Document:

<PAGE>
                                                                  EXECUTION COPY

                                                                       EXHIBIT 4

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                              K&F ACQUISITION, INC.

                                 (to be known as

                              K&F Industries, Inc.

                    following the consummation of the Merger)

                                       and

                         U.S. BANK NATIONAL ASSOCIATION

                                   as Trustee

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

                                    INDENTURE

                          Dated as of November 18, 2004

                    7-3/4% SENIOR SUBORDINATED NOTES DUE 2014

================================================================================

<PAGE>

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
Trust Indenture
  Act Section                                                                           Indenture Section
---------------                                                                         -----------------
<S>                                                                                     <C>
310(a)(1)..........................................................................           7.10
    (a)(2).........................................................................           7.10
    (a)(3).........................................................................           N.A.
    (a)(4).........................................................................           N.A.
    (a)(5).........................................................................           7.10
    (b)............................................................................           7.10
    (c)............................................................................           N.A.
311(a).............................................................................           7.11
    (b)............................................................................           7.11
    (c)............................................................................           N.A.
312(a).............................................................................           2.05
    (b)............................................................................           11.03
    (c)............................................................................           11.03
313(a).............................................................................           7.06
    (b)(1).........................................................................           10.03
    (b)(2).........................................................................           7.06, 7.07
    (c)............................................................................           7.06, 11.02
    (d)............................................................................           7.06
314(a).............................................................................           11.05
    (b)............................................................................           N.A.
    (c)(1).........................................................................           N.A.
    (c)(2).........................................................................           N.A.
    (c)(3).........................................................................           N.A.
    (d)............................................................................           N.A.
    (e)............................................................................           10.05
    (f)............................................................................           NA
315(a).............................................................................           7.01
    (b)............................................................................           N.A.
    (c)............................................................................           7.01
    (d)............................................................................           7.01
    (e)............................................................................           6.11
316(a)(last sentence)..............................................................           2.09
    (a)(1)(A)......................................................................           6.05
    (a)(1)(B)......................................................................           6.04
    (a)(2).........................................................................           N.A.
    (b)............................................................................           6.07
    (c)............................................................................           2.12
317(a)(1)..........................................................................           6.08
    (a)(2).........................................................................           6.09
    (b)............................................................................           2.04
318(a).............................................................................           N.A.
    (b)............................................................................           N.A.
    (c)............................................................................           11.01

</TABLE>
-----------------
N.A. means Not Applicable

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

<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..................................................................       24
         SECTION 1.03.        Incorporation by Reference of TIA..................................................       24
         SECTION 1.04.        Rules of Construction..............................................................       25

ARTICLE 2 THE NOTES..............................................................................................       25

         SECTION 2.01.        Form and Dating....................................................................       25
         SECTION 2.02.        Denominations......................................................................       28
         SECTION 2.03.        Execution and Authentication.......................................................       28
         SECTION 2.04.        Registrar and Paying Agent.........................................................       29
         SECTION 2.05.        Paying Agent to Hold Money in Trust................................................       29
         SECTION 2.06.        Holder Lists.......................................................................       30
         SECTION 2.07.        Transfer and Exchange..............................................................       30
         SECTION 2.08.        Mutilated, Destroyed, Lost or Stolen Notes.........................................       41
         SECTION 2.09.        Outstanding Notes..................................................................       42
         SECTION 2.10.        Treasury Notes.....................................................................       42
         SECTION 2.11.        Temporary Notes....................................................................       42
         SECTION 2.12.        Cancellation.......................................................................       42
         SECTION 2.13.        Defaulted Interest.................................................................       43
         SECTION 2.14.        Computation of Interest............................................................       43
         SECTION 2.15.        Issuance of Additional Notes.......................................................       43
         SECTION 2.16.        One Class of Notes.................................................................       43
         SECTION 2.17.        CUSIP, ISIN or Other Similar Numbers...............................................       43

ARTICLE 3 REDEMPTION AND PREPAYMENT..............................................................................       44

         SECTION 3.01.        Notices to Trustee.................................................................       44
         SECTION 3.02.        Selection of Notes to Be Redeemed..................................................       44
         SECTION 3.03.        Notice of Redemption...............................................................       44
         SECTION 3.04.        Effect of Notice of Redemption.....................................................       45
         SECTION 3.05.        Deposit of Redemption Price........................................................       45
         SECTION 3.06.        Notes Redeemed in Part.............................................................       46
         SECTION 3.07.        Optional Redemption................................................................       46
         SECTION 3.08.        Mandatory Special Redemption.......................................................       46
         SECTION 3.09.        Mandatory Redemption...............................................................       47

ARTICLE 4 COVENANTS..............................................................................................       47

         SECTION 4.01.        Payment of Notes...................................................................       47
         SECTION 4.02.        Maintenance of Office or Agency....................................................       47
         SECTION 4.03.        Reports............................................................................       48
         SECTION 4.04.        Compliance Certificate.............................................................       49
         SECTION 4.05.        Taxes..............................................................................       49
         SECTION 4.06.        Stay, Extension and Usury Laws.....................................................       49
         SECTION 4.07.        Restricted Payments................................................................       49
         SECTION 4.08.        Dividend and Other Payment Restrictions Affecting Subsidiaries.....................       52
         SECTION 4.09.        Incurrence of Indebtedness and Issuance of Preferred Stock.........................       54
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<S>                                                                                                                     <C>
         SECTION 4.10.        Asset Sales........................................................................       57
         SECTION 4.11.        Transactions with Affiliates.......................................................       60
         SECTION 4.12.        Liens..............................................................................       62
         SECTION 4.13.        Business Activities................................................................       62
         SECTION 4.14.        Corporate Existence................................................................       62
         SECTION 4.15.        Offer to Repurchase upon Change of Control.........................................       62
         SECTION 4.16.        Future Subsidiary Guarantees.......................................................       64
         SECTION 4.17.        Designation of Restricted and Unrestricted Subsidiaries............................       64
         SECTION 4.18.        Payments for Consent...............................................................       64
         SECTION 4.19.        Limitation on Layering Debt........................................................       64

ARTICLE 5 SUCCESSORS.............................................................................................       65

         SECTION 5.01.        Merger, Consolidation or Sale of Assets............................................       65
         SECTION 5.02.        Successor Corporation Substituted..................................................       66

ARTICLE 6 DEFAULTS AND REMEDIES..................................................................................       66

         SECTION 6.01.        Events of Default..................................................................       66
         SECTION 6.02.        Acceleration.......................................................................       68
         SECTION 6.03.        Other Remedies.....................................................................       68
         SECTION 6.04.        Waiver of Past Defaults............................................................       69
         SECTION 6.05.        Control by Majority................................................................       69
         SECTION 6.06.        Limitation on Suits................................................................       69
         SECTION 6.07.        Rights of Holders of Notes to Receive Payment......................................       69
         SECTION 6.08.        Collection Suit by Trustee.........................................................       70
         SECTION 6.09.        Trustee May File Proofs of Claim...................................................       70
         SECTION 6.10.        Priorities.........................................................................       70
         SECTION 6.11.        Undertaking for Costs..............................................................       71

ARTICLE 7 TRUSTEE................................................................................................       71

         SECTION 7.01.        Duties of Trustee..................................................................       71
         SECTION 7.02.        Rights of Trustee..................................................................       72
         SECTION 7.03.        Individual Rights of Trustee.......................................................       73
         SECTION 7.04.        Trustee's Disclaimer...............................................................       73
         SECTION 7.05.        Notice of Defaults.................................................................       73
         SECTION 7.06.        Reports by Trustee to Holders of the Notes.........................................       74
         SECTION 7.07.        Compensation and Indemnity.........................................................       74
         SECTION 7.08.        Replacement of Trustee.............................................................       75
         SECTION 7.09.        Successor Trustee by Merger, etc...................................................       75
         SECTION 7.10.        Eligibility; Disqualification......................................................       76
         SECTION 7.11.        Preferential Collection of Claims Against the Company..............................       76

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE...............................................................       76

         SECTION 8.01.        Option to Effect Legal Defeasance or Covenant Defeasance...........................       76
         SECTION 8.02.        Legal Defeasance and Discharge.....................................................       76
         SECTION 8.03.        Covenant Defeasance................................................................       77
         SECTION 8.04.        Conditions to Legal or Covenant Defeasance.........................................       77
         SECTION 8.05.        Deposited Money and Government Securities to Be Held in Trust;
                                   Other Miscellaneous Provisions................................................       78
         SECTION 8.06.        Repayment to the Company...........................................................       79
         SECTION 8.07.        Reinstatement......................................................................       79
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                                                                                                                     <C>
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER.......................................................................       79

         SECTION 9.01.        Without Consent of Holders of Notes................................................       79
         SECTION 9.02.        With Consent of Holders of Notes...................................................       80
         SECTION 9.03.        Compliance with Trust Indenture Act................................................       81
         SECTION 9.04.        Revocation and Effect of Consents..................................................       81
         SECTION 9.05.        Notice of Amendment; Notation on or Exchange of Notes..............................       82
         SECTION 9.06.        Trustee to Sign Amendments, etc....................................................       82

ARTICLE 10 SUBSIDIARY GUARANTEES.................................................................................       82

         SECTION 10.01.       Guarantee..........................................................................       82
         SECTION 10.02.       Limitation on Guarantor Liability..................................................       83
         SECTION 10.03.       Guarantors May Consolidate, etc., on Certain Terms.................................       84
         SECTION 10.04.       Releases of Subsidiary Guarantees..................................................       84

ARTICLE 11 SATISFACTION AND DISCHARGE............................................................................       84

         SECTION 11.01.       Satisfaction and Discharge.........................................................       84
         SECTION 11.02.       Application of Trust Funds.........................................................       85
         SECTION 11.03.       Repayment to Company...............................................................       85
         SECTION 11.04.       Reinstatement......................................................................       86

ARTICLE 12 SUBORDINATION.........................................................................................       86

         SECTION 12.01.       Agreement to Subordinate...........................................................       86
         SECTION 12.02.       Liquidation; Dissolution; Bankruptcy...............................................       86
         SECTION 12.03.       Default on Designated Senior Debt..................................................       87
         SECTION 12.04.       Acceleration of Notes..............................................................       87
         SECTION 12.05.       When Distribution Must Be Paid Over................................................       88
         SECTION 12.06.       Notice by the Company..............................................................       88
         SECTION 12.07.       Subrogation........................................................................       88
         SECTION 12.08.       Relative Rights....................................................................       88
         SECTION 12.09.       Subordination May Not Be Impaired by the Company...................................       89
         SECTION 12.10.       Distribution or Notice to Representative...........................................       89
         SECTION 12.11.       Rights of Trustee and Paying Agent.................................................       89
         SECTION 12.12.       Authorization to Effect Subordination..............................................       90

ARTICLE 13 MISCELLANEOUS.........................................................................................       90

         SECTION 13.01.       Trust Indenture Act Controls.......................................................       90
         SECTION 13.02.       Notices............................................................................       90
         SECTION 13.03.       Communication by Holders of Notes with Other Holders of Notes......................       91
         SECTION 13.04.       Certificate and Opinion as to Conditions Precedent.................................       91
         SECTION 13.05.       Statements Required in Certificate or Opinion......................................       92
         SECTION 13.06.       Rules by Trustee and Agents........................................................       92
         SECTION 13.07.       No Personal Liability of Directors, Officers, Employees and
                                   Stockholders..................................................................       92
         SECTION 13.08.       Governing Law......................................................................       93
         SECTION 13.09.       No Adverse Interpretation of Other Agreements......................................       93
         SECTION 13.10.       Successors.........................................................................       93
         SECTION 13.11.       Severability.......................................................................       93
         SECTION 13.12.       Counterpart Originals..............................................................       93
         SECTION 13.13.       Table of Contents, Headings, etc...................................................       93
</TABLE>

                                     -iii-

<PAGE>

<TABLE>
<S>                                                                                                                     <C>
         SECTION 13.14.       Benefits of Indenture..............................................................       93
         SECTION 13.15.       Legal Holidays.....................................................................       93
</TABLE>

EXHIBITS

Exhibit A    FORM OF NOTE
Exhibit B    FORM OF CERTIFICATE OF TRANSFER
Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF CERTIFICATE OF ACQUIRING ACCREDITED INVESTORS/INSTITUTIONAL
             ACCREDITED INVESTORS
Exhibit E-1  FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
             GUARANTORS
Exhibit E-2  FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY A PERMITTED
             SUCCESSOR TO THE COMPANY

                                      -iv-

<PAGE>

                  INDENTURE dated as of November 18, 2004 between K&F
Acquisition, Inc., a Delaware corporation (to be known as K&F Industries, Inc.
following the consummation of the Merger) (the "Company") and U.S. Bank National
Association, a national banking association organized under the laws of the
United States, as trustee (the "Trustee").

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

                                    ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. DEFINITIONS

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

                  "Accredited Investor" means an "accredited investor" as
defined in Rule 501(a)(1), (2), (3), (4), (5), (6) or (7) under the Securities
Act.

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

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

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

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

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

                  "Additional Notes" means 7-3/4% Senior Subordinated Notes due
2014 of the Company issued in compliance with and under this Indenture after the
Issue Date and having identical terms to the Initial Notes or the Exchange
Notes.

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

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

                  "AI Definitive Note" means one or more Restricted Definitive
Note issued to Accredited Investors.

<PAGE>

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

                  "Asset Sale" means:

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

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

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

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

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

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

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

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

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

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

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

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

                  "Board of Directors" means:

                                      -2-
<PAGE>

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

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

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

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

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

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

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

                  "Capital Stock" means:

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

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

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

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

                  "Cash Equivalents" means:

                  (1) United States dollars;

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

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

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

                                      -3-
<PAGE>

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

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

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

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

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

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

                  (3) the consummation of any transaction (including, without
         limitation, any merger or consolidation) the result of which is that
         any "person" (as that term is used in Section 13(d)(3) of the Exchange
         Act) other than a Permitted Holder becomes the Beneficial Owner,
         directly or indirectly, of more than 50% of the Voting Stock of the
         Company, measured by voting power rather than number of shares; or

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

                  "Clearstream" means Clearstream Banking, societe anonyme.

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

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

                  "Company" means K&F Acquisition, Inc., until a successor shall
have become such pursuant to the applicable provisions of this Indenture and
thereafter "Company" shall mean such successor.

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

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

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

                                      -4-
<PAGE>

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

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

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

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

                  (6) non-cash items increasing such Consolidated Net Income for
         such period, other than (i) the accrual of revenue in the ordinary
         course of business and (ii) any non-cash items reversing an accrual or
         reserve that was excluded from the determination of Consolidated Cash
         Flow pursuant to the preceding clause (3)); minus

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

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

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

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

                  (1) the consolidated interest expense of such Person and its
         Restricted Subsidiaries for such period, whether paid or accrued
         (including, without limitation, amortization of debt issuance costs and
         original issue discount, non-cash interest payments, the interest
         component of any deferred payment obligations, the interest component
         of all payments associated with Capital Lease Obligations, imputed
         interest with respect to Attributable Debt, commissions, discounts

                                      -5-
<PAGE>

         and other fees and charges incurred in respect of letter of credit or
         bankers' acceptance financings, and net of the effect of all payments
         made or received (if any) pursuant to Hedging Obligations); plus

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

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

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

                  (2) the Net Income of any Restricted Subsidiary shall be
         excluded to the extent that the declaration or payment of dividends or
         similar distributions by that Restricted Subsidiary of that Net Income
         is not at the date of determination permitted without any prior
         governmental approval (that has not been obtained) or, directly or
         indirectly, by operation of the terms of its charter or any agreement,
         instrument, judgment, decree, order, statute, rule or governmental
         regulation applicable to that Restricted Subsidiary or its
         stockholders;

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

                  (4) any non-cash compensation expense realized for grants of
         performance shares, stock options or other rights to officers,
         directors and employees of the Company or any Restricted Subsidiary
         shall be excluded, provided that such shares, options or other rights
         can be redeemed at the option of the holder only for Equity Interests
         of the Company (other than Disqualified Stock);

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

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

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

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

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

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

                                      -6-
<PAGE>

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

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

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

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

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

                  "Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.01 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.

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

                  "Designated Senior Debt" means:

                  (1) any Indebtedness outstanding under the Credit Agreement;
         and

                  (2) any other Senior Debt permitted under this Indenture the
         principal amount of which is $25.0 million or more and that has been
         designated in the agreement or instrument governing such Senior Debt as
         "Designated Senior Debt."

                                      -7-
<PAGE>

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

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

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

                  "Escrow Agreement" means that certain Escrow and Security
Agreement, to be entered into in the event that the Acquisition does not close
prior to or substantially concurrent with the closing of the issuance of the
Notes, among K&F Acquisition, Inc., U.S. Bank National Association, and Lehman
Brothers Inc., Goldman, Sachs & Co., Citigroup Global Markets Inc. and J.P.
Morgan Securities Inc.

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

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

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

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

                  "Exchange Notes" means the 7-3/4% Senior Subordinated Notes
due 2014 to be issued by the Company upon the expiration of an Exchange Offer
pursuant to the terms of a Registration Rights Agreement containing terms
substantially identical to the Initial Notes (except that (i) the transfer
restrictions thereon shall be eliminated (other than as may be imposed by state
securities laws) and (ii) there will be no provision for the payment of
Additional Interest).

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

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

                                      -8-
<PAGE>

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

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

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

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

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

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

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

                                      -9-
<PAGE>

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

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

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

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

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

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

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

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

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

                                      -10-
<PAGE>

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

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

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

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

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

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

                  "Holder" means any Person (which may include the Depositary or
its nominee) in whose name the Notes are registered.

