Document:

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                                                                  CONFORMED COPY

                                                                     EXHIBIT 4.1

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                           NATIONAL WATERWORKS, INC.

                             SERIES A AND SERIES B
                   10.50% SENIOR SUBORDINATED NOTES DUE 2012

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

                                   INDENTURE

                         Dated as of November 22, 2002

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

                                WELLS FARGO BANK
                        MINNESOTA, NATIONAL ASSOCIATION

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<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)..............................................            13.03
   (c)..............................................            13.03
313(a)..............................................             7.06
   (b)(1)...........................................             N.A.
   (b)(2)...........................................          7.06; 7.07
   (c)..............................................         7.06; 13.02
   (d)..............................................             7.06
314(a)..............................................     4.03; 13.02; 13.053
   (b)..............................................             N.A.
   (c)(1)...........................................            13.04
   (c)(2)...........................................            13.04
   (c)(3)...........................................             N.A.
   (d)..............................................             N.A.
   (e)..............................................            13.05
   (f)..............................................             N.A.
315(a)..............................................             7.01
   (b)..............................................          7.05,13.02
   (c)..............................................             7.01
   (d)..............................................             7.01
   (e)..............................................             6.11
316(a) (last sentence)..............................             2.09
   (a)(1)(A)........................................             6.05
   (a)(1)(B)........................................             6.04
   (a)(2)...........................................             N.A.
   (b)..............................................             6.07
   (c)..............................................             2.12
317(a)(1)...........................................             6.08
   (a)(2)...........................................             6.09
   (b)..............................................             2.04
318(a)..............................................            13.01
   (b)..............................................             N.A.
   (c)..............................................            13.01
</TABLE>

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

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page

                                             ARTICLE 1.
                                    DEFINITIONS AND INCORPORATION
                                            BY REFERENCE
<S>            <C>                                                                                     <C>
Section 1.01   Definitions...........................................................................    1
Section 1.02   Other Definitions.....................................................................   26
Section 1.03   Incorporation by Reference of Trust Indenture Act.....................................   26
Section 1.04   Rules of Construction.................................................................   26

                                             ARTICLE 2.
                                             THE NOTES

Section 2.01   Form and Dating.......................................................................   27
Section 2.02   Execution and Authentication..........................................................   28
Section 2.03   Registrar and Paying Agent............................................................   29
Section 2.04   Paying Agent to Hold Money in Trust...................................................   29
Section 2.05   Holder Lists..........................................................................   29
Section 2.06   Transfer and Exchange.................................................................   29
Section 2.07   Replacement Notes.....................................................................   42
Section 2.08   Outstanding Notes.....................................................................   42
Section 2.09   Treasury Notes........................................................................   42
Section 2.10   Temporary Notes.......................................................................   42
Section 2.11   Cancellation..........................................................................   43
Section 2.12   Defaulted Interest....................................................................   43
Section 2.13   Issuance of Additional Notes..........................................................   43

                                             ARTICLE 3.
                                      REDEMPTION AND PREPAYMENT

Section 3.01   Notices to Trustee....................................................................   43
Section 3.02   Selection of Notes to Be Redeemed or Purchased........................................   44
Section 3.03   Notice of Redemption..................................................................   44
Section 3.04   Effect of Notice of Redemption........................................................   45
Section 3.05   Deposit of Redemption or Purchase Price...............................................   45
Section 3.06   Notes Redeemed or Purchased in Part...................................................   46
Section 3.07   Optional Redemption...................................................................   46
Section 3.08   No Mandatory Redemption...............................................................   47
Section 3.09   Offer to Purchase by Application of Excess Proceeds...................................   47

