Document:

<PAGE>
                                                                   Exhibit 10.38

                   INDEPENDENT SALES REPRESENTATIVE AGREEMENT

     THIS INDEPENDENT SALES REPRESENTATIVE AGREEMENT ("Agreement") is made and
entered into effective April 1, 2001 ("Effective Date") by and between Mentor
Medical Inc., a Delaware corporation ("Mentor") and Tim Kain ("Sales
Representative").

     WHEREAS, Mentor sells and distributes healthcare products, both nationally
and internationally;

     WHEREAS, Sales Representative is engaged in the business of marketing such
products and desires to continue as a marketing representative for certain
Mentor Products (as defined below) in the Territory (as defined below);

     WHEREAS, Mentor and Sales Representative are parties to that certain
Independent Sales Representative Agreement dated April 1, 1998, which will
terminate as of the Effective Date of this Agreement; and

     WHEREAS, Mentor desires to engage Sales Representative for the purpose of
soliciting and procuring orders with respect to certain of its Products in the
Territory.

     NOW, THEREFORE, the parties agree as follows;

     1. Appointment, Territory and Base Amounts.

         a. Mentor hereby appoints Sales Representative for the term of this
Agreement as, and Sales Representative hereby agrees to act for Mentor as a
manufacturer's representative for the Products within the territory described in
Schedule A (the "Territory"), subject to all of the terms and conditions of this
Agreement. Except as expressly allowed by Mentor in writing, Sales
Representative agrees not to solicit orders, procure orders or otherwise act as
Mentor's representative with respect to any Products or establish or allow any
office to do so unless such office is located within the Territory and all such
activity is conducted solely within the Territory. Sales Representative may
solicit and procure orders for Products only from customers within the Territory
located and taking delivery within the Territory.

         b. In consideration for the covenants of Sales Representative contained
herein, Mentor will pay Sales Representative, within fifteen (15) days after the
end of each fiscal month during the term hereof, a commission equal to a
percentage (as specified in Schedule B) of the Revenues (as define below)
actually collected by Mentor (and not subject to refund or other contingency) on
account of shipments on bona fide firm orders acceptable to Mentor procured by
and forwarded to Mentor by Sales Representative or Sales Representative's
exclusive customers or accounts ("Orders"). Sales Representative's tax
identification number is 061337674.

         c. Sales Representative is responsible for generating Revenues to
Mentor of at least the amounts listed on Schedule B ("Base Amounts"). "Revenues"
means Orders

<PAGE>

submitted by Sales Representative net of Deductions and Allowances as deigned
and specified in Schedule C. If Sales Representative fails to meet these Base
Amounts, he/she shall be in material breach of this Agreement. No later than May
1 of each year, Mentor shall provide Sales Representative with a new yearly
plan.

         d. Nothing in this Agreement shall be construed as limiting in any
manner Mentor's marketing or distribution activities or its appointment of other
dealers, distributors, licensees, agents or representatives of any kind in the
Territory.

     2. Products.

     The products covered by this Agreement ("Products") are those products
listed on Mentor's then-current Price List (the current version of which is
attached as Schedule D hereto), subject to any updates, enhancements and new
versions which are substantially similar thereto and which are marketed under
the same model number and product nomenclature. Mentor reserves the right to
change prices or change or modify the design of or discontinue any of the
Products at any time or to add Products at any time.

     3. Warranty Disclaimer.

     MENTOR MAKES NO WARRANTIES TO SALES REPRESENTATIVE WITH RESPECT TO THE
PRODUCTS OR ANY SERVICES AND DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING
WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR
PURPOSE.

     4. Relationship of Parties.

     The parties hereto expressly understand and agree that Sales Representative
is an independent contractor in the performance of each and every part of this
Agreement and is solely responsible for all of its employees and agents and its
labor costs and expenses arising in connection therewith and for any and all
claims, liabilities or damages or debts of any type whatsoever that may arise on
account of Sales Representative's activities, or those of its employees or
agents in the performance of this Agreement. Sales Representative has no
authority, right or ability to bind or commit Mentor in any way (including,
without limitation, by accepting orders) or sell any Products and will not
attempt to do so or imply that it may do so. Mentor is in no manner associated
with or otherwise connected with the actual performance of this Agreement on the
part of Sales Representative, nor with Sales Representative's employment of
other persons or incurring of other expenses. Except as expressly provided
herein, Mentor shall have no right to exercise any control whatsoever over the
activities or operations of Sales Representative.

                                      -2-
<PAGE>

     5. Responsibilities of Sales Representative. Sales Representative's
duties hereunder are as follows:

         a. Sales Representative shall use its best efforts to successfully
promote, solicit orders for and procure orders for the Products within the
Territory and on a continuing basis, shall comply with good business practices
and all applicable laws and regulations and shall diligently perform all other
duties as mutually agreed upon herein. Sales Representative represents to Mentor
that even if it represents other products, its primary efforts will be directed
toward promoting, soliciting orders for and procuring orders for Mentor's
Products.

         b. In its efforts, Sales Representative will use Mentor's then current
names for the Products (but will not represent or imply that it is Mentor or is
a part of Mentor and will obtain Mentor's prior approval of any such use) and
will not add to, delete from or modify any sales or marketing documentation or
forms provided by Mentor except with the prior written consent of Mentor. Sales
Representative will not otherwise use or register (or make any filing with
respect to) any trademark, name or other designation relevant to the subject
matter of this Agreement anywhere in the world. Sales Representative will not
contest anywhere in the world the use by or authorization by Mentor of any
trademark, name or other designation relevant to the subject matter of this
Agreement or application or registration therefor, whether during or after the
term of this Agreement. Sales Representative acknowledges and agrees that all of
its use of such trademarks, names or other designations shall inure to the
benefit of Mentor.

         c. Sales Representative shall employ sufficient qualified employees
and/or agents to assist in diligently performing all of its duties as mutually
agreed upon herein and shall take advantage of technical training programs
offered by Mentor for such persons at Sales Representative's expense.

         d. Sales Representative shall keep Mentor informed as to any problems
encountered with the Products and as to any resolutions arrived at for those
problems, and shall communicate promptly to Mentor any and all modifications,
design changes or improvements of the Products suggested by any entity or person
solicited by or making inquiries of Sales Representative (a "Customer") or by
any employee or agent of Sales Representative. Sales Representative further
agrees that Mentor shall acquire any and all right, title and interest in and to
any such suggested modifications, design changes or improvements of the
Products, without the payment of any additional consideration therefore either
to Sales Representative, its employees or agents, or to any Customer of Sales
Representative.

         e. At Mentor's request, Sales Representative shall promptly submit to
Mentor reports containing such pertinent information about Sales
Representative's customers and the Products and Sales Representative's activity
within the Territory. Mentor may reasonably request information concerning
customers and business volumes, financial information and operating plans.

         f. Sales Representative warrants and represents that it has no
intention of exporting or re-exporting outside the Territory any Products,
whether for demonstration purposes

                                       -3-

<PAGE>

or otherwise, or Proprietary Information, any part thereof or any direct
product thereof, whether directly or indirectly, and understands that it may not
do so under this Agreement. Sales Representative agrees not to, and not to
allow, export or re-export of any Product or Proprietary Information or any part
thereof or any direct product thereof directly or indirectly from the U.S. or
elsewhere. Without limitation of the foregoing, Sales Representative agrees to
commit no act which, directly or indirectly, would violate any United States
law, regulation, or treaty or any other international treaty Agreement to which
the United States adheres, relating to the export or reexport of any of the
Products or associated technical data or products thereof.

         g. Sales Representative understands that Mentor is not bound to any
price (whether or not on the then-current Price List) with respect to an order
until it has accepted such order and Sales Representative will not imply or
represent anything to the contrary to any person or entity; in any event Mentor
will not be liable to Sales Representative for and Sales Representative will
have no rights with respect to any price change (whether before or after
acceptance of an order) or any other matter with respect to the dealings between
Mentor and customers of the Sales Representative.

         h. Mentor will consign or make available to Sales Representative
certain instruments and demonstration products on an as-needed basis. In no
event shall Sales Representative be supplied with more than the amount of
demonstration products which Mentor deems necessary hereunder in its sole
discretion.

         i. During the term of this Agreement Sales Representative shall not
market, directly or indirectly, in the Territory products which are competitive
with the Products; nor shall Sales Representative represent or provide, either
directly or indirectly, marketing services of any sort to any manufacturer or
distributor of any such other competitive products. A copy of the list of
products currently sold by Sales Representative, either for itself or for the
account of a third party, is attached as Schedule E hereto and is true, accurate
and complete. Sales Representative shall provide Mentor with thirty (30) days
prior written notice of any additions it wishes to make to Schedule E.

         j. At Mentor's request, Sales Representative will provide good faith
forecasts and status reports on its efforts and anticipated orders.

         k. Sales Representative agrees to hold harmless, defend and indemnify
Mentor and its officers, directors, employees, agents and servants from and
against any and all claims, damages and expenses, including reasonable legal
fees and expenses, of whatever kind and nature, directly or indirectly, arising
out of or on account of or resulting from the Sales Representative's activities
(other than as authorized by Mentor), including but without limitation, any
independent unauthorized representations of Sales Representative, or out of the
Sales Representative's failure to comply with its obligations under this
Agreement.

         l. Sales Representative agrees to forward immediately to Mentor any and
all monies or remittances in any form which it may collect from customers or
accounts for the purchase of Products in the Territory. All invoices in
connection with the sale of the Products

                                      -4-
<PAGE>

shall be rendered by Mentor directly to the customer. Sales Representative will
not render any invoices in connection with the sale of Products hereunder. Sales
Representative will assist Mentor with collections from customers as reasonably
requested by Mentor.

     6. Duties of Mentor. Mentor shall have the following responsibilities
during the term of this Agreement.

         a. Mentor shall provide Sales Representative, at Mentor's expense, with
reasonable initial quantities of any applicable printed marketing materials for
the Products. Additional materials shall be provided at the non-discounted price
then on Mentor's price list therefor.

         b. Mentor shall inform Sales Representative within a reasonable time of
any changes in the Products, the prices, and marketing and sale documentation.

         c. Mentor shall have no obligation whatsoever to accept any order and
may reject any order at its sole discretion. Sales Representative shall have no
rights under any order or agreement arising therefrom.

         d. With respect to each payment of commissions hereunder, Mentor shall
provide Sales Representative with an accounting of the orders for which payment
is made (which shall be limited to the invoice number, customer name, rate of
commissions and charge backs for each order).

         e. Mentor agrees to indemnify, defend and hold harmless Sales
Representative and its officers, directors, employees, shareholders, agents,
successors and assigns from and against all claims, demands, damages,
liabilities, losses, settlements, costs and expenses (including reasonable
attorneys' fees) of any kind, arising in favor of any third party in connection
with any actual or alleged defect in the design, manufacture, packaging or use
of any Product furnished by Mentor under this Agreement; provided that Sales
Representative (i) promptly notifies Mentor, in writing, of any notice or claim
hereunder of which it becomes aware, (ii) permits Mentor to control the defense,
settlement, adjustment or compromise of any such claim, and (iii) provides
Mentor with reasonable assistance in defending, settling or compromising such
claim; Mentor will not be responsible for any settlement or compromise that it
does not approve in writing.

     7. Term and Termination.

     Subject to the provisions for termination as provided herein, this
Agreement shall commence on the Effective Date and shall be for a term of one
(1) year, and shall be automatically renewed for successive one (1) year terms
unless either of the parties hereto gives to the other party written notice of
its election to terminate this Agreement at least thirty (30) days prior to the
expiration of the then-current term. Nothing contained herein shall preclude
Mentor's right of termination pursuant to this Section. Sales Representative
understands that after termination or expiration of this Agreement, it shall
have no right whatsoever to continue as a manufacturer's

                                      -5-
<PAGE>

representative of the Products regardless of any undocumented continuation of
the relationship with Mentor.

     a. Mentor may terminate this Agreement without cause at any time upon sixty
(60) days written notice to Sales Representative.

     b. Mentor may terminate this Agreement for cause immediately upon the
occurrence of any of the following events:

               (1) If Sales Representative ceases to do business, or otherwise
terminates its business operations or if there is a material change in control
of Sales Representative; or

               (2) If Sales Representative shall fail to secure or renew any
license, permit, authorization or approval for the conduct of its business in
any significant country or area of the Territory, or if any such license,
permit, authorization or approval is revoked or suspended; or

               (3) If Sales Representative breaches any provision of this
Agreement and (except in the case of a compromise of Proprietary Information
where termination shall be effective immediately upon notice) fails to fully
cure such breach within thirty (30) days or such longer time as is provided
herein of written notice from Mentor describing the breach; or

               (4) If Sales Representative shall seek protection under any
bankruptcy, receivership, trust deed, creditors arrangement, composition or
comparable proceeding, or if any such proceeding is instituted against Sales
Representative; or

               (5) If the Revenues during any consecutive six (6) month period
are less than the Base Amount for that period or if the rate of Revenues
received is such that Mentor reasonably believes such Base Amount will not be
timely achieved; or

               (6) If Sales Representative is dishonest in his representation of
Mentor or its products, disparages Mentor or its Products, fails to follow
written instructions from Mentor management, or generally engages in
insubordination, as determined by Mentor in its sole discretion.

     c. Mentor may, in its sole discretion, with or without cause in accordance
with the terms hereof, change, reconfigure or terminate a portion of the
Territory.

     d. Mentor shall incur no liability whatsoever for any damage, loss or
expense of any kind suffered or incurred by Sales Representative arising from or
incident to any expiration or termination of this Agreement by Mentor which
complies with the terms of the Agreement, whether or not Mentor is aware of the
possibility any such damage, loss or expenses,

                                      -6-

<PAGE>

         e. Upon termination or expiration of this Agreement for any reason
whatsoever, Sales Representative (i) shall immediately discontinue any use of
the name, logotype, trademarks or slogans of Mentor and the trade names or other
designations of any of the Products, (ii) shall immediately discontinue all
representations or statements from which it might be inferred that any
relationship exists between Mentor and Sales Representative, and (iii) will
cease to promote, solicit orders for or procure orders for Products (but will
not act in any way to damage the reputation of Mentor or any Product). In
addition, Sales Representative shall immediately return to Mentor at Sales
Representative's expense, all demonstration units, samples, instruments,
catalogues and literature of Mentor then in possession of Sales Representative.

         f. Upon termination of this Agreement by either party or naturally at
the end of the term:

               (1) All rights and licenses of Sales Representative and all
obligations of Mentor hereunder shall terminate, except rights to payments
accrued on Products sold prior to termination.

               (2) Sales Representative will immediately return to Mentor all
Proprietary Information (as defined below) in Sales Representative's possession,
custody or control in whatever form held (including copies or embodiments
thereof relating thereto) upon termination of this Agreement, or at any time or
from time to time, upon written request by Mentor.

               (3) Except as provided herein, the provisions of this Agreement
shall remain in effect after termination (including, without limitation, the
natural expiration hereof).

         g. Within three (3) days after termination (by expiration or otherwise)
of this Agreement for any reason whatsoever. Mentor shall pay Sales
Representative all commissions earned (as provided in Section 1.b. above) but
not paid to Sales Representative prior to the termination date. However, it is
further agreed that upon such termination, Mentor may withhold any commissions
earned by the Sales Representative prior to the termination date only to the
extent necessary, until:

               (1) All Deductions, Allowances or other contingencies on amounts
actually collected by Mentor have been determined and applied;

               (2) Sales Representative has fully, timely and satisfactorily
reconciled, accounted for and returned all Products and clinical investigative
devices consigned or loaned to Sales Representative or accounts in the Territory
and all other material described in Sections 7.c and 7.d(2) above; and

               (3) Mentor has credited, set-off or charged back all other
amounts owed by Sales Representative to Mentor. Sales Representative's
acceptance of its final commission check from Mentor shall be in full
satisfaction of all amounts due to Sales

                                      -7-
<PAGE>

Representative hereunder and a full and complete discharge by Sales
Representative of any and all liabilities of Mentor.

     8. Proprietary Information: Proprietary Rights.

         a. Sales Representative acknowledges that, in the course of performing
its duties under this Agreement, it may obtain information relating to products
and to Mentor which is of a confidential and proprietary nature ("Proprietary
Information"). Such Proprietary Information may include, without limitation,
trade secrets, know-how, inventions, techniques, processes, schematics, data,
customer lists, financial information and sales and marketing plans. Sales
Representative and its employees and agents shall, at all times, both during the
term of this Agreement and after its termination, keep in trust and confidence
all such Proprietary Information, and shall not use such Proprietary Information
other than in the course of its duties as expressly provided in this Agreement,
nor shall Sales Representative or its employees or agents disclose any such
Proprietary Information to any person without Mentor's prior written consent.
Sales Representative acknowledges that any such Proprietary Information received
by Sales Representative shall be received as a fiduciary of Mentor. Sales
Representative shall not be bound by this Section 8.a. with respect to
information Sales Representative can document (i) at the date hereof has entered
or later enters the public domain as a result of no act or omission of Sales
Representative or its employees or agents, or (ii) is lawfully received by Sales
Representative from third parties without restriction and without breach of any
duty of nondisclosure by any such third Party.

         b. Mentor and its licensors retain all right, title and interest in and
to (i) all of their service marks, trademarks, tradenames or any other
designations (and notwithstanding anything else herein, Sales Representative may
not use Mentor's or licensor's names or any such mark or designation, even in
advertising or marketing the Products, without the express written consent of
Mentor) and (ii) all copyrights, patent rights, trade secret rights and other
proprietary rights in the Products.

         c. Sales Representative agrees, as a condition of the rights and
licenses granted under this Agreement and except as otherwise expressly and
unambiguously authorized hereunder, (i) not to remove any product identification
or notices of any proprietary or copyright restrictions from the Products or any
support material, and (ii) prior to disposing of any media or apparatus, to
destroy completely any Proprietary Information contained therein.

                                      -8-
<PAGE>

     9. Liability Limitation. MENTOR WILL NOT BE LIABLE UNDER ANY SECTION OR
SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY CONTRACT, THEORY OF NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY (I) INCIDENTAL OR
CONSEQUENTIAL DAMAGES, OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS OR
SERVICES. THIS SECTION DOES NOT LIMIT MENTOR'S LIABILITY FOR BODILY INJURY OF A
PERSON.

     10. Nondisparagement. The Sales Representative recognizes and acknowledges
that the success of Mentor's business is largely dependent upon and attributable
to the goodwill which Mentor has established with hospitals and physicians over
a period of years and at great expense. Therefore, the Sales Representative
agrees that it will not, during the term of this Agreement and for one (1) year
thereafter, disparage Mentor, or Mentor's officers, agents, employees, products,
or methods and techniques of doing business.