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

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

                  (1) in respect of borrowed money;

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

                  (3) in respect of banker's acceptances;

                  (4) representing Capital Lease Obligations;

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

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

                  (7) representing any Hedging Obligations,

                                      -11-
<PAGE>

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

                  In addition, the term "Indebtedness" includes all Indebtedness
of others secured by a

Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
guarantee by the specified Person of any indebtedness of any other Person.

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

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

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

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

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

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

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

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

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

                  "Initial Notes" means the $315,000,000 aggregate principal
amount of 7-3/4% Senior Subordinated Notes due 2014 issued by the Company on the
Issue Date.

                  "Initial Purchasers" means (i) with respect to the Initial
Notes issued on the Issue Date, Lehman Brothers Inc., Goldman, Sachs & Co.,
Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. and (2) with
respect to each issuance of Additional Notes, the Persons purchasing such
Additional Notes under the related purchase agreement.

                                      -12-
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      -13-
<PAGE>

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

                  "Non-Recourse Debt" means Indebtedness:

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

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

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

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

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

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

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

                  "Offering Memorandum" means the offering memorandum of the
Company, dated November 5, 2004, in connection with the offering of the Initial
Notes.

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

                  "Officers' Certificate" means a certificate signed by two
Officers or by one Officer and any Assistant Treasurer or Assistant Secretary of
the Company, which complies with the provisions of Section 13.05 hereof.

                                      -14-
<PAGE>

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

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

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

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

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

                  "Permitted Holder" means:

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

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

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

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

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

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

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

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

                                      -15-
<PAGE>

         principals that control any one or more of the Ultimate General
         Partners or Aurora Management Partners LLC.

                  "Permitted Investments" means:

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

                  (2) any Investment in Cash Equivalents;

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

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

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

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

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

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

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

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

                  (9) Hedging Obligations;

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

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

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

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

                                      -16-
<PAGE>

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

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

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

                  "Permitted Junior Securities" means:

                  (1) Equity Interests in the Company; or

                  (2) debt securities that are subordinated in right of payment
         to all Senior Debt that may at the time be outstanding, to
         substantially the same extent as, or to a greater extent than, the
         Notes and the Subsidiary Guarantees are subordinated to Senior Debt
         pursuant to this Indenture, and such securities shall not be entitled
         to the benefits of covenants or defaults materially more beneficial to
         the holders of such securities than those in effect with respect to the
         Notes on the date of this Indenture.

                  "Permitted Liens" means:

                  (1) Liens of the Company and any Guarantor securing Senior
         Debt that was permitted by the terms of this Indenture to be incurred;

                  (2) Liens in favor of the Company or any Guarantor;

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

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

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

                  (6) Liens to secure Indebtedness (including Capital Lease
         Obligations) permitted by clause (4) of the second paragraph of Section
         4.09 covering only the assets acquired with such

                                      -17-
<PAGE>

         Indebtedness or permitted by clause (5) of such paragraph, to the
         extent such Liens secure Permitted Refinancing Indebtedness initially
         incurred under clause (4);

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

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

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

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

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

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

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

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

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

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

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

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

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

                                      -18-
<PAGE>

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

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

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

                  (23) Liens securing the obligations under the Escrow
         Agreement.

                  "Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:

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

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

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

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

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

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

                  "Predecessor Note" of any particular Note means every previous
Note evidencing all or a portion of the same Indebtedness as that evidenced by
such particular Note; and any Note authenticated

                                      -19-
<PAGE>

and delivered under Section 2.08 in lieu of a mutilated, lost, destroyed or
stolen Note shall be deemed to evidence the same Indebtedness as the mutilated,
lost, destroyed or stolen Note.

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

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

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

                  "Registration Rights Agreement" means (a) with respect to the
Initial Notes issued on the Issue Date, the Registration Rights Agreement dated
as of the date hereof among the Company and the Initial Purchasers, as
supplemented by any joinder agreement and (b) with respect to each issuance of
Additional Notes issued in a transaction exempt from the registration
requirements of the Securities Act, the registration rights agreement, if any,
among the Company, the Guarantors and the Persons purchasing such Additional
Notes under the related purchase agreement.

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

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

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

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

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

                  "Representative" means, for any Senior Debt, the trustee,
agent or representative with respect to such Senior Debt.

                   "Responsible Officer" means when used with respect to the
Trustee, an officer within the Corporate Trust Division of the Trustee (or any
successor unit, department or division of the Trustee) located at the Corporate
Trust Office of the Trustee, who has direct responsibility for the
administration

                                      -20-
<PAGE>

of this Indenture and, for the purposes of Section 7.01(c)(ii) and the second
sentence of Section 7.05 shall also include any officer of the Trustee to whom
any corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject.

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

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

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

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

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

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

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

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

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

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

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

                  "Senior Debt" means:

                  (1) all Indebtedness and other monetary obligations (whether
         now existing or hereafter incurred) of the Company and any Guarantor
         on, under or in respect of, the Credit Agreement and including all
         fees, expenses (including reasonable fees and expenses of counsel),
         claims, charges, indemnity obligations and interest accruing on or
         subsequent to the filing of a petition initiating any proceeding in
         bankruptcy, insolvency or like proceeding whether or not such interest
         is an allowed claim in such proceeding;

                  (2) all other Indebtedness of the Company or any Guarantor
         (other than the Notes and the Subsidiary Guarantees), whether presently
         outstanding or hereafter created, incurred or assumed, unless such
         Indebtedness, by the terms of the agreement or instrument creating or
         evidencing such Indebtedness expressly provides that it is subordinate
         in right of payment to or pari passu in right of payment with the Notes
         or the Subsidiary Guarantees, as applicable; and

                  (3) any Hedging Obligations.

                  Notwithstanding the foregoing, the term "Senior Debt" shall
not include:

                  (1) any Indebtedness of the Company or any Guarantor which
         when incurred and without respect to any election under Section 1111(b)
         of the Bankruptcy Code, was without recourse to the Company or any
         Guarantor;

                                      -21-
<PAGE>

                  (2) any Indebtedness of the Company to any of its Subsidiaries
         or Affiliates;

                  (3) any Indebtedness of the Company or any Guarantor not
         otherwise permitted by the covenants contained in Section 4.09 and
         Section 4.19;

                  (4) Indebtedness to any employee of the Company;

                  (5) any liability for taxes; and

                  (6) trade payables.

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

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

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

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

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

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

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

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

                  "Tender Offers" means the tender offers and consent
solicitations initiated by K&F Industries, Inc. on October 20, 2004 for all of
K&F Industries, Inc.'s outstanding 91/4% Senior Subordinated Notes due 2007 and
95/8% Senior Subordinated Notes due 2010.

                  "TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date on which this Indenture is
qualified under the TIA, provided that in the event the Trust Indenture Act of
1939 is amended after such date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

                                      -22-
<PAGE>

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

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

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

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

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

                  "Unrestricted Subsidiary" means any Subsidiary of the Company
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:

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

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

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

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

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

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

                                      -23-
<PAGE>

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

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

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

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

SECTION 1.02. OTHER DEFINITIONS

<TABLE>
<CAPTION>
                                             Term                                                      Defined in
                                                                                                        Section
<S>                                                                                                    <C>
"Affiliate Transaction".............................................................................      4.11
"Asset Sale Offer"..................................................................................      4.10
"Authenticating Agent"..............................................................................      2.03
"Authentication Order"..............................................................................      2.03
"Change of Control Offer"...........................................................................      4.15
"Change of Control Payment".........................................................................      4.15
"Change of Control Payment Date"....................................................................      4.15
"Covenant Defeasance"...............................................................................      8.03
"Custodian".........................................................................................      6.01
"DTC"...............................................................................................      2.01
"Event of Default"..................................................................................      6.01
"Excess Proceeds"...................................................................................      4.10
"incur".............................................................................................      4.09
"Legal Defeasance"..................................................................................      8.02
"Maximum Amount"....................................................................................      4.09
"New York Corporate Trust Office"...................................................................      4.02
"Offer Amount"......................................................................................      4.10
"Paying Agent"......................................................................................      2.04
"Payment Blockage Notice"...........................................................................     12.03
"Payment Default"...................................................................................      6.01
"Purchase Date".....................................................................................      4.10
"Registrar".........................................................................................      2.04
"Relevant Fixed Charge Coverage Ratio"..............................................................      4.09
"Restricted Payments"...............................................................................      4.07
"Special Redemption.................................................................................      3.08
"Special Redemption Date"...........................................................................      3.08
"Special Redemption Price"..........................................................................      3.08
</TABLE>

SECTION 1.03 INCORPORATION BY REFERENCE OF TIA

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

                                      -24-
<PAGE>

SECTION 1.04 RULES OF CONSTRUCTION

                  Unless the context otherwise requires:

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

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

                           (iii) "or" is not exclusive;

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

                           (v) provisions apply to successive events and
         transactions;

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

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

                                    ARTICLE 2

                                    THE NOTES

SECTION 2.01 FORM AND DATING

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

                  Each Note shall be dated the date of its authentication.

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

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

                                      -25-
<PAGE>

Depositary with respect to the Global Notes. The Trustee shall act as Note
Custodian with respect to the Global Notes in accordance with its agreement with
DTC.

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

                  Notes initially offered and sold outside the United States in
reliance on Regulation S shall be issued in the form of one or more Regulation S
Temporary Global Notes, which shall be deposited with the Note Custodian and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Clearstream.
The Distribution Compliance Period shall be terminated upon the receipt by the
Trustee of a written certificate from the Depositary, together with copies of
certificates from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an interest therein during the
Distribution Compliance Period pursuant to another exemption from registration
under the Securities Act and who took delivery of a beneficial ownership
interest in a 144A Global Note, all as contemplated by Section 2.07(b)(iii)
hereof). Following the termination of the Distribution Compliance Period,
beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for an equal amount of beneficial interests in the Regulation S
Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with
the authentication of the Regulation S Permanent Global Note, the Trustee shall
cancel the Regulation S Temporary Global Note.

                  (c) Definitive Notes. Notes initially offered and sold to
Accredited Investors shall be issued in the form of one or more AI Definitive
Notes.

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

                           (i) Private Placement Legend.

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

                  "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
                  OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
                  PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
                  TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
                  THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
                  EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
                  OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY
                  EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
                  RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
                  THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
                  HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
                  THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
                  IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S.
                  PERSON AND IS ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION"
                  PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT
                  OR (C) IT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
                  501(A)(1), (2), (3), (4), (5), (6) OR (7) UNDER

                                      -26-
<PAGE>

                  THE SECURITIES ACT PURCHASING ITS NOTE FOR INVESTMENT PURPOSES
                  ONLY AND WITH NO PRESENT INTENTION TO RESELL THE NOTE, (2)
                  AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO
                  YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
                  144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
                  THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
                  (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH
                  THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF
                  THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER
                  DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE
                  "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR
                  OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER, (B)
                  PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
                  EFFECTIVE UNDER THE SECURITIES ACT, (C)FOR SO LONG AS THE
                  NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
                  PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
                  BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
                  PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
                  QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
                  TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE
                  UNITED STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
                  PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
                  MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
                  PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
                  THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
                  TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
                  LEGEND; PROVIDED THAT THE ISSUER, THE TRUSTEE AND THE
                  REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
                  OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
                  DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
                  INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF
                  THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
                  TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THE NOTE
                  IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE.
                  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
                  AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN,
                  THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
                  PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER
                  THE SECURITIES ACT."

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

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

                  "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
                  SECURITIES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE
                  TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
                  OF THE

                                      -27-
<PAGE>

                  DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY
                  THE DEPOSITARY OR NOMINEE OF A SUCCESSOR DEPOSITARY, OR ANY
                  NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
                  SUCCESSOR DEPOSITARY. TRANSFERS OF THE GLOBAL NOTE SHALL BE
                  LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
                  CEDE & CO., OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
                  NOMINEE, AND TRANSFERS OF PORTIONS OF THE GLOBAL NOTE SHALL BE
                  LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
                  SET FORTH IN THE INDENTURE."

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

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

                  "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
                  NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
                  FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
                  DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS
                  OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
                  TO RECEIVE PAYMENT OF INTEREST HEREON."

SECTION 2.02 DENOMINATIONS

                  The Notes shall be in minimum denominations of $2,000
aggregate principal amount and integral multiples of $1,000 in excess thereof.

SECTION 2.03 EXECUTION AND AUTHENTICATION

                  The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is unlimited. The Trustee
shall, upon a written order of the Company signed by two Officers of the Company
or by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company (an "Authentication Order"), authenticate (i) on the Issue Date, the
Initial Notes in aggregate principal amount of $315.0 million, (ii) subject to
the provisions of Section 2.15, at any time and from time to time thereafter,
Additional Notes in an aggregate principal amount specified in such
authentication order and (iii) subject to the provisions of Section 2.07(f),
Exchange Notes issued in exchange for a like principal amount of Initial Notes
or Additional Notes tendered pursuant to an Exchange Offer. Such authentication
order shall specify (i) the amount of the Notes to be authenticated, (ii) the
date on which the Notes are to be authenticated, (iii) whether the Notes are to
be Initial Notes, Exchange Notes or Additional Notes and (iv) whether such Notes
shall bear the Global Note Legend, the Regulation S Temporary Global Note Legend
and/or the Private Placement Legend. Furthermore, Notes

                                      -28-
<PAGE>

may be authenticated and delivered upon registration or transfer, or in lieu of,
other Notes pursuant to Section 2.07, 2.08, 2.11 or 9.05 or in connection with a
Change of Control Offer pursuant to Section 4.15.

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

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

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

SECTION 2.04 REGISTRAR AND PAYING AGENT

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

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

SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST

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

                                      -29-
<PAGE>

SECTION 2.06 HOLDER LISTS

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

SECTION 2.07 TRANSFER AND EXCHANGE

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

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

                           (i) Transfer of Beneficial Interests in the Same
                  Global Note. Beneficial interests in any Restricted Global
                  Note may be transferred to Persons who take delivery thereof
                  in the form of a beneficial interest in the same Restricted
                  Global Note in accordance with the transfer restrictions set
                  forth in the Private Placement Legend and any Applicable
                  Procedures; provided, however, that prior to the expiration of
                  the Distribution Compliance Period, transfers of beneficial
                  interests in the Temporary Regulation S Global Note may not be
                  made to a U.S. Person or for the account or benefit of a U.S.
                  Person (other than an Initial Purchaser or a "distributor" (as
                  defined in Rule 902(d) of Regulation S)). Beneficial interests
                  in any Unrestricted Global Note may be transferred to Persons
                  who take delivery thereof in the form of a beneficial interest
                  in an

                                      -30-
<PAGE>

                  Unrestricted Global Note. Except as may be required by
                  Applicable Procedures, no written orders or instructions shall
                  be required to be delivered to the Registrar to effect the
                  transfers described in this Section 2.07(b)(i).

                           (ii) All Other Transfers and Exchanges of Beneficial
                  Interests in Global Notes. In connection with all transfers
                  and exchanges of beneficial interests that are not subject to
                  Section 2.07(b)(i) above, the transferor of such beneficial
                  interest must deliver to the Registrar either (A) (1) a
                  written order from a Participant or an Indirect Participant
                  given to the Depositary in accordance with the Applicable
                  Procedures directing the Depositary to credit or cause to be
                  credited a beneficial interest in another Global Note in an
                  amount equal to the beneficial interest to be transferred or
                  exchanged and (2) instructions given in accordance with the
                  Applicable Procedures containing information regarding the
                  Participant account to be credited with such increase or (B)
                  if permitted under Section 2.07(a) hereof, (1) a written order
                  from a Participant or an Indirect Participant given to the
                  Depositary in accordance with the Applicable Procedures
                  directing the Depositary to cause to be issued a Definitive
                  Note in an amount equal to the beneficial interest to be
                  transferred or exchanged and (2) instructions given by the
                  Depositary to the Registrar containing information regarding
                  the Person in whose name such Definitive Note shall be
                  registered to effect the transfer or exchange referred to in
                  (B)(1) above; provided that in no event shall Definitive Notes
                  be issued upon the transfer or exchange of beneficial
                  interests in the Regulation S Temporary Global Note prior to
                  (x) the expiration of the Distribution Compliance Period and
                  (y) the receipt by the Registrar of any certificates required
                  pursuant to Rule 903 under the Securities Act. Upon
                  consummation of an Exchange Offer by the Company in accordance
                  with Section 2.07(f) hereof, the requirements of this Section
                  2.07(b)(ii) shall be deemed to have been satisfied upon
                  receipt by the Registrar of the instructions contained in the
                  Letter of Transmittal delivered by the Holder of such
                  beneficial interests in the Restricted Global Notes. Upon
                  notification from the Registrar that all of the requirements
                  for transfer or exchange of beneficial interests in Global
                  Notes contained in this Indenture and the Notes or otherwise
                  applicable under the Securities Act have been satisfied, the
                  Trustee shall adjust the principal amount of the relevant
                  Global Note(s) pursuant to Section 2.07(h) hereof.

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

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

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

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

                                      -31-
<PAGE>

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

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

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

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

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

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

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

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

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

                                    (v) Transfer or Exchange of Beneficial
                  Interests in Unrestricted Global Notes for Beneficial
                  Interests in Restricted Global Notes Prohibited. Beneficial

                                      -32-
<PAGE>

                  interests in an Unrestricted Global Note cannot be exchanged
                  for, or transferred to Persons who take delivery thereof in
                  the form of, beneficial interests in a Restricted Global Note.