                                             ARTICLE 4.
                                             COVENANTS

Section 4.01   Payment of Notes......................................................................   48
Section 4.02   Maintenance of Office or Agency.......................................................   49
Section 4.03   Reports...............................................................................   49
Section 4.04   Compliance Certificate................................................................   50
Section 4.05   Taxes.................................................................................   50
Section 4.06   Stay, Extension and Usury Laws........................................................   51
Section 4.07   Restricted Payments...................................................................   51
Section 4.08   Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.............   54
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>            <C>                                                                                     <C>
Section 4.09   Incurrence of Indebtedness and Issuance of Preferred Stock............................   56
Section 4.10   Asset Sales...........................................................................   59
Section 4.11   Transactions with Affiliates..........................................................   61
Section 4.12   Liens.................................................................................   63
Section 4.13   Business Activities...................................................................   63
Section 4.14   Corporate Existence...................................................................   63
Section 4.15   Offer to Repurchase Upon Change of Control............................................   63
Section 4.16   No Senior Subordinated Debt...........................................................   65
Section 4.17   Future Subsidiary Guarantees..........................................................   65
Section 4.18   Designation of Restricted and Unrestricted Subsidiaries...............................   65

                                             ARTICLE 5.
                                             SUCCESSORS

Section 5.01   Merger, Consolidation, or Sale of Assets..............................................   66
Section 5.02   Successor Corporation Substituted.....................................................   67

                                             ARTICLE 6.
                                        DEFAULTS AND REMEDIES

Section 6.01   Events of Default.....................................................................   67
Section 6.02   Acceleration..........................................................................   69
Section 6.03   Other Remedies........................................................................   69
Section 6.04   Waiver of Past Defaults...............................................................   70
Section 6.05   Control by Majority...................................................................   70
Section 6.06   Limitation on Suits...................................................................   70
Section 6.07   Rights of Holders of Notes to Receive Payment.........................................   71
Section 6.08   Collection Suit by Trustee............................................................   71
Section 6.09   Trustee May File Proofs of Claim......................................................   71
Section 6.10   Priorities............................................................................   71
Section 6.11   Undertaking for Costs.................................................................   72

                                             ARTICLE 7.
                                              TRUSTEE

Section 7.01   Duties of Trustee.....................................................................   72
Section 7.02   Rights of Trustee.....................................................................   73
Section 7.03   Individual Rights of Trustee..........................................................   73
Section 7.04   Trustee's Disclaimer..................................................................   74
Section 7.05   Notice of Defaults....................................................................   74
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......................................................   76
Section 7.10   Eligibility; Disqualification.........................................................   76
Section 7.11   Preferential Collection of Claims Against Company.....................................   76

                                             ARTICLE 8.
                              LEGAL DEFEASANCE AND COVENANT DEFEASANCE

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............................................   78
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>            <C>                                                                                     <C>
Section 8.05   Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
               Provisions............................................................................   79
Section 8.06   Repayment to Company..................................................................   79
Section 8.07   Reinstatement.........................................................................   80

                                             ARTICLE 9.
                                  AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01   Without Consent of Holders of Notes...................................................   80
Section 9.02   With Consent of Holders of Notes......................................................   81
Section 9.03   Compliance with Trust Indenture Act...................................................   82
Section 9.04   Revocation and Effect of Consents.....................................................   82
Section 9.05   Notation on or Exchange of Notes......................................................   83
Section 9.06   Trustee to Sign Amendments, etc.......................................................   83

                                             ARTICLE 10.
                                            SUBORDINATION

Section 10.01  Agreement to Subordinate..............................................................   83
Section 10.02  Liquidation; Dissolution; Bankruptcy..................................................   84
Section 10.03  Default on Designated Senior Debt.....................................................   84
Section 10.04  Acceleration of Notes.................................................................   85
Section 10.05  When Distribution Must Be Paid Over...................................................   85
Section 10.06  Notice by Company.....................................................................   86
Section 10.07  Subrogation...........................................................................   86
Section 10.08  Relative Rights.......................................................................   86
Section 10.09  Subordination May Not Be Impaired by Company..........................................   86
Section 10.10  Distribution or Notice to Representative..............................................   86
Section 10.11  Rights of Trustee and Paying Agent....................................................   87
Section 10.12  Authorization to Effect Subordination.................................................   87
Section 10.13  Amendments............................................................................   87

                                             ARTICLE 11.
                                           NOTE GUARANTEES

Section 11.01  Guarantee.............................................................................   87
Section 11.02  Subordination of Note Guarantee.......................................................   88
Section 11.03  Limitation on Guarantor Liability.....................................................   89
Section 11.04  Execution and Delivery of Note Guarantee..............................................   89
Section 11.05  Guarantors May Consolidate, etc., on Certain Terms....................................   89
Section 11.06  Release of Guarantor..................................................................   90

