is terminated,
in which case Net Proceeds shall include only the amount of the reserve so
reversed or the amount returned to the Company or its Restricted Subsidiaries
from such escrow arrangement, as the case may be.

        "NEW CREDIT FACILITY" means that certain Credit Agreement, dated as of
April 15, 1999 among the Company, certain subsidiaries of the Company from time
to time party thereto as guarantors, various financial institutions party
thereto and Bank of America N.A. (formerly Bank of America National Trust &
Savings Association), as administrative agent, including, without limitation,
any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and, in each case, as amended, modified,
renewed, refunded, replaced or refinanced from time to time, including, without
limitation, any agreement (i) extending or shortening the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, (iii) increasing the amount of

                                       10
<PAGE>   16

Indebtedness incurred thereunder or available to be borrowed thereunder,
provided that on the date such Indebtedness is incurred it would not be
prohibited by clause (i) of the second paragraph of Section 4.09 hereof or (iv)
otherwise altering the terms and conditions thereof. Indebtedness under the New
Credit Facility outstanding on the 11 7/8% Notes Original Issuance Date shall be
deemed to have been incurred on such date in reliance on the first paragraph of
Section 4.09 hereof.

        "NON-RECOURSE DEBT" means Indebtedness (i) no default with respect to
which (including, without limitation, any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (ii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock (other than the stock
of an Unrestricted Subsidiary pledged by the Company to secure debt of such
Unrestricted Subsidiary) or assets of the Company or any of its Restricted
Subsidiaries; provided that in no event shall Indebtedness of any Unrestricted
Subsidiary fail to be Non-Recourse Debt solely as a result of any default
provisions contained in a guarantee thereof by the Company or any of its
Restricted Subsidiaries if the Company or such Restricted Subsidiary was
otherwise permitted to incur such guarantee pursuant to this Indenture.

        "NOTE GUARANTEES" means the guarantees by the Guarantor of the Company's
payment obligations under this Indenture and the Notes.

        "NOTES" means (i) the 15% Senior Discount Notes due 2011 issued on April
12, 2001 and (ii) additional 15% Senior Discount Notes due 2011 issued by the
Company from time to time on or before June 11, 2001 to Management Shareholders
(as such term is defined under the Investors' Agreement dated as of April 15,
1999 among the Company and the several shareholders of the Company named
therein) pursuant to the exercise of preemptive rights for aggregate cash
proceeds not to exceed $1,200,000.

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

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

        "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, 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 11.04 and 11.05 hereof.

        "OLD LEGEND" means the legend set forth in Section 2.06(a)(ii) to be
placed on all Notes issued under this Indenture.

                                       11
<PAGE>   17

        "OPINION OF COUNSEL" means an opinion in form and substance reasonably
satisfactory to the Trustee and from legal counsel who is reasonably acceptable
to the Trustee, that meets the requirements of Sections 11.04 and 11.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.

        "PARI PASSU INDEBTEDNESS" means Indebtedness of the Company or the
Guarantor that ranks pari passu in right of payment to the Notes or any Note
Guarantee, other than Indebtedness or Guarantees pursuant to the New Credit
Facility.

        "PERMITTED BUSINESS" means the manufacture, sale, distribution or
service of electronic defense products or systems or any other business
reasonably related, incidental or ancillary thereto or the manufacture, sale,
distribution or service of products using similar technologies.

        "PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in cash or Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Wholly Owned
Restricted Subsidiary of the Company; (d) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (e) any Investment acquired solely
in exchange for Equity Interests (other than Disqualified Stock) of the Company;
(f) any Investment in a Person engaged in a Permitted Business (other than an
Investment in an Unrestricted Subsidiary) having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (f) that
are at that time outstanding, not to exceed the greater of (i) $20.0 million and
(ii) 15% of Total Assets at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value); (g) Investments relating to any special
purpose Wholly Owned Subsidiary of the Company organized in connection with a
Receivables Facility that, in the good faith determination of the board of
directors of the Company, are necessary or advisable to effect such Receivables
Facility; and (h) the GTP Loans.

        "PERMITTED LIENS" means: (i) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary, provided that such Liens were not incurred in
contemplation of such merger or consolidation and do not secure any property or
assets of the Company or any Restricted Subsidiary other than the property or
assets subject to the Liens prior to such merger or consolidation; (ii) Liens
existing on the 11 7/8% Notes Original Issuance Date; (iii) Liens securing
Indebtedness consisting of Capitalized Lease Obligations, purchase money
Indebtedness, mortgage financings, industrial revenue bonds or other monetary
obligations, in each case incurred solely for the purpose of financing all or
any part of the purchase price or cost of construction or installation of assets
used in the business of the Company or its Restricted Subsidiaries, or repairs,
additions or improvements to such assets, provided that (A) such Liens secure
Indebtedness in an amount not in excess of the original purchase price or the
original cost of any such assets or repair, additional or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such Indebtedness), (B) such Liens do not extend to any other
assets of the Company or its Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or

                                       12
<PAGE>   18

improved), (C) the Incurrence of such Indebtedness is permitted by Section 4.09
hereof and (D) such Liens attach within 365 days of such purchase, construction,
installation, repair, addition or improvement; (iv) Liens to secure any
refinancings, renewals, extensions, modification or replacements (collectively,
"refinancing") (or successive refinancings), in whole or in part, of any
Indebtedness secured by Liens referred to in the clauses above so long as such
Lien does not extend to any other property (other than improvements thereto);
(v) Liens securing letters of credit entered into in the ordinary course of
business and consistent with past business practice; (vi) Liens on and pledges
of the capital stock of any Unrestricted Subsidiary securing Non-Recourse Debt
of such Unrestricted Subsidiary; (vii) Liens securing Indebtedness (including,
without limitation, all Obligations) under the New Credit Facility; and (viii)
other Liens securing Indebtedness that is permitted by the terms of this
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $20.0 million.

        "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued within 60 days after
repayment of, in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness of the Company
or any of its Restricted Subsidiaries; provided that (a) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
premium, if any, and accrued interest on the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith), (b) such Permitted
Refinancing Indebtedness has a final maturity date no earlier than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, and (c) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to, the Notes on terms at least
as favorable, taken as a whole, to the Holders of Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.

        "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including, without limitation, any subdivision or ongoing business of
any such entity or substantially all of the assets of any such entity,
subdivision or business).

        "PRINCIPAL AMOUNT AT MATURITY" of any Note means the principal amount of
such Note due at maturity on April 1, 2011 as set forth in the face of such
Note.

        "PRINCIPALS" means DLJMB, GTP and Behrman Capital.

        "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(a)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

        "PUBLIC EQUITY OFFERING" means any issuance of common stock by the
Company (other than Disqualified Stock) that is registered pursuant to the
Securities Act, other than issuances registered on Form S-8 and issuances
registered on Form S-4, excluding issuances of common

                                       13
<PAGE>   19

stock pursuant to employee benefit plans of the Company or otherwise as
compensation to employees of the Company.

        "QUALIFIED PROCEEDS" means any of the following or any combination of
the following: (i) cash; (ii) Cash Equivalents; (iii) assets (other than
Investments) that are used or useful in a Permitted Business; and (iv) the
Capital Stock of any Person engaged in a Permitted Business if, in connection
with the receipt by the Company or any Restricted Subsidiary of the Company of
such Capital Stock, (A) such Person becomes a Restricted Subsidiary of the
Company or any Restricted Subsidiary of the Company or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or any
Restricted Subsidiary of the Company.

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

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

        "RELATED PARTY" means, with respect to any Principal, (i) any
controlling stockholder or partner of such Principal on the 11 7/8% Notes
Original Issuance Date, or (ii) any trust, corporation, partnership or other
entity, the beneficiaries, shareholders, partners, owners or Persons
beneficially holding (directly or through one or more Subsidiaries) a 51% or
more controlling interest of which consist of the Principals and/or such other
Persons referred to in the immediately preceding clauses (i) or (ii).

        "RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

        "RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.

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

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

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

        "SPOT RATE" means, for any currency, the spot rate at which such
currency is offered for sale against United States dollars as determined by
reference to the New York foreign exchange

                                       14
<PAGE>   20

selling rates, as published in The Wall Street Journal on such date of
determination for the immediately preceding business day or, if such rate is not
available, as determined in any publicly available source of similar market
data.

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

        "STERLING PLANT CLOSURE" means the Company's closing of its facilities
in Sterling, Virginia.

        "SUBSIDIARY" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (b) any partnership or limited liability company (i) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (ii) the only general partners or
managing members of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).

        "TERMINATION AGREEMENTS" means (i) that certain Termination Agreement,
dated as of March 8, 1999, among the Company, Nomura Holding America Inc.,
Antares Leveraged Capital Corp, Behrman Capital, Behrman Capital "B" L.P., and
the Strategic Entrepreneur Fund L.P. and (ii) that certain Option Termination
Agreement, dated as of April 15, 1999, among the Company and the holders of
certain options to purchase common stock of the Company.

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

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

        "TRUSTEE" means, except solely for purposes of Section 8.05 as otherwise
specified therein, 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" means any Subsidiary that is designated by the
board of directors as an Unrestricted Subsidiary pursuant to a board resolution,
but only to the extent that such Subsidiary: (a) has no Indebtedness other than
Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or

                                       15
<PAGE>   21

indirect obligation (i) to subscribe for additional Equity Interests (other than
Investments described in clause (g) of the definition of Permitted Investments)
or (ii) to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels, of operating results; and (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries. Any such
designation by the board of directors shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the board resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as a Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
shall be in default of such covenant). The board of directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.09 hereof and
(ii) no Default or Event of Default would be in existence following such
designation.

        "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.

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

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

SECTION 1.02   OTHER DEFINITIONS.

<TABLE>
<CAPTION>
Term                                                                  Defined in Section
-----                                                                 ------------------
<S>                                                                   <C>
"ASSET SALE"........................................................         4.10
"ASSET SALE OFFER"..................................................         4.10
"AFFILIATE TRANSACTION".............................................         4.11
"AUTHENTICATION ORDER"..............................................         2.02
"BANKRUPTCY LAW"....................................................         4.01
"CHANGE OF CONTROL OFFER"...........................................         4.14
</TABLE>

                                       16
<PAGE>   22

<TABLE>
<CAPTION>
Term                                                                  Defined in Section
-----                                                                 ------------------
<S>                                                                   <C>
"CHANGE OF CONTROL PAYMENT".........................................         4.14
"CHANGE OF CONTROL PAYMENT DATE"....................................         4.14
"COVENANT DEFEASANCE"...............................................         8.03
"EVENT OF DEFAULT"..................................................         6.01
"EXCESS PROCEEDS"...................................................         4.10
"INCUR".............................................................         4.09
"LEGAL DEFEASANCE"..................................................         8.02
"OFFER AMOUNT"......................................................         3.09
"OFFER PERIOD"......................................................         3.09
"PAYING AGENT"......................................................         2.03
"PAYMENT DEFAULT"...................................................         6.01
"PERMITTED INDEBTEDNESS"............................................         4.09
"PURCHASE DATE".....................................................         3.09
"REGISTRAR".........................................................         2.03
"RESTRICTED PAYMENTS"...............................................         4.07
</TABLE>

SECTION 1.03 INCORPORATION OF TIA PROVISIONS.