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

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

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

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

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

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

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

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

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

                  the Trustee shall cause the aggregate principal amount of the
                  applicable Global Note to be reduced accordingly pursuant to
                  Section 2.07(h) hereof, and the Company shall execute and upon
                  receipt of an Authentication Order in accordance with Section
                  2.03 hereof or in accordance with a previously delivered
                  Authentication Order, the Trustee shall authenticate and
                  deliver to the Person designated in the instructions a
                  Definitive

                                      -33-
<PAGE>

                  Note in the appropriate principal amount. Any Restricted
                  Definitive Note issued in exchange for a beneficial interest
                  in a Restricted Global Note pursuant to this Section 2.07(c)
                  shall be registered in such name or names and in such
                  authorized denomination or denominations as the holder of such
                  beneficial interest shall instruct the Registrar through
                  instructions from the Depositary and the Participant or
                  Indirect Participant. The Trustee shall deliver such
                  Restricted Definitive Notes to the Persons in whose names such
                  Notes are so registered. Any Restricted Definitive Note issued
                  in exchange for a beneficial interest in a Restricted Global
                  Note pursuant to this Section 2.07(c)(i) shall bear the
                  Private Placement Legend and shall be subject to all
                  restrictions on transfer contained therein.

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

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

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

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

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

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

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

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

                                      -34-
<PAGE>

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

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

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

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

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

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

                                      -35-
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

                                      -36-
<PAGE>

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

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

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

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

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

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

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

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

                                      -37-
<PAGE>

requesting Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.07(e).

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

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

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

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

                                    (D) if the transfer shall be to an
                           Accredited Investor in reliance on an exemption from
                           the registration requirements of the Securities Act
                           other than those listed in subparagraphs (A) and (B)
                           above, then the transferor must deliver a certificate
                           in the form of Exhibit B hereto, including the
                           certifications, certificates and Opinion of Counsel
                           required by item (3)(d) thereof, if applicable.

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

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

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

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

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

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

                                      -38-
<PAGE>

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

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

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

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

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

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

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

                                      -39-
<PAGE>

be increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.

                  (h) General Provisions Relating to Transfers and Exchanges.

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

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

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

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

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

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

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

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

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

                           (x) Subject to compliance with any applicable
         additional requirements contained in this Article, when a Note is
         presented to the Registrar with a request to register a transfer
         thereof or to exchange such Note for an equal principal amount of Notes
         of other authorized denominations, the Registrar shall register the
         transfer or make the exchange as requested; provided, however, that
         every Note presented or surrendered for registration of transfer or

                                      -40-
<PAGE>

         exchange shall be duly endorsed or accompanied by an assignment form
         and, if applicable, a transfer certificate, each in the form included
         in Exhibit A attached hereto and in form satisfactory to the Registrar
         and each duly executed by the Holder thereof or its attorney duly
         authorized in writing. To permit registration of transfers and
         exchanges, upon surrender of any Note for registration of transfer or
         exchange at an office or agency maintained for such purpose pursuant to
         Section 2.04, the Company shall execute, and the Trustee shall
         authenticate, Notes of a like aggregate principal amount at maturity at
         the Registrar's request.

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

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

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

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

SECTION 2.08 MUTILATED, DESTROYED, LOST OR STOLEN NOTES

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

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

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

                                      -41-
<PAGE>

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

SECTION 2.09 OUTSTANDING NOTES

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

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

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

SECTION 2.10 TREASURY NOTES

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

SECTION 2.11 TEMPORARY NOTES

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

SECTION 2.12 CANCELLATION

                  The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel and destroy all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation in
accordance with customary practices (subject to the record retention requirement
of the Exchange Act) and, upon request, deliver a

                                      -42-
<PAGE>

certificate of such destruction to the Company unless the Company directs the
Trustee to deliver canceled Notes to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.

SECTION 2.13 DEFAULTED INTEREST

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

SECTION 2.14 COMPUTATION OF INTEREST

                  Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.

SECTION 2.15 ISSUANCE OF ADDITIONAL NOTES

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

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

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

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

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

SECTION 2.16 ONE CLASS OF NOTES

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

SECTION 2.17 CUSIP, ISIN OR OTHER SIMILAR NUMBERS

                                      -43-
<PAGE>

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

                                    ARTICLE 3

                            REDEMPTION AND PREPAYMENT

SECTION 3.01 NOTICES TO TRUSTEE

                  If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, the Company shall furnish to the
Trustee, at least 35 days but not more than 60 days (unless a shorter period is
acceptable to the Trustee) (or, in the case of a redemption pursuant to Section
3.08, by 11:00 a.m. New York time (or such other time of day acceptable to the
Trustee which will permit it to give the notice referred to in the last
paragraph of Section 3.03) at least one Business Day prior to the Special
Redemption Date) before a redemption date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price (expressed as a percentage or principal
amount).

SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED

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

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

SECTION 3.03 NOTICE OF REDEMPTION

                  Except as provided in Section 3.08, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture.

                                      -44-
<PAGE>

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

                  (a) the redemption date;

                  (b) the redemption price;

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

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

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

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

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

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

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

                  Notwithstanding the foregoing, in the event that the Notes
will be redeemed pursuant to the Special Redemption as set forth in Section
3.08, the Trustee shall, at the Company's request and in the Company's name and
expense, give notice of such redemption to each Holder in accordance with this
Section at least one Business Day prior to the Special Redemption Date.

SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION

                  Once notice of redemption is mailed in accordance with Section
3.03 hereof or delivered in accordance with Section 3.08 hereof, Notes called
for redemption shall become irrevocably due and payable on the redemption date
at the redemption price. A notice of redemption may not be conditional.

SECTION 3.05. DEPOSIT OF REDEMPTION PRICE

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

                                      -45-
<PAGE>

                  If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

SECTION 3.06. NOTES REDEEMED IN PART

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

SECTION 3.07. OPTIONAL REDEMPTION

                  (a) Except as set forth in clause (b) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to November 15, 2009. Thereafter, the Company shall have the
option to the Notes, in whole or in part at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Additional Interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on November 15 of the
years indicated below:

<TABLE>
<CAPTION>

Year                                                                                 Percentage
----                                                                                 ----------
<S>                                                                                  <C>
2009..............................................................                    103.875%
2010..............................................................                    102.583%
2011..............................................................                    101.292%
2012 and thereafter...............................................                    100.000%
</TABLE>

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

                  (b) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to November 15, 2007, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price equal to 107.750% of the
principal amount thereof on the redemption date, plus accrued and unpaid
interest and Additional Interest, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings by the Company; provided that (1)
at least 65% of the aggregate principal amount of Notes issued under this
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Subsidiaries); and (2)
that such redemption shall occur within 90 days of the date of the closing of
such offering.

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

SECTION 3.08. MANDATORY SPECIAL REDEMPTION.

                                      -46-
<PAGE>

                  Notwithstanding the foregoing, in the event that the
Acquisition is not consummated on or prior to December 27, 2004 or if the
Acquisition Agreement is terminated prior to such time, the Company shall redeem
(the "Special Redemption") the Notes, in whole but not in part, on or prior to
December 28, 2004, at a redemption price (the "Special Redemption Price") in
cash equal to 100.0% of the principal amount of the Notes plus accrued and
unpaid interest to the Special Redemption Date. The "Special Redemption Date"
means the earlier of the date specified by the Company in an Officers'
Certificate delivered in accordance with the Escrow Agreement and December 28,
2004. The Trustee shall deliver to each Holder a written notice (specifying the
information specified in Section 3.03) of the Special Redemption one Business
Day prior to the Special Redemption Date.

SECTION 3.09. MANDATORY REDEMPTION

                  Except as set forth in Sections 3.08, 4.10 and 4.15, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

                                    ARTICLE 4

                                    COVENANTS

SECTION 4.01. PAYMENT OF NOTES

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

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

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

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

SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY

                  The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-

                                      -47-
<PAGE>

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

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

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

SECTION 4.03. REPORTS

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

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

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

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

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

                  The Company also shall comply with the other provisions of TIA
Section 314(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and

                                      -48-
<PAGE>

the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officers'
Certificates). The Trustee shall have no duty or responsibility to review such
reports, information or documents.

SECTION 4.04. COMPLIANCE CERTIFICATE

                  (a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto).

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

SECTION 4.05. TAXES

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

SECTION 4.06. STAY, EXTENSION AND USURY LAWS

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

SECTION 4.07. RESTRICTED PAYMENTS

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

                  (1) declare or pay any dividend or make any other payment or
         distribution on account of the Company's or any of its Restricted
         Subsidiaries' Equity Interests (including, without limitation, any
         payment in connection with any merger or consolidation involving the
         Company or any of its Restricted Subsidiaries) or to the direct or
         indirect holders of the

                                      -49-
<PAGE>

         Company's or any of its Restricted Subsidiaries' Equity Interests in
         their capacity as such (other than dividends or distributions payable
         to the Company or a Restricted Subsidiary of the Company or payable in
         Equity Interests (other than Disqualified Stock) of the Company);

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

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

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

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

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

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

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

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

                           (b) 100% of the fair market value of the Qualified
                  Proceeds received by the Company since the date of this
                  Indenture as a contribution to its common equity capital
                  (other than any capital contribution pursuant to clause (7)(e)
                  of the next paragraph or from the issue or sale of Equity
                  Interests of the Company (other than Disqualified Stock) or
                  from the issue or sale of convertible or exchangeable
                  Disqualified Stock or convertible or exchangeable debt
                  securities of the Company that have been converted into or
                  exchanged for such Equity Interests (other than Equity
                  Interests (or Disqualified Stock or debt securities) sold to a
                  Subsidiary of the Company or an employee stock ownership plan,
                  option plan or similar trust to the extent such sale to an
                  employee stock ownership plan or similar trust is financed by
                  loans from or guaranteed by the Company or any Restricted
                  Subsidiary unless such loans have been repaid with cash on or
                  prior to the date of determination), plus

                           (c) to the extent that any Restricted Investment that
                  was made after the date of this Indenture is sold for cash or
                  otherwise liquidated or repaid for cash, the lesser of (i) the
                  return of capital with respect to such Restricted Investment,
                  whether through

                                      -50-
<PAGE>

                  interest payments, principal payments, dividends or other
                  distributions or payments or Qualified Proceeds (less the cost
                  of disposition, if any) and (ii) the initial amount of such
                  Restricted Investment, plus

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

                  The preceding provisions shall not prohibit:

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

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

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

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

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

                                      -51-
<PAGE>

                  (6) any payments made in connection with the consummation of
         the Transactions on substantially the terms described in the offering
         memorandum;

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

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

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

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

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

                           (e) amounts payable by K&F Parent, Inc. under the Tax
                  Benefit Note; provided that the aggregate principal amount of
                  such dividend or loan shall not exceed the lesser of (i) the
                  amount payable thereunder and (ii) $20.0 million; provided
                  further that any tax refund or cash benefit received by any
                  direct or indirect parent company of the Company arising from
                  the Tender Offers shall be contributed to the capital of the
                  Company as a capital contribution; and

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

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

SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

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

                  (1) pay dividends or make any other distributions on its
         Capital Stock to the Company or any of its Restricted Subsidiaries, or
         with respect to any other interest or

                                      -52-
<PAGE>

         participation in, or measured by, its profits, or pay any Indebtedness
         owed to the Company or any of its Restricted Subsidiaries;

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

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

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

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

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

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

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

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

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

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

                                      -53-
<PAGE>

                  (8) Permitted Refinancing Indebtedness, provided that the
         restrictions contained in the agreements governing such Permitted
         Refinancing Indebtedness are no more restrictive, taken as a whole,
         than those contained in the agreements governing the Indebtedness being
         refinanced;

                  (9) Liens securing Indebtedness otherwise permitted to be
         incurred under the provisions of Section 4.12 that limit the right of
         the debtor to dispose of the assets subject to such Liens;

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

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

SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

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

                  The first paragraph of this covenant shall not prohibit:

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

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

                  (3) the incurrence by the Company and the Guarantors of
         Indebtedness represented by the Notes (other than Additional Notes) and
         the related Subsidiary Guarantees and the Exchange Notes and the
         related Subsidiary Guarantees to be issued in exchange therefor
         pursuant to the registration rights agreement;

                  (4) (A) Indebtedness incurred to finance the purchase,
         improvement or construction of property, plant or equipment (including
         through the purchase of all of the Capital Stock of a Person) so long
         as such Indebtedness is secured by a Lien on the property, plant or
         equipment so purchased, improved or constructed and such Indebtedness
         does not exceed the value of such

                                      -54-
<PAGE>

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

                  (5) the incurrence by the Company or any of its Restricted
         Subsidiaries of Permitted Refinancing Indebtedness (other than
         intercompany Indebtedness) in exchange for, or the net proceeds of
         which are used to redeem, repurchase, retire, defease, or otherwise
         refund, refinance, or replace Indebtedness that was permitted by this
         Indenture to be incurred under the first paragraph of this covenant or
         clauses (2), (3), (4) or (5) of this paragraph;

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

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

                           (b) (i) any subsequent issuance or transfer of Equity
                  Interests that results in any such Indebtedness being held by
                  a Person other than the Company or a Restricted Subsidiary of
                  the Company, (ii) any sale or other transfer of any such
                  Indebtedness to a Person that is neither the Company nor a
                  Restricted Subsidiary of the Company or (iii) the designation
                  of a Restricted Subsidiary that holds such Indebtedness as an
                  Unrestricted Subsidiary, will be deemed, in each case, to
                  constitute an incurrence of such Indebtedness by the Company
                  or such Restricted Subsidiary, as the case may be, that was
                  not permitted by this clause (6);

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

                  (8) the guarantee by the Company or any of the Guarantors of
         Indebtedness of the Company or any Guarantor that was permitted to be
         incurred by another provision of this covenant;

                  (9) obligations incurred in the ordinary course of business
         under (a) bankers acceptances or trade letters of credit which are to
         be repaid in full not more than one year after the date on which such
         Indebtedness is originally incurred to finance the purchase of goods by
         the Company or a Restricted Subsidiary of the Company; (b) standby
         letters of credit issued for the purpose of supporting (i) workers'
         compensation liabilities of the Company or any of its Restricted
         Subsidiaries as required by law, (ii) obligations with respect to
         leases of the Company or any of its Restricted Subsidiaries, or (iii)
         performance, payment, deposit or surety obligations

                                      -55-
<PAGE>

         of the Company or any of its Restricted Subsidiaries; (c) performance
         bonds and surety bonds, and refinancings thereof; and (d) guarantees of
         Indebtedness incurred in the ordinary course of business of suppliers,
         licensees, franchisees, or customers in an aggregate amount not to
         exceed $5.0 million at any time outstanding;

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

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

                  (12) Indebtedness incurred in connection with any sale and
         leaseback transaction; provided that the aggregate of the Indebtedness
         incurred pursuant to this clause (12) shall not exceed $30.0 million at
         any time outstanding;

                  (13) Indebtedness to repurchase shares, or cancel options to
         purchase shares, of Equity Interests of the Company or any Restricted
         Subsidiary of the Company or any direct or indirect parent of the
         Company held by any then current or former director, officer or
         employee of, or consultant to, the Company or any of its Restricted
         Subsidiaries; provided that the aggregate of the Indebtedness incurred
         pursuant to this clause (13) shall not exceed $5.0 million in any
         fiscal year; provided that the amount available in any given fiscal
         year shall be increased by the excess, if any, of (i) $5.0 million over
         (ii) the amount used pursuant to this clause (13) in the immediately
         preceding two fiscal years;

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

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

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

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

                  If any Non-Recourse Debt of an Unrestricted Subsidiary shall
at any time cease to constitute Non-Recourse Debt or such Unrestricted
Subsidiary shall be redesignated a Restricted

                                      -56-
<PAGE>

Subsidiary, such event will be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary.

                  For purposes of determining compliance with this Section 4.09:

                  (1) in the event that an item of proposed Indebtedness meets
         the criteria of more than one of the categories described in clauses
         (1) through (17) above, or is entitled to be incurred pursuant to the
         first paragraph of this covenant, the Company will be permitted to
         classify (or later classify or reclassify in whole or in part in its
         sole discretion) such item of Indebtedness in any manner that complies
         with this covenant;

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

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

SECTION 4.10. ASSET SALES

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

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

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

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

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

                                      -57-
<PAGE>

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

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

                  Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any of its Restricted Subsidiaries may apply an
amount of cash equal to the amount of those Net Proceeds at its option to:

                  (A) repay Senior Debt and, if such Senior Debt repaid is
         revolving credit Indebtedness, to correspondingly reduce commitments
         with respect thereto;

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

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

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

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

         To the extent that the Company and its Restricted Subsidiaries do not
apply an amount of cash equal to the amount of such Net Proceeds from Asset
Sales during such period as provided in the second preceding paragraph the
amount not so applied shall constitute "Excess Proceeds." No later than the
365th day after the Asset Sale (or, at the Company's option, an earlier date),
if the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company
shall make an offer (an "Asset Sale Offer") to all Holders of Notes and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds (the "Offer Amount"). The offer
price in any Asset Sale Offer will be equal to 100% of the principal amount (or
accreted value, as applicable) of the Notes and such other pari passu
Indebtedness, plus accrued and unpaid interest and Additional Interest (or its
equivalent with respect to any such pari passu Indebtedness), if any, to the
date of purchase, and will be payable in cash, in each case, in integral
multiples of $1,000. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other pari passu Indebtedness tendered in such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Excess Proceeds will be allocated by
the Company to the Notes and such other pari passu Indebtedness on a pro rata
basis (based upon the respective principal amounts (or accreted value, if
applicable) of the Notes and such other pari passu Indebtedness tendered into
such Asset Sale Offer) and the portion of each Note to be purchased will
thereafter be determined by the Trustee on a pro rata basis among the Holders of
such Notes with appropriate adjustments such that the Notes may only be
purchased in integral multiples of $1,000. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.