                                             ARTICLE 12.
                                     satisfaction and discharge

Section 12.01  Satisfaction and Discharge............................................................   91
Section 12.02  Application of Trust Money............................................................   92

                                             ARTICLE 13.
                                            MISCELLANEOUS

Section 13.01  Trust Indenture Act Controls..........................................................   92
Section 13.02  Notices...............................................................................   92
Section 13.03  Communication by Holders of Notes with Other Holders of Notes.........................   93
Section 13.04  Certificate and Opinion as to Conditions Precedent....................................   93
Section 13.05  Statements Required in Certificate or Opinion.........................................   94
</TABLE>

                                      iii

<PAGE>

<TABLE>
<S>            <C>                                                                                     <C>
Section 13.06  Rules by Trustee and Agents...........................................................   94
Section 13.07  No Personal Liability of Directors, Officers, Employees and Stockholders..............   94
Section 13.08  Governing Law.........................................................................   94
Section 13.09  No Adverse Interpretation of Other Agreements.........................................   94
Section 13.10  Successors............................................................................   94
Section 13.11  Severability..........................................................................   95
Section 13.12  Counterpart Originals.................................................................   95
Section 13.13  Table of Contents, Headings, etc......................................................   95
</TABLE>

<TABLE>
<CAPTION>
                                 EXHIBITS
<S>          <C>
Exhibit A1   FORM OF NOTE
Exhibit A2   FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B    FORM OF CERTIFICATE OF TRANSFER
Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E    FORM OF NOTE GUARANTEE
Exhibit F    FORM OF SUPPLEMENTAL INDENTURE
</TABLE>

                                       iv

<PAGE>

         INDENTURE dated as of November 22, 2002 between National Waterworks,
Inc., a Delaware corporation (the "Company"), and Wells Fargo Bank Minnesota,
National Association, as trustee (the "Trustee").

         The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders (as defined) of the
10.50% Series A Senior Subordinated Notes due 2012 (the "Series A Notes") and
the 10.50% Series B Senior Subordinated Notes due 2012 issued in the Exchange
Offer or Shelf Registration pursuant to the Exchange and Registration Rights
Agreement (the "Series B Notes" and, together with the Series A Notes, the
"Notes"):

                                   ARTICLE 1.
                         DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01      Definitions.

         "144A Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of Notes sold in reliance on Rule 144A.

         "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" means the purchase by the Company of substantially all of
the assets and businesses of, and the assumption of certain liabilities and
obligations of, U.S. Filter Distribution Group, Inc. to occur on the date of
this Indenture.

         "Acquisition Agreement" means that certain Asset Purchase Agreement,
dated as of September 12, 2002, by and among United States Filter Corporation,
U.S. Filter Distribution Group, Inc. and Blue Acquisition Corp. (which has
subsequently changed its name to National Waterworks, Inc.)

         "Additional Notes" means additional Notes (other than the Initial Notes
and the Exchange Notes issued with respect to the Initial Notes) issued from
time to time under this Indenture in accordance with Sections 2.02, 2.13 and
4.09 hereof, as part of the same series as the Initial 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; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings. No Person (other than the Company or any
Subsidiary of the Company) in whom a Receivables Subsidiary

                                       1

<PAGE>

makes an Investment in connection with a Qualified Receivables Transaction will
be deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.

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

         "Applicable Premium" means, with respect to any Note on any applicable
redemption date, the greater of:

                  (1)      1.0% of the then outstanding principal amount of the
         Note; and

                  (2)      the excess of:

                           (a)     the present value at such redemption date of
                  (i) the redemption price of the Note at December 1, 2007 (such
                  redemption price being set forth in the table appearing in
                  Section 3.07 hereby) plus (ii) all required interest payments
                  due on the Note through December 1, 2007 (excluding accrued
                  but unpaid interest), computed using a discount rate equal to
                  the Treasury Rate as of such redemption date plus 50 basis
                  points; over

                           (b)     the then outstanding principal amount of the
                  Note.