     11. Restrictions. In consideration of its retention by Mentor and in
consideration of Proprietary Information furnished to it by Mentor so that it
may perform its duties as Sales Representative, and in consideration of the
investment by Mentor of considerable time, effort and money in building
relationships with customers, and as a further inducement to Mentor to enter
into this Agreement, the Sales Representative agrees as follows:

         a. Noncompetition. For a period of sixty (60) days after the
expiration or termination of this Agreement, Sales Representative will not,
within the Territory, directly or indirectly engage in the sale of products
competitive with the Products (the "Competitive Products") to any entity or
person to whom it sold Products on behalf of Mentor within the Territory during
the twelve (12) months immediately preceding termination or expiration
("Restricted Persons"). It is agreed that solicitation or acceptance of orders
for Competitive Products outside of the Territory from Restricted Persons for
shipment to, delivery in or service in the Territory shall also constitute
engaging in the sale of Competitive Products in violation of this Section. The
Sales Representative acknowledges that Mentor distributes the Products
nationwide. The territorial scope of the restriction contained in this Paragraph
11(a) shall nonetheless be restricted as aforesaid.

         b. Nonsolicitation. For a period of sixty (60) days following the
expiration or termination of this Agreement, the Sales Representative will
refrain from an will not, directly or indirectly, as an independent contractor,
employee, consultant, agent, partner, joint venture, shareholder or otherwise,
contact, solicit, divert or take away or attempt to contact, solicit, divert or
take away any of the customers of Mentor which were served by the Sales
Representative or whose names and/or addresses have become known to the Sales
Representative during the term of this Agreement or any predecessor agreement
between the parties. Further, during the one (1) year following the expiration
or termination of this Agreement, Sales Representative shall not attempt to
cause customers of Mentor or the manufacturer of the Products to refrain from
patronizing Mentor, and will not assist others in doing so; provided however
that this restriction shall not include those activities which are encompassed
by the sixty (60) day restrictions described above. Further, during the one (1)
year following the expiration or termination of this Agreement, the Sales
Representative shall neither solicit, divert, take away or attempt to solicit,

                                      -9-
<PAGE>

divert or take away any of the employees, sales representatives or agents of
Mentor who at the time of the expiration or termination are employees, sales
representatives or agents of Mentor, or who served in such capacity at any time
within six (6) months prior to such expiration or termination.

         c. Extension of Time. The period of time during which the Sales
Representative is prohibited from engaging in such business practices pursuant
to this Paragraph shall be extended by any length of time during which the Sales
Representative is in breach of this Agreement.

         d. Independent Covenants. Each restrictive covenant set forth in this
Section shall be construed as an agreement independent of any other provision in
this Agreement. The existence of any claim or cause of action of the Sales
Representative against Mentor, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Mentor of such
covenants.

         e. Divisibility of Covenants. If any portion of the covenants set
forth in this Paragraph is held to be unreasonable, unenforceable, arbitrary or
against public policy, then such portion of such covenant shall be considered
divisible as to time, geographical area and prohibited activities. Mentor and
the Sales Representative agree that if any court of competent jurisdiction
determines the specified time period, the specified geographical area or
specified prohibited activities applicable to this Section is to be
unreasonable, arbitrary or against public policy, then a lesser time period,
geographical area or prohibited activities which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced against the Sales
Representative. Mentor and the Sales Representative agree that the foregoing
covenants are appropriate and reasonable when considered in light of the nature
and extent of the business conducted by Mentor.

         f. Agents of Sales Representative. Any person, firm, corporation,
association or entity which Sales Representative or any sub-representatives
under it shall employ, retain or engage in connection with the sale of the
Products hereunder will, as a precondition of such employment, retention or
engagement, execute a sub-representative agreement in a form provided by Mentor
at the Sales Representative's expense. Mentor shall be a third party beneficiary
of the rights and benefits of the Sales Representative under this Agreement and
any such subrepresentative agreement, with a direct right to enforcement
thereof, and upon termination or expiration of this Agreement for any reason
whatsoever, Mentor shall have the election, at its sole discretion, to take over
and assume any one or more of the sub-representative agreements which the Sales
Representative may then have in effect with its subrepresentatives. The Sales
Representative shall provide Mentor with a fully executed copy of all such
sub-representative agreements, including the noncompetition covenants therein,
and seeking damages for breach thereof, including but not limited to reasonable
attorneys' fees, shall be borne by the Sales Representative. The Sales
Representative shall be reimbursed for such costs to the extent of any damage
recovery by Mentor. To the extent that the damages recovered exceed such costs,
such damages shall be recovered by, and paid by, the Sales Representative to
Mentor. In the event the Sales Representative fails to obtain such a
sub-representative agreement in a form provided by Mentor from any such sub
representative, the Sales Representative agrees to hold harmless, defend

                                      -10-
<PAGE>

and indemnify Mentor from any and all losses or damages sustained by Mentor as a
result of the Sales Representative's failure to obtain a fully executed
sub-representative agreement in a form provided by Mentor.

         g. Notice of Offers. The Sales Representative agrees that it will
immediately give Mentor written notice of any offers, whether oral or written,
received by it, its officers, directors, agents or employees, during the term of
its retention by Mentor, which, if accepted, would place the Sales
Representative in violation of the covenants of this Section.

     12. Miscellaneous.

         a. Neither this Agreement nor any right or obligation hereunder is
capable of being assigned by Sales Representative without the prior written
consent of Mentor and any purported transfer or assignment will be void. Mentor
may assign its rights and duties hereunder without restriction. Except as
otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties' successors and assigns (whether by operation of law,
merger, change of control or otherwise).

         b. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

         c. If any provision of this Agreement is held to be illegal or
unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force and
effect and enforceable.

         d. Except as otherwise expressly provided herein, any provision of this
Agreement may be amended and the observance of any provision of this Agreement
may be waived (either generally or any particular instance and either
retroactively or prospectively) only with the written consent of Mentor and
Sales Representative.

         e. This Agreement shall be governed by and construed under the laws of
the State of California and the United States as applied to agreements among
California residents entered into and to be performed entirely with California.
Unless waived by Mentor in writing for the particular instance (which Mentor may
do at its option), the sole jurisdiction and venue for actions related to the
subject matter hereof shall be the Superior Court of the State of California for
Santa Barbara County or the United States District Court for the Central
District of California. Both parties consent to the jurisdiction of such courts
and agree that process may be served in the manner provided herein for giving of
notices or otherwise as allowed by California law. In any action or proceeding
to enforce rights under this Agreement, the prevailing party shall be entitled
to recover costs and attorneys' fees.

         f. Any notice required or permitted under this Agreement shall be given
in writing and shall be deemed effective: (i) immediately upon personal delivery
or facsimile transmission to the parties to be notified, (ii) one (1) day after
deposit with a commercial

                                      -11-
<PAGE>

overnight courier with tracking capabilities, or (iii) three (3) days after
deposit with the United States Postal Service, by registered or certified mail,
postage prepaid and addressed to the party to be notified (Attn: President) at
the address indicated for such party on the signature page hereof, or at such
other address as the party may designate by ten (10) days' advanced written
notice to the other party.

         g. This Agreement is the sole agreement between the parties with
respect to the subject matter hereof. This Agreement supersedes all prior
agreements or discussions between the parties with respect to distribution,
marketing and/or service of any products of or distributed by Mentor, including
that certain Independent Sales Representative Agreement dated April 1, 1998.

         h. Termination of this Agreement shall not be an exclusive remedy for
breach of this Agreement and, whether or not termination is effected, all other
remedies will remain available. No waiver of any remedy shall be implied by a
party's actions or failure to act, unless the party to be charged with waiving a
remedy explicitly agrees in writing to such waiver.

         i. Sales Representative shall bind in writing its employees who have
access to Proprietary Information to hold such information in confidence and not
to disclose any thereof except as expressly allowed herein.

         j. If, during the term of this Agreement, Mentor elects to utilize the
services of an employee in the Territory in lieu of the services of any
independent sales representative, Mentor shall first offer the position to Sales
Representative provided Sales Representative has fully performed his obligations
under the terms of this Agreement.

                                      -12-
<PAGE>

         BASIS OF BARGAIN -- EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE MATERIAL
BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE BEEN TAKEN INTO ACCOUNT
AND REFLECTED IN DETERMINING THE CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER
THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS AGREEMENT.

         IN WITNESS WHEREOF, the parties have entered into this Agreement
effective as of the date first above written.

                                       MENTOR CORPORATION

                                       By /s/ Adel Michael
                                         ---------------------------------------
                                         Adel Michael, Senior Vice President

                             Address:  Mentor Corporation
                                       201 Mentor Drive
                                       Santa Barbara, CA 93111

                                       TIM KAIN

                                       By /s/ TIM KAIN
                                         ---------------------------------------
                                                    (Signature)
                             Address:  39 Limerick Road
                                       Arundel, ME 04046

--------------------------
Mentor Legal Dept.

                                       13
<PAGE>

                                                                      SCHEDULE A

     The Territory consists of the following areas only:

                                 Zip Code Range
                                 --------------

                                  03900-04999
                                  05000-06999
                                  01000-01399
                                  01400-01718
                                  01719-01720
                                  01721-01720
                                     01730
                                  01731-01739
                                     01740
                                     01741
                                     01742
                                  01743-01751
                                     01752
                                     01753
                                     01754
                                  01755-01772
                                     01773
                                     01774
                                  01775-01778
                                  01777-01809
                                  01810-01879
                                  01880-01914
                                  01915-01930
                                  01931-01981
                                     01982
                                  01983-02112
                                  02113-02114
                                  02115-02127
                                  02128-02129
                                  02130-02137
                                  02138-02141
                                     02142
                                  02143-02145
                                  02146-02147
                                  02148-02151
                                  02152-02154
                                     02155
                                  02156-02172
                                     02173
                                  02174-02175
                                     02176
                                     02177
                                     02178
                                  02179-02799
                                  03000-03399
                                  03400-03799
                                  03800-03899
                                  02800-02999
                                  05000-05999

                                      -14-
<PAGE>
                                   SCHEDULE B

I.    COMMISSION PERCENTAGES
      ----------------------

      A.  If monthly plan is not achieved:

      -   All sales up to monthly base amount: 8%
      -   All sales above monthly base amounts: 10%

      B.  If monthly plan is achieved, the above stated commissions will be
          replaced by the following:

      -   If two Brand Groups are achieved for the month:       11% on all sales
      -   If three Brand Groups are achieved for the month:     13% on all sales
      -   If four Brand Groups are achieved for the month:      15% on all sales

II.   BASE AMOUNTS AND PRODUCT GROUP PLANS (ATTACHED)
      -----------------------------------------------

                                      -15-<PAGE>

                                                                     EXHIBIT 4.3

                              AVONDALE MILLS, INC.,

                                   as Issuer,

                             AVONDALE INCORPORATED,

                                  as Guarantor,

                                       and

                       WACHOVIA BANK, NATIONAL ASSOCIATION

                                   as Trustee

                                    INDENTURE

                            DATED AS OF JUNE 30, 2003

                   10 1/4% SENIOR SUBORDINATED NOTES DUE 2013

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
TIA 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)........................................................................................          7.08; 7.10
   (c)........................................................................................             N.A.
311(a)........................................................................................             7.11
   (b)........................................................................................             7.11
   (c)........................................................................................             N.A.
312(a)........................................................................................             2.05
   (b)........................................................................................            13.03
   (c)........................................................................................            13.03
313(a)........................................................................................             7.06
   (b)(1).....................................................................................             N.A.
   (b)(2).....................................................................................             7.06
   (c)........................................................................................            13.02
   (d)........................................................................................             7.06
314(a)........................................................................................   4.02; 4.10; 4.11; 13.02
   (b)........................................................................................             N.A.
   (c)(1).....................................................................................            13.04
   (c)(2).....................................................................................            13.04
   (c)(3).....................................................................................             N.A.
   (d)........................................................................................             N.A.
   (e)........................................................................................            13.05
   (f)........................................................................................             4.11
315(a)........................................................................................             7.01
   (b)........................................................................................         7.05; 13.02
   (c)........................................................................................             7.01
   (d)........................................................................................             7.01
   (e)........................................................................................             6.11
316(a) (last sentence)........................................................................            13.06
   (a)(1)(A)..................................................................................             6.05
   (a)(1)(B)..................................................................................             6.04
   (a)(2).....................................................................................             N.A.
   (b)........................................................................................             6.07
317(a)(1).....................................................................................             6.08
   (a)(2).....................................................................................             6.09
   (b)........................................................................................             2.04
318(a)........................................................................................            13.01
</TABLE>

N.A. means not applicable.

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

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.

                                       i

<PAGE>

                                TABLE OF CONTENTS

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

         Section 1.01.        Definitions....................................................................    1
         Section 1.02.        Other Definitions..............................................................   18
         Section 1.03.        Incorporation by Reference of Trust Indenture Act..............................   19
         Section 1.04.        Rules of Construction..........................................................   19

ARTICLE 2 THE SECURITIES.....................................................................................   20

         Section 2.01.        Form and Dating................................................................   20
         Section 2.02.        Execution and Authentication...................................................   21
         Section 2.03.        Registrar and Paying Agent.....................................................   21
         Section 2.04.        Paying Agent to Hold Money in Trust............................................   21
         Section 2.05.        Securityholder Lists...........................................................   22
         Section 2.06.        Replacement Securities.........................................................   22
         Section 2.07.        Outstanding Securities.........................................................   22
         Section 2.08.        Temporary Securities...........................................................   23
         Section 2.09.        Cancellation...................................................................   23
         Section 2.10.        Defaulted Interest.............................................................   23
         Section 2.11.        CUSIP Numbers..................................................................   23
         Section 2.12.        Registration, Registration of Transfer and Exchange............................   23
         Section 2.13.        Book Entry Provisions for Global Notes.........................................   24
         Section 2.14.        Special Transfer and Exchange Provisions.......................................   26

ARTICLE 3 REDEMPTION.........................................................................................   29

         Section 3.01.        Notices to Trustee.............................................................   29
         Section 3.02.        Selection of Securities to Be Redeemed.........................................   29
         Section 3.03.        Notice of Redemption...........................................................   30
         Section 3.04.        Effect of Notice of Redemption.................................................   30
         Section 3.05.        Deposit of Redemption Price....................................................   30
         Section 3.06.        Securities Redeemed in Part....................................................   31

ARTICLE 4 COVENANTS..........................................................................................   31

         Section 4.01.        Payment of Securities..........................................................   31
         Section 4.02.        SEC Reports....................................................................   31
         Section 4.03.        Limitation on Indebtedness.....................................................   32
         Section 4.04.        Limitation on Restricted Payments..............................................   33
         Section 4.05.        Limitation on Restrictions on Distributions from Restricted Subsidiaries.......   36
         Section 4.06.        Limitation on Sales of Assets and Subsidiary Stock.............................   37
         Section 4.07.        Limitation on Affiliate Transactions...........................................   39
         Section 4.08.        Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries.   40
         Section 4.09.        Change of Control..............................................................   40
         Section 4.10.        Compliance Certificate.........................................................   41
         Section 4.11.        Further Instruments and Acts...................................................   41
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                             <C>
ARTICLE 5 SUCCESSOR COMPANY................................................................................     42

         Section 5.01.        When Company May Merge or Transfer Assets....................................     42

ARTICLE 6 DEFAULTS AND REMEDIES............................................................................     43

         Section 6.01.        Events of Default............................................................     43
         Section 6.02.        Acceleration.................................................................     44
         Section 6.03.        Other Remedies...............................................................     45
         Section 6.04.        Waiver of Past Defaults......................................................     45
         Section 6.05.        Control by Majority..........................................................     45
         Section 6.06.        Limitation on Suits..........................................................     45
         Section 6.07.        Rights of Holders to Receive Payment.........................................     46
         Section 6.08.        Collection Suit by Trustee...................................................     46
         Section 6.09.        Trustee May File Proofs of Claim.............................................     46
         Section 6.10.        Priorities...................................................................     46
         Section 6.11.        Undertaking for Costs........................................................     47
         Section 6.12.        Waiver of Stay or Extension Laws.............................................     47

ARTICLE 7 TRUSTEE..........................................................................................     47

         Section 7.01.        Duties of Trustee............................................................     47
         Section 7.02.        Rights of Trustee............................................................     48
         Section 7.03.        Individual Rights of Trustee.................................................     49
         Section 7.04.        Trustee's Disclaimer.........................................................     49
         Section 7.05.        Notice of Defaults...........................................................     49
         Section 7.06.        Reports by Trustee to Holders................................................     49
         Section 7.07.        Compensation and Indemnity...................................................     50
         Section 7.08.        Replacement of Trustee.......................................................     50
         Section 7.09.        Successor Trustee by Merger..................................................     51
         Section 7.10.        Eligibility; Disqualification................................................     51
         Section 7.11.        Preferential Collection of Claims Against Company............................     51
         Section 7.12.        Trustee's Application for Instructions from the Company......................     51

ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE...............................................................     52

         Section 8.01.        Discharge of Liability on Securities; Defeasance.............................     52
         Section 8.02.        Conditions to Defeasance.....................................................     52
         Section 8.03.        Application of Trust Money...................................................     53
         Section 8.04.        Repayment to Company.........................................................     53
         Section 8.05.        Indemnity for Government Obligations.........................................     54
         Section 8.06.        Reinstatement................................................................     54

ARTICLE 9 AMENDMENTS.......................................................................................     54

         Section 9.01.        Without Consent of Holders...................................................     54
         Section 9.02.        With Consent of Holders......................................................     55
         Section 9.03.        Compliance with Trust Indenture Act..........................................     56
         Section 9.04.        Revocation and Effect of Consents and Waivers................................     56
         Section 9.05.        Notation on or Exchange of Securities........................................     56
         Section 9.06.        Trustee to Sign Amendments...................................................     56
</TABLE>

                                       iii

<PAGE>

<TABLE>
<S>                                                                                                             <C>
         Section 9.07.        Payment for Consent............................................................   56

ARTICLE 10 SUBORDINATION OF THE SECURITIES...................................................................   57

         Section 10.01.       Agreement to Subordinate.......................................................   57
         Section 10.02.       Liquidation, Dissolution, Bankruptcy...........................................   57
         Section 10.03.       Default on Senior Indebtedness of the Company..................................   57
         Section 10.04.       Acceleration of Payment of Securities..........................................   58
         Section 10.05.       When Distribution Must Be Paid Over............................................   58
         Section 10.06.       Subrogation....................................................................   58
         Section 10.07.       Relative Rights................................................................   58
         Section 10.08.       Subordination May Not Be Impaired by Company...................................   59
         Section 10.09.       Rights of Trustee and Paying Agent.............................................   59
         Section 10.10.       Distribution or Notice to Representative.......................................   59
         Section 10.11.       Article 10 Not to Prevent Events of Default or Limit Right to Accelerate.......   59
         Section 10.12.       Trust Moneys Not Subordinated..................................................   59
         Section 10.13.       Trustee Entitled to Rely.......................................................   60
         Section 10.14.       Trustee to Effectuate Subordination............................................   60
         Section 10.15.       Trustee Not Fiduciary for Holders of Senior Indebtedness.......................   60
         Section 10.16.       Reliance by Holders of Senior Indebtedness on Subordination Provisions.........   60

ARTICLE 11 GUARANTY..........................................................................................   61

         Section 11.01.       Guaranty.......................................................................   61
         Section 11.02.       Successors and Assigns.........................................................   62
         Section 11.03.       No Waiver......................................................................   62
         Section 11.04.       Modification...................................................................   62

ARTICLE 12 SUBORDINATION OF THE GUARANTY.....................................................................   63

         Section 12.01.       Agreement to Subordinate.......................................................   63
         Section 12.02.       Liquidation, Dissolution, Bankruptcy...........................................   63
         Section 12.03.       Default on Senior Indebtedness of the Guarantor................................   63
         Section 12.04.       Demand for Payment.............................................................   64
         Section 12.05.       When Distribution Must Be Paid Over............................................   64
         Section 12.06.       Subrogation....................................................................   64
         Section 12.07.       Relative Rights................................................................   64
         Section 12.08.       Subordination May Not Be Impaired by Guarantor.................................   64
         Section 12.09.       Rights of Trustee and Paying Agent.............................................   64
         Section 12.10.       Distribution or Notice to Representative.......................................   65
         Section 12.11.       Article 12 Not to Prevent Defaults Under the Guaranty or Limit Right to
                              Demand Payment.................................................................   65
         Section 12.12.       Trustee Entitled to Rely.......................................................   65
         Section 12.13.       Trustee to Effectuate Subordination............................................   65
         Section 12.14.       Trustee Not Fiduciary for Holders of Senior Indebtedness of the Guarantor......   66
         Section 12.15.       Reliance by Holders of Senior Indebtedness on Subordination Provisions.........   66

ARTICLE 13 MISCELLANEOUS.....................................................................................   66

         Section 13.01.       Trust Indenture Act Controls...................................................   66
</TABLE>

                                       iv

<PAGE>

<TABLE>
<S>                                                                                                             <C>
         Section 13.02.       Notices..................................................................         66
         Section 13.03.       Communication by Holders with Other Holders..............................         67
         Section 13.04.       Certificate and Opinion as to Conditions Precedent.......................         67
         Section 13.05.       Statements Required in Certificate or Opinion............................         67
         Section 13.06.       When Securities Disregarded..............................................         67
         Section 13.07.       Rules by Trustee, Paying Agent and Registrar.............................         68
         Section 13.08.       Legal Holidays...........................................................         68
         Section 13.09.       Governing Law............................................................         68
         Section 13.10.       No Recourse Against Others...............................................         68
         Section 13.11.       Successors...............................................................         68
         Section 13.12.       Multiple Originals.......................................................         68
         Section 13.13.       Table of Contents; Headings..............................................         68
</TABLE>

Exhibit A - Form of Initial Note

Exhibit B - Regulation S Certificate

Exhibit C - Rule 144A Certificate

Exhibit D - Institutional Accredited Investor Certificate

Exhibit E - Unrestricted Securities Certificate

                                       v

<PAGE>

         INDENTURE dated as of June 30, 2003, among AVONDALE MILLS, INC., an
Alabama corporation (the "Company"), AVONDALE INCORPORATED, a Georgia
corporation (the "Guarantor") and Wachovia Bank, National Association, a
national banking association (the "Trustee").

         Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 10 1/4% Senior
Subordinated Notes due 2013 (the "Securities"):

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions. "144A Global Note" means a global note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Securities sold in reliance on Rule 144A.

         "Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock), including, without limitation, land, machinery,
equipment, leasehold interests and improvements, primarily in a Related
Business; (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (iii) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary described in clauses (ii) or (iii)
above is primarily engaged in a Related Business.

         "Additional Notes" means an unlimited aggregate principal amount of
Securities (other than the Initial Notes) issued under this Indenture in
accordance with Section 2.02 hereof.

         "Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the 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. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.