                                      -58-
<PAGE>

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

                  (1) that the Asset Sale Offer is being made pursuant to this
         Section 4.11 and that such Asset Sale Offer shall remain open for 20
         Business Days;

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

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

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

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

                  (6) that Holders shall be entitled to withdraw their election
         if the Company, the Depositary or the Paying Agent, as the case may be,
         receives, not later than the expiration of the offer period, a
         telegram, telex, facsimile transmission or letter setting forth the
         name of the Holder, the principal amount of the Note the Holder
         delivered for purchase and a statement that such Holder is withdrawing
         his election to have such Note purchased;

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

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

                  On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes and such other pari passu Indebtedness or portions
thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Notes, and such other pari passu Indebtedness or
portions thereof tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes, and such other pari passu Indebtedness or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 4.10. The Company, the Depositary or the Paying Agent, as
the case may be, shall on the Purchase Date mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company

                                      -59-
<PAGE>

shall promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such Holder, in
a principal amount at maturity equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer promptly after Purchase Date.

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

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

                  Prior to making any Asset Sale Offer, but in any event within
30 days following the date on which such Asset Sale Offer would otherwise be
required, the Company shall either repay all outstanding Senior Debt (or
commitments to extend Senior Debt) that prohibits prepayment or repurchase of
the Notes pursuant to an Asset Sale Offer or obtain the requisite consents, if
any, under all agreements governing such Senior Debt or commitments to permit
the repurchase of Notes required by this Section 4.10.

SECTION 4.11. TRANSACTIONS WITH AFFILIATES

                  The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company or any of its Restricted Subsidiaries
(each, an "Affiliate Transaction") involving aggregate consideration in excess
of $1.0 million, unless:

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

                  (2) the Company delivers to the Trustee:

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

                                      -60-
<PAGE>

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

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

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

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

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

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

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

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

                  (7) Restricted Payments that are permitted by the provisions
         of this Indenture in Section 4.07;

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

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

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

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SECTION 4.12. LIENS

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

SECTION 4.13. BUSINESS ACTIVITIES

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

SECTION 4.14. CORPORATE EXISTENCE

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

SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL

                  If a Change of Control occurs, the Company will be required to
make an offer (a "Change of Control Offer") to each Holder of Notes, unless the
Company has exercised its right to redeem all the Notes as described under
Section 3.07, to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Holder's Notes on the terms set forth in this
Indenture. In the Change of Control Offer, the Company will offer a payment in
cash (the "Change of Control Payment") equal to 101% of the aggregate principal
amount of Notes repurchased plus accrued and unpaid interest and Additional
Interest, if any, on the Notes repurchased, to the date of purchase (the "Change
of Control Payment Date"). Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder stating: (i) that the Change of
Control Offer is being made pursuant to this Section 4.15 (and describing the
transactions or transactions that constitute the Change of Control) and that all
Notes tendered shall be accepted for payment; (ii) the purchase price and Change
of Control Payment Date, which shall be no earlier than 30 days and no later
than 60 days from the date such notice is mailed; (iii) that any Note not
tendered shall continue to accrue interest and Additional Interest, if any; (iv)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest and Additional Interest, if any, after the Change
of Control Payment Date; (v) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer shall be required to surrender the Notes,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of

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Control Payment Date; (vi) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount at maturity of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have the Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part shall be issued
new Notes equal in principal amount at maturity to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be in a minimum principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof.

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

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

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

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

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

                  The Paying Agent shall promptly mail to each Holder of Notes
validly tendered the Change of Control Payment for such Notes, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each new Note will be in a
minimum principal amount of $2,000 or an integral multiple of $1,000 in excess
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.

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

                  The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer.

                  Prior to complying with any of the other provisions of this
Section 4.15, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Debt (or commitments to extend
Senior Debt) that prohibits prepayment or repurchase of the Notes pursuant to a
Change of Control Offer or obtain the requisite consents, if any, under all
agreements

                                      -63-
<PAGE>

governing such Senior Debt or commitments to permit the repurchase of Notes
required by this Section 4.15.

SECTION 4.16. FUTURE SUBSIDIARY GUARANTEES

                  If the Company or any of its Restricted Subsidiaries acquires
or creates another Domestic Subsidiary after the date hereof, then the Company
shall cause that newly acquired or created Domestic Subsidiary, unless such
newly acquired or created Subsidiary has been designated an Unrestricted
Subsidiary under this Indenture, to become a Guarantor and execute a Subsidiary
Guarantee pursuant to a supplemental indenture in form and substance set forth
in Exhibit E-1 and deliver an Opinion of Counsel satisfactory to the Trustee, to
the Trustee within ten Business Days of the date on which it was acquired or
created. In addition, if any of the Company's Foreign Subsidiaries guarantee any
Indebtedness of the Company, then the Company shall cause such Foreign
Subsidiary to become a Guarantor and execute a Subsidiary Guarantee pursuant to
a supplemental indenture in form and substance set forth in Exhibit E-1 and
deliver an Opinion of Counsel satisfactory to the Trustee, to the Trustee within
ten Business Days of the date on which it guaranteed such Indebtedness.

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

SECTION 4.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES

                  The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary properly designated will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under the first paragraph
(or clause (7) of the second paragraph) of Section 4.07 or Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.

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

SECTION 4.18. PAYMENTS FOR CONSENT

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

SECTION 4.19. LIMITATION ON LAYERING DEBT

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                  The Company shall not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Subsidiary Guarantee.

                                    ARTICLE 5

                                   SUCCESSORS

SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS

                  The Company may not, directly or indirectly: (1) consolidate
or merge with or into another Person (whether or not the Company is the
surviving corporation); or (2) sell, assign, transfer, convey, lease or
otherwise dispose of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person, unless:

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

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

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

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

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

                  Notwithstanding the preceding clause (4), (i)(x) any
Restricted Subsidiary may consolidate with, merge into, sell, assign, convey,
lease or otherwise transfer all or part of its properties and assets to the
Company or to any other Restricted Subsidiary that is a Guarantor and (y) the
Company

                                      -65-
<PAGE>

may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax benefits and
(ii) the Company may consummate the Merger.

SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED

                  Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the Company shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein. The
predecessor company shall be relieved from the obligation to pay the principal
of and interest on the Notes (and its obligations to the Trustee pursuant to
Section 7.07) only in the case of a sale or other disposition of all or
substantially all of the properties and assets of all of the Company and its
Restricted Subsidiaries taken as a whole that meets the requirements of Section
5.01 hereof. The successor Person shall execute a supplemental indenture in form
and substance set forth in Exhibit E-2 and satisfactory to the Trustee and
deliver an Opinion of Counsel satisfactory to the Trustee, to the Trustee within
ten Business Days of the date of any such consolidation or merger, or any sale,
assignment, transfer, conveyance or other disposition of all or substantially
all of the assets of the Company.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

SECTION 6.01. EVENTS OF DEFAULT

                  Each of the following is an Event of Default:

                  (1) default for 30 days in the payment when due of interest
         on, or Additional Interest with respect to, the Notes, whether or not
         prohibited by the subordination provisions of this Indenture;

                  (2) default in payment when due of the principal of, or
         premium, if any, on the Notes, whether or not prohibited by the
         subordination provisions of this Indenture;

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

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

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

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

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<PAGE>

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

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

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

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

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

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

                           (a) commences a voluntary case,

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

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

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

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

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

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

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

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

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<PAGE>

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

SECTION 6.02. ACCELERATION

                  In the case of an Event of Default arising from clause (9) or
(10) of the first paragraph of Section 6.01, with respect to the Company or any
Restricted Subsidiary that is a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable immediately without further
action or notice. If any other Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice in writing to the Trustee and the Company
designated as a "Notice of Default," may declare all the Notes to be due and
payable (a) if there shall no longer be any Credit Facility that constitutes
Senior Debt, immediately or (b) if there shall be a Credit Facility that
constitutes Senior Debt, upon the first to occur of (i) the declaration of an
acceleration of Indebtedness outstanding under any such Credit Facility and (ii)
the fifth Business Day after receipt by the Company and the agents or trustees
acting on behalf of any such Credit Facility of such declaration given under the
indenture and, upon any such declaration, such principal amount (and premium, if
any) and accrued interest, notwithstanding anything contained in the indenture
or the Notes to the contrary will become immediately due and payable. Any such
declaration with respect to the Notes may be annulled by the Holders of a
majority in aggregate principal amount of the then outstanding Notes upon the
conditions set forth herein.

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

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

SECTION 6.03. OTHER REMEDIES

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

                  The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a

                                      -68-
<PAGE>

Note in exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. WAIVER OF PAST DEFAULTS

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

SECTION 6.05. CONTROL BY MAJORITY

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

SECTION 6.06. LIMITATION ON SUITS

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

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

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

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

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

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

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

SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT

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<PAGE>

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

SECTION 6.08. COLLECTION SUIT BY TRUSTEE

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

SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM

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

SECTION 6.10. PRIORITIES

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

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

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

                                      -70-
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                  Third: to the Company or to such party as a court of competent
         jurisdiction shall direct in writing.

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

SECTION 6.11. UNDERTAKING FOR COSTS

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

                                    ARTICLE 7

                                     TRUSTEE

SECTION 7.01. DUTIES OF TRUSTEE

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

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

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

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

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

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

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

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

                                      -71-
<PAGE>

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

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

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

SECTION 7.02. RIGHTS OF TRUSTEE

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

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

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

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

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

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

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

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

                                      -72-
<PAGE>

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

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

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

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

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

SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE

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

SECTION 7.04. TRUSTEE'S DISCLAIMER

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

SECTION 7.05. NOTICE OF DEFAULTS

                                      -73-
<PAGE>

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

SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES

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

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

SECTION 7.07. COMPENSATION AND INDEMNITY

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

                  The Company and the Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company and the Guarantors (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company, the
Guarantors or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith or willful misconduct. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company or any of the
Guarantors of their obligations hereunder. The Company or such Guarantor shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. Neither the Company nor any Guarantor need pay for any
settlement made without its consent.

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

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

                                      -74-
<PAGE>

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

SECTION 7.08. REPLACEMENT OF TRUSTEE

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

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

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

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

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

                  (d) the Trustee becomes incapable of acting.

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

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

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

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

SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC

                                      -75-
<PAGE>

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

SECTION 7.10. ELIGIBILITY; DISQUALIFICATION

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

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

                  For purposes of Section 310(b)(1) of the TIA and to the extent
permitted thereby, the Trustee shall not be deemed to have a conflicting
interest arising from its capacity as trustee in respect of (i) the Indenture,
dated October 15, 1997, pursuant to which K&F Industries, Inc.'s 9-1/4% Senior
Subordinated Notes due 2007 are outstanding and (ii) the Indenture, dated
December 20, 2002, pursuant to which K&F Industries, Inc.'s 9-5/8% Senior
Subordinated Notes due 2010 are outstanding.

SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY

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

                                    ARTICLE 8

                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE

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

SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE

                  Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from all of its obligations with
respect to all outstanding Notes (including Subsidiary Guarantees) and this
Indenture on the date the conditions set forth below are satisfied and the
Guarantors shall be deemed to have been discharged with respect to their
Subsidiary Guarantees (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and the Guarantors shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
(including Subsidiary Guarantees), which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes, the Subsidiary Guarantees
and this Indenture (and the Trustee, on demand of and at the

                                      -76-
<PAGE>

expense of the Company, shall execute proper instruments acknowledging the
same); provided that the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of or premium, if any, Additional Interest, if any, or interest on
the Notes when such payments are due, (b) the Company's obligations with respect
to the Notes concerning issuing temporary Notes, registration of Notes and
mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payment and money for security payments held in trust, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's and the Guarantor's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.

SECTION 8.03. COVENANT DEFEASANCE

                  Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from its obligations under the covenants contained in Article 4
(other those in Sections 4.01, 4.02, 4.06 and 4.14) and in clause (3) of Section
5.01(4) hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Subsidiary Guarantees, the Company and the Guarantors may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes and Subsidiary Guarantees
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(6) through 6.01(8) hereof shall not constitute Events of Default.

SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE

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

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

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

                                      -77-
<PAGE>

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

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

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

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

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

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

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

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

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

                  Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company

                                      -78-
<PAGE>

acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal of or
premium, if any, Additional Interest, if any, or interest, but such money need
not be segregated from other funds except to the extent required by law.

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

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

SECTION 8.06. REPAYMENT TO THE COMPANY

                  Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or
premium, if any, Additional Interest, if any, or interest on the Notes and
remaining unclaimed for two years after such principal, and premium, if any,
Additional Interest, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in The New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.

SECTION 8.07. REINSTATEMENT

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

                                    ARTICLE 9

                        AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES

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

                  (1) cure any ambiguity, defect or inconsistency;

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

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

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

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

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

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

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

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

                  Upon the request of the Company accompanied by a resolution of
the Board of Directors of the Company authorizing the execution of any such
amended or supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.

SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES

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

                                      -80-
<PAGE>

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

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

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

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

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

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

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

                  (7) waive a redemption payment with respect to any Note (other
         than a payment required by one of the covenants contained in Section
         4.10 and Section 4.15);

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

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

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

                  Upon the request of the Company accompanied by a resolution of
the Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.

SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT

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

SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS

                                      -81-
<PAGE>

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

SECTION 9.05. NOTICE OF AMENDMENT; NOTATION ON OR EXCHANGE OF NOTES

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

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

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

SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.

                  The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement, in the
sole discretion of the Trustee, does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, in addition to
the documents required by Section 11.04 hereof, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.

                                   ARTICLE 10

                              SUBSIDIARY GUARANTEES

SECTION 10.01. GUARANTEE

                  (a) Subject to this Article 10, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:

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

                           (ii) in case of any extension of time of payment or
         renewal of any Notes or any of such other obligations, that same will
         be promptly paid in full when due or performed in

                                      -82-
<PAGE>

         accordance with the terms of the extension or renewal, whether at
         Stated Maturity, by acceleration or otherwise.

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

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

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

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

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

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

SECTION 10.02. LIMITATION ON GUARANTOR LIABILITY

                  Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited to the maximum amount
that will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Guarantor that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 10, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.

                                      -83-
<PAGE>

SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS

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

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

         (2) either:

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

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

SECTION 10.04. RELEASES OF SUBSIDIARY GUARANTEES

         The Subsidiary Guarantee of a Guarantor will be released:

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

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

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

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

                                   ARTICLE 11

                           SATISFACTION AND DISCHARGE

SECTION 11.01. SATISFACTION AND DISCHARGE

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

                  (a) either:

                                      -84-
<PAGE>

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

                           (ii) all Notes that have not been previously
         delivered to the Trustee for cancellation (A) have become due and
         payable or (B) will become due and payable at their maturity within one
         year or (C) are to be called for redemption within one year under
         arrangements satisfactory to the Trustee for the giving of a notice of
         redemption by the Trustee, and the Company or any Guarantor has
         irrevocably deposited or caused to be deposited with the Trustee as
         trust funds in trust solely for the benefit of the Holders, cash in
         U.S. dollars, non-callable Government Securities, or a combination
         thereof, in such amounts as will be sufficient without consideration of
         any reinvestment of interest, to pay and discharge the entire
         Indebtedness on the Notes not previously delivered to the Trustee for
         cancellation for principal, premium, if any, and interest and
         Additional Interest, if any, on the Notes to the date of deposit, in
         the case of Notes that have become due and payable, or to the Stated
         Maturity or redemption date, as the case may be;

                  (b) the Company or any Guarantor has paid or caused to be paid
all other sums payable by it under this Indenture;

                  (c) no Default or Event of Default has occurred and is
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit shall not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company or any Guarantor is bound; and

                  (d) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.

                  In addition, the Company must deliver an Officers' Certificate
and an Opinion of Counsel to the Trustee stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been satisfied.

                  Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.07 and,
if money shall have been deposited with the Trustee pursuant to subclause (C) of
Clause (ii) of this Section, the obligations of the Trustee under Section 11.02
shall survive.

SECTION 11.02. APPLICATION OF TRUST FUNDS

                  Subject to Section 11.03 hereof, all cash and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 11.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest and
Additional Interest, if any, but such cash and securities need not be segregated
from other funds except to the extent required by law.

SECTION 11.03. REPAYMENT TO COMPANY

                                      -85-
<PAGE>

                  Any cash or non-callable Government Securities deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest or Additional
Interest, if any, on, any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest or Additional Interest, if any, has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder shall
thereafter, as an unsecured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such cash and securities, and all liability of the Company as trustee thereof,
shall thereupon cease; provided that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company
cause to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such cash and securities remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such cash
and securities then remaining will be repaid to the Company.