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

         "Asset Sale" means:

                  (1)      the sale, lease (other than an operating lease
         entered into in the ordinary course of business), conveyance or other
         disposition of any assets or rights of the Company or any Restricted
         Subsidiary; provided that the sale, conveyance or other disposition of
         all or substantially all of the assets of the Company and its
         Restricted Subsidiaries taken as a whole will be governed by Section
         4.15 or Section 5.01 here and not by Section 4.10 hereof; 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 Subsidiaries (in each case other than directors' qualifying
         Equity Interests or Equity Interests required by applicable law to be
         held by a Person other than the Company or a Restricted Subsidiary).

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

                  (1)      any single transaction or series of related
         transactions that involves assets or rights having a fair market value
         of less than $2.0 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 inventory or accounts receivable
         in the ordinary course of business or accounts receivable in connection
         with the compromise, settlement or collection thereof;

                                       2

<PAGE>

                  (5)      the sale or disposition of obsolete, damaged or worn
         out equipment or property in the ordinary course of business or any
         other property that is uneconomic or no longer useful to the conduct of
         the Company's business;

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

                  (7)      sales of accounts receivable and related assets of
         the type specified in the definition of "Qualified Receivables
         Transaction" to a Receivables Subsidiary for the fair market value
         thereof, including cash in an amount at least equal to 75% of the book
         value thereof as determined in accordance with GAAP, it being
         understood that, for the purposes of this clause (7), notes received in
         exchange for the transfer of accounts receivable and related assets
         will be deemed cash if the Receivables Subsidiary or other payor is
         required to repay said notes as soon as practicable from available cash
         collections less amounts required to be established as reserves
         pursuant to contractual agreements with entities that are not
         Affiliates of the Company entered into as part of a Qualified
         Receivables Transaction; or

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

         "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" will 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. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.

         "Board of Directors" means:

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

                  (2)      with respect to a partnership or limited liability
         company, the managing general partner or partners or the managing
         member or members or any controlling committee of partners or members,
         as applicable; and

                  (3)      with respect to any other Person, any similar
         governing body.

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

         "Business Day" means any day other than 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, and the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.

                                       3

<PAGE>

         "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 six months from the date
         of acquisition;

                  (3)      marketable general obligations issued by any state of
         the United States or any political subdivision of any such state or any
         public instrumentality thereof maturing within one year of the date of
         acquisition and at the time of acquisition rated "A" or better from
         either of Moody's Investors Service Inc. or Standard & Poor's Rating
         Services;

                  (4)      certificates of deposit, time deposits and eurodollar
         time deposits or bankers acceptances' with maturities of one year or
         less from the date of acquisition, and overnight bank deposits, in each
         case, with any lender party to the Credit Agreement or with any
         commercial bank having capital and surplus in excess of $500.0 million;

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

                  (6)      commercial paper rated at the time of acquisition
         thereof at least A-1 or the equivalent by Moody's Investors Service,
         Inc. or at least P-1 or the equivalent by Standard & Poor's Rating
         Services (or carrying an equivalent rating by a nationally recognized
         rating agency if both the two named agencies cease publishing ratings
         of investments) and in each case maturing within one year after the
         date of acquisition; and

                  (7)      interests in investment companies or money market
         funds at least 95% of the assets of which constitute cash and Cash
         Equivalents of the kinds described in clauses (1) through (7) of this
         definition.

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

                  (1)      (A) prior to the first public offering of Capital
         Stock of either Holdings or the Company, the first day on which
         Holdings ceases to own 100% of the outstanding Voting Stock of the
         Company, and (B) after the first public offering of Capital Stock of
         either Holdings or the

                                       4

<PAGE>

         Company, (i) if such public offering is of Holdings' Capital Stock, the
         first day on which Holdings ceases to own 100% of the outstanding
         Voting Stock of the Company or (ii) if such public offering is of the
         Company's Capital Stock, the date on which any person (as defined in
         clause (2) below), other than the Permitted Holders or a Permitted
         Group, 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;

                  (2)      the direct or indirect sale, 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
         or a Permitted Group;