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

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

        "INDENTURE SECURITIES" means the Notes;

        "INDENTURE SECURITY HOLDER" means a Holder of a Note;

        "INDENTURE TO BE QUALIFIED" means this Indenture;

        "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and

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

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

SECTION 1.04 RULES OF CONSTRUCTION.

               (1)    Unless the context otherwise requires:

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

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

               (4)    "or" is not exclusive;

                                       17
<PAGE>   23

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

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

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

                                   ARTICLE 2
                                   THE NOTES

SECTION 2.01 FORM AND DATING.

        General. The Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be in minimum
denominations of $1,000 Principal Amount at Maturity.

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

SECTION 2.02 EXECUTION AND AUTHENTICATION.

        One Officer shall sign the Notes for the Company by manual or facsimile
signature.

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

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

        The Trustee shall, upon a written order of the Company signed by one
Officer (an "AUTHENTICATION ORDER"), authenticate Notes for issuance of up to
$20,000,000 in aggregate Principal Amount at Maturity. The aggregate Principal
Amount at Maturity of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.

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

                                       18
<PAGE>   24

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 ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

        The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Notes.

SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.

        The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest, if any, on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.

SECTION 2.05 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
all Holders and shall otherwise comply with TIA Section 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 the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

SECTION 2.06 TRANSFER AND EXCHANGE.

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

               (i)    Private Placement Legend.

                                       19
<PAGE>   25

                      (A)    Except as specified in Section 2.06(a)(i) (B)
               below, each Note (and all Notes issued in exchange therefor or
               upon registration of transfers or replacement thereof) shall bear
               the legend in substantially the following form:

        "THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
        SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND,
        ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
        WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
        PERSONS IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM."

                      (B)    Notwithstanding the foregoing, a Note shall not
               bear the Private Placement Legend if:

                             (1) it is issued upon registration of transfer or
                      replacement of, or in exchange for, a Note which does not
                      bear the Private Placement Legend; or

                             (2) it is issued upon registration of transfer or
                      replacement of, or in exchange for, a Note which bears the
                      Private Placement Legend, but there is delivered to the
                      Registrar an Opinion of Counsel reasonably satisfactory to
                      the Company and the Trustee to the effect that neither
                      such legend nor the related restrictions on transfer are
                      required in order to maintain compliance with the
                      provisions of the Securities Act.

                      (C)    By its acceptance of any Note bearing the Private
               Placement Legend, each Holder of such Note acknowledges the
               restrictions on transfer of such Note set forth in this Indenture
               and in the Private Placement Legend and agrees that it will
               transfer such Note only in accordance herewith and therewith. In
               connection with any transfer of Notes, each Holder agrees by its
               acceptance of the Notes to furnish the Registrar or the Company
               such certifications, legal opinions or other information as
               either of them may reasonably require to confirm that such
               transfer is being made pursuant to an exemption from, or a
               transaction not subject to, the registration requirements of the
               Securities Act; provided that the Registrar shall not be required
               to determine (but may rely on a determination made by the Company
               with respect to) the sufficiency of any such certifications,
               legal opinions or other information.

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

        "FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
        REVENUE CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH
        ORIGINAL ISSUE DISCOUNT."

        (b)    General Provisions Relating to Transfers and Exchanges.

                                       20
<PAGE>   26

               (i)    Subject to the provisions of this Section 2.06, when Notes
        are presented to the Registrar with a request to register the transfer
        or to exchange them for an equal Principal Amount of Notes of other
        denominations, the Registrar shall register the transfer or make the
        exchange if its requirements for such transactions are met; provided,
        however, that any Note presented or surrendered for registration of
        transfer or exchange shall be duly endorsed or accompanied by a written
        instruction of transfer in form satisfactory to the Registrar and the
        Trustee duly executed by the Holder thereof or by his attorney duly
        authorized in writing.

               (ii)   To permit registrations of transfers and exchanges, the
        Company shall execute and the Trustee shall authenticate Notes upon the
        Company's order or at the Registrar's request.

               (iii)  No service charge shall be made to a Holder for any
        registration of transfer or exchange, but the Company may require
        payment of a sum sufficient to cover any transfer tax or similar
        governmental charge payable in connection therewith (other than any such
        transfer taxes or similar governmental charge payable upon exchange or
        transfer pursuant to Sections 3.06, 3.09, 4.10 and 4.14 hereof).

               (iv)   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.

               (v)    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.

               (vi)   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 any
        selection of Notes for redemption under Section 3.02 hereof and ending
        at the close of business on the day of selection, (B) to register the
        transfer of or to exchange any Note 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.

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

               (viii) The Registrar shall retain copies of all letters, notices
        and other written communications received pursuant to this Section 2.06.
        The Company shall have the right to inspect and make copies of all such
        letters, notices or other written communications at any reasonable time
        upon the giving of reasonable written notice to the Registrar.

                                       21
<PAGE>   27

               (ix)   All certifications, certificates and Opinions of Counsel
        required to be submitted to the Registrar pursuant to this Section 2.06
        to effect a registration of transfer or exchange may be submitted by
        facsimile.

SECTION 2.07 REPLACEMENT NOTES.

        If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its 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
proportionately with all other Notes duly issued hereunder.

SECTION 2.08 OUTSTANDING NOTES.

        The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, 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; provided,
however, Notes held by the Company or a Subsidiary of the Company shall not be
deemed to be outstanding for purposes of Section 3.07 hereof.

        If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a 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) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

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, including, without
limitation, for purposes of Section 9.02, 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 (i) 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

                                       22
<PAGE>   28

knows are so owned shall be so disregarded and (ii) Notes held by any Investor
(as such term is defined in the Securities Subscription Agreement dated April
12, 2001 among the Company and certain purchasers of Notes named therein) and
its successors and assigns shall nonetheless be considered outstanding.

SECTION 2.10 TEMPORARY NOTES.

        Until certificates representing Notes are ready for delivery, the
Company may prepare, and the Trustee, upon receipt of an Authentication Order,
shall authenticate, temporary Notes. Temporary Notes shall be substantially in
the form of certificated 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, as soon as practicable upon receipt of an Authentication Order,
authenticate Definitive Notes 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 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 all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act), if applicable. Certification of the destruction of all cancelled Notes
shall be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.

SECTION 2.12 DEFAULTED INTEREST.

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

SECTION 2.13 CUSIP NUMBERS.

        The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a

                                       23
<PAGE>   29

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 omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE 3
                            REDEMPTION AND PREPAYMENT

SECTION 3.01 NOTICES TO TRUSTEE.

        If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 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 Principal
Amount at Maturity of Notes to be redeemed and (iv) the redemption price.

SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.

        If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee 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 by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 Principal Amount at Maturity or less shall be redeemed
in part.

        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 at Maturity thereof to be redeemed. The
Principal Amount at Maturity Notes and portions of Notes selected shall be in
minimum amounts of $1,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
less than $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.

SECTION 3.03 NOTICE OF REDEMPTION.

        Subject to the provisions of Section 3.09 hereof, notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the Principal Amount at
Maturity thereof to be redeemed. A new Note in Principal Amount at Maturity
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. Notes called for redemption
become due on the date fixed for redemption. On and after the redemption date,
any further Principal Amount at Maturity or interest on Notes or portions
thereof called for redemption, as the case may be, shall cease to accrue.

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

        (a)    the redemption date;

                                       24
<PAGE>   30

        (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, any further Principal Amount at Maturity or interest on Notes or
portions thereof called for redemption, as the case may be, shall cease to
accrue on and after the redemption date;

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

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

        At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 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.

        One Business Day prior to 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 or the portion thereof 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, no further Principal Amount at Maturity or
interest on Notes, as the case may be, shall 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

                                       25
<PAGE>   31

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, further Principal
Amount at Maturity or interest on Notes, as the case may be, shall cease to
accrue 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
rate provided in the Notes and in Section 4.01 hereof.

SECTION 3.06 NOTES REDEEMED IN PART.

        Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon receipt of the Company's written request, the Trustee shall as
soon as practicable authenticate for the Holder at the expense of the Company a
new Note equal in Principal Amount at Maturity to the unredeemed portion of the
Note surrendered.

SECTION 3.07 OPTIONAL REDEMPTION.

        Subject to Section 3.10 hereof, the Notes will be subject to redemption
at any time on or after April 1, 2005 at the option of the Company, in whole or
in part, upon not less than 30 nor more than 60 days' notice, in cash at the
redemption prices (expressed as percentages of Accreted Value or principal
amount, as the case may be,) set forth below, plus accrued and unpaid interest
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 1 of the years indicated below:

<TABLE>
<CAPTION>
          Year                                        Percentage
          ----                                        ----------
<S>                                                   <C>
          Prior to 2006.............................    107.5%
          2007......................................      105%
          2008......................................    102.5%
          2008 and thereafter.......................      100%
</TABLE>

        Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof and is subject to the
restrictions of Section 3.10 hereof.

SECTION 3.08 MANDATORY REDEMPTION.

        Subject to Section 3.10 hereof, except as provided in Sections 4.10 and
4.14, the Company is not required to make mandatory redemption of, or sinking
fund payments with respect to, the Notes.

SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.

        Subject to Section 3.10 hereof, in the event that, pursuant to Section
4.10 hereof, the Company shall be required to commence an Asset Sale Offer, it
shall follow the procedures specified below.

        The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "OFFER PERIOD"). No later than five
Business Days after the termination of the Offer

                                       26
<PAGE>   32

Period (the "PURCHASE DATE"), the Company shall purchase the principal amount of
Notes required to be purchased pursuant to Section 4.10 hereof (the "OFFER
AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Asset Sale 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 Asset Sale Offer.

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

        (a)    that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;

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

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

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

        (e)    that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may not
elect to have only a portion of such Note purchased;

        (f)    that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, an exchange agent or
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 exchange agent or depositary or the Paying Agent, as the case may
be, receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the Principal Amount at Maturity of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such Note
purchased;

        (h)    that, if the Accreted Value or principal amount, as the case may
be, of Notes surrendered by Holders exceeds the Offer Amount, the Company shall
select the Notes to be

                                       27
<PAGE>   33

purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in a minimum denomination of
$1,000 Principal Amount at Maturity 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 Principal Amount
at Maturity 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 Notes or
portions thereof tendered pursuant to the Asset Sale Offer having an Accreted
Value or principal amount, as the case may be, equal to the Offer Amount, or
Notes having an aggregate Accreted Value or principal amount, as the case may
be, of less than the Offer Amount have been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company 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 at Maturity equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Asset Sale Offer on the Purchase Date.

        Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

SECTION 3.10 RESTRICTIONS ON REDEMPTION

        By its acceptance of any Note, each Holder of such Note acknowledges
that the New Credit Facility prohibits the Company from voluntarily redeeming
all or any portion of the Notes, or from redeeming all or any portion of the
Notes pursuant to Section 3.07 prior to April 1, 2005, and each Holder hereby
agrees that it shall not accept the redemption price in respect of any voluntary
redemption or any mandatory redemption pursuant to Section 4.10, 4.14 or 5.01 at
any time prior to April 1, 2005.

                                    ARTICLE 4
                                    COVENANTS

SECTION 4.01 PAYMENT OF NOTES.

        Subject to Section 3.10 hereof, the Company shall pay or cause to be
paid the principal of, premium, if any, and interest, if any, on the Notes on
the dates and in the manner provided in the Notes. Principal, premium, if any,
and interest, if any, shall be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, (i) holds as of 10:00
a.m. Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest, if any,

                                       28
<PAGE>   34

then due and (ii) is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.

        The Company shall pay interest (including, without limitation,
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate equal to
17% per annum in excess of the rate then in effect on the Notes to the extent
lawful and shall pay interest (including, without limitation, post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) from time to time on
demand 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, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the 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.

SECTION 4.03 REPORTS.

        Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company will furnish to the Holders of
Notes (a) all quarterly and annual financial information that would be required
to be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such Forms, including, without limitation, a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants, and (b) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports, in each case, within the time
periods specified in the Commission's rules and regulations.

                                       29
<PAGE>   35

SECTION 4.04 COMPLIANCE CERTIFICATE.

        (a)    The Company and the Guarantor (to the extent the 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
have been made under the supervision of the signing Officers with a view to
determining whether the Company have 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 propose 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 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.

        (b)    So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (which shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

        (c)    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 TAXES.

        The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

SECTION 4.06 STAY, EXTENSION AND USURY LAWS.

        Each of the Company and the Guarantor covenants 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 each of the Company and the Guarantor 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

                                       30
<PAGE>   36

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 will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Wholly Owned Restricted
Subsidiary of the Company); (b) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company, any of its Restricted
Subsidiaries or any other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Restricted Subsidiary of the Company); (c)
make any principal payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value, any Indebtedness of the Company that
is subordinated in right of payment to the Notes, except in accordance with the
mandatory redemption or repayment provisions set forth in the original
documentation governing such Indebtedness (but not pursuant to any mandatory
offer to repurchase upon the occurrence of any event); or (d) make any
Restricted Investment (all such payments and other actions set forth in clauses
(a) through (d) above being collectively referred to as "RESTRICTED PAYMENTS"),
unless, at the time of and after giving effect to such Restricted Payment:

               (i)    no Default or Event of Default shall have occurred and be
        continuing or would occur as a consequence thereof; and

               (ii)   the Company would, immediately after giving pro forma
        effect thereto as if such Restricted Payment had been made at the
        beginning of the applicable four-quarter period, have been permitted to
        incur at least $1.00 of additional Indebtedness pursuant to the Fixed
        Charge Coverage Ratio test set forth in the first paragraph of Section
        4.09 hereof; and

               (iii)  such Restricted Payment, together with the aggregate
        amount of all other Restricted Payments made by the Company and its
        Restricted Subsidiaries after the 11 7/8% Notes Original Issuance Date
        (excluding Restricted Payments permitted by clauses (a) (to the extent
        that the declaration of any dividend referred to therein reduces amounts
        available for Restricted Payments pursuant to this clause (iii)), (b)
        through (g), (i), (j), (m), (n) and (p) of the next succeeding
        paragraph), is less than the sum, without duplication, of (A) 50% of the
        Consolidated Net Income of the Company for the period (taken as one
        accounting period) commencing July 1, 1999 to the end of the Company's
        most recently ended fiscal quarter for which internal financial
        statements are available at the time of such Restricted Payment (or, if
        such Consolidated Net Income for such period is a deficit, less 100% of
        such deficit), plus (B) 100% of the Qualified Proceeds received by the
        Company on or after the 11 7/8% Notes Original Issuance Date from
        contributions to the Company's capital or from the issue or sale on or
        after the 11 7/8% Notes Original Issuance Date of Equity Interests of
        the Company or of Disqualified Stock or convertible debt securities of
        the Company to the extent that they have been converted into such Equity
        Interests (other than Equity Interests, Disqualified Stock or
        convertible debt securities sold to a Subsidiary of the Company and
        other than Disqualified Stock or

                                       31
<PAGE>   37

        convertible debt securities that have been converted into Disqualified
        Stock), plus (C) the amount equal to the net reduction in Investments in
        Persons after the 11 7/8% Notes Original Issuance Date who are not
        Restricted Subsidiaries (other than Permitted Investments) resulting
        from (x) Qualified Proceeds received as a dividend, repayment of a loan
        or advance or other transfer of assets (valued at the fair market value
        thereof) to the Company or any Restricted Subsidiary from such Persons,
        (y) Qualified Proceeds received upon the sale or liquidation of such
        Investment and (z) the redesignation of Unrestricted Subsidiaries
        (excluding any increase in the amount available for Restricted Payments
        pursuant to clause (h) or (l) below arising from the redesignation of
        such Unrestricted Subsidiary) whose assets are used or useful in, or
        which is engaged in, one or more Permitted Business as Restricted
        Subsidiaries (valued (proportionate to the Company's equity interest in
        such Subsidiary) at the fair market value of the net assets of such
        Subsidiary at the time of such redesignation).

        The foregoing provisions will not prohibit:

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

        (b)    the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock), provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(iii)(B) of the preceding paragraph;

        (c)    the defeasance, redemption, repurchase, retirement or other
acquisition of subordinated Indebtedness of the Company with the net cash
proceeds from an incurrence of, or in exchange for, Permitted Refinancing
Indebtedness;

        (d)    the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or held by any member of the
Company's (or any of its Restricted Subsidiaries') management pursuant to any
management equity subscription agreement or stock option agreement, provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed (x) $2.0 million in any calendar year
(with unused amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum (without giving effect to the following
clause (y)) of $4.0 million in any calendar year), plus (y) the aggregate net
cash proceeds received by the Company during such calendar year from any
reissuance of Equity Interests by the Company to members of management of the
Company and its Restricted Subsidiaries (provided that the amount of any such
net cash proceeds that are used to permit an acquisition or retirement for value
pursuant to this clause (d) shall be excluded from clause (iii)(B) of the
preceding paragraph) and (ii) no Default or Event of Default shall have occurred
and be continuing immediately after such transaction;

                                       32
<PAGE>   38

        (e)    payments and transactions in connection with the Acquisition, the
offering of the 11 7/8% Notes, the New Credit Facility (including, without
limitation, commitment, syndication and arrangement fees payable thereunder) and
the application of the proceeds thereof, and the payment of fees and expenses
with respect thereto, provided, however, that the Qualified Proceeds of any
offering of Equity Securities that results in an "IPO" incentive payment
pursuant to the Acquisition Agreement shall be excluded from clause (iii)(B) of
the preceding paragraph to the extent of the amount of such incentive payment;

        (f)    the payment of dividends by a Restricted Subsidiary on any class
of common stock of such Restricted Subsidiary if (i) such dividend is paid pro
rata to all holders of such class of common stock and (ii) at least 51% of such
class of common stock is held by the Company or one or more of its Restricted
Subsidiaries;

        (g)    the repurchase of any class of common stock of a Restricted
Subsidiary if (i) such repurchase is made pro rata with respect to such class of
common stock and (ii) at least 51% of such class of common stock is held by the
Company or one or more of its Restricted Subsidiaries;

        (h)    any other Restricted Investment made in a Permitted Business
which, together with all other Restricted Investments made pursuant to this
clause (h) since the 11 7/8% Notes Original Issuance Date, does not exceed $15.0
million (in each case, after giving effect to all subsequent reductions in the
amount of any Restricted Investment made pursuant to this clause (h), either as
a result of (i) the repayment or disposition thereof for cash or (ii) the
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued
proportionate to the Company's equity interest in such Subsidiary at the time of
such redesignation) at the fair market value of the net assets of such
Subsidiary at the time of such redesignation), in the case of clause (i) and
(ii), not to exceed the amount of such Restricted Investment previously made
pursuant to this clause (h); provided that no Default or Event of Default shall
have occurred and be continuing immediately after making such Restricted
Investment;

        (i)    the declaration and payment of dividends to holders of any class
or series of Disqualified Stock of the Company or any Restricted Subsidiary
issued on or after the 11 7/8% Notes Original Issuance Date in accordance with
Section 4.09 hereof; provided that no Default or Event of Default shall have
occurred and be continuing immediately after making such Restricted Payment;

        (j)    repurchases of Equity Interests deemed to occur upon exercise of
stock options if such Equity Interests represent a portion of the exercise price
of such options;

        (k)    the payment of dividends or distributions on the Company's common
stock, following the first public offering of the Company's common stock after
the 11 7/8% Notes Original Issuance Date, of up to 6.0% per annum of the net
proceeds received by the Company from such public offering of its common stock
or the net proceeds received by the Company from such public offering of its
common stock as common equity other than with respect to public offerings with
respect to the Company's common stock registered on Form S-8; provided that no
Default or Event of Default shall have occurred and be continuing immediately
after any such payment of dividends or distributions;

                                       33
<PAGE>   39

        (l)    any other Restricted Payment which, together with all other
Restricted Payments made pursuant to this clause (l) since the 11 7/8% Notes
Original Issuance Date, does not exceed $1.0 million (in each case, after giving
effect to all subsequent reductions in the amount of any Restricted Investment
made pursuant to this clause (l) either as a result of (i) the repayment or
disposition thereof for cash or (ii) the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary (valued proportionate to the Company's
equity interest in such Subsidiary at the time of such redesignation) at the
fair market value of the net assets of such Subsidiary at the time of such
redesignation), in the case of clause (i) and (ii), not to exceed the amount of
such Restricted Investment previously made pursuant to this clause (l); provided
that no Default or Event of Default shall have occurred and be continuing
immediately after making such Restricted Payment;

        (m)    the pledge by the Company of the Capital Stock of an Unrestricted
Subsidiary of the Company to secure Non-Recourse Debt of such Unrestricted
Subsidiary;

        (n)    the purchase, redemption or other acquisition or retirement for
value of any Equity Interests of any Restricted Subsidiary issued after the
11 7/8% Notes Original Issuance Date, provided that the aggregate price paid for
any such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed the sum of (x) the amount of cash and Cash Equivalents received by such
Restricted Subsidiary from the issue or sale thereof and (y) any accrued
dividends thereon the payment of which would be permitted pursuant to clause (i)
above;

        (o)    any Investment in an Unrestricted Subsidiary that is funded by
Qualified Proceeds received by the Company on or after the 11 7/8% Notes
Original Issuance Date from contributions to the Company's capital or from the
issue and sale on or after the Original Issuance Date of Equity Interests of the
Company or of Disqualified Stock or convertible debt securities to the extent
they have been converted into such Equity Interests (other than Equity
Interests, Disqualified Stock or convertible debt securities sold to a
Subsidiary of the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock) in an amount
(measured at the time such Investment is made and without giving effect to
subsequent changes in value) that does not exceed the amount of such Qualified
Proceeds (excluding any such Qualified Proceeds to the extent utilized to permit
a prior "Restricted Payment" pursuant to clause (iii)(B) of the preceding
paragraph); and

        (p)    distributions or payments of Receivables Fees.