SECTION 11.04. REINSTATEMENT

                  If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Sections
11.01 and 11.02, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and any Guarantor's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Sections 11.01 and 11.02 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Sections 11.01 and 11.02 hereof, as the case may be; provided that, if the
Company makes any payment of principal of, premium on, if any, or interest or
Additional Interest, if any, on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

                                   ARTICLE 12

                                  SUBORDINATION

SECTION 12.01. AGREEMENT TO SUBORDINATE

                  The Company agrees, and each Holder by accepting a Note
agrees, that the payment of principal, interest and premium and Additional
Interest, if any, and interest on, and other Obligations evidenced by, the Notes
is subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment in full of all Senior Debt (whether
outstanding on the date hereof or hereafter incurred) of the Company, and that
the subordination is for the benefit of the holders of Senior Debt.

SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY

                  Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities:

                           (1) holders of Senior Debt shall be entitled to
                  receive payment in full in cash (or U.S. dollar-denominated
                  Cash Equivalents) of all Obligations due in respect of such
                  Senior Debt (including interest after the commencement of any
                  such proceeding at the

                                      -86-
<PAGE>

                  rate specified in the applicable Senior Debt) before the
                  Holders of Notes shall be entitled to receive any payment of
                  any kind or character with respect to the Notes; and

                           (2) until all Obligations with respect to Senior Debt
                  are paid in full in cash (or U.S. dollar-denominated Cash
                  Equivalents), any distribution to which the Holders of Notes
                  would be entitled but for this Article 12 shall be made to the
                  holders of such Senior Debt.

                  Notwithstanding the foregoing, Holders of Notes may receive
and retain (i) Permitted Junior Securities and (ii) payments made from the
trusts described in Article 8 hereof.

SECTION 12.03. DEFAULT ON DESIGNATED SENIOR DEBT

                  The Company may not redeem or make any payment of any kind or
character upon or in respect of the Notes (other than in (1) Permitted Junior
Securities and (2) payments made from the trusts described in Article 8 hereof)
if:

                           (i) a default in the payment of the principal of,
                  premium, if any, or interest on, or fees or any other amount
                  payable with respect to, any Designated Senior Debt occurs and
                  is continuing beyond any applicable grace period; or

                           (ii) any other default occurs and is continuing with
                  respect to Designated Senior Debt that permits holders of the
                  Designated Senior Debt as to which such default relates to
                  accelerate its maturity (or that would permit such holders to
                  accelerate with the giving of notice or passage of time or
                  both) and the Trustee receives a notice of such default (a
                  "Payment Blockage Notice") from the Company or the holders of
                  such Designated Senior Debt.

                  Payments or distributions on the Notes or redemption of the
Notes may and shall be resumed:

                  (a) in the case of default referred to in Section 12.03(i),
         upon the date on which such default is cured or waived, and

                  (b) in case of a default referred to in Section 12.03(ii),
         upon the earlier of (i) the date on which such default is cured or
         waived or (ii) 179 days after the date on which the applicable Payment
         Blockage Notice is received by the Trustee (unless the maturity of any
         Designated Senior Debt has been accelerated or unless the provisions of
         this Article 12 otherwise do not permit such payment).

                  No new Payment Blockage Notice may be delivered unless and
until (a) 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice and (2) all scheduled payments of principal of, premium
and Additional Interest, if any, and interest on the Notes that have come due
have been paid in full in cash. No nonpayment default that existed or was
continuing on the date of receipt by the Trustee of any Payment Blockage Notice
shall be, or be made, the basis for a subsequent Payment Blockage Notice unless
such default has been cured or waived for a period of not less than 90
consecutive days. Following the expiration of any period during which the
Company is prohibited from making payments on the Notes pursuant to a Payment
Blockage Notice, the Company will be obligated to resume making any and all
required payments in respect of the Notes, including without limitation any
missed payments.

SECTION 12.04. ACCELERATION OF NOTES

                                      -87-
<PAGE>

                  The Company shall promptly notify holders of Designated Senior
Debt if payment of the Notes is accelerated because of an Event of Default.

SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER

                  In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes (other than in (1)
Permitted Junior Securities and (2) payments made from the trusts described in
Article 8 hereof) at a time when the Trustee or such Holder, as applicable, has
actual knowledge that such payment is prohibited by Section 12.03 hereof, such
payment shall be held by the Trustee or such Holder, in trust for the benefit of
and, upon written request, shall be paid forthwith over and delivered to, the
holders of Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.

                  With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 12, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.

SECTION 12.06. NOTICE BY THE COMPANY

                  The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 12, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article.

SECTION 12.07. SUBROGATION

                  After all Senior Debt is irrevocably paid in full in cash or
U.S. dollar-denominated Cash Equivalents reasonably satisfactory to the holders
thereof and until the Notes are paid in full, Holders shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Debt. A distribution made under this
Article to holders of Senior Debt that otherwise would have been made to Holders
is not, as between the Company and Holders, a payment by the Company on the
Notes.

SECTION 12.08. RELATIVE RIGHTS

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

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

                                      -88-
<PAGE>

                  (2) affect the relative rights of Holders and other creditors
         of the Company other than their rights in relation to holders of Senior
         Debt; or

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

                  If the Company fails because of this Article 12 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.

SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY

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

SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE

                  Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.

                  Upon any payment or distribution of assets of the Company
referred to in this Article 12, the Trustee and the Holders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12.

SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT

                  Notwithstanding the provisions of this Article 12 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article. Only the Company or a
Representative may give the notice. Nothing in this Article 12 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof.

                  The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior Debt
(or a Representative of such holder) to establish that such notice has been
given by a holder of Senior Debt (or a Representative of any such holder). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt 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 Debt held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and any 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 which it may be required to make for the benefit of such Person
pursuant to the terms of this Indenture pending judicial determination as to the
rights of such Person to receive such payment.

                                      -89-
<PAGE>

                  The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.

SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION

                  Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 12, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes.

SECTION 12.13. SUBORDINATION OF SUBSIDIARY GUARANTEES

                  The Obligations of each Guarantor under its Subsidiary
Guarantee are subordinated in right of payment to the Obligations of each
Guarantor under its Senior Debt in the same manner and to the same extent that
the Notes are subordinated to Senior Debt of the Company pursuant to this
Article 12.

                                   ARTICLE 13

                                  MISCELLANEOUS

SECTION 13.01. TRUST INDENTURE ACT CONTROLS

                  If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

SECTION 13.02. NOTICES

                  Any notice or communication by the Company, any Guarantor or
the Trustee shall be in writing (which may be a facsimile, receipt confirmed)
and delivered in person or mailed by first class mail addressed as follows:

                           If to the Company or any Guarantor (prior to the
                           Merger):

                           K&F Acquisition, Inc.
                           c/o Aurora Capital Group
                           10877 Wilshire Boulevard, Suite 2100
                           Los Angeles, CA  90024
                           Attn: Richard K. Roeder
                           Fax: (310) 824-2791

                           If to the Company or any Guarantor (after the
                           Merger):

                           K&F Industries, Inc.
                           600 Third Avenue
                           27th Floor
                           New York, NY 10016
                           Attn: General Counsel
                           Fax: (212) 297-0900

                                      -90-
<PAGE>

                           With a copy to:

                           Gibson, Dunn & Crutcher LLP
                           333 Grand Avenue
                           Los Angeles, CA 90071
                           Attention: Bruce D. Meyer
                           Facsimile: (213) 229-6979

                           If to the Trustee:

                           U.S. Bank National Association
                           Goodwin Square
                           224 Asylum Street
                           Hartford, CT 06103
                           Attention: Corporate Trust/C. Silva
                           Facsimile: (860) 241-6881
                           Re: K&F Acquisition, Inc.

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

                  All notices and communications (other than those sent to
Holders) shall be in writing and shall be deemed to have been duly given when
received.

                  Any notice or communication to a Holder shall be mailed by
first class mail to its address shown on the register kept by the Registrar. Any
notice or communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.

                  If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES

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

SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT

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

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

                  (b) an Opinion of Counsel (which shall include the statements
         set forth in Section 13.05 hereof) stating that, in the opinion of such
         counsel, all such conditions precedent (including any covenants
         compliance with which constitutes a condition precedent) have been
         satisfied.

                                      -91-
<PAGE>

                  In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such eligible and qualified Persons as to other matters, and any
such Person may certify or given an opinion as to such matters in one or several
documents.

                  Any certificate or opinion of an Officer of the Company may be
based, insofar as it related to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company stating the information on which
counsel is relying unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

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

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

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

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

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

SECTION 13.06. RULES BY TRUSTEE AND AGENTS

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

SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
               STOCKHOLDERS

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

                                      -92-
<PAGE>

consideration for issuance of the Notes. The wavier may not be effective to
waive liabilities under the federal securities laws

SECTION 13.08. GOVERNING LAW

                  THIS INDENTURE, THE Subsidiary GUARANTEES AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

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

SECTION 13.10. SUCCESSORS

                  All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors. All agreements of each Guarantor in this Indenture will
bind its successors, except as otherwise provided in Section 10.05.

SECTION 13.11. SEVERABILITY

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

SECTION 13.12. COUNTERPART ORIGINALS

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

SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.

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

SECTION 13.14. BENEFITS OF INDENTURE

                  Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture, except as may
otherwise be provided pursuant to this Indenture with respect to such Notes.

SECTION 13.15. LEGAL HOLIDAYS

                  In any case where any interest payment date, redemption date
or maturity of any Note, or any date on which a Holder has the right to convert
his Note, shall not be a Business Day at any place of payment, then
(notwithstanding any other provision of this Indenture or of the Notes (other
than a provision of any Note which specifically states that such provision shall
apply in lieu of this Section)) payment of interest or principal (and premium,
if any), or conversion of such Note need not be made at

                                      -93-
<PAGE>

such place of payment on such date, but may be made on the next succeeding
Business Day at such place of payment with the same force and effect as if made
on the interest payment date or redemption date, or at the maturity, or on such
date for conversion, as the case may be.

                         [Signatures on following page]

                                      -94-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Indenture this 18th of November 2004.

                                       K&F ACQUISITION, INC.

                                       By: /s/ Richard K. Roeder
                                          --------------------------------------
                                       Name: Richard K. Roeder
                                       Title: Vice President and Secretary

                                       U.S. BANK NATIONAL ASSOCIATION,
                                       as Trustee

                                       By: /s/ Cauna M. Silva
                                          --------------------------------------
                                       Name: Cauna M. Silva
                                       Title: Vice President

                                      -95-
<PAGE>

                                                                       EXHIBIT A

[Insert the Global Note Legend, if applicable, pursuant to the provisions of the
                                   Indenture]

[Insert the Private Placement Legend, if applicable, pursuant to the provisions
                                of the Indenture]

  [Insert the Regulation S Legend, if applicable, pursuant to the provisions of
                                 the Indenture]

                                                                       CUSIP No.
                                                                        ISIN No.

                                 [Face of Note]

                    7-3/4% Senior Subordinated Notes due 2014

                                           Principal amount at Maturity $ ______

                              K&F Acquisition, Inc.

K&F Acquisition, Inc., a Delaware corporation (the "Company") promises to pay to
______________, or registered assigns, the principal sum of _____________
Dollars on _____________, 20[__] [or such greater or lesser amount as may be
indicated on Schedule A hereto](1).

Interest Payment Dates: May 15 and November 15, commencing __________, ___

Record Dates: May 1 and November 1

Additional provisions of this Note are set forth on the other side of this Note.

----------------------
(1) If this Note is a Global Note, include this provision.

                                      A-1
<PAGE>

Dated:

                                       K&F ACQUISITION, INC.

                                       By:______________________________________
                                          Name:
                                          Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the [Global] Notes
referred to in the within-mentioned
Indenture:

U.S. BANK NATIONAL ASSOCIATION,
   as Trustee

By:_________________________________
         Authorized Signatory

                                      A-2

<PAGE>

                           [FORM OF REVERSE OF NOTES]

                    7-3/4% Senior Subordinated Notes due 2014

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

                  (1) Interest. K&F Acquisition, Inc., a Delaware corporation
(together with its permitted successors, the "Company"), promises to pay
interest on the principal amount of this Note at 7-3/4% per annum from November
18, 2004 until maturity and shall pay the Additional Interest, if any, payable
pursuant to Section 5 of the Registration Rights Agreement. The Company shall
pay interest and Additional Interest, if any, semi-annually in arrears on May 15
and November 15 of each such year, commencing May 15, 2005 or if any such day is
not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance[; provided that if 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 the first of May 15 or
November 15 to occur after the date of issuance, unless such May 15 or November
15 occurs within one calendar month of such date of issuance, in which case the
first Interest Payment Date shall be the second of May 15 or November 15 to
occur after the date of issuance](2). Interest shall be computed on the basis of
a 360-day year of twelve 30-day months.

                  (2) Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) and Additional Interest, if any, to the
Persons in whose name(s) this Note (or one or more Predecessor Notes) who are
registered Holders of Notes at the close of business on the May 1 or November 1
next preceding the Interest Payment Date (each, a "Record Date"), even if such
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.13 of the Indenture with respect to
defaulted interest. The Notes shall be payable as to principal of or premium, if
any, Additional Interest, if any, or interest at the office or agency of the
Company maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest and Additional
Interest, if any, may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, and provided that payment by wire transfer
of immediately available funds shall be required with respect to principal of or
premium, if any, Additional Interest, if any, or interest on, the Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent prior to the applicable Record
Date. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

                  (3) Paying Agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, shall act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

                  (4) Indenture. The Company issued the Notes under an
Indenture, dated as of November 18, 2004 ("Indenture"), between the Company and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act

-------------------------
(2) Insert if Notes are Additional Notes.

                                      A-3
<PAGE>

of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are obligations of the Company initially in
the aggregate principal amount of $315,000,000. Subject to compliance with
Section 2.15 of the Indenture, the Company is permitted to issue Additional
Notes under the Indenture in an unlimited principal amount. Any such Additional
Notes that are actually issued shall be treated as issued and outstanding Notes
(and as the same class as the Initial Notes) for all purposes of the Indenture,
unless the context clearly indicated otherwise.

                  (5) Subordination. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture. Each Holder
by his acceptance hereof agrees to be bound by such provisions and authorizes
and expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.

                  (6) Guarantees. This Note is guaranteed by the Persons, if
any, specified as Guarantors in the Indenture to the extent provided in the
Indenture. The Subsidiary Guarantees are subordinated to the Senior Debt of the
applicable Guarantor in the manner and to the extent provided in the Indenture.
Each Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such
purposes.

                  (7) Optional Redemption.

                  (a) Except as set forth in clause (b) of this Paragraph 7, the
Company shall not have the option to redeem the Notes pursuant to Section 3.07
of the Indenture prior to November 15, 2009. Thereafter, the Company shall have
the option to redeem the Notes, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Additional Interest thereon, if any, to the applicable
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the twelve-month period beginning on November 15 of the years
indicated below:

<TABLE>
<CAPTION>
YEAR                                                                                Percentage
----                                                                                ----------
<S>                                                                                 <C>
2009.....................................................................             103.875%
2010.....................................................................             102.583%
2011.....................................................................             101.292%
2012 and thereafter......................................................             100.000%
</TABLE>

                  (b) Notwithstanding the provisions of clause (a) of this
Paragraph 7, at any time prior to November 15, 2007, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture (including any Additional Notes) at a redemption
price equal to 107.750% of the principal amount thereof on the redemption date,
plus accrued and unpaid Additional Interest, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings by the Company;
provided that (1) at least 65% of the aggregate principal amount of Notes
(including any Additional Notes) issued under this Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Company and its Subsidiaries); and (2) that such redemption shall occur within
90 days of the date of the closing of such offering.

                                      A-4
<PAGE>

                  (c) On and after the redemption date interest ceases to accrue
on Notes or portions thereof called for redemption.

                  (8) Special Mandatory Redemption. Notwithstanding the
foregoing, in the event that the Acquisition is not consummated on or prior to
December 27, 2004 or if the Acquisition Agreement is terminated prior to such
time, the Company shall redeem (the "Special Redemption") the Notes, in whole
but not in part, on or prior to December 28, 2004, at a redemption price (the
"Special Redemption Price") in cash equal to 100.0% of the principal amount of
the Notes plus accrued and unpaid interest on the Special Redemption Date. The
"Special Redemption Date" means the earlier of the date specified by the Company
in an Officers' Certificate delivered in accordance with the Escrow Agreement
and December 28, 2004. The Trustee shall deliver to each Holder a written notice
(specifying the information specified in Section 3.03) of the Special Redemption
one Business Day prior to the Special Redemption Date.

                  (9) Repurchase at Option of Holder.

                  (a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest, if any, thereon to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.

                  (b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10 million,
the Company or the applicable Restricted Subsidiary shall commence an offer to
all Holders pursuant to Section 4.10 of the Indenture to purchase the maximum
principal amount of Notes (an "Asset Sale Offer") to all Holders of Notes and
all holders of such other Indebtedness of the Company that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, thereon to the date of purchase, in
accordance with the procedures set forth in the Indenture. To the extent that
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered in such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Excess Proceeds will be allocated by the Company to the Notes and
such other pari passu Indebtedness on a pro rata basis (based upon the
respective principal amounts (or accreted value, if applicable) of the Notes and
such other pari passu Indebtedness tendered into such Asset Sale Offer) and the
portion of each Note to be purchased will thereafter be determined by the
Trustee on a pro rata basis among the Holders of such Notes with appropriate
adjustments such that the Notes may only be purchased in integral multiples of
$1,000. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
shall be reset to zero. Holders of Notes that are the subject of an offer to
purchase shall receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.

                  (10) Notice of Redemption. Except as provided in paragraph
(8), notice of redemption shall be mailed at least 30 days but not more than 60
days before the redemption date to each Holder whose Notes are to be redeemed at
its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to

                                      A-5
<PAGE>

be redeemed on the basis of the aggregate principal amount (or accreted value,
as applicable) of Notes and other pari passu Indebtedness tendered.