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

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

         "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of (i) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares or
shares required by applicable law to be held by a Person other than the

                                        1

<PAGE>

Company or a Restricted Subsidiary), (ii) all or substantially all the assets of
any division or lines of business of the Company or any Restricted Subsidiary,
or (iii) any other assets of the Company or any Restricted Subsidiary outside of
the ordinary course of business of the Company or such Restricted Subsidiary.
Notwithstanding the foregoing, the following shall not be deemed an "Asset
Disposition" for purposes of this Indenture: (a) the sale or other transfer or
disposition of Receivables and Related Assets pursuant to or in connection with
a Receivables Program, (b) the sale or discount, in each case without recourse,
of accounts receivable arising in the ordinary course of business (c) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (d) for purposes of Section
4.06 only, a disposition that constitutes a Restricted Payment permitted by
Section 4.04, and (e) any transfer of property or assets: (1) that is governed
by Section 5.01; (2) by the Company to any Restricted Subsidiary, or by any
Restricted Subsidiary to the Company or any Restricted Subsidiary in accordance
with the terms of this Indenture; (3) that are obsolete, damaged, worn out or
otherwise unsuitable for use in connection with the Company's business or the
Company subsidiaries' business in the ordinary course of business; (4) the sale
or other disposition of cash or Cash Equivalents; (5) the issuance of Capital
Stock by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary; (6) in any transaction or a series of related transactions that
involves assets having a fair market value of less than $1 million; (7) any sale
of equipment or other assets specifically contemplated by the Company's capital
expenditure budget previously approved by the Board of Directors; or (8) the
lease, assignment or sublease of any real or personal property in the ordinary
course of business.

         "Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of (x) the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock multiplied
by (y) the amount of such payment by (ii) the sum of all such principal or
redemption payments.

         "Bank Indebtedness" means indebtedness pursuant to the Credit Facility.

         "Banks" has the meaning specified in the Credit Facility.

         "Board of Directors" means, as the context requires, the Board of
Directors of the Guarantor or the Company or any committee thereof duly
authorized to act on behalf of such Board.

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

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

         "Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.

         "Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.

                                        2

<PAGE>

         "Cash Equivalents" means:

                  (i)      any evidence of Indebtedness with a maturity of one
         year or less issued or directly and fully guaranteed or insured by the
         United States of America or any agency or instrumentality thereof
         (provided that the full faith and credit of the United States of
         America is pledged in support thereof);

                  (ii)     certificates of deposit or acceptances with a
         maturity of one year or less of any financial institution that is a
         member of the Federal Reserve System having combined capital and
         surplus and undivided profits of not less than $500 million;

                  (iii)    commercial paper with a maturity of one year or less
         issued by a corporation that is not the Company's Affiliate and is
         organized under the laws of any state of the United States or the
         District of Columbia and rated at least A-1 by S&P or any successor
         rating agency or at least P-1 by Moody's or any successor rating
         agency;

                  (iv)     repurchase obligations with a term of not more than
         seven days for underlying securities of the types described in clauses
         (i) and (ii) above;

                  (v)      demand and time deposits with a domestic commercial
         bank that is a member of the Federal Reserve System that are FDIC
         insured;

                  (vi)     repurchase obligations with a term of not more than
         seven days entered into with any bank meeting the qualifications
         specified in clause (v) above; or

                  (vii)    investments in funds investing solely in investments
         of the types described in clauses (i) through (vi) above.

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

                  (i)      prior to the earlier to occur of (A) the first public
         offering of any class of common stock of the Guarantor or (B) the first
         public offering of any class of common stock of the Company, the
         Permitted Holders cease to be the "beneficial owner" (as defined in
         Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly,
         of a majority of the total voting power of the Voting Stock of the
         Company (for purposes of this clause (i) and clause (ii) below, the
         Permitted Holders shall be deemed to beneficially own any Voting Stock
         of the Company or any other corporation (in any such case, the
         "specified corporation") held by the Guarantor or any other corporation
         (in any such case, the "parent corporation") so long as the Permitted
         Holders beneficially own (as so defined), directly or indirectly, in
         the aggregate a majority of the total voting power of the Voting Stock
         of the parent corporation);

                  (ii)     on or after any such first public offering of common
         stock referred to in clause (i) above, any "person" (as such term is
         used in Sections 13(d) and 14(d) of the Exchange Act), other than one
         or more Permitted Holders, is or becomes the beneficial owner (as
         defined in clause (i) above, except that for purposes of this clause
         (ii) such person shall be deemed to have "beneficial ownership" of all
         shares that any such person has the right to acquire, whether such
         right is exercisable immediately or only after the passage of time),
         directly or indirectly, of more than 40% of the total voting power of
         the Voting Stock of the Company; provided, however, that the Permitted
         Holders beneficially own (as defined in clause (i) above), directly or
         indirectly, in the aggregate a lesser percentage of the total voting
         power of the Voting Stock of the Company than such other person and do
         not have the right or ability by voting power, contract or otherwise to

                                       3

<PAGE>

         elect or designate for election a majority of the Board of Directors
         (for the purposes of this clause (ii), such other person shall be
         deemed to beneficially own any Voting Stock of a specified corporation
         held by a parent corporation, if such other person is the beneficial
         owner (as defined in this clause (ii)), directly or indirectly, of more
         than 40% of the total voting power of the Voting Stock of such parent
         corporation and the Permitted Holders beneficially own (as defined in
         clause (i) above), directly or indirectly, in the aggregate a lesser
         percentage of the voting power of the Voting Stock of such parent
         corporation and do not have the right or ability by voting power,
         contract or otherwise to elect or designate for election a majority of
         the board of directors of such parent corporation); or

                  (iii)    (A) during any period of two consecutive years,
         individuals who at the beginning of such period constituted the Board
         of Directors of the Company (together with any new directors whose
         election by such Board of Directors or whose nomination for election by
         the shareholders of the Company was approved by a vote of 66 2/3% of
         the directors of the Company then still in office who were either
         directors at the beginning of such period or whose election or
         nomination for election was previously so approved) cease for any
         reason to constitute a majority of the Board of Directors then in
         office, and (B) the Permitted Holders cease to be the beneficial owners
         (as defined in clause (ii) above), directly or indirectly, of a
         majority of the total outstanding Voting Stock of the Guarantor or the
         Company or cease to have the ability, by voting power, contract or
         otherwise, to elect or designate for election a majority of the Board
         of Directors of the Guarantor or the Company.

         "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.

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

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

         "Comparable Treasury Issue" means the United States Treasury security
selected by a Reference Treasury Dealer appointed by the Company as having a
maturity comparable to the then remaining term of the Notes to July 1, 2008 (as
if the Notes matured on such date) that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the then remaining
term of the Notes to July 1, 2008 as if the Notes matured on such date).

         "Comparable Treasury Price" means, with respect to any redemption date,
(1) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Company obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.

         "Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to the date of
such determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has incurred any

                                        4

<PAGE>

Indebtedness since the beginning of such period that remains outstanding or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an incurrence of Indebtedness, or both, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been incurred
on the first day of such period (other than Indebtedness incurred or repaid
under a revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement) in
effect on the last day of such period unless any portion of such Indebtedness is
projected, in the reasonable judgment of the senior management of the Company,
to remain outstanding for a period in excess of twelve months from the date of
incurrence thereof) and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period, or increased by an amount equal to the EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Asset Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and its continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale), (3) if since the beginning of
such period the Company or any Restricted Subsidiary (by merger or otherwise)
shall have made an Investment in any Restricted Subsidiary (or any person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period and (4) if since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the beginning
of such period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).

         "Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, (i) interest
expense attributable to Capital Lease Obligations, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest, (iv) non-cash
interest expenses, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (vi) net
costs associated with Hedging Obligations (including amortization of fees),
(vii) Preferred Stock dividends in respect of all Preferred

                                        5

<PAGE>

Stock held by Persons other than the Company or a Restricted Subsidiary, (viii)
interest incurred in connection with Investments in discontinued operations,
(ix) interest accruing on any Indebtedness of any other Person to the extent
such Indebtedness is Guaranteed by the Company or any Restricted Subsidiary, (x)
the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company) in connection with Indebtedness
incurred by such plan or trust and (xi) any premiums, fees, discounts, expenses
and losses on sales of Receivables and Related Assets (and any amortization
thereof) payable in connection with the Credit Facility, the Receivables Program
or the Offering of the Securities, all as determined on a consolidated basis in
conformity with GAAP.

         "Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries; provided, however, that
there shall be excluded from such Consolidated Net Income, without duplication:

                  (i)      any net income of any Person if such Person is not a
         Restricted Subsidiary, except that subject to the exclusion contained
         in clause (iv) below, the Company's equity in the net income of any
         such Person for such period shall be included in such Consolidated Net
         Income up to the aggregate amount of cash actually distributed by such
         Person during such period to the Company or a Restricted Subsidiary as
         a dividend or other distribution (subject, in the case of a dividend or
         other distribution paid to a Restricted Subsidiary, to the limitations
         contained in clause (iii) below);

                  (ii)     any net income (or loss) of any Person acquired by
         the Company or a Subsidiary in a pooling of interests transaction for
         any period prior to the date of such acquisition;

                  (iii)    any net income of any Restricted Subsidiary if such
         Restricted Subsidiary is subject to restrictions, directly or
         indirectly, on the payment of dividends or the making of distributions
         by such Restricted Subsidiary, directly or indirectly, to the Company,
         except that subject to the exclusion contained in clause (iv) below,
         the Company's equity in the net income of any such Restricted
         Subsidiary for such period shall be included in such Consolidated Net
         Income up to the aggregate amount of cash actually distributed by such
         Restricted Subsidiary during such period to the Company or another
         Restricted Subsidiary as a dividend or other distribution (subject, in
         the case of a dividend or other distribution paid to another Restricted
         Subsidiary, to the limitation contained in this clause);

                  (iv)     any gain or loss realized upon the sale or other
         disposition of any assets of the Company or its consolidated
         Subsidiaries (including pursuant to any sale-and-leaseback arrangement)
         which is not sold or otherwise disposed of in the ordinary course of
         business and any gain or loss realized upon the sale or other
         disposition of any Capital Stock of any Person;

                  (v)      extraordinary gains or losses;

                  (vi)     any non-cash goodwill impairment charges incurred
         subsequent to the date of this Indenture resulting from the application
         of SFAS No. 142;

                  (vii)    any non-cash charges incurred subsequent to the date
         of this Indenture relating to the underfunded portion of any pension
         plan;

                  (viii)   any non-cash charges incurred subsequent to the date
         of this Indenture resulting from the application of SFAS No. 123; and

                                        6

<PAGE>

                  (ix)     the cumulative effect of a change in accounting
         principles.

         Notwithstanding the foregoing, for the purpose of Section 4.04 only,
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under such Section pursuant to clause (a)(3)(E) thereof.

         "Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.

         "Credit Facility" means the credit facility provided to the Company
pursuant to the Amended and Restated Credit Agreement dated March 28, 2003,
among the Company, the Guarantor, the lenders and the agents thereunder, as the
same may from time to time be amended, renewed, supplemented, modified,
extended, substituted, refinanced, (including to increase the amount available
for borrowing thereunder), restructured or replaced in whole or in part from
time to time, whether with the same or different lenders or agents.

         "Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

         "Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, The Depository Trust Company ("DTC"), its
nominees and successors, or another Person designated as Depositary by the
Company, which must be a clearing agency registered under the Exchange Act.

         "Designated Senior Indebtedness" means (i) the Indebtedness and all
other monetary obligations (including Post-Petition Interest, expenses and fees)
under the Credit Facility and any other obligation, including Hedging
Obligations, secured by the security agreements referred to in the Credit
Facility and (ii) any other Senior Indebtedness of the Company which, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25,000,000 and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.

         "Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
Stated Maturity of the Securities; provided, however, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the provisions of Sections
4.06 and 4.09.

                                        7

<PAGE>

         "EBITDA" for any period means the sum of Consolidated Net Income plus
Consolidated Interest Expense plus, without duplication, the following to the
extent deducted in calculating such Consolidated Net Income: (a) all income tax
expense of the Company, (b) depreciation expense, (c) amortization expense, (d)
non-cash inventory charges recorded as a result of the utilization of the
last-in, first-out (LIFO) inventory valuation method and (e) all other non-cash
items reducing Consolidated Net Income (other than items that will require cash
payments and for which an accrual or reserve is, or is required by GAAP to be,
made), less all non-cash items increasing Consolidated Net Income, in each case
for such period. Notwithstanding the foregoing, the provision for taxes based on
the income or profits of, and the depreciation and amortization of, a Subsidiary
of the Company shall be added to Consolidated Net Income to compute EBITDA only
to the extent (and in the same proportion) that the net income of such
Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Subsidiary without prior approval (that has
not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to such Subsidiary or its stockholders.

         "Equity Interest" of any person means:

                  (i)      any and all shares, interests, participations, rights
         in or other equivalents (however designated) of such person's capital
         stock, other equity interests whether now outstanding or issued after
         the date of this Indenture, partnership interests (whether general or
         limited), 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; and

                  (ii)     any warrants, options or other rights (other than
         debt securities exchangeable for or convertible into any such Equity
         Interests referred to in clause (i)) exchangeable for or convertible
         into such Equity Interests referred to in clause (i).

         "Equity Offering" means an offering of Capital Stock of the Company or
the Guarantor (other than pursuant to a registration statement on Form S-8 or
otherwise relating to equity securities issuable under any employee benefit plan
of the Company).

         "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.

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

         "Exchange Notes" means the Securities issued in the Exchange Offer in
accordance with Section 2.14(a) hereof.

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

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

         "Existing Notes" means the Company's 10 1/4% Senior Subordinated Notes
due 2006 issued under the Old Indenture.

         "Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to

                                        8

<PAGE>

sell and an informed and willing buyer under no compulsion to buy. Unless
otherwise indicated, Fair Market Value shall be determined in good faith by the
Board of Directors.

         "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
(i) in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) in statements and
pronouncements of the Financial Accounting Standards Board, (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) in the published rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements inn staff accounting
bulletins and similar written statements from the accounting staff of the SEC.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.

         "Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, issued in accordance
with certain sections of this Indenture.

         "Global Note Legend" means the legend set forth in the Global Note
attached to this Indenture as Exhibit A under the caption "[Global Notes
Legend]."

         "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "guarantor" shall mean any Person Guaranteeing
any obligation.

         "Guarantor" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.

         "Guaranty" means the Guarantee of the Securities by the Guarantor
pursuant to this Indenture.

         "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate or Currency Protection Agreement.

         "Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.

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

         "incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be

                                       9

<PAGE>

incurred by such Subsidiary at the time it becomes a Restricted Subsidiary. The
term "incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the incurrence of Indebtedness.

         "Indebtedness" means, with respect to any Person on any date of
determination (without duplication):

                  (i)      the principal of and premium (if any) in respect of
         (A) indebtedness of such Person for money borrowed and (B) indebtedness
         evidenced by notes, debentures, bonds or other similar instruments for
         the payment of which such Person is responsible or liable (other than,
         in the case of the Company and its Restricted Subsidiaries, any
         non-negotiable notes of the Company or its Subsidiaries issued to its
         insurance carriers in lieu of maintenance of policy reserves in
         connection with its workers compensation and liability insurance
         programs);

                  (ii)     all Capital Lease Obligations of such Person;

                  (iii)    all obligations of such Person issued or assumed as
         the deferred purchase price of property, all conditional sale
         obligations of such Person and all obligations of such Person under any
         title retention agreement (but excluding trade accounts payable arising
         in the ordinary course of business);

                  (iv)     all obligations of such Person for the reimbursement
         of any obligor on any letter of credit, banker's acceptance or similar
         credit transaction (other than obligations with respect to letters of
         credit securing obligations (other than obligations described in
         clauses (i) through (iii) above) entered into in the ordinary course of
         business of such Person to the extent such letters of credit are not
         drawn upon or, if and to the extent drawn upon, such drawing is
         reimbursed no later than the tenth Business Day following receipt by
         such Person of a demand for reimbursement following payment on the
         letter of credit and time drafts relating to any such letters of credit
         payable within 180 days after the date of Issuance to the extent such
         time drafts are issued in the ordinary course of business for the
         payment of goods or services);

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

                  (vi)     all obligations of the type referred to in clauses
         (i) through (v) of other Persons and all dividends of other Persons for
         the payment of which, in either case, such Person is responsible or
         liable, directly or indirectly, as obligor, guarantor or otherwise,
         including by means of any Guarantee;

                  (vii)    all obligations of the type referred to in clauses
         (i) through (vi) of other Persons secured by any Lien on any property
         or asset of such Person (whether or not such obligation is assumed by
         such Person), the amount of such obligation being deemed to be the
         lesser of the fair market value of such property or assets at such date
         of determination or the amount of the obligation so secured; and

                  (viii)   to the extent not otherwise included in this
         definition, Hedging Obligations of such Person.

         The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the

                                       10

<PAGE>

amount of liability required by GAAP to be accrued or reflected on the most
recently published balance sheet of such Person; provided, however, that (A) the
amount outstanding at any time of any Indebtedness issued with original issue
discount is the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP and (B) Indebtedness shall not include any
liability for Federal, state, local or other taxes.

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

         "Initial Notes" means $150 million in aggregate principal amount of
Securities originally issued under this Indenture on the date hereof.

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

         "Insolvency or Liquidation Proceeding" means (i) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith, relating to the
Company or its assets, or (ii) any liquidation, dissolution or other winding up
of the Company, whether voluntary or involuntary or whether or not involving
insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors
or any other marshalling of assets or liabilities of the Company.

         "Interest Rate or Currency Protection Agreement" of any Person means
any interest rate protection agreement (including, without limitation, interest
rate swaps, caps, floors, collars, derivative instruments and similar
agreements), and/or other types of interest hedging agreements and any currency
protection agreement (including foreign exchange contracts, currency swap
agreements or other currency hedging arrangements) entered into for bona fide
purposes in support of the Company's business and not of a speculative nature.

         "Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are,
in conformity with GAAP, recorded as accounts receivable on the balance sheet of
such Person) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
the definition of "Unrestricted Subsidiary", the definition of "Restricted
Payment" and Section 4.04, (i) "Investment" shall include the portion
(proportionate to the Company's Equity Interest in such Subsidiary) of the fair
market value of the net assets of any Subsidiary of the Company at the time that
such Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to (x) the
Company's "Investment" in such Unrestricted Subsidiary at the time of such
redesignation as a Restricted Subsidiary less (y) the portion (proportionate to
the Company's Equity Interest in such Unrestricted Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary at the time of
such redesignation as a Restricted Subsidiary; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith by the
Board of Directors.

         "Issue Date" means the date on which the Securities are originally
issued.

                                       11

<PAGE>

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

         "Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).

         "Net Available Cash" from an Asset Disposition means payments in cash
or cash equivalents received therefrom (including any cash payments received by
way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets that are
the subject of such Asset Disposition or received in any other noncash form), in
each case net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred (including fees and expenses of investment
bankers), and all Federal, state, provincial, foreign and local taxes required
to be accrued as a liability under GAAP, incurred in connection with such Asset
Disposition, (ii) all payments made on any Indebtedness which is secured by a
Lien on any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be, repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Disposition and (iv) the deduction of
appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the property or other assets
disposed in such Asset Disposition, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Dispositions, all as determined in conformity with GAAP, and retained
by the Company or any Restricted Subsidiary after such Asset Disposition.

         "Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the proceeds of such issuance or sale in the form of cash or cash
equivalents net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.

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

         "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

         "Officers' Certificate" means a certificate signed by two Officers.

         "Old Indenture" means the indenture, dated as of April 23, 1996, by and
among the Company, the Guarantor and The Bank of New York.

         "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.

         "Permitted Holders" means G. Stephen Felker and/or any "Permitted
Transferee" (as defined in the Restated and Amended Articles of Incorporation of
the Guarantor as of the Issue Date) of G. Stephen Felker.

                                       12

<PAGE>

         "Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Receivables Subsidiary or a Restricted Subsidiary
or a Person that will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such Restricted
Subsidiary is a Related Business; (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary business is
a Related Business; (iii) Temporary Cash Investments; (iv) receivables owing to
the Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments; (viii) any
Person to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to Section
4.06; and (ix) a trust, limited liability company, special purpose entity or
other similar entity in connection with a Receivables Program; provided,
however, that (A) such Investment is made by a Receivables Subsidiary and (B)
the only assets transferred to such trust, limited liability company, special
purpose or other similar entity consist of Receivables and Related Assets of
such Receivables Subsidiary.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.

         "Post-Petition Interest" means all interest accrued or accruing after
the commencement of any Insolvency or Liquidation Proceeding (and interest that
would accrue but for the commencement of any Insolvency or Liquidation
Proceeding) in accordance with and at the contract rate (including, without
limitation, any rate applicable upon default) specified in the agreement or
instrument creating, evidencing or governing any Indebtedness, whether or not,
pursuant to applicable law or otherwise, the claim for such interest is allowed
as a claim in such Insolvency or Liquidation Proceeding.

         "Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.

         "principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.

         "Private Placement Legend" means the legend set forth in the Global
Note attached to this Indenture as Exhibit A under the caption "[Private
Placement Legend]."

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

         "Quotation Agent" means the Reference Treasury Dealer appointed by the
trustee after consultation with the Company.