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

                  (4)      (A) prior to the first public offering of Capital
         Stock of either Holdings or the Company, the consummation of any
         transaction (including, without limitation, any merger or
         consolidation) the result of which is that any person (as defined
         above), other than a Permitted Holder or a Permitted Group, becomes the
         Beneficial Owner, directly or indirectly, of more than 50% of the
         Voting Stock of Holdings, measured by voting power rather than number
         of shares, and (B) after the first public offering of Capital Stock of
         either Holdings or the Company, (i) if such public offering is of
         Holdings' Capital Stock, the consummation of any transaction
         (including, without limitation, any merger or consolidation) the result
         of which is that any person (as defined above), other than a Permitted
         Holder or a Permitted Group, becomes the Beneficial Owner, directly or
         indirectly, of more than 50% of the Voting Stock of Holdings, measured
         by voting power rather than number of shares, or (ii) if such public
         offering is of the Company's Capital Stock, the consummation of any
         transaction (including, without limitation, any merger or
         consolidation) the result of which is that any person (as defined
         above), other than a Permitted Holder or a Permitted Group, becomes the
         Beneficial Owner, directly or indirectly, of more than 50% of the
         Voting Stock of Holdings or the Company, as the case may be, in each
         case measured by voting power rather than number of shares;

                  (5)      (A) prior to the first public offering of Capital
         Stock of either Holdings or the Company, the first day on which a
         majority of the members of the Board of Directors of Holdings are not
         Continuing Directors and (B) after the first public offering of Capital
         Stock of either Holdings or the Company, (i) if such public offering is
         of Holdings' Capital Stock, the first day on which a majority of the
         members of the Board of Directors of Holdings are not Continuing
         Directors, or (ii) if such public offering is of the Company's Capital
         Stock, the first day on which a majority of the members of the Board of
         Directors of the Company are not Continuing Directors; or

                  (6)      (A) prior to the first public offering of Capital
         Stock of either Holdings or the Company, Holdings consolidates with, or
         merges with or into, any Person, or any Person consolidates with, or
         merges with or into, Holdings, in any such event pursuant to a
         transaction in which any of the outstanding Voting Stock of Holdings or
         such other Person is converted into or exchanged for cash, securities
         or other property, other than any such transaction where the Voting
         Stock of Holdings outstanding immediately prior to such transaction is
         converted into or exchanged for Voting Stock (other than Disqualified
         Stock) of the surviving or transferee Person constituting a majority of
         the outstanding shares of such Voting Stock of such surviving or
         transferee Person (immediately after giving effect to such issuance)
         and (B) after the first public

                                       5

<PAGE>

         offering of Capital Stock of either Holdings or the Company, (i) if
         such public offering is of Holdings' Capital Stock, Holdings
         consolidates with, or merges with or into, any Person, or any Person
         consolidates with, or merges with or into, Holdings, in any such event
         pursuant to a transaction in which any of the outstanding Voting Stock
         of Holdings or such other Person is converted into or exchanged for
         cash, securities or other property, other than any such transaction
         where the Voting Stock of Holdings outstanding immediately prior to
         such transaction is converted into or exchanged for Voting Stock (other
         than Disqualified Stock) of the surviving or transferee Person
         constituting a majority of the outstanding shares of such Voting Stock
         of such surviving or transferee Person (immediately after giving effect
         to such issuance), or (ii) if such public offering is of the Company's
         Capital Stock, the Company consolidates with, or merges with or into,
         any Person, or any Person consolidates with, or merges with or into,
         the Company, in any such event pursuant to a transaction in which any
         of the outstanding Voting Stock of the Company or such other Person is
         converted into or exchanged for cash, securities or other property,
         other than any such transaction where the Voting Stock of the Company
         outstanding immediately prior to such transaction is converted into or
         exchanged for Voting Stock (other than Disqualified Stock) of the
         surviving or transferee Person constituting a majority of the
         outstanding shares of such Voting Stock of such surviving or transferee
         Person (immediately after giving effect to such issuance).

         "Clearstream" means Clearstream Banking, S.A.

         "Commodity Price Protection Agreement" means with respect to any Person
any forward contract, commodity swap, commodity option or other similar
agreement or arrangement relating to, or the value of which is dependent upon or
which is designed to protect such Person against, fluctuations in commodity
prices.

         "Company" means National Waterworks, Inc., and any and all successors
thereto.