                  (11) Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Company need not exchange or register the transfer
of any Notes for a period of 15 days before a selection of Notes to be redeemed
or during the period between a record date and the corresponding Interest
Payment Date. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                  (12) Persons Deemed Owners. The registered Holder of a Note
may be treated as its owner for all purposes.

                  (13) Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes voting as a single class, and any
existing default or compliance with any provision of the Indenture, the
Subsidiary Guarantees or the Notes (other than a Default or Event of Default in
the payment of the principal of or premium, if any, Additional Interest, if any,
or interest on the Notes) or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes voting as a single class. Without
the consent of any Holder of a Note, the Indenture or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency; provide for
uncertificated Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes
are described in Section 163(f)(2)(B) of the Code); provide for the assumption
of the Company's obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's assets; make
any change that would provide any additional rights or benefits to the Holders
of Notes or that does not adversely affect the rights under the Indenture of any
such Holder; provide for the issuance of Additional Notes in accordance with the
provisions set forth in this Indenture; evidence and provide for the acceptance
of an appointment of a successor trustee; conform this Indenture or the Notes to
the "Description of Notes" set forth in the Offering Memorandum; add Subsidiary
Guarantees with respect to the Notes; or comply with requirements of the
Commission in order to effect or maintain the qualification of the indenture
under the TIA.

                  (14) Events of Default. Events of Default include (1) default
for 30 days in the payment when due of interest on, or Additional Interest with
respect to, the Notes, whether or not prohibited by the subordination provisions
of the Indenture; (2) default in payment when due of the principal of, or
premium, if any, on the Notes, whether or not prohibited by the subordination
provisions of the Indenture; (3) failure by the Company to comply with any of
the provisions of Section 5.01 of the Indenture; (4) failure by the Company or
any of its Restricted Subsidiaries to purchase Notes tendered pursuant to an
offer required by Section 4.10 or Section 4.15 of the Indenture; (5) failure by
the Company or any of its Restricted Subsidiaries for 60 days after notice to
comply with any of the other agreements in the Indenture; (6) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed of the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its

                                      A-6
<PAGE>

Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, if that default: (a) is caused by a
failure to pay at the final Stated Maturity the principal amount of such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or (b) results
in the acceleration of such Indebtedness prior to its Stated Maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more; (7) failure by the Company or any of its Subsidiaries to
pay final judgments (not subject to appeal) aggregating in excess of $15.0
million, which judgments are not paid, discharged or stayed within a period of
60 days after the date on which the right to appeal has expired; (8) except as
permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting on behalf
of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (9) certain events of bankruptcy or insolvency with respect to
the Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary.
If any Event of Default (other than an Event of Default specified in clause (9)
of this Section 14) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency as specified in clause (9) of this Section 14, all outstanding Notes
shall become due and payable immediately without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture, except a continuing Default or
Event of Default in the payment of interest or Additional Interest on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Event of Default, to deliver to the Trustee
a statement specifying such Event of Default.

                  (15) Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.

                  (16) No Recourse Against Others. No director, officer,
employee, incorporator, Affiliate or stockholder of the Company or any of the
Guarantors, as such, will have any liability for any obligations of the Company
or such Guarantor under the Notes, the Indenture, the Subsidiary Guarantee, the
Registration Rights Agreement or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes.

                  (17) Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an Authenticating Agent.

                  (18) Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

                                      A-7
<PAGE>

                  (19) Registration Rights Agreement. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of November 18, 2004 between the Company
and the Initial Purchasers.

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

                  (21) Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of New York.

                                      A-8
<PAGE>

                                 ASSIGNMENT FORM

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

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

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

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

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

________________________________________________________________________________

Date:______________________     Your Name:______________________________________
                                      (Print your name exactly as it  appears on
the face of this Note)

                                Your Signature:_________________________________
                                      (Sign exactly as your name  appears on the
face of this Note)

                                Signature Guarantee*:___________________________

----------------------------
*        Participant in a recognized Signature Guarantee Medallion Program (or
         other signature guarantor acceptable to the Trustee).

                                      A-9
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:

         [_] Section 4.10 [_] Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

$_________________

Date:_____________              Your Signature:_________________________________
                                       (Sign exactly as your name appears on the
face of this Note)

                                Tax Identification No:__________________________

Signature Guarantee*:

_____________________________________
(*Participant in a Recognized
Signature Guarantee Medallion Program)

                                      A-10
<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(3)

                  The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:

<TABLE>
<CAPTION>
                                                                      Principal Amount of
                                                                       this Global Note         Signature of
                       Amount of decrease    Amount of increase in      following such       authorized officer
                       in Principal Amount    Principal Amount of        decrease (or           of Trustee or
Date of Exchange       of this Global Note      this Global Note           increase)           Note Custodian
----------------       -------------------      ----------------           ---------           --------------
<S>                    <C>                   <C>                      <C>                    <C>
</TABLE>

--------------------------
(3) If this Note is a Global Note, include this schedule.

                                      A-11
<PAGE>

                                    EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

[Prior to the Merger:
K&F Acquisition, Inc.
c/o Aurora Capital Group
10877 Wilshire Boulevard, Suite 2100
Los Angeles, CA  90024
Attn: Richard K. Roeder
Fax: (310) 824-2791]

[After the Merger:
K&F Industries, Inc.
600 Third Avenue
27th Floor
New York, NY 10016
Attn: General Counsel
Fax: (212) 297-0900]

U.S. Bank National Association
Goodwin Square
224 Asylum Street
Hartford, CT 06103
Attention: Corporate Trust Division

                  Re: 7-3/4% Senior Subordinated Notes due 2014

                  Reference is hereby made to the Indenture, dated as of
November 18, 2004 (the "Indenture"), between K&F Acquisition, Inc., as issuer
(the "Company"), and U.S. Bank National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

                  ________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount at maturity of $____ in such Note[s] or interests (the
"Transfer"), to _____________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

                                       B-1
<PAGE>

2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A DEFINITIVE
NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Distribution Compliance Period, the transfer
is not being made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, the Temporary Regulation S Global Note and/or the Definitive Note
and in the Indenture and the Securities Act.

3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN IAI GLOBAL NOTE, AN AI DEFINITIVE NOTE OR A DEFINITIVE NOTE
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

                  (a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;

                                       or

                  (b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;

                                       or

                  (c) [_] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act.

                                       or

                  (d) [_] such Transfer is being effected to an Accredited
Investor or an Institutional Accredited Investor and pursuant to an exemption
from the registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that it has
not engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has

                                      B-2
<PAGE>

attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note and/or
the AI Definitive Note and in the Indenture and the Securities Act.

4. [_] Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.

                  (a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

                  (b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

                  (c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.

                                    ____________________________________________
                                    [Insert Name of Transferor]

                                    By:_________________________________________
                                         Name:
                                         Title:
Dated:  _________, __

                                      B-3
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

1.       The Transferor owns and proposes to transfer the following:

                                                 [CHECK ONE]

         (a) [_] a beneficial interest in the:

             (i)   [_] 144A Global Note (CUSIP _______); or

             (ii)  [_] Regulation S Global Note (CUSIP ______); or

             (iii) [_] IAI Global Note (CUSIP ______); or

         (b) [_]   an AI Definitive Note; or

         (c) [_]   a Restricted Definitive Note; or

2.       After the Transfer the Transferee will hold:

                                   [CHECK ONE]

         (a) [_] a beneficial interest in the:

             (i)   [_] 144A Global Note (CUSIP ); or

             (ii)  [_] Regulation S Global Note (CUSIP ); or

             (iii) [_] IAI Global Note (CUSIP ______); or

             (iv)  [_] Unrestricted Global Note (CUSIP ); or

         (b) [_]   an AI Definitive Note; or

         (c) [_]   a Restricted Definitive Note; or

         (d) [_]   an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

                                      B-4
<PAGE>

                                    EXHIBIT C
                         FORM OF CERTIFICATE OF EXCHANGE

[Prior to the Merger:
K&F Acquisition, Inc.
c/o Aurora Capital Group
10877 Wilshire Boulevard, Suite 2100
Los Angeles, CA  90024
Attn: Richard K. Roeder
Fax:  (310) 824-2791]

[After the Merger:
K&F Industries, Inc.
600 Third Avenue
27th Floor
New York, NY 10016
Attn: General Counsel
Fax:  (212) 297-0900]

U.S. Bank National Association
Goodwin Square
224 Asylum Street
Hartford, CT 06103
Attention: Corporate Trust Division

                  Re: 7-3/4% Senior Subordinated Notes due 2014

                                (CUSIP _________)

                  Reference is hereby made to the Indenture, dated as of
November 18, 2004 (the "Indenture"), between K&F Acquisition, Inc., as issuer
(the "Company") and U.S. Bank National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

                  _______, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$______ in such Note[s] or interests (the "Exchange"). In connection with the
Exchange, the Owner hereby certifies that:

1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

                  (a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial

                                      C-1
<PAGE>

interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

                  (b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

                  (c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

                  (d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES

                  (a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.

                  (b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note,
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such

                                      C-2
<PAGE>

Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.

                                            ____________________________________
                                            [Insert Name of Transferor]

                                            By:_________________________________
                                                  Name:
                                                  Title:
Dated:  _________, ____

                                      C-3
<PAGE>

                                    EXHIBIT D

                            FORM OF CERTIFICATE FROM
              ACCREDITED INVESTOR/INSTITUTIONAL ACCREDITED INVESTOR

[Prior to the Merger:
K&F Acquisition, Inc.
c/o Aurora Capital Group
10877 Wilshire Boulevard, Suite 2100
Los Angeles, CA  90024
Attn: Richard K. Roeder
Fax: (310) 824-2791]

[After the Merger:
K&F Industries, Inc.
600 Third Avenue
27th Floor
New York, NY 10016
Attn:
Fax: (212)]

U.S. Bank National Association
Goodwin Square
224 Asylum Street
Hartford, CT 06103
Attention: Corporate Trust Division

                  Re: 7-3/4% Senior Subordinated Notes due 2014

                                (CUSIP _________)

                  Reference is hereby made to the Indenture, dated as of
November 18, 2004 (the "Indenture"), between K&F Acquisition, Inc., as issuer
(the "Company") and U.S. Bank National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

                  In connection with my proposed purchase of $________ aggregate
principal amount of an 7-3/4% Senior Subordinated Notes due 2014 (the "Notes"),
I hereby confirm that:

         1. I am an "accredited investor" (as defined in 501(a)(1), (2), (3),
(4), (5), (6) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of my
investment in the Notes, and I and any accounts for which I am acting are each
able to bear the economic risk of my or its investment.

         2. I am acquiring the Notes or beneficial interest therein for my own
account or for one or more accounts (each of which is an "accredited investor")
as to each of which I exercise sole investment discretion.

         3. I understand that any subsequent transfer of the Notes, or any
interest therein is subject to certain restrictions and conditions set forth in
the Notes and the Indenture and the undersigned agrees to

                                       D-1
<PAGE>

be bound by, and not to resell, pledge or otherwise transfer the Notes or any
interest therein except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act").

         4. I understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. I
agree, on my own behalf and on behalf of any accounts for which I am acting,
that if I should sell the Notes or any interest therein, I will do so only (a)
to the Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) for so long as the Notes are eligible
for resale pursuant to Rule 144A, to a "Qualified Institutional Buyer" as
defined in Rule 144A under the Securities Act that purchases for its own account
or for the account of a Qualified Institutional Buyer to whom notice is given
that the transfer is being made in reliance on Rule 144A inside the United
States, (d) pursuant to offers and sales to non-U.S. persons that occur outside
the United States within the meaning of Regulation S under the Securities Act or
(e) pursuant to any other available exemption from the registration requirements
of the Securities Act, and I further agree to provide to any person purchasing a
Note from me in a transaction meeting the requirements of clauses (a) through
(e) of this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

         5. I understand that, on any proposed resale of the Notes or beneficial
interest therein, I will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. I further understand that the Notes purchased by me will bear a
legend to the foregoing effect.

         6. I am acquiring the Notes for investment purposes only with no
present intention to resell the Notes, and agree not to sell, transfer, assign,
pledge or hypothecate any of the Notes for at least three months following the
completion of the offering.

                  You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.

                                            ____________________________________
                                            [Insert Name of Accredited Investor]

                                            By:_________________________________
                                                  Name:
                                                  Title:
Dated:  _________, __

                                      D-2
<PAGE>

                                   EXHIBIT E-1

                         [FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

                  This SUPPLEMENTAL INDENTURE, dated as of ________________,
200__, among __________________ (the "Guaranteeing Subsidiary"), a subsidiary of
K&F Acquisition, Inc. (or its permitted successor), a Delaware corporation (the
"Company"), the Company, the other Guarantors (as defined in the Indenture
referred to herein) and U.S. Bank National Association, as Trustee.

                               W I T N E S S E T H

                  WHEREAS, the Company and the Trustee entered into an Indenture
(the "Indenture"), dated as of November 18, 2004, pursuant to which the Company
has issued $___________ in principal amount of 7-3/4% Senior Subordinated Notes
due 2014 (the "Notes");

                  WHEREAS, Section 9.01(8) of the Indenture provides that the
Company, the Guarantors and the Trustee may amend or supplement the Indenture in
order to add Subsidiary Guarantees with respect to the Notes, without the
consent of the Holders of the Notes; and

                  WHEREAS, all acts and things prescribed by the Indenture, by
law and by the Certificate of Incorporation and the Bylaws (or comparable
constituent documents) of the Company, the Guarantors and the Trustee necessary
to make this Supplemental Indenture a valid instrument legally binding on the
Company, the Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed;

                  NOW THEREFORE, to comply with the provisions of the Indenture,
and in consideration of the foregoing, the Guaranteeing Subsidiary, the Company,
the Guarantors and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Notes as follows:

                                   ARTICLE 1

                  Section 1.01. This Supplemental Indenture is supplemental to
the Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.

                  Section 1.02. This Supplemental Indenture shall become
effective immediately upon its execution and delivery by each of the
Guaranteeing Subsidiaries, the Company, the Guarantors and the Trustee.

                                   ARTICLE 2

                  Section 2.01. Each of the Guaranteeing Subsidiaries hereby
agrees to be bound by the terms, conditions and other provisions of the
Indenture with all attendant rights, duties and obligations stated therein, on a
joint and several basis with the parties hereto and thereto, with the same force
and effect as if originally named as a Guarantor therein and as if such party
executed the Indenture on the date thereof.

                                      E-1-1
<PAGE>

                                    ARTICLE 3

                  Section 3.01. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis
mutandis) and shall remain in full force and effect in accordance with their
terms.

                  Section 3.02. All capitalized terms used but not defined
herein shall have the same respective meanings ascribed to them in the
Indenture.

                  Section 3.03. Except as otherwise expressly provided herein,
no duties, responsibilities or liabilities are assumed, or shall be construed to
be assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all of
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.

                  Section 3.04. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  Section 3.05. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

                  Section 3.06. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this letter agreement.

                  Section 3.07. The recitals hereto are statements only of the
Company, the Guarantors and the Guaranteeing Subsidiaries and shall not be
considered statements of or attributable to the Trustee.

                                      E-1-2
<PAGE>

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

                                            [GUARANTEEING SUBSIDIARY]

                                            By:_________________________________
                                               Name:
                                               Title:

                                            K&F ACQUISITION, INC.

                                            By:_________________________________
                                               Name:
                                               Title:

                                            [EXISTING GUARANTORS]

                                            By:_________________________________
                                               Name:
                                               Title:

                                            U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                            By:_________________________________
                                               Name:
                                               Title:

                                      E-1-3
<PAGE>

                                   EXHIBIT E-2

                         [FORM OF SUPPLEMENTAL INDENTURE
            TO BE DELIVERED BY A PERMITTED SUCCESSOR TO THE COMPANY]

                  This SUPPLEMENTAL INDENTURE, dated as of ________________,
200__, among __________________ (the "Successor Company"), a permitted successor
to K&F Acquisition, Inc., a Delaware corporation (the "Company"), the Guarantors
(as defined in the Indenture referred to herein) and U.S. Bank National
Association, as Trustee.

                               W I T N E S S E T H

                  WHEREAS, the Company and the Trustee entered into an Indenture
(the "Indenture"), dated as of November 18, 2004, pursuant to which the Company
has issued $___________ in principal amount of 7-3/4% Senior Subordinated Notes
due 2014 (the "Notes");

                  WHEREAS, Section 9.01(3) of the Indenture provides that the
Company, the Guarantors and the Trustee may amend or supplement the Indenture in
order to provide for the assumption of the Company's obligations to Holders of
Notes in the case of a merger or consolidation or sale of all or substantially
all of the Company's assets, without the consent of the Holders of the Notes;
and

                  WHEREAS, all acts and things prescribed by the Indenture, by
law and by the Certificate of Incorporation and the Bylaws (or comparable
constituent documents) of the Successor Company, the Guarantors and the Trustee
necessary to make this Supplemental Indenture a valid instrument legally binding
on the Successor Company, the Guarantors and the Trustee, in accordance with its
terms, have been duly done and performed;

                  NOW THEREFORE, to comply with the provisions of the Indenture,
and in consideration of the foregoing, the Successor Company, the Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:

                                   ARTICLE 4

                  Section 1.01. This Supplemental Indenture is supplemental to
the Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.