        The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such designation, all outstanding Investments by the Company
and its Restricted Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under the first paragraph of this Section 4.07. All such outstanding Investments
will be deemed to constitute Restricted Investments in an amount equal to the
greater of (i) the net book value of such Investments at the time of such
designation and (ii) the fair market value of such Investments at the time of
such designation. Such designation will only be permitted if such Restricted
Investment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.

                                       34
<PAGE>   40

        The amount of (i) all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment
and (ii) Qualified Proceeds (other than cash) shall be the fair market value on
the date of receipt thereof by the Company of such Qualified Proceeds. The fair
market value of any non-cash Restricted Payment shall be determined by the board
of directors of the Company whose resolution with respect thereto shall be
delivered to the Trustee. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed.

SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

        The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances to the Company or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions will not apply to encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the 11 7/8% Notes Original
Issuance Date, (b) the New Credit Facility as in effect as of the 11 7/8% Notes
Original Issuance Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, (c) the 11 7/8% Notes and the 11 7/8% Notes Indenture; (d) this
Indenture and the Notes, (e) applicable law and any applicable rule, regulation
or order, (f) any agreement or instrument of a Person acquired by the Company or
any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent created in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred, (g)
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (h) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (f) above on the property so
acquired, (i) contracts for the sale of assets, including, without limitation,
customary restrictions with respect to a Subsidiary pursuant to an agreement
that has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, (j) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are, in the good faith
judgment of the Company's board of directors, not materially less favorable,
taken as a whole, to the Holders of the Notes than those contained in the
agreements governing the Indebtedness being refinanced, (k) secured Indebtedness
otherwise permitted to be incurred pursuant to Sections 4.09 and 4.12 hereof
that limit the right of the debtor to dispose of the assets securing such
Indebtedness, (l) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business, (m)
other Indebtedness or Disqualified Stock of Restricted Subsidiaries permitted to
be incurred subsequent to the 11 7/8

                                       35
<PAGE>   41

% Notes Original Issuance Date pursuant to the provisions of Section 4.09
hereof, (n) customary provisions in joint venture agreements and other similar
agreements entered into in the ordinary course of business, and (o) restrictions
created in connection with any Receivables Facility that, in the good faith
determination of the board of directors of the Company, are necessary or
advisable to effect such Receivables Facility.

SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

        The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including, without
limitation, Acquired Indebtedness), the Company will not, and will not permit
any of its Restricted Subsidiaries to, issue any shares of Disqualified Stock
and the Company will not permit any of its Restricted Subsidiaries to issue any
shares of preferred stock; provided that the Company or any Restricted
Subsidiary may incur Indebtedness (including, without limitation, Acquired
Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1 if such four-quarter period ended on or
prior to December 31, 2001 and 2.25 to 1.0 thereafter, determined on a
consolidated pro forma basis (including, without limitation, a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock had been issued, as the case may
be, at the beginning of such four-quarter period.

        The provisions of the first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "PERMITTED INDEBTEDNESS"):

               (i)    the incurrence by the Company and its Restricted
        Subsidiaries of Indebtedness under the New Credit Facility and the
        Foreign Credit Facilities; provided that the aggregate principal amount
        of all Indebtedness (with letters of credit being deemed to have a
        principal amount equal to the maximum potential liability of the Company
        and such Restricted Subsidiaries thereunder) then classified as having
        been incurred in reliance upon this clause (i) that remains outstanding
        under the New Credit Facility and the Foreign Credit Facilities, after
        giving effect to such incurrence does not exceed an amount equal to
        $70.0 million;

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

               (iii)  the incurrence by the Company of Indebtedness represented
        by the Notes and this Indenture and by the Guarantor of Indebtedness
        represented by the Note Guarantees;

               (iv)   the incurrence by the Company of Indebtedness represented
        by the 11 7/8% Notes and the 11 7/8% Notes Indenture and guarantees
        thereof by Restricted Subsidiaries;

                                       36
<PAGE>   42

               (v)    the incurrence by the Company or any of its Restricted
        Subsidiaries of Indebtedness represented by Capital Expenditure
        Indebtedness, Capital Lease Obligations or other obligations, in each
        case, the proceeds of which are used solely for the purpose of financing
        all or any part of the purchase price or cost of construction or
        improvement of property, plant or equipment (including, without
        limitation, acquisitions of Capital Stock of a Person that becomes a
        Restricted Subsidiary to the extent of the fair market value of the
        property, plant or equipment so acquired) used in the business of the
        Company or such Restricted Subsidiary, in an aggregate principal amount
        (or accreted value, as applicable) not to exceed $10.0 million
        outstanding after giving effect to such incurrence;

               (vi)   Indebtedness arising from agreements of the Company or any
        Restricted Subsidiary providing for indemnification, adjustment of
        purchase price or similar obligations, in each case, incurred or assumed
        in connection with the disposition of any business, assets or a
        Subsidiary, other than guarantees of Indebtedness incurred by any Person
        acquiring all or any portion of such business, assets or Restricted
        Subsidiary for the purpose of financing such acquisition; provided that
        (A) such Indebtedness is not reflected on the balance sheet of the
        Company or any Restricted Subsidiary (contingent obligations referred to
        in a footnote or footnotes to financial statements and not otherwise
        reflected on the balance sheet will not be deemed to be reflected on
        such balance sheet for purposes of this clause (A)) and (B) the maximum
        assumable liability in respect of such Indebtedness shall at no time
        exceed the gross proceeds including, without limitation, non-cash
        proceeds (the fair market value of such non-cash proceeds being measured
        at the time received and without giving effect to any subsequent changes
        in value) actually received by the Company and/or such Restricted
        Subsidiary in connection with such disposition;

               (vii)  the incurrence by the Company or any of its Restricted
        Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
        the net proceeds of which are used to refund, refinance or replace
        Indebtedness (other than intercompany Indebtedness) that was permitted
        by this Indenture to be incurred;

               (viii) the incurrence by the Company or any of its Restricted
        Subsidiaries of intercompany Indebtedness between or among the Company
        and/or any of its Restricted Subsidiaries; provided that (i) if the
        Company is the obligor on such Indebtedness, such Indebtedness is
        expressly subordinated to the prior payment in full in cash of all
        Obligations with respect to the Notes and (ii)(A) any subsequent
        issuance or transfer of Equity Interests that results in any such
        Indebtedness being held by a Person other than the Company or a
        Restricted Subsidiary thereof and (B) any sale or other transfer of any
        such Indebtedness to a Person that is not either the Company or a
        Restricted Subsidiary thereof shall be deemed, in each case, to
        constitute an incurrence of such Indebtedness by the Company or such
        Restricted Subsidiary, as the case may be, that was not permitted by
        this clause (viii);

               (ix)   the incurrence by the Company or any of its Restricted
        Subsidiaries of Hedging Obligations that are incurred for the purpose of
        fixing or hedging (A) interest rate risk with respect to any floating
        rate Indebtedness that is permitted by the terms of this Indenture to be
        outstanding and (B) exchange rate risk with respect to agreements or

                                       37
<PAGE>   43

        Indebtedness of such Person payable denominated in a currency other than
        U.S. dollars, provided that such agreements do not increase the
        Indebtedness of the obligor outstanding at any time other than as a
        result of fluctuations in foreign currency exchange rates or interest
        rates or by reason of fees, indemnities and compensation payable
        thereunder;

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

               (xi)   the incurrence by the Company or any of its Restricted
        Subsidiaries of Indebtedness in connection with an acquisition in an
        aggregate principal amount (or accreted value, as applicable) not to
        exceed $10.0 million outstanding after giving effect to such incurrence;

               (xii)  obligations in respect of performance and surety bonds and
        completion guarantees (including, without limitation, related letters of
        credit) provided by the Company or any Restricted Subsidiary in the
        ordinary course of business; and

               (xiii) the incurrence by the Company or any of its Restricted
        Subsidiaries of additional Indebtedness in an aggregate principal amount
        (or accreted value, as applicable) outstanding after giving effect to
        such incurrence, including, without limitation, all Permitted
        Refinancing Indebtedness incurred to refund, refinance or replace any
        Indebtedness incurred pursuant to this clause (xiii), not to exceed
        $10.0 million.

        For purposes of determining compliance with this Section 4.09, 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 (xiii)
above or is entitled to be incurred pursuant to the first paragraph of this
Section 4.09, the Company shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this Section 4.09 and such item of
Indebtedness will be treated as having been incurred pursuant to only one of
such clauses or pursuant to the first paragraph of this Section 4.09. In
addition, the Company may, at any time, change the classification of an item of
Indebtedness (or any portion thereof) to any other clause or to the first
paragraph hereof provided that the Company would be permitted to incur such item
of Indebtedness (or such portion thereof) pursuant to such other clause or the
first paragraph hereof of this Section 4.09, as the case may be, at such time of
reclassification. Accrual of interest, accretion or amortization of original
issue discount will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09.

        All Indebtedness under the New Credit Facility outstanding on the 117/8%
Notes Original Issuance Date shall be deemed to have been incurred on such date
in reliance on the first paragraph of this Section 4.09.

SECTION 4.10 ASSET SALES.

        The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (a) the Company or such
Restricted Subsidiary, as the case may

                                       38
<PAGE>   44

be, receives consideration at the time of such Asset Sale at least equal to the
fair market value (evidenced by a resolution of the board of directors set forth
in an Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (b) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of (i) cash or Cash Equivalents or (ii) property or assets that are
used or useful in a Permitted Business, or the Capital Stock of any Person
engaged in a Permitted Business if, as a result of the acquisition by the
Company or any Restricted Subsidiary thereof, such Person becomes a Restricted
Subsidiary. For purposes of this Section 4.10 each of the following shall be
deemed cash: (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any guarantee thereof) that are assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability,
(y) any securities, notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are contemporaneously
(subject to ordinary settlement periods) converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash
or Cash Equivalents received), and (z) any Designated Noncash 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
Noncash Consideration received pursuant to this clause (z) that is at that time
outstanding, not to exceed 15% of Total Assets at the time of the receipt of
such Designated Noncash Consideration (with the fair market value of each item
of Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value); provided that the 75%
limitation referred to in clause (b) above will not apply to any Asset Sale in
which the cash or Cash Equivalents portion of the consideration received
therefrom, determined in accordance with subclauses (x), (y) and (z) above, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75% limitation.

        Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary, as the case may be, shall apply
such Net Proceeds, at its option (or to the extent the Company is required to
apply such Net Proceeds pursuant to the terms of the New Credit Facility, to
(a)(i) repay Indebtedness under the New Credit Facility or (ii) repay or
repurchase Pari Passu Indebtedness of the Company or any Indebtedness of any
Restricted Subsidiary that is not the Guarantor, as the case may be, provided
that, if the Company shall so repay or purchase Pari Passu Indebtedness of the
Company, it will equally and ratably reduce Indebtedness under the Notes and the
Note Guarantee if the Notes are then redeemable, or, if the Notes may not then
be redeemed, the Company shall make an offer (in accordance with the procedures
set forth below for an Asset Sale Offer) to all Holders of Notes to purchase at
a purchase price equal to 100% of the Accreted Value of the Notes, plus accrued
and unpaid interest, if any, thereon to the date of purchase, the Notes that
would otherwise be redeemed, or (b) an investment in property, the making of a
capital expenditure or the acquisition of assets that are used or useful in a
Permitted Business, or Capital Stock of any Person primarily engaged in a
Permitted Business if (i) as a result of the acquisition by the Company or any
Restricted Subsidiary thereof, such Person becomes a Restricted Subsidiary or
(ii) the Investment in such Capital Stock is permitted by clause (f) of the
definition of Permitted Investments. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce Indebtedness or otherwise
invest such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the first sentence of

                                       39
<PAGE>   45

this paragraph will be deemed to constitute "EXCESS PROCEEDS". When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will be
required to make an offer to all Holders of Notes (an "ASSET SALE OFFER") to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon to the date
of purchase, in accordance with the procedures set forth in this Indenture. To
the extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof in connection with an Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased as set forth under Sections 3.02 and 3.03 hereof. Upon completion of
such offer to purchase, the amount of Excess Proceeds 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 the Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture relating to such Asset Sale Offer, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.

SECTION 4.11 TRANSACTIONS WITH AFFILIATES.

        The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or such Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (b) the Company delivers to
the Trustee, with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $7.5
million, either (i) a resolution of the board of directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (a) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the board of directors or (ii) an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing.

        Notwithstanding the foregoing, the following items shall not be deemed
to be Affiliate Transactions: (a) customary directors' fees, indemnification or
similar arrangements or any employment agreement or other compensation plan or
arrangement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business (including, without limitation, ordinary course
loans to employees not to exceed (i) $5.0 million outstanding in the aggregate
at any time and (ii) $2.0 million to any one employee) and consistent with the
past practice of the Company or such Restricted Subsidiary; (b) transactions
between or among the Company and/or its Restricted Subsidiaries; (c) payments of
customary fees by the Company or any of its Restricted Subsidiaries to DLJMB and
its Affiliates made for any financial advisory,

                                       40
<PAGE>   46

financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which are approved by a majority of the board of
directors in good faith; (d) any agreement as in effect on the 11 7/8% Notes
Original Issuance Date or any amendment thereto (so long as such amendment is
not disadvantageous to the Holders of the Notes in any material respect) or any
transaction contemplated thereby; (e) payments and transactions in connection
with the Acquisition (including, without limitation, any purchase price
adjustment or any other payments made pursuant to the Acquisition Agreement or
the Financial Advisory Agreements or the Termination Agreements) and the
Acquisition Financing, the New Credit Facility (including, without limitation,
commitment, syndication and arrangement fees payable thereunder) and the
offering of the 11 7/8% Notes (including, without limitation, underwriting
discounts and commissions in connection therewith) and the application of the
proceeds thereof, and the payment of the fees and expenses with respect thereto;
(f) Restricted Payments that are permitted by Section 4.07 hereof and any
Permitted Investments; (g) payments and transactions in connection with any GTP
Investment or GTP Loan, this Indenture and the payment of fees and expenses with
respect thereto and the Notes; (h) any issuance of capital stock of the Company
to GTP other than Disqualified Stock; and (i) sales of accounts receivable, or
participations therein, in connection with any Receivables Facility.

SECTION 4.12 LIENS.

        The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien, other than a Permitted Lien, that secures obligations under any
Pari Passu Indebtedness or subordinated Indebtedness of the Company on any asset
or property now owned or hereafter acquired by the Company or any of its
Restricted Subsidiaries, or any income or profits therefrom or assign or convey
any right to receive income therefrom, unless the Notes are equally and ratably
secured with the obligations so secured until such time as such obligations are
no longer secured by a Lien; provided that, in any case involving a Lien
securing subordinated Indebtedness of the Company, such Lien is subordinated to
the Lien securing the Notes to the same extent that such subordinated
Indebtedness is subordinated to the Notes.

SECTION 4.13 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) the
corporate, partnership or other existence of itself and each of its
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Subsidiary and
(ii) the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of itself and any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.

                                       41
<PAGE>   47

SECTION 4.14 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

        (a)    Subject to Section 3.10, upon the occurrence of a Change of
Control (and subject, if and to the extent that any Notes are held by an
Affiliate of the Company, to the requirement of the 117/8% Notes Indenture),
each Holder of Notes will have the right to require the Company to repurchase
all or any part (equal to a minimum of $1,000 Principal Amount at Maturity) of
such Holder's Notes pursuant to the offer described below (the "CHANGE OF
CONTROL OFFER") at an offer price in cash equal to 101% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (the "CHANGE OF CONTROL PAYMENT"). Within 60 days following any
Change of Control, the Company will (or will cause the Trustee to) mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Notes on the date specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"),
pursuant to the procedures required by this Indenture and described in such
notice. 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 the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture relating to such Change of Control Offer, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.

        On the Change of Control Payment Date, the Company shall, to the extent
lawful, (a) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (b) 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 (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate Principal Amount at Maturity of Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book-entry)
to each Holder a new Note equal in Principal Amount at Maturity to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a minimum Principal Amount at Maturity of $1,000. 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.

        Notwithstanding anything to the contrary in this Section 4.14, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

                                       42
<PAGE>   48

SECTION 4.15 [INTENTIONALLY OMITTED].

SECTION 4.16 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.

        The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if (a) the Company or such Restricted Subsidiary, as the case may
be, could have (i) incurred Indebtedness in an amount equal to the Attributable
Indebtedness relating to such sale and leaseback transaction pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof and (ii) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12 hereof, (b) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the board of directors and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (c) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.10 hereof.

SECTION 4.17 PAYMENTS FOR CONSENT.

        Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

                                   ARTICLE 5
                                   SUCCESSORS

SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS.

        The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions to, another Person, unless (a) the Company is the
surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any state
thereof or the District of Columbia, (b) the Person formed by or surviving any
such consolidation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes and this
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee, (c) immediately after such transaction no Default or Event of
Default exists and (d) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made (i)
will, at the time of such transaction and after giving pro forma effect thereto
as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test

                                       43
<PAGE>   49

set forth in the first paragraph of Section 4.09 hereof or (ii) would (together
with its Restricted Subsidiaries) have a higher Fixed Charge Coverage Ratio
immediately after such transaction (after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period) than the Fixed Charge Coverage Ratio of the Company and its Restricted
Subsidiaries immediately prior to such transaction. The foregoing clause (d)
will not prohibit the Acquisition or (i) a merger between the Company and a
Wholly Owned Restricted Subsidiary or (ii) a merger between the Company and an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another State of the United States so long as, in each case, the amount of
Indebtedness of the Company and its Restricted Subsidiaries is not increased
thereby. The Company shall not lease all or substantially all of its assets to
any Person.

SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.

        Upon any consolidation of the Company with or any merger of the Company
into another Person, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.

                                   ARTICLE 6
                              DEFAULTS AND REMEDIES

SECTION 6.01 EVENTS OF DEFAULT.

        Each of the following constitutes an Event of Default:

        (a)    default for 30 days in the payment when due of interest, if any,
on the Notes;

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

        (c)    failure by the Company or any of its Restricted Subsidiaries for
30 days after receipt of notice from the Trustee or Holders of at least 25% in
Principal Amount at Maturity of the Notes then outstanding to comply with
Sections 4.07, 4.09, 4.10 or 4.14 or Article 5 hereof;

        (d)    failure by the Company for 60 days after notice from the Trustee
or the Holders of at least 25% in Principal Amount at Maturity of the Notes then
outstanding to comply with any of its other agreements in this Indenture or the
Notes;

                                       44
<PAGE>   50

        (e)    default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after April 12, 2001, which default (i) is caused by a failure to pay
the principal amount of any Indebtedness at its stated final maturity (after
giving effect to any applicable grace period provided in such Indebtedness) (a
"PAYMENT DEFAULT") or (ii) results in the acceleration of such Indebtedness
prior to its stated final maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more;

        (f)    failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $10.0 million (net of any amounts
with respect to which a reputable and creditworthy insurance company has
acknowledged liability in writing), which judgments are not paid, discharged or
stayed for a period of 60 days;

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

        (h)    the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary:

               (i)    commences a voluntary case under any Bankruptcy Law,

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

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

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

               (v)    shall be unable to, or shall admit in writing its
        inability to, pay its debts generally as they become due; or

        (i)    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 Restricted
        Subsidiaries that is a Significant Subsidiary in an involuntary case;

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

                                       45
<PAGE>   51

               (iii)  orders the liquidation of the Company or any of its
        Restricted Subsidiaries that is a Significant Subsidiary;

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

SECTION 6.02 ACCELERATION.

        If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Company or any
Restricted Subsidiary that is a Significant Subsidiary) occurs and is
continuing, the Holders of at least 25% in Principal Amount at Maturity of the
then outstanding Notes may direct the Trustee to declare all the Notes to be due
and payable immediately. Upon any such declaration the Accreted Value of the
Notes shall become due and payable immediately. However, so long as any
Indebtedness permitted to be incurred pursuant to the New Credit Facility shall
be outstanding or any commitments under the New Credit Facility to make loans or
issue letters of credit thereunder shall be outstanding, such acceleration shall
not be effective until the earlier of (i) an acceleration under any such
Indebtedness under the New Credit Facility or a termination of any of the
commitments under the New Credit Facility or (ii) five Business Days after
receipt by the Company and the administrative agent under the New Credit
Facility of written notice of such acceleration or termination. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (h) or (i) of Section
6.01 hereof occurs with respect to the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary, (i) all outstanding Notes shall,
ipso facto, be due and payable immediately without further action or notice and
(ii) the Company shall promptly notify the Trustee of such Event of Default
(although the Notes shall become due and payable immediately upon the occurrence
of such Event of Default as specified in clause (i) regardless of whether the
Company so notifies the Trustee). The Holders of a majority in aggregate
Principal Amount at Maturity of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal (or
Accreted Value), interest or premium, if any, that has become due solely because
of the acceleration) have been cured or waived, provided that, in the event of a
declaration of acceleration of the Notes because an Event of Default has
occurred and is continuing as a result of the acceleration of any Indebtedness
described in clause (e) of Section 6.01 hereof, the declaration of acceleration
of the Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (e) of Section 6.01 hereof have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of the date of such
declaration and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, except non-payment of principal (or
Accreted Value) or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.