                                       13

<PAGE>

         "Receivables and Related Assets" means accounts receivable,
instruments, chattel paper, obligations, general intangibles and other similar
assets, including interest in merchandise or goods, the sale or lease of which
give rise to the foregoing, related contractual rights, guarantees, insurance
proceeds, collections, other related assets and proceeds of all the foregoing.

         "Receivables Program" means, with respect to any Person, any accounts
receivable securitization program pursuant to which such Person pledges, sells
or otherwise transfers or encumbers its accounts receivable, including to a
trust, limited liability company, special purpose entity or other similar
entity.

         "Receivables Subsidiary" means a Restricted Subsidiary (i) created for
the purpose of financing receivables created in the ordinary course of business
of the Company and its Subsidiaries, and (ii) the sole assets of which consist
of Receivables and Related Assets of the Company and its Subsidiaries and
related Permitted Investments.

         "Reference Treasury Dealer" means each of (i) Wachovia Securities, LLC
and its successors; provided however that if Wachovia Securities, LLC shall
cease to be a primary U.S. Government securities dealer in the City of New York,
the Company shall substitute therefor another primary U.S. Government securities
dealer, and (ii) any other primary U.S. Government securities dealers selected
by the Company.

         "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.

         "Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.

         "Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or incurred in compliance with this Indenture, including Indebtedness that
refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company, (y) Indebtedness of the
Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary (z) Indebtedness that Refinances Indebtedness of a
Subsidiary that was incurred and outstanding on or prior to the date such
Subsidiary was acquired by the Company unless such proposed Refinancing
Indebtedness is incurred by such Subsidiary.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 30, 2003, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties

                                       14

<PAGE>

thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.

         "Regulation S Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities originally offered and sold outside the
United States of America to a non U.S person in a transaction meeting the
requirements of Rule 904 under the Securities Act.

         "Related Business" means the businesses of the Company and its
Restricted Subsidiaries on the Issue Date, any reasonable extension thereof, and
any additional business reasonably related, incidental, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the Issue Date.

         "representative" means any trustee, agent or representative (if any)
for an issue of Senior Indebtedness of the Company.

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

         "Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions in respect of
its Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the direct or
indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock)) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Restricted Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary
that is an entity other than a corporation)), (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock of the Company
held by any Person or of any Capital Stock of a Restricted Subsidiary held by
any Affiliate of the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Company that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations (other than the purchase, repurchase, or
other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) the making
of any Investment in any Person (other than a Permitted Investment).

         "Restricted Period" means the 40-day restricted period as defined in
Regulation S.

         "Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.

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

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

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

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

                                       15

<PAGE>

         "SEC" means the Securities and Exchange Commission.

         "Secured Indebtedness" means any Indebtedness secured by a Lien.

         "Securities" means the Securities issued under this Indenture.

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

         "Senior Indebtedness" means, with respect to any Person, (i)
Indebtedness referred to in clause (i) of the definition of "Designated Senior
Indebtedness", (ii) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter incurred and (iii) accrued and unpaid interest
(including Post-Petition Interest) in respect of (A) indebtedness of such Person
for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is responsible or
liable unless, in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligations are
subordinate in right of payment to the Securities or the Guaranty, as the case
may be; provided, however, that Senior Indebtedness shall not include (1) any
obligation of such Person to any Subsidiary, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of such Person (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect to
any other Indebtedness or other obligation of such Person or (5) that portion of
any Indebtedness which at the time of incurrence is incurred in violation of
this Indenture.

         "Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank pari passu with the Securities in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.

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

         "Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.

         "Stated Maturity" means, with respect to any security or obligation,
the date specified in such security or obligation as the fixed date on which the
final payment of principal of such security or obligation is due and payable,
including pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency beyond the control of the
issuer unless such contingency has occurred).

         "Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.

         "Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of outstanding shares of Capital Stock or other interests
(including partnership interests) 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

                                       16

<PAGE>

controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person.

         "Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.06 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security

         "Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000 (or
the foreign currency equivalent thereof) and has outstanding debt that is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money- market fund sponsored by a registered broker
dealer or mutual fund distributor, (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) investments in commercial paper, maturing not more than
90 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group, and (v) investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's
Investors Service, Inc.

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

          "Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.

         "Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.

         "Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

         "Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.

         "Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests

                                       17

<PAGE>

in the Global Note" attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary, representing Securities that do
not bear the Private Placement Legend.

         "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that either
(A) the Subsidiary to be so designated has total assets of $1,000 or less or (B)
if such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could incur
$1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.

         "U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.

         "Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.

         "Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares and shares held by other
Persons to the extent such shares are required by applicable law to be held by a
Person other than the Company or a Restricted Subsidiary) is owned by the
Company or one or more Wholly Owned Subsidiaries.

Section 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                                                                   Defined in
           Term                                                                                      Section
           ----                                                                                      -------
<S>                                                                                                <C>
"Affiliate Transaction"..........................................................................    4.07
"Agent Members"..................................................................................    2.13(b)
"Authentication Order"...........................................................................    2.02
"Bankruptcy Law".................................................................................    6.01
"Blockage Notice"................................................................................    10.03
"covenant defeasance option".....................................................................    8.01(b)
"Custodian"......................................................................................    6.01
"DTC"............................................................................................    2.03
"Event of Default"...............................................................................    6.01
"Excess Proceeds"................................................................................    4.06(a)
"legal defeasance option"........................................................................    8.01(b)
"Legal Holiday"..................................................................................    13.08
"Offer"..........................................................................................    4.06
</TABLE>

                                       18

<PAGE>

<TABLE>
<S>                                                                                                  <C>
"Offer Amount"...................................................................................    4.06
"Offer Period"...................................................................................    4.06
"pay the Securities".............................................................................    10.03
"Paying Agent"...................................................................................    2.03
"Payment Blockage Period"........................................................................    10.03
"Purchase Date"..................................................................................    4.06
"Registrar"......................................................................................    2.03
"Successor Company"..............................................................................    5.01
</TABLE>

Section 1.03 Incorporation by Reference of Trust Indenture Act.

         This Indenture is subject to the mandatory provisions of the TIA which
are incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:

                  "Commission" means the SEC.

                  "indenture securities" means the Securities.

                  "indenture security holder" means a Securityholder.

                  "indenture to be qualified" means this Indenture.

                  "indenture trustee" or "institutional trustee" means the
         Trustee.

                  "obligor" on the indenture securities means the Company and
         any other obligor on the indenture securities.

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

Section 1.04 Rules of Construction.

         Unless the context otherwise requires:

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

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

                  (3) "or" is not exclusive;

                  (4) "including" means including without limitation;

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

                  (6) unsecured Indebtedness shall not be deemed to be
         subordinate or junior to Secured Indebtedness merely by virtue of its
         nature as unsecured Indebtedness;

                  (7) the principal amount of any noninterest bearing or other
         discount security at any date shall be the principal amount thereof
         that would be shown on a balance sheet of the issuer dated

                                       19
<PAGE>

         such date prepared in accordance with GAAP and accretion of principal
         on such security shall be deemed to be the incurrence of Indebtedness;

                  (8) the principal amount of any Preferred Stock shall be (i)
         the maximum liquidation value of such Preferred Stock or (ii) the
         maximum mandatory redemption or mandatory repurchase price with respect
         to such Preferred Stock, whichever is greater; and

                  (9) all references to the date the Securities were originally
         issued shall refer to the date the Initial Securities were originally
         issued.

                                   ARTICLE 2

                                 THE SECURITIES

Section 2.01. Form and Dating.

         (A)      The Securities and the Trustee's certificate of authentication
shall be substantially in the form provided in Exhibit A which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The Securities
shall be in denominations of $1,000 and integral multiples thereof.

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

         (B)      Global Notes. Securities issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Securities issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Securities as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Securities from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Securities represented thereby shall
be made by the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.13 hereof.

         (C)      Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by participants through Euroclear or Clearstream.

                                       20

<PAGE>

Section 2.02. Execution and Authentication.

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

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

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

         The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate an unlimited aggregate
principal amount of Securities for original issue, subject to Section 4.03, of
which $150 million will be issued as Initial Notes on the date hereof. The
Initial Notes and any Securities subsequently issued hereunder will be treated
as a single class for all purposes hereunder, including, without limitation,
waivers, amendments, redemptions and offers to purchase. The aggregate principal
amount of Securities outstanding at any time may not exceed such amount except
as provided in Section 2.06 hereof.

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

Section 2.03. Registrar and Paying Agent.

         The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange.

         The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent. The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.

         The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.

Section 2.04. Paying Agent to Hold Money in Trust.

         On or prior to each due date of the principal and interest on any
Security, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal and interest when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying

                                       21

<PAGE>

Agent for the payment of principal of or interest on the Securities and shall
notify the Trustee of any default by the Company in making any such payment. If
the Company or a Subsidiary acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed by the Paying Agent. Upon complying with
this Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.

Section 2.05. Securityholder 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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee, in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.

Section 2.06. Replacement Securities.

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

                  Every replacement Security issued pursuant to this Section
2.06 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
Securities duly issued hereunder.

Section 2.07. Outstanding Securities.

         Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions of Section 2.13, and those described
in this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.

         If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

         If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.

                                       22

<PAGE>

Section 2.08. Temporary Securities.

         Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.

Section 2.09. Cancellation.

         The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel and destroy (subject to the
record retention requirements of the Exchange Act) all Securities surrendered
for registration of transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company unless the Company directs the
Trustee to deliver canceled Securities to the Company; provided, however, that
the Trustee shall not be required to destroy any Securities. Subject to Section
2.06, the Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancellation.

Section 2.10. Defaulted Interest.

         If the Company defaults in a payment of interest on the Securities, the
Company shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) in any lawful manner. The Company may pay the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix or cause to be fixed any such special record date
and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Securityholder a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.

Section 2.11. CUSIP Numbers.

         The Company in issuing the Securities 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, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.

Section 2.12. Registration, Registration of Transfer and Exchange.

         (a)      Upon surrender for registration of transfer of any Security to
the Registrar, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denomination or denominations, of a like
aggregate principal amount.

         (b)      Furthermore, any Holder of Global Notes shall, by acceptance
of such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through a book-entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in a Security shall be required to be reflected in a book entry.

                                       23

<PAGE>

         (c)      At the option of the Holder, Securities of any authorized
denomination or denominations may be exchanged for other Securities of a like
aggregate principal amount, upon surrender of the Securities to be exchanged to
the Registrar. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
Securities which the Holder making the exchange is entitled to receive; provided
that no exchange of a Restricted Global Note for an Unrestricted Global Note
shall occur until an Exchange Offer Registration Statement shall have been
declared effective by the Commission and the Exchange Offer shall have expired;
and provided, further, however that the Initial Notes exchanged for the Exchange
Notes shall be canceled.

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

         (e)      Every Security presented or surrendered for registration of
transfer, or for exchange, repurchase or redemption, shall (if so required by
the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.

         (f)      No service charge shall be made to a Holder for any
registration of transfer, exchange or redemption of Securities, except for any
tax or other governmental charge that may be imposed in connection therewith,
other than exchanges pursuant to Sections 2.02, 2.06, 2.08, 2.13(c), 2.14. 3.06,
4.06, 4.09 or this Section 2.12 not involving any transfer.

         (g)      The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the selection of Securities to be redeemed under Section
3.02 and ending at the close of business on the day of such selection, (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of Securities being redeemed in
part, (iii) to register the transfer of or exchange any Security during a period
beginning 15 days before an Interest Payment Date or (iv) to register the
transfer of or exchange any Security that has been tendered in a Change of
Control.

         (h)      Every Security shall be subject to the restrictions on
transfer provided in the Private Placement Legend, and the restrictions set
forth in this Section 2.12, and the Holder of each Security, by such Holder's
acceptance thereof (or interest therein), agrees to be bound by such
restrictions on transfer.

         (i)      Except as provided in Section 2.13(c) hereof, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Note, whether pursuant to this Section 2.12,
Section 2.06, 2.08 or 3.06 or otherwise, shall also be a Global Note and bear
the Global Note Legend.

Section 2.13. Book Entry Provisions for Global Notes.

         (a)      Each Global Note initially shall (i) be registered in the name
of the Depositary for such Global Note or the nominee of such Depositary, (ii)
be deposited with, or on behalf of, the Depositary or with the Trustee as
custodian for such Depositary and (iii) bear the Private Placement Legend and
the Global Note Legend.

         (b)      Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary, or the Trustee as its custodian, or
under such Global Note, and the Depositary may be treated by the Company, the
Guarantor, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global

                                       24

<PAGE>

Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Guarantor, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.

         (c)      Notwithstanding any other provision in this Indenture, no
Global Note may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Note in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Note or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note or (B) has
ceased to be a clearing agency registered as such under the Exchange Act, and in
either case the Company fails to appoint a successor Depositary within 90 days,
(ii) the Company, at its option, executes and delivers to the Trustee a written
order stating that it elects to cause the issuance of the Securities in
certificated form and that all Global Notes shall be exchanged in whole for
Securities that are not Global Notes (in which case such exchange shall be
effected by the Trustee) or (iii) there shall have occurred and be continuing an
Event of Default or any event which after notice or lapse of time or both would
be an Event of Default with respect to such Global Note.

         (d)      If any Global Note is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Registrar, for exchange or cancellation as provided in this
Article 2. If any Global Note is to be exchanged for other Securities or
canceled in part, or if another Security is to be exchanged in whole or in part
for a beneficial interest in any Global Note, then either (i) such Global Note
shall be so surrendered for exchange or cancellation as provided in this Article
2 or (ii) the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or canceled, or equal to
the principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Registrar, whereupon the Trustee, in accordance with the
Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Note, the Trustee shall, subject to this
Section 2.13(d) and as otherwise provided in this Article 2, authenticate and
deliver any Securities issuable in exchange for such Global Note (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in Section 2.13(c), the Company shall promptly make available to the Trustee a
reasonable supply of Securities that are not in the form of Global Notes. The
Trustee shall be entitled to rely upon any order, direction or request of the
Depositary or its authorized representative which is given or made pursuant to
this Article 2 if such order, direction or request is given or made in
accordance with the Applicable Procedures.

         (e)      Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Note or any portion
thereof, whether pursuant to this Article 2 or otherwise, shall be authenticated
and delivered in the form of, and shall be, a Global Note, unless such Security
is registered in the name of a Person other than the Depositary for such Global
Note or a nominee thereof.

         (f)      The Depositary or its nominee, as registered owner of a Global
Note, shall be the Holder of such Global Note for all purposes under this
Indenture and the Securities, and owners of beneficial interests in a Global
Note shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Note will be shown
only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members.

                                       25

<PAGE>

         Section 2.14. Special Transfer and Exchange Provisions.

                  (a)      Certain Transfers and Exchanges. Transfers and
exchanges of Securities and beneficial interests in a Global Note of the kinds
specified in this Section 2.14 shall be made only in accordance with this
Section 2.14 and subject in each case to the Applicable Procedures.

                           (1)      144A Global Note to Regulation S Global
                  Note. If the owner of a beneficial interest in the 144A Global
                  Note wishes at any time to transfer such interest to a Person
                  who wishes to acquire the same in the form of a beneficial
                  interest in the Regulation S Global Note, such transfer may be
                  effected only in accordance with the provisions of this
                  paragraph and paragraph (8) below and subject to the
                  Applicable Procedures. Upon receipt by the Registrar of (a) an
                  order given by the Depositary or its authorized representative
                  directing that a beneficial interest in the Regulation S
                  Global Note in a specified principal amount be credited to a
                  specified Agent Member's account and that a beneficial
                  interest in the 144A Global Note in an equal principal amount
                  be debited from another specified Agent Member's account and
                  (b) a certificate in the form of Exhibit B hereto,
                  satisfactory to the Trustee and duly executed by the owner of
                  such beneficial interest in the 144A Global Note or his
                  attorney duly authorized in writing, then the Registrar,
                  subject to paragraph (8) below, shall reduce the principal
                  amount of the 144A Global Note and increase the principal
                  amount of the Regulation S Global Note by such specified
                  principal amount as provided in Section 2.13(d).

                           (2)      144A Global Note to IAI Global Note. If the
                  owner of a beneficial interest in the 144A Global Note wishes
                  at any time to transfer such interest to a Person who wishes
                  to acquire the same in the form of a beneficial interest in
                  the IAI Global Note, such transfer may be effected only in
                  accordance with the provisions of this paragraph and subject
                  to the Applicable Procedures. Upon receipt by the Registrar of
                  (a) an order given by the Depositary or its authorized
                  representative directing that a beneficial interest in the IAI
                  Global Note in a specified principal amount be credited to a
                  specified Agent Member's account and that a beneficial
                  interest in the 144A Global Note in an equal principal amount
                  be debited from another specified Agent Member's account and
                  (b) a certificate in the form of Exhibit D hereto,
                  satisfactory to the Trustee, then the Registrar shall reduce
                  the principal amount of the 144A Global Note and increase the
                  principal amount of the IAI Global Note by such specified
                  principal amount as provided in Section 2.13(d).

                           (3)      Regulation S Global Note to 144A Global
                  Note. If the owner of a beneficial interest in the Regulation
                  S Global Note wishes at any time to transfer such interest to
                  a Person who wishes to acquire the same in the form of a
                  beneficial interest in the 144A Global Note, such transfer may
                  be effected only in accordance with the provisions of this
                  paragraph and subject to the Applicable Procedures. Upon
                  receipt by the Registrar of (a) an order given by the
                  Depositary or its authorized representative directing that a
                  beneficial interest in the 144A Global Note in a specified
                  principal amount be credited to a specified Agent Member's
                  account and that a beneficial interest in the Regulation S
                  Global Note in an equal principal amount be debited from
                  another specified Agent Member's account and (b) if such
                  transfer is to occur during the Restricted Period, a
                  certificate in the form of Exhibit C hereto, satisfactory to
                  the Trustee and duly executed by the owner of such beneficial
                  interest in the Regulation S Global Note or his attorney duly
                  authorized in writing, then the Registrar shall reduce the
                  principal amount of the Regulation S Global Note and increase
                  the principal amount of the 144A Global Note by such specified
                  principal amount as provided in Section 2.13(d).

                                       26

<PAGE>

                           (4)      Regulation S Global Note to IAI Global Note.
                  If the owner of a beneficial interest in the Regulation S
                  Global Note wishes at any time to transfer such interest to a
                  Person who wishes to acquire the same in the form of a
                  beneficial interest in the IAI Global Note, such transfer may
                  be effected only in accordance with the provisions of this
                  paragraph and subject to the Applicable Procedures. Upon
                  receipt by the Registrar of (a) an order given by the
                  Depositary or its authorized representative directing that a
                  beneficial interest in the IAI Global Note in a specified
                  principal amount be credited to a specified Agent Member's
                  account and that a beneficial interest in the Regulation S
                  Global Note in an equal principal amount be debited from
                  another specified Agent Member's account and (b) if such
                  transfer is to occur during the Restricted Period, a
                  certificate in the form of Exhibit D hereto, satisfactory to
                  the Trustee, then the Registrar shall reduce the principal
                  amount of the Regulation S Global Note and increase the
                  principal amount of the IAI Global Note by such specified
                  principal amount as provided in Section 2.13(d).

                           (5)      IAI Global Note to Regulation S Global Note.
                  If the owner of a beneficial interest in the IAI Global Note
                  wishes at any time to transfer such interest to a Person who
                  wishes to acquire the same in the form of a beneficial
                  interest in the Regulation S Global Note, such transfer may be
                  effected only in accordance with the provisions of this
                  paragraph and paragraph (8) below and subject to the
                  Applicable Procedures. Upon receipt by the Registrar of (a) an
                  order given by the Depositary or its authorized representative
                  directing that a beneficial interest in the IAI Global Note in
                  a specified principal amount be credited to a specified Agent
                  Member's account and that a beneficial interest in the IAI
                  Global Note in an equal principal amount be debited from
                  another specified Agent Member's account and (b) a certificate
                  in the form of Exhibit B hereto, satisfactory to the Trustee
                  and duly executed by the owner of such beneficial interest in
                  the IAI Global Note or his attorney duly authorized in
                  writing, then the Registrar subject to paragraph (8) below,
                  shall reduce the principal amount of the IAI Global Note and
                  increase the principal amount of the Regulation S Global Note
                  by such specified principal amount as provided in Section
                  2.13(d).

                           (6)      IAI Global Note to 144A Global Note. If the\
                  owner of a beneficial interest in the IAI Global Note wishes
                  at any time to transfer such interest to a Person who wishes
                  to acquire the same in the form of a beneficial interest in
                  the 144A Global Note, such transfer may be effected only in
                  accordance with the provisions of this paragraph and subject
                  to the Applicable Procedures. Upon receipt by the Registrar of
                  (a) an order given by the Depositary or its authorized
                  representative directing that a beneficial interest in the
                  144A Global Note in a specified principal amount be credited
                  to a specified Agent Member's account and that a beneficial
                  interest in the IAI Global Note in an equal principal amount
                  be debited from another specified Agent Member's account and
                  (b) a certificate in the form of Exhibit C hereto,
                  satisfactory to the Trustee and duly executed by the owner of
                  such beneficial interest in the IAI Global Note or his
                  attorney duly authorized in writing, then the Registrar shall
                  reduce the principal amount of the IAI Global Note and
                  increase the principal amount of the 144A Global Note by such
                  specified principal amount as provided in Section 2.13(d).