         "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

                  (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 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 pursuant to Hedging Obligations), to the extent that
         any such expense 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
         expenses (excluding any such non-cash expense to the extent that it
         represents an accrual of or reserve for cash expenses in any future
         period or amortization of a prepaid cash expense that was paid in a
         prior period) of such Person and its Restricted Subsidiaries for such

                                       6

<PAGE>

         period, to the extent that such depreciation, amortization and other
         non-cash expenses were deducted in computing such Consolidated Net
         Income; minus

                  (4)      non-cash items increasing such Consolidated Net
         Income for such period, other than the accrual of revenue in the
         ordinary course of business,

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

         "Consolidated Net Income" means, with respect to any specified 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 of any Person that is not a Restricted
         Subsidiary or that is accounted for by the equity method of accounting
         will be included only to the extent of the amount of dividends or
         distributions paid in cash to the specified Person or a Restricted
         Subsidiary of the Person (and if such Net Income is a loss will be
         included only to the extent that such loss has been funded with cash by
         the specified Person or a Restricted Subsidiary of the specified
         Person);

                  (2)      the Net Income of any Restricted Subsidiary will be
         excluded to the extent that the declaration or payment of dividends or
         similar distributions or the making of loans or intercompany advances
         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)      any net gain or loss realized upon the sale or other
         disposition of any asset of such Person or its Restricted Subsidiaries
         (including pursuant to a Sale/Leaseback Transaction) that is not sold
         or otherwise disposed of in the ordinary course of business and any net
         gain or loss realized upon the sale or other disposition of any Equity
         Interest of any Person will be excluded;

                  (4)      any extraordinary gain or loss will be excluded;

                  (5)      any noncash compensation charges or other non-cash
         expenses or charges arising from the grant of or issuance or repricing
         of stock, stock options or other equity-based awards or any amendment,
         modification, substitution or change of any such stock, stock options
         or other equity-based awards will be excluded;

                  (6)      any non-recurring fees, charges or other expenses
         made or incurred in connection with the Acquisition and the
         transactions contemplated thereby within 180 days of the date of this
         Indenture will be excluded;

                  (7)      the cumulative effect of a change in accounting
         principles will be excluded;

                  (8)      for purposes of Section 4.07 only, the total amount
         of cash tax savings generated during the applicable period attributable
         to the depreciation and amortization resulting from the step-up in the
         basis for tax purposes of the assets acquired in the Acquisition
         (including, without limitation, intangible assets such as goodwill)
         will be added to "Consolidated Net Income" so long as such addition
         will not result in double-counting; and

                                       7

<PAGE>

                  (9)      any non-cash goodwill impairment charges subsequent
         to the date of this Indenture resulting from the application of SFAS
         No. 142 will be excluded.

         "Continuing Directors"  means, as of any date of determination, any
member of the Board of Directors of Holdings 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; or

                  (3)      was nominated for election or appointed to such Board
         of Directors by a Permitted Holder or a Permitted Group.

         "Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.

         "Credit Agreement" means that certain Credit Agreement, dated as of
November 22, 2002 by and among the Company, Holdings, UBS AG, Stamford Branch,
JPMorgan Securities Inc., Goldman Sachs Credit Partners L.P. and the lenders
from time to time thereunder, providing for up to $250.0 million of term loans
and $75.0 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, supplemented,
renewed, refunded, replaced, restructured, restated or refinanced from time to
time (including any agreement extending the maturity thereof or increasing the
amount of available borrowings thereunder or adding Restricted Subsidiaries of
the Company as additional borrowers or guarantors thereunder) whether with the
original agents and lenders or otherwise and whether provided under the original
credit agreement or other credit agreements or otherwise.

         "Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, 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, in each case, as
amended, restated, modified, supplemented, renewed, refunded, replaced,
restructured or refinanced in whole or in part from time to time (including any
agreement extending the maturity thereof or increasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder).

         "Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements, futures contract, options contract,
synthetic cap or other similar agreement or arrangement to which such Person is
a party or of which it is a beneficiary for the purpose of hedging foreign
currency risk.

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

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

         "Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A1 hereto except that

                                       8

<PAGE>

such Note shall not bear the Global Note Legend and shall not have the "Schedule
of Exchanges of Interests in the Global Note" attached thereto.