SECTION 6.03 OTHER REMEDIES.

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

                                       46
<PAGE>   52

        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 75% in aggregate Principal Amount at Maturity
of the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of (or Accreted Value), premium or interest, if
any, on, the Notes (including, without limitation, in connection with an offer
to purchase) (provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including, without limitation, 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 HOLDERS.

        Holders of 75% in Principal Amount at Maturity of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may result in the
incurrence of liability by the Trustee.

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 at Maturity 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 75% in principal amount
of the then outstanding Notes do not give the Trustee a direction inconsistent
with the request.

                                       47
<PAGE>   53

        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, subject to
Section 3.10, the right of any Holder of a Note to receive payment of principal
(or Accreted Value), premium and interest, if any, on the Note, on or after the
respective due dates expressed in the Note (including, without limitation, 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) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium and 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,
without limitation, the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.

        The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including, without limitation, 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.

                                       48
<PAGE>   54

SECTION 6.10 PRIORITIES.

        If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:

        First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including, without limitation, payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;

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

        Third: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Notes; and

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

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

SECTION 6.11 UNDERTAKING FOR COSTS.

        In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including, without
limitation, 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 at Maturity of the then outstanding Notes.

                                    ARTICLE 7
                                     TRUSTEE

SECTION 7.01 DUTIES OF TRUSTEE.

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

                                       49
<PAGE>   55

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

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

               (i)    this paragraph does not limit the effect of paragraph (b)
        of this Section 7.01;

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

               (iii)  the Trustee shall not be liable with respect to any action
        it takes or omits to take in good faith in accordance with a direction
        received by it pursuant to Sections 6.02, 6.04 or 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 7.01 and Section 7.02 hereof.

        (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 indemnity satisfactory to it against any loss, liability or
expense.

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

SECTION 7.02 RIGHTS OF TRUSTEE.

        (a)    The Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting 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 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.

                                       50
<PAGE>   56

        (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.

        (g)    Except with respect to Section 4.01 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.01(a), 6.01(b) and 4.01 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.

        (h)    The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may, in its discretion, 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.

        (i)    The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.

        (j)    Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).

SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.

        The Trustee 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 Commission for permission to continue as trustee or resign.
Any Agent may do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof.

                                       51
<PAGE>   57

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 statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

SECTION 7.05 NOTICE OF DEFAULTS.

        If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after such Default or Event Default
becomes known to the Trustee. Except in the case of a Default or Event of
Default in payment of principal (or Accreted Value) of, premium, if any, or
interest, if any, 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 March 1 beginning with the March 1 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 Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section (b)(2). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).

        A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 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 shall pay the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon 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 and the Guarantor shall jointly and severally indemnify the
Trustee and its agents, employees, officers, directors and shareholders for, and
hold the same harmless against, any and all losses, liabilities or expenses
(including, without limitation, reasonable attorneys' fees and expenses)
incurred by it arising out of or in connection with the acceptance or
administration

                                       52
<PAGE>   58

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

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

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

        When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including, without limitation, the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

        The Trustee shall comply with the provisions of TIA Section 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 at Maturity of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:

        (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

                                       53
<PAGE>   59

        (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 at Maturity 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 hereof, 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 combined capital and surplus of at least $100 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 Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).

                                       54
<PAGE>   60

SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

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

                                   ARTICLE 8
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE

        The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.

        Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantor 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 and Note Guarantees 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 payments in
respect of the principal (or Accreted Value) of, premium, if any, and interest,
if any, on such Notes when such payments are due from the trust referred to
below,

        (b)    the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust,

        (c)    the rights, powers, trusts, duties and immunities of the Trustee,
and the Company's obligations in connection therewith and

        (d)    the Legal Defeasance provisions of this Indenture.

                                       55
<PAGE>   61

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, 4.14, 4.16 and 4.17 hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter 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) through
6.01(f) 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 of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal (or Accreted Value) of, premium, if any, and
interest on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the
Notes are being defeased to maturity or to a particular redemption date;

        (b)    in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that (i) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (ii) since April 12,
2001, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, subject to customary assumptions and exclusions, the Holders of
the outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to federal
income tax on 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;

                                       56
<PAGE>   62

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

        (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 borrowing of funds to be applied to such deposit) or, insofar
as Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 123rd day after the date of deposit;

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

        (f)    the Company must have delivered to the Trustee an Opinion of
Counsel to the effect that, subject to customary assumptions and exclusions,
after the 123rd day following the deposit, the trust funds will not be subject
to the effect of Section 547 of the United States Bankruptcy Code or any
analogous New York State law provision or any other applicable federal or New
York bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally;

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

        (h)    the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel (which opinion may be subject to customary assumptions
and exclusions), each stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with.

SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
             OTHER MISCELLANEOUS PROVISIONS.

        Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including, without limitation, 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, without limitation, 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 (or
Accreted Value), premium, if any, and interest, if any, but such money need not
be segregated from other funds except to the extent required by law.

                                       57
<PAGE>   63

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

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

SECTION 8.06 REPAYMENT TO COMPANY.

        Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal (or Accreted Value)
of, premium, if any, or interest, if any, on any Note and remaining unclaimed
for two years after such principal (or Accreted Value), and premium, if any, or
interest, if any, has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder 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 trustees 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 8.07 REINSTATEMENT.

        If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's 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 (or Accreted Value) of, premium, if any, or interest, if
any, on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.

                                       58
<PAGE>   64

                                   ARTICLE 9
                        AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.

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

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

        (b)    to provide for uncertificated Notes in addition to in place of
certificated Notes or to alter the provisions of Article 2 hereof (including,
without limitation, the related definitions) in a manner that does not
materially adversely affect any Holder;

        (c)    to provide for the assumption of the Company's or the Guarantor's
obligations to the Holders of the Notes by a successor to the Company or the
Guarantor pursuant to Article 5 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 Note;

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

        (f)    to provide for additional guarantees of the Notes.

        Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee 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, the Company, the
Guarantor and the Trustee may amend or supplement this Indenture (including,
without limitation, Section 3.09, 4.10 and 4.14 hereof), the Note Guarantees and
the Notes may be amended or supplemented with the consent of the Holders of at
least 75% in Principal Amount at Maturity of the Notes then outstanding voting
as a single class (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal (or Accreted Value) of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been

                                       59
<PAGE>   65

rescinded) or compliance with any provision of this Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders of 75% in
Principal Amount at Maturity of the then outstanding Notes voting as a single
class (including, without limitation, consents obtained in connection with the
purchase of, or tender offer or exchange offer for, the Notes). Notwithstanding
the foregoing, any (i) amendment to or waiver of Section 4.14 hereof, and (ii)
amendment to Article 10 herein will require the consent of the Holders of at
least 75% in aggregate Principal Amount at Maturity of the Notes then
outstanding if such amendment would materially adversely affect the rights of
Holders of Notes. Sections 2.08 and 2.09 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 9.02 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
75% in aggregate Principal Amount at Maturity of the Notes then outstanding
voting as a single class may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Notes. However, without the
consent of each Holder affected, an amendment 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 at Maturity of Notes whose Holders
must consent to an amendment, supplement or waiver,

        (b)    reduce the Principal Amount at Maturity of or change the fixed
maturity of any Note or alter the provisions with respect to the redemption of
the Notes (other than Sections 4.10 and 4.14 hereof),

        (c)    reduce the rate of or extend the time for payment of interest, if
any, on any Note,

        (d)    change the definition or method of calculation of the Accreted
Value of the Notes,

        (e)    waive a Default or Event of Default in the payment of principal
(or Accreted Value) of or premium, if any, or interest, if any, on the Notes
(except a rescission of acceleration

                                       60
<PAGE>   66

of the Notes by the Holders of at least a majority in aggregate Principal Amount
at Maturity of the Notes and a waiver of the payment default that resulted from
such acceleration),

        (f)    make any Note payable in money other than that stated in the
Notes,

        (g)    make any change in the provisions of this Indenture relating to
waivers of past Defaults,

        (h)    waive a redemption payment with respect to any Note (other than
Sections 4.10 and 4.14 hereof),

        (i)    release the Guarantor from its obligations under the Note
Guarantees or the Indenture, except in accordance with the terms of the
Indenture, or

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

SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.

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

SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.

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

SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.

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

        Failure to make the appropriate notation or issue a new Note 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 its 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

                                       61
<PAGE>   67

hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 11.04 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
                                 NOTE GUARANTEES

SECTION 10.01 GUARANTEES.

        Subject to this Article 10, the Guarantor hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder and thereunder, that: (a) the Accreted Value of and interest
on the Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders and the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantor shall be obligated to pay the same immediately. The
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

        The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that the Note Guarantees shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

        If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantor or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantor, any amount paid by either to the Trustee or such Holder, the Note
Guarantees, to the extent theretofore discharged, shall be reinstated in full
force and effect.

        The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. The Guarantor
further agrees that, as between the Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of the Note Guarantees, notwithstanding any stay, injunction or other
prohibition prevention such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any

                                       62
<PAGE>   68

declaration of acceleration of such obligations as proved in Article 6 hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of the Note Guarantees.

SECTION 10.02 LIMITATION ON GUARANTOR LIABILITY.

        The Guarantor and, by its acceptance of the Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantees
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state laws to the extent applicable to the Note
Guarantees. To effectuate the foregoing intention, the Trustee, the Holders and
the Guarantor hereby irrevocably agree that the obligations of the Guarantor
under the Note Guarantees and this Article 10 shall be limited to the maximum
amounts as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of the Guarantor that are relevant under such
laws, result in the obligations of the Guarantor under the Note Guarantees not
constituting a fraudulent transfer or conveyance.

SECTION 10.03 EXECUTION AND DELIVERY OF NOTE GUARANTEES.

        To evidence the Note Guarantees set forth in Section 10.01, the
Guarantor hereby agrees that this Indenture shall be executed on its behalf by
the president or one of its vice presidents.

        If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates the Notes, the Note Guarantees
shall be valid nevertheless.

        The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantees set
forth in this Indenture on behalf of the Guarantor.

SECTION 10.04 GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

        The Guarantor shall not consolidate with or merge with or into (whether
or not the Guarantor is the surviving Person) another Person whether or not
affiliated with the Guarantor unless:

        (a)    subject to Section 10.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than the Guarantor or the
Company) unconditionally assumes all of the obligations of the Guarantor,
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Indenture and the Note Guarantees on the
terms set forth herein or therein;

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

        (c)    (i) the Company would be permitted, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof or (ii) would (together with its Restricted
Subsidiaries) have a higher Fixed Charge Coverage Ratio immediately after

                                       63
<PAGE>   69

such transaction (after giving pro forma effect thereto as if such transaction
had occurred at the beginning of the applicable four-quarter period) than the
Fixed Charge Coverage Ratio of Condor and its Restricted Subsidiaries
immediately prior to such transaction.