                           (7)      Exchanges between Global Note and Non-Global
                  Note. A beneficial interest in a Global Note may be exchanged
                  for a Security that is not a Global Note as provided in
                  Section 2.13(c), provided that, if such interest is a
                  beneficial interest in the 144A Global Note, or if such
                  interest is a beneficial interest in the IAI Global Note, or
                  if such interest is a beneficial interest in the Regulation S
                  Global Note and such exchange is

                                       27

<PAGE>

                  to occur during the Restricted Period, then such interest
                  shall bear the Private Placement Legend (subject in each case
                  to Section 2.13(c)).

                           (8)      Regulation S Global Note to be Held Through
                  Euroclear or Clearstream during Restricted Period. The Company
                  shall use its commercially reasonable efforts to cause the
                  Depositary to ensure that, until the expiration of the
                  Restricted Period, beneficial interests in the Regulation S
                  Global Note may be held only in or through accounts maintained
                  at the Depositary by Euroclear or Clearstream (or by Agent
                  Members acting for the account thereof), and no person shall
                  be entitled to effect any transfer or exchange that would
                  result in any such interest being held otherwise than in or
                  through such an account; provided that this paragraph (8)
                  shall not prohibit any transfer or exchange of such an
                  interest in accordance with paragraph (7) above.

                           (9)      Exchange Offer. Upon the occurrence of the
                  Exchange Offer in accordance with the Registration Rights
                  Agreement, the Company shall issue and, upon receipt of an
                  Authentication Order in accordance with Section 2.02, the
                  Trustee shall authenticate one or more Unrestricted Global
                  Notes in an aggregate principal amount equal to the principal
                  amount of the beneficial interests in the Restricted Global
                  Notes tendered for acceptance by Persons that certify in the
                  applicable Letters of Transmittal that (i) they are not
                  Broker-Dealers, (ii) they are not participating in a
                  distribution of the Exchange Notes and (iii) they are not
                  affiliates (as defined in Rule 144) of the Company, and
                  accepted for exchange in the Exchange Offer. Any Securities
                  that remain outstanding after the consummation of the Exchange
                  Offer, and Exchange Notes issued in connection with the
                  Exchange Offer, shall be treated as a single class of
                  securities under this Indenture.

                  (b)      Private Placement Legends. 144A Global Notes and
         their Successor Securities, IAI Global Notes and their Successor
         Securities and Regulation S Global Notes and their Successor Securities
         shall bear a Private Placement Legend, subject to the following:

                           (1)      subject to the following clauses of this
                  Section 2.14(b), a Security or any portion thereof which is
                  exchanged, upon transfer or otherwise, for a Global Note or
                  any portion thereof shall bear the Private Placement Legend
                  borne by such Global Note while represented thereby;

                           (2)      subject to the following clauses of this
                  Section 2.14(b), a new Security which is not a Global Note and
                  is issued in exchange for another Security (including a Global
                  Note) or any portion thereof, upon transfer or otherwise,
                  shall bear the Private Placement Legend borne by such other
                  Security;

                           (3)      all Securities sold or otherwise disposed of
                  pursuant to an effective registration statement under the
                  Securities Act, together with their respective Successor
                  Securities, shall not bear a Private Placement Legend;

                           (4)      at any time after the Securities may be
                  freely transferred without registration under the Securities
                  Act or without being subject to transfer restrictions pursuant
                  to the Securities Act, a new Security which does not bear a
                  Private Placement Legend may be issued in exchange for or in
                  lieu of a Security (other than a Global Note) or any portion
                  thereof which bears such a legend if the Trustee has received
                  a certificate substantially in the form of Exhibit E hereto,
                  satisfactory to the Trustee and duly executed by the Holder of
                  such legended Security or his attorney duly authorized in

                                       28

<PAGE>

                  writing, and after such date and receipt of such certificate,
                  the Trustee shall authenticate and deliver such a new Security
                  in exchange for or in lieu of such other Security as provided
                  in this Article 2;

                           (5)      a new Security which does not bear a Private
                  Placement Legend may be issued in exchange for or in lieu of a
                  Security (other than a Global Note) or any portion thereof
                  which bears such a legend if, in the Company's judgment,
                  placing such a legend upon such new Security is not necessary
                  to ensure compliance with the registration requirements of the
                  Securities Act, and the Trustee, at the direction of the
                  Company, shall authenticate and deliver such a new Security as
                  provided in this Article 2; and

                           (6)      notwithstanding the foregoing provisions of
                  this Section 2.14(b), a Successor Security of a Security that
                  does not bear a particular form of Private Placement Legend
                  shall not bear such form of legend unless the Company has
                  reasonable cause to believe that such Successor Security is a
                  "restricted security" within the meaning of Rule 144, in which
                  case the Trustee, at the direction of the Company, shall
                  authenticate and deliver a new Security bearing a Private
                  Placement Legend in exchange for such Successor Security as
                  provided in this Article 2.

                  By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.

                  The Trustee and the Registrar shall retain copies of all
letters, notices and other written communications received pursuant to Section
2.13 or this Section 2.14. 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.

                                   ARTICLE 3

                                   REDEMPTION

Section 3.01. Notices to Trustee.

         If the Company elects to redeem Securities pursuant to paragraph 5 of
the Securities, it shall notify the Trustee in writing of the redemption date
and the principal amount of Securities to be redeemed.

         The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein.

Section 3.02. Selection of Securities to Be Redeemed.

         If fewer than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the

                                       29

<PAGE>

selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.

Section 3.03. Notice of Redemption.

         At least 30 days but not more than 60 days before a date for redemption
of Securities, the Company shall mail a notice of redemption by first-class mail
to each Holder of Securities to be redeemed.

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

                  (1)      the redemption date;

                  (2)      the redemption price;

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

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

                  (5)      if fewer than all the outstanding Securities are to
         be redeemed, the identification and principal amounts of the particular
         Securities to be redeemed;

                  (6)      that, unless the Company defaults in making such
         redemption payment or the Paying Agent is prohibited from making such
         payment pursuant to the terms of this Indenture, interest on Securities
         (or portion thereof) called for redemption ceases to accrue on and
         after the redemption date; and

                  (7)      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 Securities.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.

Section 3.04. Effect of Notice of Redemption.

         Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice, plus accrued interest to the
redemption date. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.

Section 3.05. Deposit of Redemption Price.

         On or prior to the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money in immediately

                                       30

<PAGE>

available funds, sufficient to pay the redemption price of and accrued interest
on all Securities to be redeemed on that date other than Securities or portions
of Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation.

Section 3.06. Securities Redeemed in Part.

         Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.

                                   ARTICLE 4

                                   COVENANTS

Section 4.01. Payment of Securities.

         The Company shall promptly pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities and in this
Indenture. Principal and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Securityholders on that date pursuant to the terms of this
Indenture.

         The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

Section 4.02. SEC Reports.

         The Company or, as provided in the proviso below, the Guarantor, shall
file with the Trustee and provide Securityholders, within 15 days after it files
them with the SEC, copies of its annual report and the information, documents
and other reports which the Company or the Guarantor, as the case may be, is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. Notwithstanding that the Company may not be required to remain subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company or the Guarantor, as provided in the proviso below, shall continue to
file with the SEC and provide the Trustee and Securityholders with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be so
filed and provided at the times specified for the filing of such information,
documents and reports under such Sections; provided, however, that so long as
the Guarantor is guaranteeing the Securities pursuant to this Indenture, the
reports, information and other documents required to be filed and provided as
described hereunder may, at the Company's option (with written notice to the
Trustee), be filed by and be those of the Guarantor rather than the Company;
provided further, however, that in the event the Guarantor conducts any business
or holds any significant assets other than the Capital Stock of the Company at
the time of filing and providing any such report, information or other document
containing financial statements of the Guarantor, the Guarantor shall include in
such report, information or other document summarized financial information (as
defined in Rule 1-02(bb) of Regulation S-X) with respect to the Company. The
Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information

                                       31

<PAGE>

contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).

Section 4.03. Limitation on Indebtedness.

         (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, incur, directly or indirectly, any Indebtedness unless, on the
date of such incurrence, the Consolidated Coverage Ratio exceeds 2.0 to 1.

         (b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may incur any or all of the following Indebtedness:

                  (1) Indebtedness incurred by the Company pursuant to the
         Credit Facility or any other revolving credit arrangement; provided,
         however, that, after giving effect to any such incurrence, the
         aggregate principal amount of such Indebtedness then outstanding does
         not exceed the greater of $175,000,000 (less the then outstanding
         principal amount of Indebtedness arising under any Receivables Program
         of the Company or any Restricted Subsidiary, other than Indebtedness
         described in clause (2) below) and the sum of (i) 50% of the book value
         of the inventory of the Company and its Restricted Subsidiaries and
         (ii) 85% of the book value of the accounts receivable of the Company
         and its Restricted Subsidiaries (other than accounts receivable subject
         to any Receivables Program of the Company or any Restricted
         Subsidiary), in each case determined in accordance with GAAP;

                  (2) Indebtedness of the Company owed to and held by a
         Restricted Subsidiary and Indebtedness of a Restricted Subsidiary owed
         to and held by the Company or a Restricted Subsidiary; provided,
         however, that any subsequent issuance or transfer of any Capital Stock
         which results in any such Restricted Subsidiary ceasing to be a
         Restricted Subsidiary or any subsequent transfer of such Indebtedness
         (other than to the Company or a Restricted Subsidiary) shall be deemed,
         in each case, to constitute the incurrence of such Indebtedness by the
         issuer thereof;

                  (3) the Securities;

                  (4) Indebtedness outstanding on the Issue Date (other than
         Indebtedness described in clause (1), (2), (3) or (10) of this Section
         4.03(b));

                  (5) Refinancing Indebtedness in respect of Indebtedness
         incurred pursuant to Section 4.03(a) or pursuant to clause (3) or (4)
         of this Section 4.03(b) or this clause (5);

                  (6) Hedging Obligations consisting of Interest Rate or
         Currency Protection Agreements directly related to Indebtedness
         permitted to be incurred hereunder;

                  (7) Indebtedness incurred by a Receivables Subsidiary, other
         than Indebtedness described in clause (2) above, in an amount not
         exceeding 95% of the aggregate unpaid balance of the Receivables and
         Related Assets of such Receivables Subsidiary at the time of such
         incurrence pursuant to a Receivables Program;

                  (8) Indebtedness of the Company and the Company's Restricted
         Subsidiaries to the extent the net proceeds thereof are concurrently
         deposited to defease all outstanding notes pursuant to Article 8;

                                       32

<PAGE>

                  (9) Indebtedness represented by guarantees by the Company or
         the Company's Restricted Subsidiaries of Indebtedness otherwise
         permitted to be incurred under the Indenture;

                  (10) until such time as the Company shall have effected a
         satisfaction and discharge of the Old Indenture under which the
         Existing Notes were issued in connection with the redemption of such
         Existing Notes in accordance with the notice of redemption relating to
         the Existing Notes mailed on the Issue Date, the Existing Notes; and

                  (11) Indebtedness incurred by the Company in an aggregate
         principal amount which, together with all other Indebtedness of the
         Company outstanding on the date of such incurrence incurred pursuant to
         this clause (11), does not exceed $70,000,000.

                  Notwithstanding the foregoing, the Company shall not incur any
Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations.

         (c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness incurred under the Credit Facility on
or prior to the date of the Indenture shall be treated as incurred pursuant to
clause (1) of Section 4.03(b) and (2) Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of
determining compliance with this Section 4.03, (i) in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described herein, the Company, in its sole discretion, will classify (and may
reclassify) such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of the above clauses and (ii) an item of
Indebtedness may be divided and classified (and reclassified) in more than one
of the types of Indebtedness described herein.

         (d) Notwithstanding Section 4.03(a) and Section 4.03(b), the Company
shall not incur (i) any Indebtedness if such Indebtedness is subordinate or
junior in ranking in any respect to any Senior Indebtedness, unless such
Indebtedness is Senior Subordinated Indebtedness or is expressly subordinated in
right of payment to Senior Subordinated Indebtedness or (ii) any Indebtedness
that is not Senior Indebtedness and is secured by a Lien unless
contemporaneously therewith effective provision is made to secure the Securities
equally and ratably with respect to such Lien for so long as such Indebtedness
is secured by a Lien.

Section 4.04. Limitation on Restricted Payments.

         (a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:

                  (1) a Default shall have occurred and be continuing (or would
         result therefrom);

                  (2) the Company or such Restricted Subsidiary is not able to
         incur an additional $1.00 of Indebtedness under Section 4.03(a); or

                  (3) the aggregate amount of such Restricted Payment and all
         other Restricted Payments since the Issue Date would exceed the sum of:

                                       33

<PAGE>

                           (A)      50% of the Consolidated Net Income accrued
                  on a cumulative basis during the period (treated as one
                  accounting period) beginning on the first day of the fiscal
                  quarter in which the Issue Date falls to the end of the most
                  recent fiscal quarter ending at least 45 days prior to the
                  date of such Restricted Payment (or, in case such Consolidated
                  Net Income shall be a deficit, minus 100% of such deficit);

                           (B)      the aggregate Net Cash Proceeds received by
                  the Company from the issuance or sale of, or as a capital
                  contribution in respect of, its or the Guarantor's Capital
                  Stock (other than Disqualified Stock) subsequent to the Issue
                  Date (other than an issuance or sale to a Subsidiary of the
                  Company and other than an issuance or sale to an employee
                  stock ownership plan or to a trust established by the Company,
                  the Guarantor or any of the Company's Subsidiaries for the
                  benefit of their employees);

                           (C)      the aggregate Net Cash Proceeds received by
                  the Company from the issuance or sale of, or as a capital
                  contribution in respect of, the Company or the Guarantors'
                  Capital Stock (other than Disqualified Stock) subsequent to
                  the Issue Date to any employee stock ownership plan or to a
                  trust established by the Guarantor, the Company or any of the
                  Company's Subsidiaries for the benefit of their employees to
                  the extent that any such Net Cash Proceeds are equal to an
                  increase in the Consolidated Net Worth resulting from
                  principal repayments made by such employee stock ownership
                  plan or trust with respect to Indebtedness incurred by it to
                  finance the purchase of such Capital Stock;

                           (D)      the amount by which Indebtedness of the
                  Company is reduced on the Company's balance sheet upon the
                  conversion or exchange (other than by a Subsidiary of the
                  Company) subsequent to the Issue Date of any Indebtedness of
                  the Company convertible or exchangeable for Capital Stock
                  (other than Disqualified Stock) of the Company (less the
                  amount of any cash, or the fair value of any other property,
                  distributed by the Company upon such conversion or exchange);

                           (E)      an amount equal to the sum of (i) the net
                  reduction in Investments in any Person resulting from
                  dividends, repayments of loans or advances or other transfers
                  of assets, in each case to the Company or any Restricted
                  Subsidiary from such Person, and (ii) the portion
                  (proportionate to the Company's Equity Interest in such
                  Subsidiary) of the fair market value of the net assets of an
                  Unrestricted Subsidiary at the time such Unrestricted
                  Subsidiary is designated a Restricted Subsidiary; provided,
                  however, that the foregoing sum shall not exceed, in the case
                  of any Unrestricted Subsidiary, the amount of Investments
                  previously made (and treated as a Restricted Payment) by the
                  Company or any Restricted Subsidiary in such Unrestricted
                  Subsidiary; and

                           (F)      $20,000,000.

         (b) The provisions of Section 4.04(a) shall not prohibit:

                  (i)      any purchase or redemption of Capital Stock or
         Subordinated Obligations of the Company made by exchange for, or out of
         the proceeds of the substantially concurrent sale of or capital
         contribution in respect of, Capital Stock of the Company (other than
         Disqualified Stock and other than Capital Stock issued or sold to a
         Subsidiary of the Company or an employee stock ownership plan or to a
         trust established by the Guarantor, the Company or any of the Company's
         Subsidiaries for the benefit of their employees); provided, however,
         that (A) such purchase or redemption shall be excluded from the
         calculation of the amount of Restricted Payments and (B)

                                       34

<PAGE>

         the Net Cash Proceeds from such sale or capital contribution shall be
         excluded from the calculation of amounts under clause (3)(B) of Section
         4.04(a);

                  (ii)     any purchase, repurchase, redemption, defeasance or
         other acquisition or retirement for value of Subordinated Obligations
         made by exchange for, or out of the proceeds of the substantially
         concurrent sale of, Indebtedness of the Company which is permitted to
         be incurred pursuant to Section 4.03; provided, however, that such
         purchase, repurchase, redemption, defeasance or other acquisition or
         retirement for value shall be excluded from the calculation of the
         amount of Restricted Payments;

                  (iii)    dividends paid within 60 days after the date of
         declaration thereof if at such date of declaration such dividend would
         have complied with Section 4.04(a); provided, however, that at the time
         of payment of such dividend, no other Default shall have occurred and
         be continuing (or result therefrom); provided further, however, that
         such dividend shall be included in the calculation of the amount of
         Restricted Payments;

                  (iv)     the repurchase of shares of, or options to purchase
         shares of, Capital Stock (other than Preferred Stock) of the Guarantor,
         the Company or any of its Subsidiaries from employees, former
         employees, directors or former directors of the Guarantor, the Company
         or any of its Subsidiaries (or permitted transferees of such employees,
         former employees, directors or former directors or their respective
         estates), pursuant to the terms of the agreements (including employment
         agreements) or plans (or amendments thereto) approved by the Board of
         Directors of the Guarantor or the Company, as the case may be, under
         which such individuals purchase or sell or are granted the option or
         right to purchase or sell such Capital Stock (other than Preferred
         Stock); provided, however, that the aggregate amount of such
         repurchases shall not exceed $2,000,000 in any calendar year (excluding
         any such repurchases funded with the proceeds of any life insurance
         policy or policies maintained by the Company or under which the Company
         is the beneficiary) unless the aggregate amount of such repurchases in
         any prior calendar year was less than $2,000,000 in which case (x) the
         difference, up to an aggregate amount of $2,000,000, may be carried
         forward and (y) the aggregate amount of such repurchases in any
         subsequent calendar year may not exceed $2,000,000 plus the then
         remaining balance of such carry forward amount (after giving effect to
         all prior repurchases utilizing such carry forward amount); provided
         further, however, that such repurchases shall be excluded from the
         calculation of the amount of Restricted Payments;

                  (v)      dividends paid by the Company to the Guarantor to be
         used by the Guarantor to pay foreign, Federal, state and local taxes
         payable by the Guarantor and directly attributable to (or which arise
         as a result of) the operations of the Company and its Restricted
         Subsidiaries; provided, however, that (A) the amount of such dividends
         shall not exceed the amount that the Company and its Restricted
         Subsidiaries would be required to pay in respect of such foreign,
         Federal, state and local taxes were the Company to pay such taxes as a
         stand-alone taxpayer and (B) such dividends pursuant to this clause (v)
         are used by the Guarantor for such purposes within 20 days of the
         receipt of such dividends by the Guarantor; provided further, however,
         that such dividends shall be excluded from the calculation of the
         amount of Restricted Payments;

                  (vi)     payments or distributions to shareholders pursuant to
         appraisal rights in respect of up to 10% of the Capital Stock of the
         Guarantor or the Company required by law in connection with a
         consolidation, merger or transfer of assets that complies with Section
         5.01; provided, however, that any such payments or distributions shall
         be included in the calculation of the amount of Restricted Payments;

                                       35

<PAGE>

                  (vii)    so long as no Default has occurred and is continuing
         or would result therefrom, any purchase of any fractional share of
         Capital Stock of the Guarantor or the Company resulting from (A) any
         dividend or other distribution on outstanding shares of Capital Stock
         that is payable in shares of such Capital Stock (including any stock
         split or subdivision of the outstanding Capital Stock of the Guarantor
         or the Company), (B) any combination of all of the outstanding shares
         of the outstanding Capital Stock of the Guarantor or the Company, (C)
         any reorganization or consolidation of the Guarantor or the Company in
         any merger of the Guarantor or the Company with or into any other
         Person or (D) the conversion of any securities of the Guarantor or the
         Company into shares of Capital Stock of the Guarantor or the Company;
         provided, however, that such purchases shall be included in the
         calculation of the amount of Restricted Payments; or

                  (viii)   Investments in an aggregate amount not to exceed
         $20,000,000 in any Person engaged primarily in a Related Business on
         the date of any such Investment; provided, however, that such
         Investments shall be included in the calculation of the amount of
         Restricted Payments.

Section 4.05. Limitation on Restrictions on Distributions from Restricted
              Subsidiaries.