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

         "Designated Non-cash Consideration" means the fair market value of
noncash consideration received by the Company or one or more of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate setting
forth the basis of valuation.

         "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 by the Company as "Designated Senior Debt."

         "Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable or exercisable, in each case at the option of the holder of the
Capital Stock), or upon the happening of any event (other than an event solely
within the control of the issuer thereof), 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; provided, however,
that any class of Capital Stock that, by its terms, authorizes the issuer
thereof to satisfy in full its obligations with respect to payment of dividends
or upon maturity, redemption (pursuant to a sinking fund or otherwise) or
repurchase thereof or otherwise by delivery of Capital Stock that is not
Disqualified Stock, and that is not convertible, puttable or exchangeable for
Disqualified Stock or Indebtedness, shall not be deemed Disqualified Stock so
long as such issuer satisfies its obligations with respect thereto solely by the
delivery of Capital Stock that is not Disqualified Stock. 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 will 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 the Company has first
complied with the provisions set forth in Sections 3.09, 4.10 and 4.15 hereof,
as applicable.

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

         "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 a public or private sale for cash of Capital
Stock (other than Disqualified Stock).

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

                                       9

<PAGE>

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

         "Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of November 22, 2002 among the Company
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time, and, with respect to
any Additional Notes, one or more registration rights agreements among the
Company and the other parties thereto, as such agreement(s) may be amended,
modified or supplemented from time to time, relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes
under the Securities Act.

         "Exchange Notes" means the Series B Notes issued in an Exchange Offer
pursuant to Section 2.06(f) hereof or issued pursuant to the Shelf Registration
Statement.

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

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

         "Existing Indebtedness" means the Indebtedness of the Company (other
than Indebtedness under the Credit Agreement) in existence on the date of this
Indenture.

         "Fee Agreement" means that certain Fee Agreement, dated as of September
30, 2002, by and among National Waterworks, Inc., THL Managers V, LLC and J.P.
Morgan Partners, LLC.

         "Fixed Charges" means, with respect to any specified Person and its
Restricted Subsidiaries 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 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
         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)      commissions, discounts, yield and other financing
         fees and financing charges incurred in connection with any transaction
         (including, without limitation, a Qualified Receivables Transaction)
         pursuant to which such Person or any of its Restricted Subsidiaries may
         sell, convey or otherwise transfer or grant a security interest in any
         accounts receivable or related assets of the type specified in the
         definition of "Qualified Receivables Transaction;" plus

                  (5)      the product of (a) all dividends, whether paid or
         accrued and whether or not in cash, on any series of Disqualified Stock
         of such Person or preferred stock of any of its Restricted
         Subsidiaries, other than dividends on Equity Interests payable solely
         in Equity Interests of the

                                       10

<PAGE>

         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.

         "Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries 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 Disqualified Stock
of such Person or preferred stock of a Restricted Subsidiary of such Person
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 will 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
         or consolidations and including any related financing transactions,
         during the four-quarter reference period or subsequent to such
         reference period and on or prior to the Calculation Date will be given
         pro forma effect as if they had occurred on the first day of the
         four-quarter reference period and Consolidated Cash Flow for such
         reference period will be calculated on a pro forma basis in accordance
         with Regulation S-X under the Securities Act and may include operating
         expense reductions (net of continuing associated expenses but excluding
         non-recurring associated expenses) for such period resulting from the
         acquisition which is being given pro forma effect to that either (a)
         would be permitted pursuant to Rule 11-02 of Regulation S-X under the
         Securities Act or (b) have been realized or for which substantially all
         the steps necessary for realization have been taken or at the time of
         determination are reasonably expected to be taken within six months
         following any such acquisition, including, but not limited to, the
         execution or termination of any contracts, the termination of any
         personnel or the closing of any facility, as applicable, provided that
         such adjustments shall be calculated on an annualized basis and will be
         set forth in an Officers' Certificate signed by the Company's chief
         financial officer and another Officer which states in detail (i) the
         amount of such adjustment or adjustments, (ii) that such adjustment or
         adjustments are based on the reasonable good faith beliefs of the
         officers executing such Officers' Certificate at the time of such
         execution and (iii) that such adjustment or adjustments and the plan or
         plans related thereto have been reviewed and approved by the Board of
         Directors. Any such Officer's Certificate will be provided to the
         Trustee if the Company incurs any Indebtedness or takes any other
         action under this Indenture in reliance thereon;

                  (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,
         will 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, will be excluded,
         but only to the extent that the obligations giving rise to such Fixed
         Charges will

                                       11

<PAGE>

         not be obligations of the specified Person or any of its Restricted
         Subsidiaries following the Calculation Date.