                  Section 1.02. This Supplemental Indenture shall become
effective immediately upon its execution and delivery by each of the
Guaranteeing Subsidiaries, the Company, the Guarantors and the Trustee.

                                   ARTICLE 5

                  Section 2.01. In accordance with Section 5.02 of the
Indenture, the Successor Company hereby agrees to be bound by the terms,
conditions and other provisions of, and assumes all of the obligations of the
Company under, the Indenture and the Notes with all attendant rights, duties and
obligations stated therein, on a joint and several basis with the parties hereto
and thereto, with the same force and effect as if originally named as the
Company therein and as if such party executed the Indenture on the date thereof.
The Successor Company represents and warrants that all of the conditions set
forth in Section 5.01 of the Indenture are satisfied.

                                      E-2-1
<PAGE>

                                   ARTICLE 6

                  Section 3.01. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis
mutandis) and shall remain in full force and effect in accordance with their
terms.

                  Section 3.02. All capitalized terms used but not defined
herein shall have the same respective meanings ascribed to them in the
Indenture.

                  Section 3.03. Except as otherwise expressly provided herein,
no duties, responsibilities or liabilities are assumed, or shall be construed to
be assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all of
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.

                  Section 3.04. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  Section 3.05. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

                  Section 3.06. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this letter agreement.

                  Section 3.07. The recitals hereto are statements only of the
Company and the Guarantors and shall not be considered statements of or
attributable to the Trustee.

                                      E-2-2
<PAGE>

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

                                            [SUCCESSOR COMPANY]

                                            By:_________________________________
                                               Name:
                                               Title:

                                            [GUARANTORS]

                                            By:_________________________________
                                               Name:
                                               Title:

                                            U.S. BANK NATIONAL ASSOCIATION,
                                             as Trustee

                                            By:_________________________________
                                               Name:
                                               Title:

                                      E-2-3<PAGE>

                                                                     EXHIBIT 4.2

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

                          DATED AS OF NOVEMBER 18, 2004

                                  BY AND AMONG

                              K&F ACQUISITION, INC.

                                    AS ISSUER

                                       AND

                              LEHMAN BROTHERS INC.
                              GOLDMAN, SACHS & CO.
                          CITIGROUP GLOBAL MARKETS INC.
                           J.P. MORGAN SECURITIES INC.

                            AS THE INITIAL PURCHASERS

<PAGE>

                  This Registration Rights Agreement (this "AGREEMENT") is dated
as of November 18, 2004 by and among K&F Acquisition, Inc., a Delaware
corporation (the "ISSUER", and prior to the Merger Closing (as defined in the
Purchase Agreement), the "COMPANY") and Lehman Brothers Inc., Goldman, Sachs &
Co., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. (each an
"INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom
has agreed to purchase the Company's 7-3/4% Senior Subordinated Notes due 2014
(the "NOTES") pursuant to the Purchase Agreement (as defined below).

                  This Agreement is made pursuant to the Purchase Agreement,
dated November 5, 2004 (the "PURCHASE AGREEMENT"), by and among the Issuer, K&F
Industries, Inc. ("K&F" and after the Merger Closing and upon the execution of a
joinder agreement, the "COMPANY")), Aircraft Braking Systems Corporation,
Engineered Fabrics Corporation and Aircraft Braking Services, Inc.
(collectively, the "GUARANTORS") and the Initial Purchasers. In order to induce
the Initial Purchasers to purchase the Notes, the Issuer, K&F and the Guarantors
have agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 7 of the Purchase Agreement. The
representations, warranties and obligations of and relating to K&F and each of
the Guarantors shall not become effective until the Merger Closing, at which
time such representations, warranties and agreements shall become effective
pursuant to the terms of a joinder agreement as required by Section 10 of this
Agreement and thereafter all representations, warranties, agreements and
obligations of K&F and the Guarantors shall be joint and several.

                  Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in the Indenture, dated the date hereof (the
"INDENTURE"), among the Issuer and U.S. Bank National Association, as Trustee
(the "TRUSTEE"), relating to the Notes and the Exchange Notes (as defined
below).

                  The parties hereby agree as follows:

SECTION 1. DEFINITIONS

                  As used in this Agreement, the following capitalized terms
shall have the following meanings:

                  ACT: The U.S. Securities Act of 1933, as amended.

                  AFFILIATE: As defined in Rule 144 of the Act.

                  BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.

                  CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.

                  CLOSING DATE: The date of this Agreement.

                  COMMISSION: The U.S. Securities and Exchange Commission.

                  CONSUMMATE: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c)

<PAGE>

                                                                               2

the delivery by the Company to the Registrar under the Indenture of Exchange
Notes in the same aggregate principal amount as the aggregate principal amount
of Notes tendered by Holders thereof pursuant to the Exchange Offer.

                  CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.

                  EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a)
hereof.

                  EXCHANGE ACT: The U.S. Securities Exchange Act of 1934, as
amended.

                  EXCHANGE NOTES: The Company's 7-3/4% Senior Subordinated Notes
due 2014, registered under the Act, to be issued pursuant to the Indenture (a)
in the Exchange Offer or (b) as contemplated by Section 4 hereof.

                  EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Notes that are tendered by such Holders in connection with such exchange and
issuance.

                  EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.

                  EXEMPT RESALES: The transactions in which the Initial
Purchasers propose to sell the Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, pursuant to
Regulation S under the Act and to a limited number of "accredited investors," as
such term is defined in Rule 501(a)(3), (4), (5), (6) or (7) under the Act.

                  FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.

                  HOLDERS: As defined in Section 2 hereof.

                  INTEREST PAYMENT DATE: As defined in the Notes and the
Exchange Notes.

                  PERSON: As defined in the Indenture.

                  PROSPECTUS: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

                  RECOMMENCEMENT DATE: As defined in Section 6(e) hereof.

                  REGISTRATION DEFAULT: As defined in Section 5 hereof.

                  REGISTRATION STATEMENT: Any registration statement of the
Company and the Guarantors relating to (a) an offering of Exchange Notes and
related Subsidiary Guarantees pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, in each case (i) that is filed pursuant to the
provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.

                  REGULATION S: Regulation S promulgated under the Act.

<PAGE>

                                                                               3

                  RULE 144: Rule 144 promulgated under the Act.

                  SHELF REGISTRATION STATEMENT: As defined in Section 4(a)
hereof.

                  SUBSIDIARY GUARANTEES: The guarantees of the Notes and
Exchange Notes of the Guarantors under the Indenture, as amended from time to
time.

                  SUSPENSION NOTICE: As defined in Section 6(e) hereof.

                  TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.

                  TRANSFER RESTRICTED SECURITIES: (a) Each Note, and the related
Subsidiary Guarantees, until the earliest to occur of (i) the date on which such
Note has been exchanged by a Person other than a Broker-Dealer for an Exchange
Note in the Exchange Offer and is entitled to be resold to the public by such
Person without complying with the prospectus delivery requirements of the Act,
(ii) the date on which such Note has been effectively registered under the Act
and disposed of in accordance with the Shelf Registration Statement, or (iii)
the date on which such Note is eligible to be distributed to the public pursuant
to Rule 144 under the Act, and (b) each Exchange Note and the related Subsidiary
Guarantees acquired by a Broker-Dealer in the Exchange Offer of a Note for such
Exchange Note, until the date on which such Exchange Note is sold to a purchaser
who receives from such Broker-Dealer on or prior to the date of such sale a copy
of the Prospectus contained in the Exchange Offer Registration Statement.

SECTION 2. HOLDERS

                  A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "HOLDER") whenever such Person owns Transfer Restricted
Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

                  (a) The Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 90 days after the
Closing Date (such 90th day being the "FILING DEADLINE"), (ii) use their
commercially reasonable efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 180 days after the Closing Date (such 180th day being the
"EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Exchange Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, unless the Exchange Offer shall not be
permitted by applicable law or Commission policy, use their commercially
reasonable efforts to commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting (I) registration of the
Exchange Notes to be offered in exchange for the Notes that are Transfer
Restricted Securities and (II) resales of Exchange Notes by Broker-Dealers that
tendered into the Exchange Offer Notes that such Broker-Dealer acquired for its
own account as a result of market making activities or other trading activities
(other than Notes acquired directly from the Company or any its Affiliates) as
contemplated by Section 3(c) below.

<PAGE>

                                                                               4

                  (b) The Company and the Guarantors shall use their
commercially reasonable efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company and the Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the
Exchange Notes shall be included in the Exchange Offer Registration Statement.
The Company and the Guarantors shall use their commercially reasonable efforts
to cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event (unless required by federal securities laws) later than 30 business days
thereafter (such 30th business day being the "CONSUMMATION DEADLINE").

                  (c) The Company and the Guarantors shall include a "Plan of
Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Notes acquired directly from the Company or any Affiliate
of the Company), may exchange such Transfer Restricted Securities pursuant to
the Exchange Offer. Such "Plan of Distribution" section shall also contain all
other information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.

                  Because such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of any Exchange Notes received by such Broker-Dealer in the Exchange Offer,
the Company and the Guarantors shall permit the use of the Prospectus contained
in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy
such prospectus delivery requirement. To the extent necessary to ensure that the
prospectus contained in the Exchange Offer Registration Statement is available
for sales of Exchange Notes by Broker-Dealers, the Company and the Guarantors
agree to use their commercially reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer is Consummated or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto. The
Company shall provide sufficient copies of the latest version of such Prospectus
to such Broker-Dealers, promptly upon request, and in no event later than one
day after such request, at any time during such period.

SECTION 4. SHELF REGISTRATION

                  (a) Shelf Registration. If (i) the Company and the Guarantors
are not required to file the Exchange Offer Registration Statement, (ii) the
Exchange Offer is not permitted by applicable law or Commission policy (after
the Company and the Guarantors have complied with the procedures set forth in
Section 6(a)(i) hereof) or (iii) if any Holder of Transfer Restricted Securities
shall notify the Company prior to the 20th business day following the
Consummation of the Exchange Offer that (A) such Holder was prohibited by
applicable law or Commission policy from participating in the Exchange Offer or
(B) such Holder may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and the Prospectus contained
in the Exchange Offer Registration Statement is not

<PAGE>
                                                                               5

appropriate or available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Notes acquired directly from the Company or any of its
Affiliates or (D) if the Company otherwise receives a written request from the
Holders set forth on Schedule B hereto, then the Company and the Guarantors
shall:

                  (I) use their commercially reasonable efforts to cause to be
filed, on or prior to 30 days after the earlier of (x) the date on which the
Company determines that the Exchange Offer Registration Statement is not
required to be filed or cannot be filed as a result of clause (a)(i) or (a)(ii)
of this Section and (y) the date on which the Company receives the notice
specified in clause (a)(iii) of this Section (the 30th day after such earlier
date, the "FILING DEADLINE"), a shelf registration statement pursuant to Rule
415 under the Act (which may be an amendment to the Exchange Offer Registration
Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer
Restricted Securities; and

                  (II) use their commercially reasonable efforts to cause such
Shelf Registration Statement to become effective at the earliest possible time,
but in no event later than on or prior to 90 days after the Filing Deadline for
the Shelf Registration Statement (such 90th day the "EFFECTIVENESS DEADLINE").

                  If, after the Company has and the Guarantors have filed an
Exchange Offer Registration Statement that satisfies the requirements of Section
3(a) above, the Company is and the Guarantors are required to file and make
effective a Shelf Registration Statement solely because the Exchange Offer is
not permitted under applicable federal law (i.e., clause (a)(ii) of this
Section), then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (I) above; provided that, in such
event, the Company and the Guarantors shall remain obligated to meet the
Effectiveness Deadline set forth in clause (II) above.

                  To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their commercially reasonable
efforts to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)hereof) following the
Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto.

                  (b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a written
request therefor, the information specified in Item 507 or 508 of Regulation
S-K, as applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to additional interest pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. By its acceptance of Transfer Restricted Securities, each Holder
agrees to promptly furnish additional information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.

<PAGE>
                                                                               6

SECTION 5. ADDITIONAL INTEREST

                  If (a) any Registration Statement required by this Agreement
is not filed with the Commission on or prior to the applicable Filing Deadline,
(b) any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (c) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (d) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by an
additional Registration Statement which becomes effective (each such event
referred to in clauses (a) through (d), a "REGISTRATION DEFAULT"), then the
Company and the Guarantors hereby jointly and severally agree to pay to each
Holder of Transfer Restricted Securities affected thereby additional interest in
an amount equal to $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities held by such Holder for the first 90-day period
immediately following the occurrence of such Registration Default. The amount of
the additional interest shall increase by an additional $.05 per week per $1,000
in principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of additional interest of $.50 per week per $1,000 in principal
amount of Transfer Restricted Securities; provided that the Company and the
Guarantors shall in no event be required to pay additional interest for more
than one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (i) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (a) above, (ii) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable the Shelf Registration Statement), in the case
of (b) above, (iii) upon Consummation of the Exchange Offer, in the case of (c)
above, or (iv) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable, in the case of (d) above, the
additional interest payable with respect to the Transfer Restricted Securities
as a result of such clause (a), (b), (c) or (d), as applicable, shall cease.

                  All accrued additional interest shall be paid to the Holders
entitled thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes and the Exchange Notes. Notwithstanding the fact that
any securities for which additional interest are due cease to be Transfer
Restricted Securities, all obligations of the Company and the Guarantors to pay
additional interest with respect to securities shall survive until such time as
such obligations with respect to such securities shall have been satisfied in
full.

SECTION 6. REGISTRATION PROCEDURES

                  (a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Guarantors shall (i) comply with all
applicable provisions of Section 6(c) below, (ii) use their commercially
reasonable efforts to effect such exchange and to permit the resale of Exchange
Notes by any Broker-Dealer that tendered Notes in the Exchange Offer that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its Affiliates) being sold in accordance with the intended
method or methods of distribution thereof, and (iii) comply with all of the
following provisions:

                  (A) If, following the date hereof there has been announced a
         change in Commission policy with respect to exchange offers such as the
         Exchange Offer, that in the reasonable opinion of counsel to the
         Company raises a substantial question as to whether the Exchange Offer
         is permitted by applicable federal law, the Company and the Guarantors
         hereby agree to seek a no-action letter or other favorable decision
         from the Commission allowing the Company and the Guarantors to
         Consummate an Exchange Offer for such Transfer Restricted Securities.
         The

<PAGE>
                                                                               7

         Company and the Guarantors hereby agree to pursue the issuance of such
         a decision to the Commission staff level. In connection with the
         foregoing, the Company and the Guarantors hereby agree to take all such
         other actions as may be requested by the Commission or otherwise
         required in connection with the issuance of such decision, including
         without limitation (I) participating in telephonic conferences with the
         Commission staff, (II) delivering to the Commission staff an analysis
         prepared by counsel to the Company setting forth the legal bases, if
         any, upon which such counsel has concluded that such an Exchange Offer
         should be permitted and (III) diligently pursuing a resolution (which
         need not be favorable) by the Commission staff.

                  (B) As a condition to its participation in the Exchange Offer,
         each Holder of Transfer Restricted Securities (including, without
         limitation, any Holder who is a Broker-Dealer) shall furnish, upon the
         request of the Company, prior to the Consummation of the Exchange
         Offer, a written representation to the Company and the Guarantors
         (which may be contained in the letter of transmittal contemplated by
         the Exchange Offer Registration Statement) to the effect that (I) it is
         not an Affiliate of the Company, (II) it is not engaged in, and does
         not intend to engage in, and has no arrangement or understanding with
         any person to participate in, a distribution of the Exchange Notes to
         be issued in the Exchange Offer and (III) it is acquiring the Exchange
         Notes in its ordinary course of business. Each Holder using the
         Exchange Offer to participate in a distribution of the Exchange Notes
         will be required to acknowledge and agree that, if the resales are of
         Exchange Notes obtained by such Holder in exchange for Notes acquired
         directly from the Company or an Affiliate thereof, it (1) could not,
         under Commission policy as in effect on the date of this Agreement,
         rely on the position of the Commission enunciated in Morgan Stanley and
         Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
         Corporation (available May 13, 1988), as interpreted in the
         Commission's letter to Shearman & Sterling dated July 2, 1993, and
         similar no-action letters (including, if applicable, any no-action
         letter obtained pursuant to clause (A) above), and (2) must comply with
         the registration and prospectus delivery requirements of the Act in
         connection with a secondary resale transaction and that such a
         secondary resale transaction must be covered by an effective
         Registration Statement containing the selling security holder
         information required by Item 507 or 508, as applicable, of Regulation
         S-K

                  (C) Prior to effectiveness of the Exchange Offer Registration
         Statement, the Company and the Guarantors shall provide a supplemental
         letter to the Commission (I) stating that the Company and the
         Guarantors are registering the Exchange Offer in reliance on the
         position of the Commission enunciated in Exxon Capital Holdings
         Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
         (available June 5, 1991) as interpreted in the Commission's letter to
         Shearman & Sterling dated July 2, 1993, and, if applicable, any
         no-action letter obtained pursuant to clause (A) above, (II) including
         a representation that neither the Company nor any Guarantor has entered
         into any arrangement or understanding with any Person to distribute the
         Exchange Notes to be received in the Exchange Offer and that, to the
         best of the Company's and each Guarantor's information and belief, each
         Holder participating in the Exchange Offer is acquiring the Exchange
         Notes in its ordinary course of business and has no arrangement or
         understanding with any Person to participate in the distribution of the
         Exchange Notes received in the Exchange Offer and (III) any other
         undertaking or representation required by the Commission as set forth
         in any no-action letter obtained pursuant to clause (A) above, if
         applicable.