         The Company shall not, and shall not permit any Restricted Subsidiary
to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to
the Company, (ii) make any loans or advances to the Company or (iii) transfer
any of its property or assets to the Company, except:

                  (1) any encumbrance or restriction pursuant to an agreement in
         effect at or entered into on the Issue Date, including, without
         limitation, under the Credit Facility;

                  (2) any encumbrance or restriction with respect to a
         Receivables Subsidiary pursuant to a Receivables Program of such
         Receivables Subsidiary; provided that such encumbrances and
         restrictions, at the time the Company enters into such Receivables
         Program, are customarily required by institutional sponsors or
         arrangers in similar types of documents relating to the purchase of
         similar receivables in connection with the financing thereof;

                  (3) any encumbrance or restriction with respect to a
         Restricted Subsidiary pursuant to an agreement relating to any
         Indebtedness incurred by such Restricted Subsidiary on or prior to the
         date on which such Restricted Subsidiary was acquired by or merged into
         the Guarantor or the Company (other than Indebtedness incurred as
         consideration in, or to provide all or any portion of the funds or
         credit support utilized to consummate, the transaction or series of
         related transactions pursuant to which such Restricted Subsidiary
         became a Restricted Subsidiary or was acquired by or merged into the
         Company) and outstanding on such date;

                  (4) any encumbrance or restriction pursuant to an agreement
         effecting a Refinancing of Indebtedness incurred pursuant to an
         agreement referred to in clause (1), (2) or (3) of this Section 4.05 or
         this clause (4) or contained in any amendment to an agreement referred
         to in clause (1), (2) or (3) of this Section 4.05 or this clause (4);
         provided, however, that the encumbrances and restrictions with respect
         to such Restricted Subsidiary contained in any such refinancing
         agreement or amendment are no less favorable in any material respect to
         the Securityholders than encumbrances and restrictions with respect to
         such Restricted Subsidiary contained in such agreements;

                                       36

<PAGE>

                  (5) any such encumbrance or restriction consisting of
         customary nonassignment provisions in leases governing leasehold
         interests to the extent such provisions restrict the transfer of the
         lease or the property leased thereunder;

                  (6) in the case of clause (iii) above, restrictions contained
         in security agreements or mortgages securing Indebtedness of a
         Restricted Subsidiary to the extent such restrictions restrict the
         transfer of the property subject to such security agreements or
         mortgages; and

                  (7) any restriction with respect to a Restricted Subsidiary
         imposed pursuant to an agreement entered into for the sale or
         disposition of all or substantially all the Capital Stock or assets of
         such Restricted Subsidiary or any division or business unit thereof
         pending the closing of such sale or disposition.

Section 4.06. Limitation on Sales of Assets and Subsidiary Stock.

         (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless
the Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the Fair Market Value (including as to
the value of all non-cash consideration) of the assets subject to such Asset
Disposition and at least 75% of the consideration received by the Company or
such Restricted Subsidiaries is in the form of cash and cash equivalents. The
Company or such Restricted Subsidiary may apply the Net Available Cash from any
such Asset Disposition as follows:

         (1)      first, to the extent the Company elects (or is required by the
                  terms of any Senior Indebtedness), to prepay, repay, redeem or
                  purchase Senior Indebtedness or Indebtedness (other than any
                  Disqualified Stock) of a Restricted Subsidiary (in each case
                  other than Indebtedness owed to the Company or an Affiliate of
                  the Company) within one year from the later of the date of
                  such Asset Disposition or the receipt of such Net Available
                  Cash; or

         (2)      second, to the extent of the balance of such Net Available
                  Cash after application in accordance with clause (1), to the
                  extent the Company elects, to acquire, repair or refurbish
                  Additional Assets within one year from the later of the date
                  of such Asset Disposition or the receipt of such Net Available
                  Cash;

provided, however that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (1) above (other than such repayment or
prepayment of Indebtedness incurred pursuant to clause (1) of Section 4.03(b)),
the Company or such Restricted Subsidiary shall retire such Indebtedness and
shall cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Permitted Investments. Any amount of Net
Available Cash which is not used as set forth above in this Section 4.06(a)
constitutes "Excess Proceeds."

         For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents: (x) the assumption of Indebtedness of the Company or
any Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (y) securities received by the Company or any Restricted
Subsidiary from the transferee that are converted by the Company or such
Restricted Subsidiary into cash within 90 days.

                                       37

<PAGE>

         (b) In the event that the aggregate amount of the Excess Proceeds
exceeds $15,000,000, the Company shall, within 30 business days, make an offer
(the "Offer") to purchase from all Holders of Securities, on a pro rata basis,
in accordance with the procedures set forth in Section 4.06(c), the maximum
principal amount (expressed as integral multiples of $1,000) of Securities (and
other Senior Subordinated Indebtedness) that may be purchased with the Excess
Proceeds, at a purchase price of 100% of their principal amount (without
premium) plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in accordance with the
procedures (including prorationing in the event of oversubscription) set forth
in Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Subordinated Indebtedness) tendered pursuant to the Offer is less than
the Excess Proceeds, the Company may use the remaining Excess Proceeds for
general corporate purposes not otherwise prohibited under this Indenture. If the
aggregate principal amount of Securities validly tendered and not withdrawn by
Holders thereof exceeds the Excess Proceeds, the Company will purchase
Securities on a pro rata basis. Notwithstanding the foregoing, if the Company
must commence and Offer at any time when the terms of any other Senior
Subordinated Indebtedness provide that a similar offer must be made with respect
to such other Senior Subordinated Indebtedness, the Offer for the Securities
shall be made concurrently with such other offer and the Company will purchase
Securities and such other securities on a pro rata basis in proportion to the
aggregate principal amount of securities of each issue which the holders thereof
elect to have purchased. Upon completion of such Offer, the amount of Excess
Proceeds shall be reset to zero (regardless of the number of Securities actually
purchased in the Offer). Notwithstanding anything to the contrary herein, the
Company shall not be required to make an Offer to purchase Securities (and other
Senior Subordinated Indebtedness) pursuant to this Section 4.06 if the Net
Available Cash available therefor is less than $15,000,000 (which lesser amount
shall be carried forward for purposes of determining whether such an Offer is
required with respect to the Net Available Cash from any subsequent Asset
Disposition).

         (c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company (or, if applicable,
the Guarantor), the most recent subsequently filed Quarterly Report on Form 10-Q
and any Current Report on Form 8-K of the Company (or, if applicable, the
Guarantor) filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (ii) a description of material developments in
the Company's business subsequent to the date of the latest of such Reports, and
(iii) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Securities pursuant to the Offer,
together with the information contained in clause (3).

              (2) Not later than the date upon which written notice of an Offer
is delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.06(a). On such date, the
Company shall also irrevocably deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold in
trust) in Temporary Cash Investments, maturing on the last day prior to the
Purchase Date or on the Purchase Date

                                       38

<PAGE>

if funds are immediately available by open of business, an amount equal to the
Offer Amount to be held for payment in accordance with the provisions of this
Section. Upon the expiration of the period for which the Offer remains open (the
"Offer Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the purchase price. In
the event that the aggregate purchase price of the Securities delivered by the
Company to the Trustee is less than the Offer Amount, the Trustee shall deliver
the excess to the Company immediately after the expiration of the Offer Period
for application in accordance with this Section.

              (3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities surrendered by
Holders exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.

              (4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.

         (d) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act and any other applicable securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.

Section 4.07. Limitation on Affiliate Transactions.

         (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with any Affiliate of the Company
(an "Affiliate Transaction") unless the terms thereof (i) are no less favorable
to the Company or such Restricted Subsidiary than those that could be obtained
at the time of such transaction in arm's-length dealings with a Person who is
not such an Affiliate, (ii) if such Affiliate Transaction involves an amount in
excess of $2,500,000 (1) are set forth in writing and (2) have been approved by
a majority of the disinterested members of the Board of Directors and (iii) if
such Affiliate Transaction involves an amount in excess of $10,000,000, have
been determined by a nationally recognized investment banking or accounting firm
having experience in such matters to be fair, from a financial point of view, to
the Company and its Restricted Subsidiaries.

                                       39

<PAGE>

         (b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans or similar employee benefit plans or
arrangements approved by the Board of Directors, (iii) the grant of stock
options or similar rights to employees and directors of the Guarantor or the
Company's employees and directors pursuant to plans approved by the Board of
Directors, (iv) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company or its Restricted
Subsidiaries, but in any event not to exceed $2,000,000 in the aggregate
outstanding at any one time, (v) the payment of reasonable fees to directors of
the Guarantor or the Company and its Restricted Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries, (vi) any Affiliate
Transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, (vii) any Receivables Program of the Company or a
Restricted Subsidiary, or (viii) any agreement or arrangement in effect at or
entered into on the Issue Date, or any amendment, renewal, supplement,
modification or extension of any such agreement or arrangement; provided that
such amendment, renewal, supplement, modification or extension is on terms no
less favorable in any material respect to Holders of the Securities than the
terms of such agreement or arrangement prior to such amendment, renewal,
supplement, modification or extension.

Section 4.08. Limitation on the Sale or Issuance of Capital Stock of  Restricted
              Subsidiaries.

         The Company shall not sell or otherwise dispose of any shares of
Capital Stock of a Restricted Subsidiary, and shall not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any
shares of its Capital Stock except (i) to the Company or a Restricted Subsidiary
or (ii) if, immediately after giving effect to such issuance, sale or other
disposition, the Company and its Restricted Subsidiaries would own less than 20%
of the Voting Stock of such Restricted Subsidiary and have no greater economic
interest in such Restricted Subsidiary.

Section 4.09. Change of Control.

         (a) Upon a Change of Control, each Holder shall have the right to
require that the Company repurchase such Holder's Securities at a purchase price
in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.09(b). In the event that at the time of such Change of Control the terms of
the Bank Indebtedness restrict or prohibit the repurchase of Securities pursuant
to this Section, then prior to the mailing of the notice to Holders provided for
in Section 4.09(b) below but in any event within 30 days following any Change of
Control, the Company shall (i) repay in full all such Bank Indebtedness or offer
to repay in full all such Bank Indebtedness and repay such Bank Indebtedness of
each lender who has accepted such offer or (ii) obtain the requisite consent
under the agreements governing such Bank Indebtedness to permit the repurchase
of the Securities as provided for in Section 4.09(b).

         (b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:

                  (1) that a Change of Control has occurred and that such Holder
         has the right to require the Company to purchase such Holder's
         Securities at a purchase price in cash equal to 101% of the principal
         amount thereof plus accrued and unpaid interest, if any, to the date of
         purchase (subject to the right of Holders of record on the relevant
         record date to receive interest on the relevant interest payment date);

                                       40

<PAGE>

                  (2) the circumstances and relevant facts regarding such Change
         of Control (including information with respect to pro forma historical
         income, cash flow and capitalization, after giving effect to such
         Change of Control);

                  (3) the repurchase date (which shall be no earlier than 30
         days nor later than 60 days from the date such notice is mailed); and

                  (4) the instructions determined by the Company, consistent
         with this Section, that a Holder must follow in order to have its
         Securities purchased.

         (c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.

         (d) On the purchase date, all Securities purchased by the Company under
this Section shall be delivered by the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.

         (e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws and resolutions in connection with a change of control offer. To the extent
that the provisions of any securities laws or regulations conflict with
provisions of this covenant, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this clause by virtue hereof.

Section 4.10. Compliance Certificate.

         The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the Company
is taking or proposes to take with respect thereto. The Company also shall
comply with TIA Section 314(a)(4).

Section 4.11. Further Instruments and Acts.

         Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

                                       41

<PAGE>

                                   ARTICLE 5

                                SUCCESSOR COMPANY

Section 5.01. When Company May Merge or Transfer Assets.

         (a) The Company shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all its assets to, any Person, unless:

                  (i)      the Company shall be the resulting, surviving or
         transferee Person or the resulting, surviving or transferee Person (in
         either case, the "Successor Company") shall be a Person organized and
         existing under the laws of the United States of America, any State
         thereof or the District of Columbia and the Successor Company (if not
         the Company) shall expressly assume, by an indenture supplemental
         hereto, executed and delivered to the Trustee, in form acceptable to
         the Trustee, all the obligations of the Company under the Securities
         and this Indenture;

                  (ii)     immediately after giving effect to such transaction
         (and treating any Indebtedness which becomes an obligation of the
         Successor Company or any Restricted Subsidiary as a result of such
         transaction as having been incurred by the Successor Company or such
         Restricted Subsidiary at the time of such transaction), no Default
         shall have occurred and be continuing;

                  (iii)    immediately after giving effect to such transaction,
         the Successor Company would be able to incur an additional $1.00 of
         Indebtedness pursuant to Section 4.03(a); and

                  (iv)     the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger or transfer and such supplemental indenture (if
         any) comply with this Indenture.

         The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Securities.

         Notwithstanding the foregoing clauses (iii), any Restricted Subsidiary
may consolidate with, merge into or transfer all or part of its properties and
assets to the Company.

         (b) The Guarantor shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or series of transactions, all or
substantially all of its assets to any Person unless: (i) the resulting,
surviving or transferee Person (if not the Guarantor) shall be a Person
organized and existing under the laws of the jurisdiction under which the
Guarantor was organized or under the laws of the United States of America, or
any State thereof or the District of Columbia, and such Person shall expressly
assume, by an amendment to this Indenture, in a form acceptable to the Trustee,
all the obligations of the Guarantor, if any, under the Guaranty; (ii)
immediately after giving effect to such transaction or transactions on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as
having been issued by such Person at the time of such transaction), no Default
shall have occurred and be continuing.

                                       42

<PAGE>

                                   ARTICLE 6

                              DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

         An "Event of Default" occurs if:

                  (1) the Company defaults in any payment of interest on any
         Security when the same becomes due and payable, and such default
         continues for a period of 30 days;

                  (2) the Company (i) defaults in the payment of the principal
         of any Security when the same becomes due and payable at its Stated
         Maturity, upon optional redemption, upon required repurchase, upon
         declaration or otherwise, whether or not such payment shall be
         prohibited by Article 10 or (ii) fails to redeem or purchase Securities
         when required pursuant to this Indenture or the Securities, whether or
         not such redemption or purchase shall be prohibited by Article 10;

                  (3) the Company or the Guarantor fails to comply with Section
         5.01;

                  (4) the Company fails to comply with Section 4.02, 4.03, 4.04,
         4.05, 4.06, 4.07, 4.08 or 4.09 (other than a failure to purchase
         Securities when required under Section 4.06 or 4.09) and such failure
         continues for 30 days after the notice specified below;

                  (5) the Company or the Guarantor fails to comply with any of
         its agreements in the Securities or this Indenture (other than those
         referred to in clause (1), (2), (3) or (4) above) and such failure
         continues for 60 days after the notice specified below;

                  (6) Indebtedness of the Company, the Guarantor or any
         Significant Subsidiary is not paid within any applicable grace period
         after final maturity or is accelerated by the holders thereof because
         of a default and the total amount of such Indebtedness unpaid or
         accelerated exceeds $10,000,000 or its foreign currency equivalent;

                  (7) the Company, the Guarantor or any Significant Subsidiary
         pursuant to or within the meaning of any Bankruptcy Law:

                           (A)      commences a voluntary case;

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

                           (C)      consents to the appointment of a Custodian
                  of it or for any substantial part of its property; or

                           (D)      makes a general assignment for the benefit
                  of its creditors; or

                           (E)      takes any comparable action under any
                  foreign laws relating to insolvency;

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

                                       43

<PAGE>

                           (A)      is for relief against the Company, the
                  Guarantor or any Significant Subsidiary in an involuntary
                  case;

                           (B)      appoints a Custodian of the Company, the
                  Guarantor or any Significant Subsidiary or for any substantial
                  part of its property; or

                           (C)      orders the winding up or liquidation of the
                  Company, the Guarantor or any Significant Subsidiary; or

                           (D)      any similar relief is granted under any
                  foreign laws and the order or decree remains unstayed and in
                  effect for 60 days;

                  (9)      any judgment or decree for the payment of money in
         excess of $10,000,000 or its foreign currency equivalent at the time is
         entered against the Company, the Guarantor or any Significant
         Subsidiary, remains outstanding for a period of 60 days following the
         entry of such judgment or decree and is not discharged, waived or the
         execution thereof stayed within 10 days after the notice specified
         below; or

                  (10)     the Guaranty ceases to be in full force and effect
         (other than in accordance with the terms of the Guaranty) or the
         Guarantor denies or disaffirms its obligations under the Guaranty.

         The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.

         The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.

         A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".

         The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.

Section 6.02. Acceleration.

         If an Event of Default occurs and is continuing (other than an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company or the
Guarantor), the Trustee by written notice to the Company, or the Holders of at
least 25% in principal amount of the Securities by written notice to the Company
and the Trustee, may declare the principal of and accrued but unpaid interest on
all the Securities to be due and payable; provided that so long as any
Designated Senior Indebtedness of the Guarantor, the Company or any Significant
Subsidiary shall be outstanding, the acceleration shall not be effective until
the earlier of (1) any acceleration of any such Designated Senior Indebtedness
of the Guarantor, the Company or any Significant Subsidiary, or (2) five
business days after receipt by the

                                       44

<PAGE>

Company and the representative in respect of such Designated Senior Indebtedness
of written notice of such declaration of acceleration of the Securities. Upon
such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company or the Guarantor occurs, the principal of and interest on
all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03. Other Remedies.

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

         The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

Section 6.04. Waiver of Past Defaults.

         The Holders of a majority in principal amount of the Securities by
notice to the Trustee may waive an existing Default and its consequences except
(i) a Default in the payment of the principal of or interest on a Security or
(ii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.

Section 6.05. Control by Majority.

         The Holders of a majority in principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.

Section 6.06. Limitation on Suits.

         A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:

                  (1) the Holder gives to the Trustee written notice stating
         that an Event of Default is continuing;

                                       45

<PAGE>

                  (2) the Holders of at least 25% in principal amount of the
         Securities make a written request to the Trustee to pursue the remedy;

                  (3) such Holder or Holders offer to the Trustee reasonable
         security or indemnity against any loss, liability or expense;

                  (4) the Trustee does not comply with the request within 60
         days after receipt of the request and the offer of security or
         indemnity; and

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

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

Section 6.07. Rights of Holders to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities held by
such Holder, on or after the respective due dates expressed in the Securities,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

Section 6.08. Collection Suit by Trustee.

         If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.07.

Section 6.09. Trustee May File Proofs of Claim.

         The Trustee may 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 and
the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
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 it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.

Section 6.10. Priorities.

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

         FIRST:  to the Trustee for amounts due under Section 7.07;

         SECOND: to holders of Senior Indebtedness of the Company to the extent
                 required by Article 10;

                                       46

<PAGE>

         THIRD:  to Securityholders for amounts due and unpaid on the Securities
                 for principal and interest, ratably, without preference or
                 priority of any kind, according to the amounts due and payable
                 on the Securities for principal and interest, respectively; and

         FOURTH: to the Company.

         The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.

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 Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the Securities.

Section 6.12. Waiver of Stay or Extension Laws.

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

                                   ARTICLE 7

                                    TRUSTEE

Section 7.01. Duties of Trustee.

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

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

                  (1) the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

                  (2) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or

                                       47

<PAGE>

         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 confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein).

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

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

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

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

         (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

         (e) 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.

         (f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

         (g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

         (h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

Section 7.02. Rights of Trustee.

         (a) The Trustee may rely on 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. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.

         (c) The Trustee may act through 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 which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.

                                       48

<PAGE>

         (e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.

         (f) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution.

         (g) 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 pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.

Section 7.03. Individual Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.

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 Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in the Indenture or in
any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.

Section 7.05. Notice of Defaults.

         If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment of
principal of or interest on any Security (including payments pursuant to the
mandatory redemption provisions of such Security, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders.

Section 7.06. Reports by Trustee to Holders.

         As promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b).

         A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.

                                       49

<PAGE>

Section 7.07. Compensation and Indemnity.

         The Company shall pay to the Trustee from time to time compensation for
its services as the Company and the Trustee shall from time to time agree in
writing. 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 upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents and counsel. The Company
shall indemnify the Trustee against any and all loss, liability or expense
(including reasonable attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.

         To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.

         The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.

Section 7.08. Replacement of Trustee.

         The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:

         (1)      the Trustee fails to comply with Section 7.10;

         (2)      the Trustee is adjudged bankrupt or insolvent;

         (3)      a receiver or other public officer takes charge of the Trustee
                  or its property; or

         (4)      the Trustee otherwise becomes incapable of acting.

         If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint 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 Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

                                       50

<PAGE>

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

         If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

         Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger.

         If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Trustee.

         In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.

Section 7.10. Eligibility; Disqualification.

         The Trustee shall at all times satisfy the requirements of TIA Section
310(a). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Section 7.11. Preferential Collection of Claims Against Company.

         The Trustee shall comply with 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.

Section 7.12. Trustee's Application for Instructions from the Company.

         Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any Officer of the Company actually receives
such application, unless any such Officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall

                                       51

<PAGE>

have received written instructions in response to such application specifying
the action to be taken or omitted.

                                   ARTICLE 8

                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 8.01. Discharge of Liability on Securities; Defeasance.

         (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.06) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.06), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Sections 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.