        The requirements of clause (c) above will not apply in the case of (x) a
consolidation with or merger into Condor or (y) a merger of any Person into the
Guarantor or the consolidation of any Person with the Guarantor if the Guarantor
is the surviving Person.

        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 and substance to the Trustee,
of the Note Guarantees and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as the Guarantor. All of the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of the Note Guarantees
had been issued at the date of the execution hereof.

SECTION 10.05 RELEASES FOLLOWING SALE FOR ASSETS.

        In the event of a sale or other disposition of all of the assets of the
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the capital stock of the Guarantor, then the Guarantor (in
the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of the Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of the Guarantor) will be released and relieved
of any obligations under the Note Guarantees; provided that the Net Proceeds of
such sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including, without limitation, Section 4.10
hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate
and an Opinion of Counsel to the effect that such sale or other disposition was
made by the Company in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
the Guarantor from its obligations under the Note Guarantees.

SECTION 10.06 TRUSTEE'S COMPENSATION NOT PREJUDICED

        Nothing in Section 10.02 shall apply to amounts due to the Trustee
pursuant to other sections of this Indenture.

                                   ARTICLE 11
                                  MISCELLANEOUS

SECTION 11.01 TRUST INDENTURE ACT CONTROLS.

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

                                       64
<PAGE>   70

SECTION 11.02 NOTICES.

        Any notice or communication by the Company, the 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 or to the Guarantor:

               Condor Systems, Inc.
               2133 Samaritan Drive
               San Jose, California 95124
               Telecopier No.: (408) 371-5874
               Attention: Chief Financial Officer

        With a copy to:

               Davis Polk & Wardwell
               450 Lexington Avenue
               New York, New York 10017
               Telecopier No.: (212) 450-4800
               Attention: Tiziana M. Tabucchi, Esq.

        If to the Trustee:

               [                ]
               [                ]
               [                ]
               Telecopier:
               Attention:

        The Company, the 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) 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 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.

        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 Section 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.

                                       65
<PAGE>   71

        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 and each Agent at the same time.

SECTION 11.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.

        Holders may communicate pursuant to TIA Section 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 Section 312(c).

SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

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

        (a)    an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 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 satisfied; and

        (b)    an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.

SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

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

                                       66
<PAGE>   72

SECTION 11.06 RULES BY TRUSTEE AND AGENTS.

        The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

SECTION 11.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS; CONSENT TO SHAREHOLDER PAYMENT.

        No member, director, officer, employee, incorporator or stockholder of
the Company or the Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantor under the Notes or this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.

SECTION 11.08 GOVERNING LAW.

        THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 11.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

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

SECTION 11.10 SUCCESSORS.

        All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.

SECTION 11.11 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 11.12 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.

                                       67
<PAGE>   73

SECTION 11.13 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.

[Signatures on following page]

                                       68
<PAGE>   74

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

                                       CONDOR SYSTEMS, INC.

                                       By: _____________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                       CEI SYSTEMS, INC.

                                       By: _____________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                       [TRUSTEE],
                                         as trustee

                                       By: _____________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                       69
<PAGE>   75

                              CONDOR SYSTEMS, INC.

                       15% Senior Discount Notes due 2011

No. ____

Issue Date:  April 12, 2001

Issue Price:  $_______ ($563.18 for each $1,000 Principal Amount at Maturity)

Principal Amount at Maturity:  $______________

CONDOR SYSTEMS, INC. (the "COMPANY") promises to pay to _______________, or
registered assigns, the principal amount of this Note at maturity in Dollars on
April 1, 2011.

        Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

                                    Dated:  April 12, 2001

                                    CONDOR SYSTEMS, INC.

                                    By: _________________________________

                                    Name: _______________________________

                                    Title: ______________________________

<PAGE>   76

                                 (Back of Note)
                       15% Senior Discount Notes due 2011

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

        1.     Interest. Condor Systems, Inc., a California corporation (the
"COMPANY"), promises to pay the Principal Amount at Maturity of this Note on
April 1, 2011.

        The principal amount owed under this Note at any date prior to April 1,
2011, shall be equal to the Accreted Value.

        "ISSUE PRICE" means $563.18 (for each $1,000 Principal Amount at
Maturity).

        "ACCRETED VALUE" means, for any Note, (i) as of any date of
determination prior to April 1,2005, the sum of (a) the Issue Price of such Note
and (b) the portion of the excess of the Principal Amount at Maturity of such
Note over the Issue Price of such Note which shall have been accreted thereon
through such date, such amount to be so accreted on a daily basis at a rate of
15% per annum of the Issue Price of such Note, compounded semi-annually on each
April 1 and October 1 from April 12, 2001 through the date of determination,
computed on the basis of a 360-day year of twelve 30-day months and (ii) on or
after April 1, 2005, the principal amount at maturity of this Note.

        The Company promises to pay interest on the Principal Amount at Maturity
of this Note at 15% per annum from April 1, 2005 until the principal hereof is
paid or duly provided for. The Company shall pay interest in cash semiannually
in arrears on April 1 and October 1 (each an "INTEREST PAYMENT DATE") in each
year commencing on October 1, 2005. Interest on the Notes shall accrue from the
most recent day to which interest has been paid or provided for, or if no
interest has been paid, from April 1, 2005. Interest shall be compounded on the
basis of a 360-day year of twelve 30-day months.

        The Company shall pay interest (including without limitation,
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate of 17%
per annum to the extent lawful and shall pay interest (including, without
limitation, post-petition interest in any proceeding under Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
from time to time on demand at the same rate to the extent lawful.

        2.     Method Of Payment. The Company will pay the principal (or
Accreted Value) of, premium and interest, if any, on the Notes to the Persons
who are registered Holders of Notes on the applicable payment date. The Notes
will be payable as to principal (or Accreted Value), premium and interest, if
any, at the office of the Paying Agent and Registrar. Holders of Notes must
surrender their Notes to the Paying Agent to collect principal (or Accreted
Value) payments, and the Company may pay principal (or Accreted Value) and
interest, if any, by check and may mail checks to a Holder's registered address.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.

        3.     Paying Agent And Registrar. Initially, [         ], 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 ________ __, 20__ ("INDENTURE"), among the Company, CEI Systems, Inc. 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

                                        1
<PAGE>   77

Indenture Act of 1939, as amended (15 U.S. Code Sections 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 limited in aggregate principal amount to $20,000,000.

        5.     Optional Redemption.

               (a)    Subject to Section 3.10 of the Indenture and Section 8
        hereof, the Notes will be subject to redemption at any time on or after
        April 1, 2005 at the option of the Company, in whole or in part, upon
        not less than 30 nor more than 60 days' notice, in cash at the
        redemption prices (expressed as percentages of the Accreted Value or
        principal amount thereof, as the case may be, at the applicable
        redemption date) set forth below, if redeemed during the twelve-month
        period beginning on April 1 of the years indicated below:

<TABLE>
<CAPTION>
               YEAR                                             PERCENTAGE
               ----                                             ----------
<S>                                                               <C>
               Prior to 2006..................................    107.5%
               2007...........................................      105%
               2008...........................................    102.5%
               2008 and thereafter............................      100%
</TABLE>

               (b)    Any redemption pursuant to this Section 5 shall be made
        pursuant to the provisions of Section 3.01 through 3.06 of the Indenture
        and is subject to the restrictions in Section 3.10 of the Indenture.

        6.     Restrictions on Redemption. Subject to Section 3.10 of the
Indenture, by its acceptance of this Note, each Holder of such Note acknowledges
that the New Credit Facility prohibits the Company from voluntarily redeeming
all or any portion of the Notes pursuant to Section 5 above or from mandatorily
redeeming all or any portion of the Notes pursuant to Sections 7 and 8 hereof,
and each Holder hereby agrees that it shall not accept the redemption price in
respect of any voluntary redemption or any such mandatory redemption at any time
prior to April 1, 2005.

        7.     Mandatory Redemption. Except as set forth in Section 8 below and
Section 3.10 of the Indenture, the Company shall not be required to make
mandatory redemption payments with respect to the Notes.

        8.     Repurchase At Option Of Holder.

               (a)    Subject to Section 3.10 of the Indenture and Section 8
        hereof, upon the occurrence of a Change of Control each Holder of Notes
        will have the right to require the Company to repurchase all or any part
        (equal to a minimum of $1,000 Principal Amount at Maturity) of such
        Holder's Notes pursuant to the offer described below (the "CHANGE OF
        CONTROL OFFER") at an offer price in cash equal to 101% of the Accreted
        Value or principal amount thereof, as the case may be, at the date of
        repurchase, plus accrued and unpaid interest, if any, thereon to the
        date of repurchase (the "CHANGE OF CONTROL PAYMENT"). Within 60 days
        following any Change of Control, the Company will (or will cause the
        Trustee to) mail a notice to each Holder describing the transaction or
        transactions that constitute the Change of Control and offering to
        repurchase Notes on the date specified in such notice, which date shall
        be no earlier than 30 days and no later than 60 days from the date such
        notice is mailed, pursuant to the procedures required by the Indenture
        and described in such notice.