                  (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

                           (i) comply with all the provisions of Section 6(c)
and (d) below and use their commercially reasonable efforts to effect such
registration to permit the sale of the Transfer

<PAGE>
                                                                               8

Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof; and

                           (ii) issue, upon the request of any Holder or
purchaser of Notes covered by any Shelf Registration Statement contemplated by
this Agreement, Exchange Notes having an aggregate principal amount equal to the
aggregate principal amount of Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Company for cancellation; the Company and the
Guarantors shall register Exchange Notes and the related Subsidiary Guarantees
on the Shelf Registration Statement for this purpose and issue the Exchange
Notes to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.

                  (c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:

                           (i) use their commercially reasonable efforts to keep
such Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 hereof, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain an
untrue statement of material fact or omit to state any material fact necessary
to make the statements therein not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement curing such defect, and, if
Commission review is required, use their commercially reasonable efforts to
cause such amendment to be declared effective as soon as practicable. If at any
time the Commission shall issue any stop order suspending the effectiveness of
any Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Guarantors shall use their
commercially reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;

                           (ii) prepare and file with the Commission such
amendments and post-effective amendments to the applicable Registration
Statement as may be necessary to keep such Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462, as applicable, under the Act in a
timely manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;

                           (iii) in connection with any sale of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to register
such Transfer Restricted Securities in such denominations and such names as the
selling Holders may request at least two business days prior to such sale of
Transfer Restricted Securities;

<PAGE>
                                                                               9

                           (iv) use their commercially reasonable efforts to
cause the disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Transfer Restricted
Securities; provided, however, that neither the Company nor any Guarantor shall
be required to register or qualify as a foreign corporation where it is not now
so qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it is not now
so subject;

                           (v) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the Trustee
under the Indenture with certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with The Depository Trust Company;

                           (vi) otherwise use their commercially reasonable
efforts to comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) covering a twelve-month period beginning after the effective date of
the registration statement (as such term is defined in paragraph (c) of Rule 158
under the Act); and

                           (vii) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with the
Trustee and the Holders to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the TIA; and execute and use their commercially reasonable efforts to cause the
Trustee to execute, all documents that may be required to effect such changes
and all other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner.

                  (d) Additional Provisions Applicable to Shelf Registration
Statements and Certain Exchange Offer Prospectuses. In connection with each
Shelf Registration Statement, and each Exchange Offer Registration Statement if
and to the extent that an Initial Purchaser has notified the Company that it is
a holder of Transfer Restricted Securities (for so long as such Notes are
Transfer Restricted Securities or for the period provided in Section 3 hereof,
whichever is shorter), with respect to any Holder selling pursuant to the Shelf
Registration Statement or with respect to any such Initial Purchaser, the
Company and the Guarantors shall:

                           (i) advise such Holder promptly and, if requested by
such Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making

<PAGE>
                                                                              10

of any additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

                           (ii) if any fact or event contemplated by Section
6(d)(i)(D) above shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

                           (iii) furnish to such Holder in connection with such
exchange or sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein (except the Prospectus
included in the Exchange Offer Registration Statement at the time it was
declared effective) or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference after
the initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with such sale,
if any, for a period of at least five business days, and the Company will not
file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which such Holders shall reasonably
object within five business days after the receipt thereof, or if such
Registration Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains an untrue statement of a material fact or omits
to state any material fact necessary to make the statements therein not
misleading or fails to comply with the applicable requirements of the Act;

                           (iv) promptly prior to the filing of any document
that is to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document, upon request, to such Holder in
connection with such exchange or sale, if any, make the Company's and the
Guarantors' representatives reasonably available for discussion of such document
and other customary due diligence matters, and include such information in such
document prior to the filing thereof as such Holders may reasonably request;

                           (v) make available, at reasonable times, for
inspection by such Holder and any attorney or accountant retained by such
Holders, all financial and other records, pertinent corporate documents of the
Company and the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees to supply all information reasonably requested by any
such Holder, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;

                           (vi) if requested by any such Holders in connection
with such exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such Holders may reasonably request to have included
therein, including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included in such
Prospectus supplement or post-effective amendment;

                           (vii) furnish to such Holder in connection with such
exchange or sale without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);

<PAGE>
                                                                              11

                           (viii) deliver to such Holder without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Holder reasonably may request; the
Company and the Guarantors hereby consent to the use (in accordance with law) of
the Prospectus and any amendment or supplement thereto by each selling Holder in
connection with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;

                           (ix) upon the request of any such Holder, enter into
such agreements (including underwriting agreements) and make such reasonable and
customary representations and warranties and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be reasonably
requested by any such Holder in connection with any sale or resale pursuant to
any applicable Registration Statement. In such connection, the Company and the
Guarantors shall:

                  (A) upon request of such Holder, furnish (or in the case of
         paragraphs (2) and (3), use their commercially reasonable efforts to
         cause to be furnished) to each such Holder, upon Consummation of the
         Exchange Offer or upon the effectiveness of the Shelf Registration
         Statement, as the case may be:

                  (1) a certificate, dated such date, signed on behalf of the
         Company and each Guarantor by (x) the President or any Vice President
         and (y) a principal financial or accounting officer of the Company and
         such Guarantor, confirming, as of the date thereof, the matters set
         forth in Sections 7(i) and (k) of the Purchase Agreement and such other
         similar matters as such Holders may reasonably request;

                  (2) an opinion, dated the date of Consummation of the Exchange
         Offer or the date of effectiveness of the Shelf Registration Statement,
         as the case may be, of counsel for the Company and the Guarantors
         covering matters set forth in Sections 7(a) and (b) of the Purchase
         Agreement and such other matters as such Holder may reasonably request,
         and in any event including a statement to the effect that such counsel
         has participated in conferences with officers and other representatives
         of the Company and the Guarantors, representatives of the independent
         public accountants for the Company and the Guarantors and has
         considered the matters required to be stated therein and the statements
         contained therein, although such counsel has not independently verified
         the accuracy, completeness or fairness of such statements; and that
         such counsel advises that, on the basis of the foregoing, no facts came
         to such counsel's attention that caused such counsel to believe that
         the applicable Registration Statement, at the time such Registration
         Statement or any post-effective amendment thereto became effective and,
         in the case of the Exchange Offer Registration Statement, as of the
         date of Consummation of the Exchange Offer, contained an untrue
         statement of a material fact or omitted to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, or that the Prospectus contained in such
         Registration Statement as of its date and, in the case of the opinion
         dated the date of Consummation of the Exchange Offer, as of the date of
         Consummation, contained an untrue statement of a material fact or
         omitted to state a material fact necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading. Without limiting the foregoing, such counsel
         may state further that such counsel assumes no responsibility for, and
         has not independently verified, the accuracy, completeness or fairness
         of the financial statements, notes and schedules and other financial
         data included in any Registration Statement contemplated by this
         Agreement or the related Prospectus; and

<PAGE>
                                                                              12

                  (3) a customary comfort letter, dated the date of Consummation
         of the Exchange Offer, or as of the date of effectiveness of the Shelf
         Registration Statement, as the case may be, from the Company's
         independent accountants, in the customary form and covering matters of
         the type customarily covered in comfort letters to underwriters in
         connection with underwritten offerings, and affirming the matters set
         forth in the comfort letters delivered pursuant to Section 7(d) of the
         Purchase Agreement; and

                  (B) deliver such other documents and certificates as may be
         reasonably requested by the selling Holders to evidence compliance with
         the matters covered in clause (A) above and with any customary
         conditions contained in any agreement entered into by the Company and
         the Guarantors pursuant to this clause (ix);

                           (x) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions as the
selling Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that neither the Company nor any Guarantor shall be required
to register or qualify as a foreign corporation where it is not now so qualified
or to take any action that would subject it to the service of process in suits
or to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject; and

                           (xi) provide promptly to each such Holder, upon
request, each document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.

                  (e) Restrictions on Holders. Each Holder's acquisition of a
Transfer Restricted Security constitutes such Holder's agreement that, upon
receipt of the notice referred to in Section 6(d)(i)(C) or any notice from the
Company of the existence of any fact of the kind described in Section 6(d)(i)(D)
hereof (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder has received copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(ii) hereof,
or (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice
shall be required to either (I) destroy any Prospectuses, other than permanent
file copies, then in such Holder's possession that have been replaced by the
Company with a more recently dated Prospectus or (II) deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the Prospectuses covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.

SECTION 7. REGISTRATION EXPENSES

                  (a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and

<PAGE>
                                                                              13

disbursements of counsel for the Company, the Guarantors and one counsel for the
Holders of Transfer Restricted Securities (which shall be Simpson Thacher &
Bartlett LLP or such other counsel as may be selected by a majority of such
Holders); (v) all application and filing fees in connection with listing the
Exchange Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).

                  The Company will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

                  (b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Notes into in the Exchange Offer and/or selling or
reselling Notes or Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel (who shall be Simpson Thacher & Bartlett LLP unless another
firm shall be chosen by the Holders of a majority in principal amount of the
Transfer Restricted Securities for whose benefit such Registration Statement is
being prepared).

                  (c) Notwithstanding Sections 7(a) and (b), the Company and the
Guarantors shall not be obligated to reimburse any Holder set forth on Schedule
B hereto for any such fees or expenses incurred with respect to the inclusion by
any such Holder of Transfer Restricted Securities in a Shelf Registration
Statement and each such Holder shall be responsible to reimburse the Company and
the Guarantors for their portion of any such fees and expenses (calculated on a
pro rata basis in accordance with the amount of Transfer Restricted Securities
so included by each Holder).

SECTION 8. INDEMNIFICATION

                  (a) The Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless each Holder, its directors, officers
and each Person, if any, who controls such Holder (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act), from and against any and all
losses, claims, damages, liabilities or judgments (including without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto) provided by the Company to any Holder or any prospective
purchaser of Exchange Notes or registered Notes, or caused by any omission
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to such Holder furnished in writing to the Company by such
Holder.

                  (b) By its acquisition of Transfer Restricted Securities, each
Holder of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantors, and their respective
directors and officers, and each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company
or the Guarantors to the same extent as the foregoing indemnity from the Company
and the Guarantors set forth in Section

<PAGE>
                                                                              14

8(a) hereof, but only with reference to information relating to such Holder
furnished in writing to the Company by such Holder expressly for use in any
Registration Statement. In no event shall any Holder, its directors, officers or
any Person who controls such Holder be liable or responsible for any amount in
excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.

                  (c) In case any action shall be commenced involving any Person
in respect of which indemnity may be sought pursuant to Section 8(a) or (b)
hereof (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the Person against whom such indemnity may be sought (the "INDEMNIFYING PERSON")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and (b) hereof, a Holder shall not be
required to assume the defense of such action pursuant to this Section 8(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified,
pursuant to Section 8(a) hereof, and by the Company and the Guarantors, in the
case of parties indemnified, pursuant to Section 8(b) hereof. The indemnifying
party shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (A) effected with its written consent or (B) effected
without its written consent if the settlement is entered into more than 20
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (I) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (II) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.

<PAGE>
                                                                              15

                  (d) To the extent that the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors on the one hand, and the Holders, on the other hand, from the
initial sale by the Issuer of Transfer Restricted Securities (or in the case of
Exchange Notes that are Transfer Restricted Securities, the sale of the Notes
for which such Exchange Notes were exchanged) or (ii) if the allocation provided
by clause 8(d)(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in such
clause 8(d)(i) but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

                  The Company, the Guarantors and, by its acquisition of
Transfer Restricted Securities, each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.

SECTION 9. RULE 144A AND RULE 144

                  The Company and each Guarantor agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which the Company or such Guarantor (a) is not subject to Section 13
or 15(d) of the Exchange Act, to make available, upon request of any Holder, or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such

<PAGE>
                                                                              16

Transfer Restricted Securities pursuant to Rule 144A, and (b) is subject to
Section 13 or 15(d) of the Exchange Act, to make all filings required thereby in
a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.

SECTION 10. FUTURE PARTIES

                  If, prior to the Consummation of the Exchange Offer or prior
to the effectiveness of the Shelf Registration Statement, as the case may be,
(i) the Company merges with or into another Person in accordance with the terms
and provisions of the Indenture, such Person shall execute and deliver to the
parties hereto a joinder agreement to this Agreement substantially in the form
attached hereto as Exhibit A and such Person shall be bound by all the
provisions of this Agreement as the "Company," or (ii) any subsidiary of the
Company executes a Subsidiary Guarantee in accordance with the terms and
provisions of the Indenture, the Company shall cause such subsidiary to execute
and deliver to the parties hereto a a joinder agreement to this Agreement
substantially in the form attached hereto as Exhibit A and such subsidiary shall
be bound by all the provisions of this Agreement as a "Guarantor." It is hereby
acknowledged that upon the Merger Closing, K&F Industries, Inc. and each of the
parties listed on Schedule A hereto to will become a party to this Agreement by
executing and delivering a joinder agreement to this Agreement substantially in
the form attached hereto as Exhibit A.

SECTION 11. MISCELLANEOUS

                  (a) Remedies. The Company and the Guarantors acknowledge and
agree that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantor's obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.

                  (b) No Inconsistent Agreements. The Company and the Guarantors
will not, on or after the date of this Agreement, enter into any agreement with
respect to their respective securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The Company and the Guarantors have not previously entered
into any agreement granting any registration rights with respect to their
respective securities to any Person that would require such securities to be
included in any Registration Statement filed hereunder. The rights granted to
the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's and the Guarantors'
securities under any agreement in effect on the date hereof.

                  (c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case of
Section 5 hereof and this Section 11(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii) in
the case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver of or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.

<PAGE>
                                                                              17

                  (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

                  (e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telecopier, or air
courier guaranteeing overnight delivery:

                           (i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and

                           (ii) if to the Company or any of the Guarantors:

                                c/o K&F Industries Inc.
                                600 Third Avenue
                                New York, New York 10016
                                Attention: Kenneth M. Schwartz
                                Facsimile: (212) 867-1182)

                  All such notices and communications shall be deemed to have
been duly given at the time delivered by hand, when receipt is acknowledged, if
telecopied; and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.

                  Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.

                  (f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.

                  (g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the

<PAGE>
                                                                              18

validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.

                  (k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.

                           [Signature Pages to Follow]

<PAGE>

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

                                            K&F ACQUISITION, INC.

                                            By: /s/ Richard K. Roeder
                                                --------------------------------
                                            Name: Richard K. Roeder
                                            Title: Vice President and Secretary

LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES INC.

By: LEHMAN BROTHERS INC.

By: /s/ [signature illegible]
   ------------------------------------
        Authorized Representative

By: GOLDMAN, SACHS & CO.

By: /s/ Goldman Sachs & Co.
   ------------------------------------
         (Goldman Sachs & Co.)

On behalf of each of the Initial Purchasers

<PAGE>

                                    EXHIBIT A

               [Form of Joinder to Registration Rights Agreement]

                                                            ___________ __, 20__

Lehman Brothers Inc.
Goldman, Sachs & Co.
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10017

Ladies and Gentlemen:

         Reference is made to the Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT") dated as of November 18, 2004 among K&F
Acquisition, Inc., a Delaware corporation (the "ISSUER") and Lehman Brothers
Inc., Goldman, Sachs & Co., Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc. (collectively, the "INITIAL PURCHASERS") concerning the purchase
of the Notes (as defined in the Registration Rights Agreement) from the Issuer
by the several Initial Purchasers. Capitalized terms used herein but not defined
herein shall have the meanings assigned to such terms in the Registration Rights
Agreement.

         [___________](1) (the "SUCCESSOR COMPANY") and
[___________],[___________] and [___________] (the "GUARANTORS") agree that this
letter agreement is being executed and delivered in connection with the issue
and sale of the Notes pursuant to the Purchase Agreement.

                  1. Joinder of the Successor Company. The Successor Company
hereby agrees to become bound by the terms, conditions and other provisions of
the Registration Rights Agreement with all attendant rights, duties and
obligations stated therein, with the same force and effect as if originally
named as the Company therein and as if such party executed the Registration
Rights Agreement on the date thereof.

                  2. Joinder of the Guarantors. Each of the Guarantors hereby
agrees to become bound by the terms, conditions and other provisions of the
Registration Rights Agreement with all attendant rights, duties and obligations
stated therein, with the same force and effect as if originally named as a
Guarantor therein and as if such party executed the Registration Rights
Agreement on the date thereof.

                  3. Governing Law. THIS LETTER AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

--------------------
(1) Insert name of Person, if any, that the Company merges with or into in
accordance with the terms and provisions of the Indenture.

<PAGE>

                                                                               5

                  4. Counterparts. This letter agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

                  5. Amendments. No amendment or waiver of any provision of this
letter agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.

                  6. Headings. The headings in this letter agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

<PAGE>

                                                                               6

                  If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
letter agreement will become a binding agreement between the Successor Company,
the Guarantors party hereto and the several Initial Purchasers in accordance
with its terms.

                                            Very truly yours,

                                            [SUCCESSOR COMPANY]

                                            By:_________________________________
                                            Name:
                                            Title:

                                            GUARANTORS:

                                            [GUARANTOR]

                                            By:_________________________________
                                            Name:
                                            Title:

<PAGE>
                                                                               7

Accepted:  ____________ __, 20__

LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES INC.

By: LEHMAN BROTHERS INC.

By: _____________________________________
         Authorized Representative

By: GOLDMAN, SACHS & CO.

By:______________________________________
          (Goldman, Schs & Co.)

On behalf of each of the Initial Purchasers

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