         (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08 and 4.09 and the operation of Section 6.01(3) (but
only as it applies to Section 5.01(a)(iii) and (iv)), 6.01(4), 6.01(6), 6.01(7),
6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and (8), with respect
only to Significant Subsidiaries) or contained in Section 5.01(a)(iii) and (iv)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.

         If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and
(8), with respect only to Significant Subsidiaries) or because of the failure of
the Company to comply with Section 5.01(a)(iii) and (iv). If the Company
exercises its legal defeasance option or its covenant defeasance option, the
Guarantor shall be released from all of its obligations under the Guaranty.

         Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

         (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.04, 8.05 and
8.06 shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.

Section 8.02. Conditions to Defeasance.

         The Company may exercise its legal defeasance option or its covenant
defeasance option only if:

                  (1) the Company irrevocably deposits in trust with the Trustee
         money or U.S. Government Obligations for the payment of principal of
         and interest on the Securities to maturity or redemption, as the case
         may be;

                                       52

<PAGE>

                  (2) the Company delivers to the Trustee a certificate from a
         nationally recognized firm of independent accountants expressing their
         opinion that the payments of principal and interest when due and
         without reinvestment on the deposited U.S. Government Obligations plus
         any deposited money without investment will provide cash at such times
         and in such amounts as will be sufficient to pay principal and interest
         when due on all the Securities to maturity or redemption, as the case
         may be;

                  (3) 123 days pass after the deposit is made and during the
         123-day period no Default specified in Sections 6.01(7) or (8) with
         respect to the Company occurs which is continuing at the end of the
         period;

                  (4) the deposit does not constitute a default under any other
         agreement binding on the Company and is not prohibited by Article 10;

                  (5) the Company delivers to the Trustee an Opinion of Counsel
         to the effect that the trust resulting from the deposit does not
         constitute, or is qualified as, a regulated investment company under
         the Investment Company Act of 1940;

                  (6) in the case of the legal defeasance option, the Company
         shall have delivered to the Trustee an Opinion of Counsel stating that
         (i) the Company has received from, or there has been published by, the
         Internal Revenue Service a ruling, or (ii) since the date of this
         Indenture there has been a change in the applicable Federal income tax
         law, in either case to the effect that, and based thereon such Opinion
         of Counsel shall confirm that, the Securityholders will not recognize
         income, gain or loss for Federal income tax purposes as a result of
         such 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 defeasance had not occurred;

                  (7) in the case of the covenant defeasance option, the Company
         shall have delivered to the Trustee an Opinion of Counsel to the effect
         that the Securityholders 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; and

                  (8) the Company delivers to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent to the defeasance and discharge of the Securities as
         contemplated by this Article 8 have been complied with.

         Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

Section 8.03. Application of Trust Money.

         The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities. Money and securities so held in trust are not subject to Article
10.

Section 8.04. Repayment to Company.

         The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.

                                       53

<PAGE>

         Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.

Section 8.05. Indemnity for Government Obligations.

         The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.

Section 8.06. Reinstatement.

         If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that, if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.

                                   ARTICLE 9

                                   AMENDMENTS

Section 9.01. Without Consent of Holders.

         The Company, the Guarantor and the Trustee may amend this Indenture or
the Securities without notice to or consent of any Securityholder:

                  (1) to cure any ambiguity, omission, defect or inconsistency;

                  (2) to comply with Article 5;

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

                  (4) to make any change in Article 10 that would limit or
         terminate the benefits available to any holder of Senior Indebtedness
         (or representatives therefor) under Article 10;

                  (5) to add guarantees with respect to the Securities or to
         secure the Securities;

                  (6) to add to the covenants of the Company for the benefit of
         the Holders or to surrender any right or power herein conferred upon
         the Company;

                                       54

<PAGE>

                  (7) to comply with any requirements of the SEC in connection
         with qualifying, or maintaining the qualification of, this Indenture
         under the TIA; or

                  (8) to make any change that does not materially adversely
         affect the rights of any Securityholder.

         An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.

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

Section 9.02. With Consent of Holders.

         The Company and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in principal amount of the Securities. However, without
the consent of each Securityholder affected, an amendment may not:

                  (1) reduce the amount of Securities whose Holders must consent
         to an amendment;

                  (2) reduce the rate of or extend the time for payment of
         interest on any Security;

                  (3) reduce the principal of or extend the Stated Maturity of
         any Security;

                  (4) reduce the premium payable upon the redemption of any
         Security or change the time at which any Security may be redeemed in
         accordance with Article 3;

                  (5) make any Security payable in money other than that stated
         in the Security;

                  (6) make any changes in Article 10 that adversely affects the
         rights of any Securityholder under Article 10 or Article 12;

                  (7) make any change in Section 6.04 or 6.07 or the second
         sentence of this Section 9.02; or

                  (8) make any change in any the Guaranty that would adversely
         affect the Securityholders.

         It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.

         An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.

         After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all

                                       55

<PAGE>

Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section.

Section 9.03. Compliance with Trust Indenture Act.

         Every amendment to this Indenture or the Securities shall comply with
the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents and Waivers.

         A consent to an amendment or a waiver by a Holder of a Security shall
bind the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.

Section 9.05. Notation on or Exchange of Securities.

         If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

Section 9.06. Trustee to Sign Amendments.

         The Trustee shall sign any amendment authorized pursuant to this
Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture and that such amendment constitutes the legal, valid and binding
obligation of the Company and the Guarantor, subject to customary exceptions.

Section 9.07. Payment for Consent.

         Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or

                                       56

<PAGE>

the Securities unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.

                                   ARTICLE 10

                         SUBORDINATION OF THE SECURITIES

Section 10.01. Agreement to Subordinate.

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

Section 10.02. Liquidation, Dissolution, Bankruptcy.

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

                  (1) holders of Senior Indebtedness of the Company shall be
         entitled to receive payment in full of such Senior Indebtedness before
         Securityholders shall be entitled to receive any payment of principal
         of or interest on the Securities; and

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

Section 10.03. Default on Senior Indebtedness of the Company.

         The Company may not pay the principal of or interest on the Securities
or make any deposit pursuant to Section 8.01 and may not repurchase, redeem or
defease any Securities (collectively, "pay the Securities") if (i) any
Designated Senior Indebtedness of the Company is not paid when due or (ii) any
other default on such Designated Senior Indebtedness occurs and the maturity of
such Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Designated Senior Indebtedness has
been paid in full; provided, however, that the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the representative of such Designated Senior
Indebtedness. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Company may not pay the Securities for a period (a
"Payment

                                       57

<PAGE>

Blockage Period") commencing upon the receipt by the Company and the Trustee of
written notice (a "Blockage Notice") of such default from the representative of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) by
repayment in full of such Designated Senior Indebtedness or (iii) because the
representative of the holders of such Designated Senior Indebtedness shall have
notified the Trustee that the default giving rise to such Blockage Notice is no
longer continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 10.03), unless the holders of such Designated Senior
Indebtedness or the representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume payments
on the Securities after such Payment Blockage Period. Not more than one Blockage
Notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period; provided, however, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior Indebtedness
(other than the Bank Indebtedness), the representative of the Bank Indebtedness
may give another Blockage Notice within such period; provided further, however,
that in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period. For purposes of this Section, no default or event of
default which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.

Section 10.04. Acceleration of Payment of Securities.

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

Section 10.05. When Distribution Must Be Paid Over.

         If a distribution is made to Securityholders that because of this
Article 10 should not have been made to them, the Securityholders who receive
the distribution shall hold it in trust for holders of Senior Indebtedness of
the Company and pay it over to them as their interests may appear.

Section 10.06. Subrogation.

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

Section 10.07. Relative Rights.

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

                                       58

<PAGE>

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

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

Section 10.08. Subordination May Not Be Impaired by Company.

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

Section 10.09. Rights of Trustee and Paying Agent.

         Notwithstanding Section 10.03, the Trustee or Paying Agent may continue
to make payments on the Securities and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that payments
may not be made under this Article 10. The Company, the Registrar or
co-registrar, the Paying Agent, a representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if the holders of an
issue of Senior Indebtedness of the Company have a representative, only the
representative may give the notice.

         The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 with respect to any Senior Indebtedness of the Company which may
at any time be held by it, to the same extent as any other holder of such Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 10 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.

Section 10.10. Distribution or Notice to Representative.

         Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness of the Company, the distribution may be made and the notice
given to their representative (if any).

Section 10.11. Article 10 Not to Prevent Events of Default or Limit Right to
               Accelerate.

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

Section 10.12. Trust Moneys Not Subordinated.

         Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article 10, and
none of the Securityholders shall be obligated

                                       59

<PAGE>

to pay over any such amount to the Company or any holder of Senior Indebtedness
of the Company or any other creditor of the Company.

Section 10.13. Trustee Entitled to Rely.

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

Section 10.14. Trustee to Effectuate Subordination.

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

Section 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.

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

Section 10.16. Reliance by Holders of Senior Indebtedness on Subordination
               Provisions.

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

                                       60
<PAGE>

                                   ARTICLE 11

                                    GUARANTY

Section 11.01. Guaranty.

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

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

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

         The Guaranty is, to the extent and in the manner set forth in Article
12, subordinated and subject in right of payment to the prior payment in full of
the principal of and premium, if any, and interest on all Senior Indebtedness of
the Guarantor and is made subject to such provisions of this Indenture.

         Except as expressly set forth in Section 8.01(b), the obligations of
the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Guarantor herein shall not be discharged or impaired or otherwise affected
by the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any remedy under this Indenture, the Securities or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantor or would otherwise
operate as a discharge of the Guarantor as a matter of law or equity.

         The Guarantor further agrees that its Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal or interest on any

                                       61

<PAGE>

Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.

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

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

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

Section 11.02. Successors and Assigns.

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

Section 11.03. No Waiver.

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

Section 11.04. Modification.

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

                                       62

<PAGE>

                                   ARTICLE 12

                          SUBORDINATION OF THE GUARANTY

Section 12.01. Agreement to Subordinate.

         The Guarantor agrees, and each Securityholder by accepting a Security
agrees, that the Obligations of the Guarantor are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
prior payment of all Senior Indebtedness of the Guarantor and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Obligations of the Guarantor shall in all respects rank
pari passu with all other Senior Subordinated Indebtedness of the Guarantor and
only Senior Indebtedness of the Guarantor shall rank senior to the Obligations
of the Guarantor in accordance with the provisions set forth herein.

Section 12.02. Liquidation, Dissolution, Bankruptcy.

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

                  (1) holders of Senior Indebtedness of the Guarantor shall be
         entitled to receive payment in full of such Senior Indebtedness in cash
         or cash equivalents before Securityholders shall be entitled to receive
         any payment pursuant to any Obligations of the Guarantor; and

                  (2) until the Senior Indebtedness of the Guarantor is paid in
         full in cash or cash equivalents, any distribution to which
         Securityholders would be entitled but for this Article 12 shall be made
         to holders of such Senior Indebtedness as their interests may appear,
         except that Securityholders may receive shares of stock and any debt
         securities of the Guarantor that are subordinated to Senior
         Indebtedness, and to any debt securities received by holders of Senior
         Indebtedness, of the Guarantor to at least the same extent as the
         Obligations of the Guarantor are subordinated to Senior Indebtedness of
         the Guarantor.

Section 12.03. Default on Senior Indebtedness of the Guarantor.

         The Guarantor may not make any payment pursuant to any of its
Obligations or repurchase, redeem or otherwise retire or defease any Securities
or other Obligations (collectively, "pay its Guaranty") if (i) any Designated
Senior Indebtedness of the Company is not paid when due or (ii) any other
default on Designated Senior Indebtedness of the Company occurs and the maturity
of such Designated Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, (x) the default has been cured or waived and any
such acceleration has been rescinded or (y) such Designated Senior Indebtedness
has been paid in full; provided, however, that the Guarantor may pay its
Guaranty without regard to the foregoing if the Guarantor and the Trustee
receive written notice approving such payment from the representative of such
Designated Senior Indebtedness. The Guarantor may not pay its Guaranty during
the continuance of any Payment Blockage Period after receipt by the Company and
the Trustee of a Payment Notice under Section 10.03. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of Designated Senior Indebtedness giving such Payment Notice or the
representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Guarantor may resume payments pursuant to
its Obligations after such Payment Blockage Period.

                                       63

<PAGE>

Section 12.04. Demand for Payment.

         If a demand for payment is made on the Guarantor pursuant to Article
11, the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness (or their representatives) of such demand.

Section 12.05. When Distribution Must Be Paid Over.

         If a distribution is made to Securityholders that because of this
Article 12 should not have been made to them, the Securityholders who receive
the distribution shall hold it in trust for holders of the relevant Senior
Indebtedness and pay it over to them or their representative as their interests
may appear.

Section 12.06. Subrogation.

         After all Senior Indebtedness of the Guarantor is paid in full and
until the Securities are paid in full, Securityholders shall be subrogated to
the rights of holders of such Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this Article 12 to
holders of such Senior Indebtedness which otherwise would have been made to
Securityholders is not, as between the Guarantor and Securityholders, a payment
by the Guarantor on such Senior Indebtedness.

Section 12.07. Relative Rights.

         This Article 12 defines the relative rights of Securityholders and
holders of Senior Indebtedness of the Guarantor. Nothing in this Indenture
shall:

                  (1) impair, as between the Guarantor and Securityholders, the
         obligation of the Guarantor, which is absolute and unconditional, to
         pay its Obligations to the extent set forth in Article 11; or

                  (2) prevent the Trustee or any Securityholder from exercising
         its available remedies upon a default by the Guarantor under its
         Obligations, subject to the rights of holders of Senior Indebtedness of
         the Guarantor to receive distributions otherwise payable to
         Securityholders.

Section 12.08. Subordination May Not Be Impaired by Guarantor.

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

Section 12.09. Rights of Trustee and Paying Agent.

         Notwithstanding Section 12.03, the Trustee or Paying Agent may continue
to make payments on the Guaranty and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article 12. The Company, the Guarantor, the Registrar
or co-registrar, the Paying Agent, a representative or a holder of Senior
Indebtedness of the Guarantor may give the notice; provided, however, that, if
an issue of Senior Indebtedness of the Guarantor has a representative, only the
representative may give the notice.

                                       64

<PAGE>

         The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of the Guarantor which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 12 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.

Section 12.10. Distribution or Notice to Representative.

         Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness of the Guarantor, the distribution may be made and the
notice given to their representative (if any).

Section 12.11. Article 12 Not to Prevent Defaults Under the Guaranty or Limit
               Right to Demand Payment.

         The failure to make a payment pursuant to the Guaranty by reason of any
provision in this Article 12 shall not be construed as preventing the occurrence
of a default under the Guaranty. Nothing in this Article 12 shall have any
effect on the right of the Securityholders or the Trustee to make a demand for
payment on the Guarantor pursuant to Article 11.

Section 12.12. Trustee Entitled to Rely.

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

Section 12.13. Trustee to Effectuate Subordination.

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

                                       65

<PAGE>

Section 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of the
Guarantor.

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

Section 12.15. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.

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

                                   ARTICLE 13

                                  MISCELLANEOUS

Section 13.01. Trust Indenture Act Controls.

         If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.

Section 13.02. Notices.

         Any notice or communication shall be in writing and delivered in person
or mailed by first-class mail addressed as follows:

                if to the Company or the Guarantor:

                Avondale Mills, Inc.
                506 South Broad Street
                Monroe, Georgia 30655

                Attention: Chief Financial Officer

                if to the Trustee:

                Wachovia Bank, National Association
                191 Peachtree Street, 23rd Floor
                Atlanta, Georgia 30303

                Attention: Corporate Trust Department

         The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

                                       66

<PAGE>

         Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.

         Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

Section 13.03. Communication by Holders with Other Holders.

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

Section 13.04. Certificate and Opinion as to Conditions Precedent.

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

                  (1) an Officers' Certificate in form and substance reasonably
         satisfactory to the Trustee stating that, in the opinion of the
         signers, all conditions precedent, if any, provided for in this
         Indenture relating to the proposed action have been complied with; and

                  (2) an Opinion of Counsel in form and substance reasonably
         satisfactory to the Trustee stating that, in the opinion of such
         counsel, all such conditions precedent have been complied with.

Section 13.05. Statements Required in Certificate or Opinion.

         Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture shall include:

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

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

                  (3) a statement that, in the opinion of such individual, he
         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 complied with; and

                  (4) a statement as to whether or not, in the opinion of such
         individual, such covenant or condition has been complied with.

Section 13.06. When Securities Disregarded.

         In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities 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
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the

                                       67

<PAGE>

Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
Also, subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.

Section 13.07. Rules by Trustee, Paying Agent and Registrar.

         The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.

Section 13.08. Legal Holidays.

         A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York. If a payment
date is a Legal Holiday, payment shall be made on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening period.
If a regular record date is a Legal Holiday, the record date shall not be
affected.

Section 13.09. Governing Law.

         This Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York but 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 13.10. No Recourse Against Others.

         A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.

Section 13.11. Successors.

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

Section 13.12. Multiple 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. One signed copy is enough to prove this Indenture.

Section 13.13. Table of Contents; Headings.

         The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

                                       68

<PAGE>

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

                                AVONDALE MILLS, INC.,
                                as Issuer,

                                By /s/ Jack R. Altherr
                                  ----------------------------------------------
                                Name: Jack R. Altherr
                                Title: Vice Chairman and Chief Financial Officer

                                AVONDALE INCORPORATED,
                                as Guarantor,

                                By /s/ Jack R. Altherr
                                  ----------------------------------------------
                                Name: Jack R. Altherr, Jr.
                                Title: Vice Chairman and Chief Financial Officer

                                WACHOVIA BANK, NATIONAL ASSOCIATION,
                                as Trustee,

                                By /s/ Eric J. Knoll
                                  ----------------------------------------------
                                Name: Eric J. Knoll
                                Title: Assistant Vice President

                                       69

<PAGE>

                                                                       EXHIBIT A

                       [FORM OF FACE OF INITIAL SECURITY]

                              AVONDALE MILLS, INC.

                           [Private Placement Legend]

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

                  (A) SUCH SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
         TRANSFERRED, ONLY

                           (1) (a) TO A PERSON WHOM THE SELLER REASONABLY
                  BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
                  RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
                  THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
                  THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
                  OUTSIDE THE UNITED STATES TO A NON U.S PERSON IN A TRANSACTION
                  MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
                  (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
                  RULE 501(a) (1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
                  "INSTITUTIONAL ACCREDITED INVESTOR ")) THAT, PRIOR TO SUCH
                  TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
                  CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
                  BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
                  RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
                  $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT
                  SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e)
                  IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
                  REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
                  OF COUNSEL IF THE ISSUER SO REQUESTS),

                           (2) TO THE ISSUER, OR

                           (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
                  AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
                  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
                  APPLICABLE JURISDICTION; AND

                  (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
         TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF

                                      A-1

<PAGE>

         THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO REPRESENTATION CAN
         BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144
         FOR RESALE OF THE SECURITY EVIDENCED HEREBY.

THIS SECURITY MAY NOT BE ACQUIRED OR HELD WITH THE ASSETS OF (I) AN "EMPLOYEE
BENEFIT PLAN" (AS DEFINED IN THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO ERISA, (II) A "PLAN" DESCRIBED IN
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
(III) ANY ENTITY DEEMED TO HOLD "PLAN ASSETS" OF ANY OF THE FOREGOING BY REASON
OF AN EMPLOYEE BENEFIT PLAN'S OR PLAN'S INVESTMENT IN SUCH ENTITY, OR (IV) A
GOVERNMENTAL PLAN OR CHURCH PLAN SUBJECT TO APPLICABLE LAW THAT IS SUBSTANTIALLY
SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION PROVISIONS OF
ERISA OR SECTION 4975 OF THE CODE ("SIMILAR LAW"), UNLESS THE ACQUISITION AND
HOLDING OF THIS SECURITY BY THE PURCHASER OR TRANSFEREE, THROUGHOUT THE PERIOD
THAT IT HOLDS THIS SECURITY, ARE EXEMPT FROM THE PROHIBITED TRANSACTION
RESTRICTIONS UNDER ERISA AND SECTION 4975 OF THE CODE OR ANY PROVISIONS OF
SIMILAR LAW, AS APPLICABLE, PURSUANT TO ONE OR MORE PROHIBITED TRANSACTION
STATUTORY OR ADMINISTRATIVE EXEMPTIONS. BY ITS ACQUISITION OR HOLDING OF THIS
SECURITY, EACH PURCHASER AND TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT THE FOREGOING REQUIREMENTS HAVE BEEN SATISFIED.

                              [Global Notes Legend]

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.13 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

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

                                      A-2

<PAGE>

                   10 1/4% SENIOR SUBORDINATED NOTES DUE 2013

No.______
$[____________]
                                                          [CUSIP No.___________]

Avondale Mills, Inc. an Alabama corporation, promises to pay to
_________________ or registered assigns the principal sum of [____________]
Dollars on July 1, 2013.

         Interest Payment Dates: January 1 and July 1, commencing January 1,
2004.