                                       2
<PAGE>   78

               (b)    Subject to Section 3.10 of the Indenture and Section 8
        hereof, within 365 days after the receipt of any Net Proceeds from an
        Asset Sale, the Company or such Restricted Subsidiary, as the case may
        be, shall apply such Net Proceeds, at its option (unless to the extent
        the Company is required to apply such Net Proceeds pursuant to the terms
        of the New Credit Facility) to (a)(i) repay Indebtedness under the New
        Credit Facility or (ii) repay or repurchase Pari Passu Indebtedness of
        the Company or any Indebtedness of any Restricted Subsidiary of the
        Company that is not the Guarantor, as the case may be, provided that, if
        the Company shall so repay or purchase Pari Passu Indebtedness of the
        Company, it will equally and ratably reduce Indebtedness under the Notes
        and the Note Guarantee if the Notes are then redeemable, or, if the
        Notes may not then be redeemed, the Company shall make an offer (in
        accordance with the procedures set forth below for an Asset Sale Offer)
        to all Holders of Notes to purchase at a purchase price equal to 100% of
        the Accreted Value, plus accrued and unpaid interest, if any, thereon to
        the date of purchase, the Notes that would otherwise be redeemed, or (b)
        an investment in property, the making of a capital expenditure or the
        acquisition of assets that are used or useful in a Permitted Business,
        or Capital Stock of any Person primarily engaged in a Permitted Business
        if (i) as a result of the acquisition by the Company or any Restricted
        Subsidiary thereof, such Person becomes a Restricted Subsidiary or (ii)
        the Investment in such Capital Stock is permitted by clause (f) of the
        definition of Permitted Investments. Pending the final application of
        any such Net Proceeds, the Company may temporarily reduce Indebtedness
        or otherwise invest such Net Proceeds in any manner that is not
        prohibited by the Indenture. Any Net Proceeds from Asset Sales that are
        not applied or invested as provided in the first sentence of this
        paragraph will be deemed to constitute "EXCESS PROCEEDS". Subject to
        Section 3.10 of the Indenture and Section 8 hereof, when the aggregate
        amount of Excess Proceeds exceeds $10.0 million, the Company will be
        required to make an offer to all Holders of Notes (an "ASSET SALE
        OFFER") to purchase the maximum principal amount of Notes that may be
        purchased out of the Excess Proceeds, at an offer price in cash in an
        amount equal to 100% of the principal amount thereof, plus accrued and
        unpaid interest thereon to the date of purchase, in accordance with the
        procedures set forth in the Indenture. To the extent that any Excess
        Proceeds remain after consummation of an Asset Sale Offer, the Company
        may use such Excess Proceeds for any purpose not otherwise prohibited by
        this Indenture. If the aggregate principal amount of Notes surrendered
        by Holders thereof in connection with an Asset Sale Offer exceeds the
        amount of Excess Proceeds, the Trustee shall select the Notes to be
        purchased as set forth under Sections 3.02 and 3.03 of the Indenture.
        Upon completion of such offer to purchase, the amount of Excess Proceeds
        shall be reset at zero. Holders of Notes that are the subject of an
        offer to purchase 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 by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Only Notes in denominations larger than $1,000 Principal Amount at
Maturity may be redeemed in part, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date further Principal Amount at
Maturity or interest on Notes or portions thereof called for redemption, as the
case may be, shall cease to accrue.

        10.    Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in minimum denominations of $1,000 Principal Amount at
Maturity. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

                                       3
<PAGE>   79

        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 or the Notes may be amended or supplemented with the consent of
the Holders of at least 75% in principal amount of the then outstanding Notes
and any existing Default or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the Holders of 75% in Principal
Amount at Maturity of the then outstanding Notes. Without the consent of any
Holder of a Note, the Indenture or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for the assumption of
the Company's or Guarantor's obligations to Holders of the Notes by a successor
to the Company or the Guarantor in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the Holders
of the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act, or to provide for additional guarantees of the Notes.

        13.    Defaults And Remedies. Each of the following constitutes an
"EVENT OF DEFAULT": (a) default for 30 days in the payment when due of interest,
if any, on the Notes; (b) default in payment when due of the principal (or
Accreted Value) of or premium, if any, on the Notes; (c) failure by the Company
or any of its Restricted Subsidiaries for 30 days after receipt of notice from
the Trustee or Holders of at least 25% in Principal Amount at Maturity of the
Notes then outstanding to comply with Sections 4.07, 4.09, 4.10 or 4.14 or
Article 5 of the Indenture; (d) failure by the Company for 60 days after notice
from the Trustee or the Holders of at least 25% in Principal Amount at Maturity
of the Notes then outstanding to comply with any of its other agreements in the
Indenture or the Notes; (e) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the Original Issuance Date, which default (i) is caused by a
failure to pay Indebtedness at its stated final maturity (after giving effect to
any applicable grace period provided in such Indebtedness) (a "PAYMENT DEFAULT")
or (ii) results in the acceleration of such Indebtedness prior to its stated
final maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $10.0 million or more; (f) failure by the Company or any
of its Restricted Subsidiaries to pay final judgments aggregating in excess of
$10.0 million (net of any amounts with respect to which a reputable and
creditworthy insurance company has acknowledged liability in writing), which
judgments are not paid, discharged or stayed for a period of 60 days; (g) except
as permitted by the Indenture, the Note Guarantees shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or the Guarantor, or any Person acting on behalf of the
Guarantor, shall deny or disaffirm its obligations under the Note Guarantees;
and (h) certain events of bankruptcy or insolvency as described in Section
6.01(h) of the Indenture.

        If any Event of Default (other than certain events of bankruptcy or
insolvency) occurs and is continuing, the Holders of at least 25% in Principal
Amount at Maturity of the then outstanding Notes may direct the Trustee to
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately, provided, that
so long as any Indebtedness permitted to be incurred pursuant to the New Credit
Facility shall be outstanding, such acceleration shall not be effective until
the earlier of (i) an acceleration under any such Indebtedness under the New
Credit Facility or (ii) five Business Days after receipt by the Company and the
administrative agent under the New Credit Facility of written notice of such
acceleration. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency as described in Section
6.01(h) of the Indenture, all outstanding Notes shall be due and payable
immediately without further action or notice. The Holders of a majority in
aggregate

                                       4
<PAGE>   80

principal amount of the then outstanding Notes by written notice to the Trustee
may on behalf of all of the Holders rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived. 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.    If any Event of Default (other than certain events of bankruptcy
or insolvency) occurs and is continuing, the Holders of at least 25% in
Principal Amount at Maturity of the then outstanding Notes may direct the
Trustee to declare, all the Notes to be due and payable immediately. Upon any
such declaration, the Accreted Value of the Notes shall become due and payable
immediately. However, so long as any Indebtedness permitted to be incurred
pursuant to the New Credit Facility shall be outstanding, such acceleration
shall not be effective until the earlier of (i) an acceleration under any such
Indebtedness under the New Credit Facility or (ii) five Business Days after
receipt by the Company and the administrative agent under the New Credit
Facility of written notice of such acceleration. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, the Accreted Value of all outstanding Notes shall be due and payable
immediately without further action or notice. The Holders of a majority in
aggregate principal amount Principal Amount at Maturity of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal (or Accreted Value), interest or premium, if
any, or that has become due solely because of the acceleration) have been cured
or waived; provided that in the event of a declaration of acceleration of the
Notes because an Event of Default has occurred and is continuing as a result of
the acceleration of any Indebtedness described in clause (e) of Section 6.01 of
the Indenture, the declaration of acceleration of the Notes shall be
automatically annulled if the holders of any Indebtedness described in clause
(e) of Section 6.01 of the Indenture have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of the date of such
declaration and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, except non-payment of principal (or
Accreted Value) or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived. 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.

        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. No member, director, officer,
employee or incorporator of the Company, as such, shall have any liability for
any obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.

        Pursuant to and for purposes of Section 506(b) of the General
Corporation Law of the State of California, the Holder of this Note, by
accepting this Note, shall be deemed to have consented to the payment of the
Merger Consideration (as defined in the Acquisition Agreement) to the former
shareholders of the Company pursuant to the Acquisition Agreement.

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

                                       5
<PAGE>   81

        18.    Additional Rights Of Holders Of Restricted Notes. In addition to
the rights provided to Holders of Notes under the Indenture, Holders of
Restricted Notes shall have all the rights set forth in the Registration Rights
Agreement.

        19.    CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

        The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture or the Registration Rights Agreement. Requests
may be made to:

               CONDOR SYSTEMS, INC.
               2133 Samaritan Drive
               San Jose, California 95124
               Telecopier No.: (408) 371-5874
               Attention: Chief Financial Officer

                                       6
<PAGE>   82

                                 ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to

(Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________
(Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
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 Note)

                                 Tax Identification No: ________________________

Signature Guarantee _____________________________ .

                                       7
<PAGE>   83

                       OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.14 of the Indenture, check the box below:

        [ ] Section 4.10                             [ ] Section 4.14

        If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $________

Date:                            Your Signature: _______________________________
                                 (Sign exactly as your name appears on the Note)

                                 Tax Identification No: ________________________

Signature Guarantee.

                                       8
<PAGE>   84

                                 NOTE GUARANTEE

        CEI Systems, Inc., a Delaware corporation (the "Guarantor") hereby
unconditionally guarantees, to the fullest extent permitted by law, (i) the due
and punctual payment of the principal of, interest on the Notes, whether at the
maturity or of the principal of, interest on the Notes, whether at the maturity
or interest payment date, by acceleration, call for redemption or otherwise, and
of interest on the overdue principal of, interest on the Notes and all other
obligations of the Issuer to the Holders or the Trustee, if any, under the
Indenture or the Notes and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration or otherwise.

        The obligations of the Guarantor to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are as expressly set forth in
Article 11 of the Indenture and in such other provisions of the Indenture as are
applicable to the Guarantor, and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee. The terms of Article 10 of the
Indenture (including, without limitation, Section 10.02 of the Indenture) and
such other provisions of the Indenture as are applicable to the Guarantor are
incorporated herein by reference.

        This is a continuing guarantee and shall remain in full force and effect
and shall be binding upon the Guarantor and its successors and assigns until
full and final payment of all of the Company's obligations under the Notes and
the Indenture and shall inure to the benefit of the successors and assigns of
the Trustee, if any, and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, if any, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. This is a guarantee of payment and not a guarantee of collection.

        This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by an authenticating agent under the
Indenture by the manual signature of one of its authorized officers.

        In case any provision in this Note Guarantee 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.

        THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS NOTE GUARANTEE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF OTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

                                        CEI SYSTEMS, INC.

                                        By:__________________________________
                                           Name:
                                           Title:

                                       9
<PAGE>   85

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
Trust Indenture Act Section                                   Indenture Section
---------------------------                                   -----------------
<S>                                                           <C>
310  (a)(1)...............................................................7.10
     (a)(2) ..............................................................7.10
     (a)(3)...............................................................N.A.
     (a)(4)...............................................................N.A.
     (a)(5)...............................................................7.10
     (b)..................................................................7.10
     (c)..................................................................N.A.
311  (a)..................................................................7.11
     (b)..................................................................7.11
     (c)..................................................................N.A.
312  (a)..................................................................2.05
     (b).................................................................11.03
     (c).................................................................10.03
313  (a)..................................................................7.06
     (b)(1)...............................................................N.A.
     (b)(2).........................................................7.06; 7.07
     (c)...........................................................7.06; 11.02
     (d)..................................................................7.06
314  (a).................................................................11.05
     (b)..................................................................N.A.
     (c)(1)..............................................................11.04
     (c)(2)..............................................................11.04
     (c)(3)...............................................................N.A.
     (d)..................................................................N.A.
     (e).................................................................11.05
     (f)..................................................................N.A.
315  (a)..................................................................7.01
     (b)...........................................................7.05; 10.02
     (c)..................................................................7.01
     (d)..................................................................7.01
     (e)..................................................................6.11
316  (a)(last sentence)...................................................2.09
     (a)(1)(A)............................................................6.05
     (a)(1)(B)............................................................6.04
     (a)(2)...............................................................N.A.
     (b)..................................................................6.07
     (c)..................................................................2.12
317  (a)(1)...............................................................6.08
     (a)(2)...............................................................6.09
     (b)..................................................................2.04
318  (a).................................................................10.01
     (b)..................................................................N.A.
     (c).................................................................10.01
</TABLE>

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]