         Record Dates: December 15 and June 15.

         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.

                                      A-3

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.

                                                       AVONDALE MILLS, INC.

                                                       By:______________________
                                                          Name:
                                                          Title:

                                                       By:______________________
                                                          Name:
                                                          Title:

Dated: [_________]

Certificate of Authentication:

Wachovia Bank, National Association,
as Trustee, certifies that this is one
of the Notes referred to in the within-
mentioned Indenture.

By:_____________________________________
       Authorized Signatory

                                      A-4

<PAGE>

                               [REVERSE OF NOTE]

                              AVONDALE MILLS, INC.

                   10 1/4% SENIOR SUBORDINATED NOTES DUE 2013

         1.       Interest. Avondale Mills, Inc. an Alabama corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
___% per annum from ________, 2003 until maturity; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured at a rate of 0.25% per annum
with respect to the first 90-day period following such Registration Default,
increasing by an additional 0.25% per annum with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of additional interest of 0.75% per annum. The Company will pay interest
semiannually on January 1 and July 1 of each year (each an "Interest Payment
Date"), or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Securities will accrue from the most recent
Interest Payment Date on which interest has been paid or, if no interest has
been paid, from June 30, 2003; provided that if there is no existing Default in
the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be January 1, 2004. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate equal to the interest rate then in effect; it shall pay
interest on overdue installments of interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

         2.       Method of Payment. The Company shall pay interest on the
Securities (except defaulted interest) to the persons who are registered holders
of Securities at the close of business on the record date immediately preceding
the Interest Payment Date, even if such Securities are cancelled after the
record date and on or before the Interest Payment Date, except as provided in
Section 2.10 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium, if any, and interest at the office or
agency of the Company maintained for such purpose in The City of New York
maintained for such purposes, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, and provided that payment by wire transfer of
immediately available funds shall be required with respect to principal of,
premium, if any, and interest on, all Global Notes and all other Securities, the
Holder of which has at least $1,000,000,000 aggregate principal amount of
Securities registered in its name and shall have provided wire transfer
instructions designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other dates as the Company
or Paying Agent may accept in its discretion) to the Company or the Paying
Agent. Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal of, premium, if any, and interest on
the Securities in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may pay such amounts by check payable in such money. It may mail an
interest check to a Holder's registered address.

         3.       Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.

                                      A-5

<PAGE>

         4.       Indenture. The Company issued the Securities under an
Indenture dated as of June 30, 2003 ("Indenture"), among the Company, Avondale
Incorporated, a Georgia corporation (such corporation, and its successors and
assigns under the Indenture, being herein called the "Guarantor"), and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.

         The Securities are general unsecured obligations of the Company limited
to $150,000,000 aggregate principal amount (subject to Section 2.06 of the
Indenture). The Indenture contains certain covenants that, among other things,
limit (i) the issuance of additional indebtedness by the Company and certain of
the Company's subsidiaries, (ii) the payment of dividends on capital stock of
the Company and certain of its subsidiaries and the purchase, redemption or
retirement of capital stock or subordinated indebtedness, (iii) investments,
(iv) certain transactions with affiliates, (v) sales of assets, including
capital stock of subsidiaries, and (vi) certain consolidations, mergers and
transfers of assets. The Indenture also prohibits certain restrictions on
distributions from certain subsidiaries. In addition, the Company may be
obligated, under certain circumstances and subject to the limitations set out in
the Indenture, to offer to repurchase Securities at a purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of repurchase.

         5.       Optional Redemption. Except as described below, the Notes will
not be redeemable at the Company's option prior to July 1, 2008. At any time on
or after July 1, 2008, the Company may, at its option, redeem all or any portion
of the Notes at the redemption prices (expressed as percentages of the principal
amount of the Notes) set forth below, plus, in each case, accrued interest
thereon to the applicable redemption date, if redeemed during the 12-month
period beginning July 1 of the years indicated below:

<TABLE>
<CAPTION>
        Year         Percentage
        ----         ----------
<S>                  <C>
2008                  105.125%
2009                 103.4167%
2010                 101.7083%
2011 and thereafter   100.000%
</TABLE>

         At any time prior to July 1, 2008, the Company may at its option redeem
all or part of the notes at a redemption price equal to the greater of (1) 100%
of the principal amount of the notes being redeemed and (2) as determined by the
Quotation Agent, the sum of the present values of 105.125% of the principal
amount of the notes being redeemed and scheduled interest payments (excluding
interest accrued and unpaid to the date of redemption) on such notes to and
including July 1, 2008 discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points, in either case plus accrued and unpaid
interest, if any, to the date of redemption.

         Notwithstanding the foregoing, at any time and from time to time on or
prior to July 1, 2006, the Company may redeem in the aggregate up to 35% of the
aggregate principal amount of the Notes originally issued under the Indenture
with the proceeds of one or more Equity Offerings, at a redemption price
(expressed as a percentage of principal amount) of 110.25%, plus accrued and
unpaid interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the aggregate
principal

                                      A-6

<PAGE>

amount of the Notes originally issued under the Indenture must remain
outstanding after each such redemption.

         6.       Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.

         7.       Put Provisions. Upon a Change of Control, any Holder of
Securities will have the right, subject to certain conditions, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.

         8.       Guaranty. To secure the due and punctual payment of the
principal and interest, if any, on the Securities and all other amounts payable
by the Company under the Indenture and the Securities when and as the same shall
be due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Guarantor has agreed to
guarantee the Obligations on a senior subordinated basis pursuant to the terms
of the Indenture.

         9.       Subordination. The Securities are subordinated to Senior
Indebtedness of the Company, as defined in the Indenture. To the extent provided
in the Indenture, Senior Indebtedness of the Company must be paid before the
Securities may be paid. The Company agrees, and each Securityholder by accepting
a Security agrees, to the subordination provisions contained in the Indenture
and authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.

         10.      Denominations; Transfer; Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and whole multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

         11.      Persons Deemed Owners. The registered Holder of this Security
may be treated as the owner of it for all purposes.

         12.      Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent shall pay
the money back to the Company at its request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the money
must look only to the Company and not to the Trustee for payment.

         13.      Discharge and Defeasance. Subject to certain conditions, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.

                                      A-7

<PAGE>

         14.      Amendment, Waiver. Subject to certain exceptions set forth in
the Indenture, (i) the Indenture or the Securities may be amended with the
written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount outstanding of the Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Securityholder, the
Company and the Trustee may amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make certain changes in the subordination provisions, or to make any change
that does not adversely affect the rights of any Securityholder.

         15.      Defaults and Remedies. Under the Indenture, Events of Default
include (i) default for 30 days in payment of interest on the Securities; (ii)
default in payment of principal on the Securities at maturity, upon redemption
pursuant to paragraph 5 of the Securities, upon acceleration or otherwise, or
failure by the Company to redeem or purchase Securities when required; (iii)
failure by the Company or the Guarantor to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $10,000,000; (v) certain events of bankruptcy
or insolvency with respect to the Company, the Guarantor and the Significant
Subsidiaries; (vi) certain judgments or decrees for the payment of money in
excess of $10,000,000; and (vii) the Guaranty ceasing to be in full force and
effect (other than in accordance with its terms). If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

         Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest ) if it determines that withholding notice
is in the interest of the Holders.

         16.      Trustee Dealings with the Company. Subject to certain
limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with and collect obligations owed to it by the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.

         17.      No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or the Trustee shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.

         18.      Authentication. This Security shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent) manually signs
the certificate of authentication on the other side of this Security.

                                      A-8

<PAGE>

         19.      Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN
ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/MA
(=Uniform Gift to Minors Act).

         20.      Holders' Compliance with Registration Rights Agreement. Each
Holder of a Security, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

         21.      Governing Law. THIS SECURITY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Avondale Mills, Inc,
  506 South Broad Street, Monroe, Georgia 30655, Attention: Jack Altherr, Jr.

                                      A-9

<PAGE>

                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to:

________________________________________________________________________________
               (Insert assignee's social security or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

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

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

________________________________________________________________________________

Your Signature:_________________________________________________________________
               (Sign exactly as your name appears on the other side of this
               Note)

Your Name:______________________________________________________________________

Date:________________

Signature Guarantee:____________________________________________________________

                                      A-10

<PAGE>

                   FORM OF OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the box: [ ]

         If you want to have only part of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, state the amount (in
integral multiples of $1,000:

$______________

Date:______________________________   Signature:________________________________
(Sign exactly as your name appears on the other side of this Note)

Name:___________________________________________________________________________

Signature Guarantee:____________________________________________________________

<PAGE>

                        [TO BE ATTACHED TO GLOBAL NOTES]

                SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

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

<TABLE>
<CAPTION>
                  AMOUNT OF DECREASE                       PRINCIPAL AMOUNT OF       SIGNATURE OF
                     IN PRINCIPAL     AMOUNT OF INCREASE     THIS GLOBAL NOTE         AUTHORIZED
                    AMOUNT OF THIS    IN PRINCIPAL AMOUNT     FOLLOWING SUCH     SIGNATORY OF TRUSTEE
DATE OF EXCHANGE     GLOBAL NOTE      OF THIS GLOBAL NOTE  DECREASE OR INCREASE   OR NOTES CUSTODIAN
=====================================================================================================
<S>               <C>                 <C>                  <C>                   <C>
</TABLE>

<PAGE>

                                                                       EXHIBIT B

                            REGULATIONS CERTIFICATE

   (For transfers pursuant to Sections 2.14(a)(1) and (a)(5) of the Indenture)

Wachovia Bank, National Association
191 Peachtree Street, 23rd Floor
Atlanta, Georgia 30303
Attention: Corporate Trust Department

        Re:   10 1/4% Senior Subordinated Notes due 2013 of Avondale Mills, Inc.
              (the "Securities")

         Reference is made to the Indenture, dated as of June 30, 2003 (the
"Indenture"), among Avondale Mills, Inc., an Alabama corporation (the
"Company"), Avondale Incorporated, a Georgia corporation ( the "Guarantor"), and
Wachovia Bank, National Association, as Trustee. Terms used herein and defined
in the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of
1933, as amended (the "Securities Act"), are used herein as so defined.

         This certificate relates to US$____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

                CUSIP No(s). ___________________________

                CERTIFICATE No(s). _____________________

         The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Securities are represented by a Global Note and are held through
the Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner.

         The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a beneficial
interest in the Regulation S Global Note. In connection with such transfer, the
Owner hereby certifies that, unless such transfer is being effected pursuant to
an effective registration statement under the Securities Act, it is being
effected in accordance with Rule 904 or Rule 144 under the Securities Act and
with all applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:

                  (1)      Rule 904 Transfers. If the transfer is being effected
         in accordance with Rule 904:

                  (A)      the Owner is not a distributor of the Securities, an
         affiliate of the Company or any such distributor or a person acting on
         behalf of any of the foregoing;

                  (B)      the offer of the Specified Securities was not made to
         a person in the United States;

                                      B-1

<PAGE>

                  (C)      either:

                  (i) at the time the buy order was originated, the Transferee
         was outside the United States or the Owner and any person acting on its
         behalf reasonably believed that the Transferee was outside the United
         States, or

                  (ii) the transaction is being executed in, on or through the
         facilities of the Eurobond market, as regulated by the Association of
         International Bond Dealers, or another designated offshore securities
         market and neither the Owner nor any person acting on its behalf knows
         that the transaction has been prearranged with a buyer in the United
         States;

                  (D)      no directed selling efforts have been made in the
         United States by or on behalf of the Owner or any affiliate thereof;

                  (E)      if the Owner is a dealer in securities or has
         received a selling concession, fee or other remuneration in respect of
         the Specified Securities, and the transfer is to occur during the
         Restricted Period, then the requirements of Rule 904(c)(1) have been
         satisfied; and

                  (F)      the transaction is not part of a plan or scheme to
         evade the registration requirements of the Securities Act.

                  (2)      Rule 144 Transfers. If the transfer is being effected
         pursuant to Rule 144:

                  (A)      the transfer is occurring after a holding period of
         at least one year (computed in accordance with paragraph (d) of Rule
         144) has elapsed since the Specified Securities were last acquired from
         the Company or from an affiliate of the Company, whichever is later,
         and is being effected in accordance with the applicable amount, manner
         of sale and notice requirements of Rule 144; or

                  (B)      the transfer is occurring after a holding period of
         at least two years has elapsed since the Specified Securities were last
         acquired from the Company or from an affiliate of the Company,
         whichever is later, and the Owner is not, and during the preceding
         three months has not been, an affiliate of the Company.

                                      B-2

<PAGE>

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company, the Guarantor and the Initial
Purchaser.

Dated:
                                          (Print the name of the Undersigned, as
                                          such term is defined in the second
                                          paragraph of this certificate.)

                                          By: __________________________________
                                              Name:
                                              Title:

                                          (If the Undersigned is a corporation,
                                          partnership or fiduciary, the title of
                                          the person signing on behalf of the
                                          Undersigned must be stated.)

                                      B-3

<PAGE>

                                                                       EXHIBIT C

                              RULE 144A CERTIFICATE

   (For transfers pursuant to Sections 2.14(a)(3) and (a)(6) of the Indenture)

Wachovia Bank, National Association
191 Peachtree Street, 23rd Floor
Atlanta, Georgia 30303
Attention: Corporate Trust Department

        Re:   10 1/4% Senior Subordinated Notes due 2013 of Avondale Mills, Inc.
              (the "Securities")

         Reference is made to the Indenture, dated as of June 30, 2003 (the
"Indenture"), among Avondale Mills, Inc., an Alabama corporation (the
"Company"), Avondale Incorporated, a Georgia corporation ( the "Guarantor"), and
Wachovia Bank, National Association, as Trustee. Terms used herein and defined
in the Indenture or in Rule 144A or Rule 144 under the U.S. Securities Act of
1933, as amended (the "Securities Act"), are used herein as so defined.

         This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

                      CUSIP No(s). ___________________________
                      ISIN No(s)., if any. ____________________
                      CERTIFICATE No(s). _____________________

         The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Securities are represented by a Global Note and are held through
the Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner.

         The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a beneficial
interest in the 144A Global Note. In connection with such transfer, the Owner
hereby certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 144A or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:

                  (1)      Rule 144A Transfers. If the transfer is being
         effected in accordance with Rule 144A:

                  (A)      the Specified Securities are being transferred to a
         person that the Owner and any person acting on its behalf reasonably
         believe is a "qualified institutional buyer" within the meaning of Rule
         144A, acquiring for its own account or for the account of a qualified
         institutional buyer; and

                                      C-1

<PAGE>

                  (B)      the Owner and any person acting on its behalf have
         taken reasonable steps to ensure that the Transferee is aware that the
         Owner may be relying on Rule 144A in connection with the transfer; and

                  (2)      Rule 144 Transfers. If the transfer is being effected
         pursuant to Rule 144:

                  (A)      the transfer is occurring after a holding period of
         at least one year (computed in accordance with paragraph (d) of Rule
         144) has elapsed since the Specified Securities were last acquired from
         the Company or from an affiliate of the Company, whichever is later,
         and is being effected in accordance with the applicable amount, manner
         of sale and notice requirements of Rule 144; or

                  (B)      the transfer is occurring after a holding period of
         at least two years has elapsed since the Specified Securities were last
         acquired from the Company or from an affiliate of the Company,
         whichever is later, and the Owner is not, and during the preceding
         three months has not been, an affiliate of the Company.

                                      C-2

<PAGE>

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantor and the Initial Purchaser.

Dated:
                                          (Print the name of the Undersigned, as
                                          such term is defined in the second
                                          paragraph of this certificate.)

                                          By: __________________________________
                                              Name:
                                              Title:

                                          (If the Undersigned is a corporation,
                                          partnership or fiduciary, the title of
                                          the person signing on behalf of the
                                          Undersigned must be stated.)

                                      C-3

<PAGE>

                                                                       EXHIBIT D

                  INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE

   (For transfers pursuant to Sections 2.14(a)(2) and (a)(4) of the Indenture)

Wachovia Bank, National Association
191 Peachtree Street, 23rd Floor
Atlanta, Georgia 30303
Attention: Corporate Trust Department

         Re:  10 1/4% Senior Subordinated Notes due 2013 of Avondale Mills, Inc.
              (the "Securities")

         Reference is made to the Indenture, dated as of June 30, 2003 (the
"Indenture"), among Avondale Mills, Inc., an Alabama corporation (the
"Company"), Avondale Incorporated, a Georgia corporation ( the "Guarantor"), and
Wachovia Bank, National Association, as Trustee. Terms used herein and defined
in the Indenture are used herein as so defined.

         We are delivering this letter in connection with the proposed transfer
of $_____________ principal amount of Securities.

         We, the undersigned, hereby confirm that:

         (i)      we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act (an "Institutional Accredited Investor");

         (ii)     the purchase of the Securities by us is for our own account or
for the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring the Securities as fiduciary for the account of
one or more institutions for which we exercise sole investment discretion;

         (iii)    we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing the Securities; and

         (iv)     we are not acquiring the Securities with a view to
distribution thereof or with any present intention of offering or selling the
Securities, except as permitted below; provided that the disposition of our
property and property of any accounts for which we are acting as fiduciary shall
remain at all times within our control.

         We understand that the Securities were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Securities have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any Securities, that if in the
future we decide to resell or otherwise transfer such Securities prior to the
date (the "Resale Restriction Termination Date") which is two years after the
later of the original issuance of the Securities and the last date on which the
Company or an affiliate of the Company was the owner of the Security, such
Securities may be offered, resold,

                                      D-1

<PAGE>

pledged or otherwise transferred, only (1) (A) to a Person whom the Transferor
reasonably believes is a "qualified institutional buyer" within the meaning of
Rule 144A, acquiring for its own account or for the account of a qualified
institutional buyer under the Securities Act in a transaction meeting the
requirements of Rule 144A, (B) in a transaction meeting the requirements of Rule
144 under the Securities Act, (C) outside the United States to a non-U.S. Person
in a transaction meeting the requirements of Rule 904 under the Securities Act,
(D) to an Institutional Accredited Investor that, prior to such transfer,
furnishes the trustee a signed letter containing certain representations and
agreements (the form of which can be obtained from the trustee) and, if such
transfer is in respect of an aggregate principal amount of securities less than
$100,000, an opinion of counsel acceptable to the Company that such transfer is
in compliance with the Securities Act, or (E) in accordance with another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of Counsel if the Company so requests), (2) to the Company, or
(3) pursuant to an effective registration statement and, in each case, in
accordance with any applicable securities laws of any state of the United States
or any other applicable jurisdiction.

         We further agree to provide any person purchasing any of the Securities
other than pursuant to clause (3) above from us a notice advising such purchaser
that resales of such securities are restricted as stated herein. We understand
that the trustee or the transfer agent, as the case may be, for the Securities
will not be required to accept for registration of transfer any Securities
pursuant to clause 1(C), 1(D) or 1(E) above except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Securities are represented by
a Global Note and are held through the Depositary or an Agent Member in the name
of the undersigned, as or on behalf of the owner and that such Global Note will
bear a legend reflecting the substance of this paragraph other than certificates
representing Securities transferred pursuant to clause (3) above.

                                      D-2

<PAGE>

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantor and the Initial Purchaser.

Dated:
                                            (Print the name of the Institutional
                                             Accredited Investor)

                                            By: ________________________________
                                                Name:
                                                Title:

                                      D-3

<PAGE>

                                                                       EXHIBIT E

                       UNRESTRICTED SECURITIES CERTIFICATE

(For removal of Private Placement Legends pursuant to Section 2.14(b) of the
Indenture)

Wachovia Bank, National Association
191 Peachtree Street, 23rd Floor
Atlanta, Georgia 30303
Attention: Corporate Trust Department

     Re:    10 1/4% Senior Subordinated Notes due 2013 of Avondale Mills, Inc.
            (the "Securities")

         Reference is made to the Indenture, dated as of June 30, 2003 (the
"Indenture"), among Avondale Mills, Inc., an Alabama corporation (the
"Company"), Avondale Incorporated, a Georgia corporation ( the "Guarantor"), and
Wachovia Bank, National Association, as Trustee. Terms used herein and defined
in the Indenture or in Rule 144 under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), are used herein as so defined.

         This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

                      CUSIP No(s). ___________________________

                      CERTIFICATE No(s). _____________________

         The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Note, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Note, they are registered in the name of the Undersigned, as or on behalf
of the Owner.

         The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Private Placement Legend pursuant to Section 2.14(b) of
the Indenture. In connection with such exchange, the Owner hereby certifies that
the exchange is occurring after a holding period of at least two years (computed
in accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Securities were last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.

                                      E-1

<PAGE>

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantor and the Initial Purchaser.

Dated:
                                          (Print the name of the Undersigned, as
                                          such term is defined in the second
                                          paragraph of this certificate.)

                                          By: __________________________________
                                              Name:
                                              Title:

                                          (If the Undersigned is a corporation,
                                          partnership or fiduciary, the title of
                                          the person signing on behalf of the
                                          Undersigned must be stated.)

                                      E-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]