         In addition, to the extent not covered by the foregoing, if the
Acquisition has occurred in the four-quarter period used to determine the Fixed
Charge Coverage Ratio, then the Fixed Charge Coverage Ratio shall be determined
giving pro forma effect to the Acquisition on the same basis given in the
Offering Circular.

         If any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Hedging Obligation applicable to such Indebtedness if such
Hedging Obligation has a remaining term as at the date of determination in
excess of 12 months).

         "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 Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.

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

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

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

         "Guarantors" means:

                  (1)      each of the Company's Domestic Subsidiaries, if any;
         and

                  (2)      any other Subsidiary that executes a Note Guarantee
         in accordance with the provisions of this Indenture and their
         respective successors and assigns.

         "Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:

                  (1)      interest rate swap agreements, interest rate cap
         agreements and interest rate collar agreements;

                  (2)      any Currency Agreement or Commodity Price Protection
         Agreement; and

                  (3)      other agreements or arrangements of a similar
         character designed to protect such Person against fluctuations in
         interest rates.

                                       12

<PAGE>

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

         "Holdings" means National Waterworks Holdings, Inc.

         "IAI Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes transferred to Institutional
Accredited Investors.

         "Indebtedness" means, 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 deferred and unpaid balance of the
         purchase price of any property, except any such balance that
         constitutes an accrued expense or trade payable;

                  (6)      amounts outstanding and other obligations of such
         Person in respect of a Qualified Receivables Transaction; or

                  (7)      representing any Hedging Obligations,

if and to the extent any of the preceding items (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 (i) 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); provided, however, that the amount of Indebtedness of
such Person shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness of such other
Persons; and (ii) 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 will be:

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

                  (2)      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.

         In addition, for purposes of determining the outstanding principal
amount of any particular Indebtedness incurred pursuant to Section 4.09 hereof:

                  (1)      Guarantees or obligations in respect of letters of
         credit relating to Indebtedness which is otherwise included in the
         determination of a particular amount of Indebtedness shall not be
         double-counted;

                                       13

<PAGE>

                  (2)      the principal amount of any Disqualified Stock of the
         Company or preferred stock of a Restricted Subsidiary of the Company
         shall be the greater of the maximum mandatory redemption or purchase
         price (not including, in either case, any redemption or purchase
         premium) or the maximum liquidation preference; and

                  (3)      the principal amount of Indebtedness, Disqualified
         Stock of the Company or preferred stock of a Restricted Subsidiary of
         the Company issued at a price less than the principal amount thereof,
         maximum fixed redemption or repurchase price thereof or liquidation
         preference thereof, as applicable, will be equal to the amount of the
         liability or obligation in respect thereof determined in accordance
         with GAAP.

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

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

         "Initial Notes" means the first $200,000,000.00 aggregate principal
amount of Series A Notes issued under this Indenture on the date hereof.

         "Initial Purchasers" means Goldman, Sachs & Co., J.P. Morgan Securities
Inc. and UBS Warburg LLC.

         "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 payroll, travel and similar advances to officers and
employees to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business), 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 will be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.

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

                                       14

<PAGE>

nature thereof, any option or other agreement to sell or give a security
interest in and, except in connection with any Qualified Receivables
Transaction, any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

         "Management Agreement" means that certain Management Agreement dated as
of November 22, 2002, by and among National Waterworks, Inc., THL Managers V,
LLC, and J.P. Morgan Partners, LLC.

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

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

         "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 Designated Non-cash Consideration or other non-cash
consideration received in any Asset Sale), net of the direct costs, fees and
expenses relating to such Asset Sale, including, without limitation:

                  (1)      legal, accounting and investment banking fees and all
         other professionals' and advisors' fees;

                  (2)      sales commissions, title and recording expenses and
         any relocation expenses incurred as a result of the Asset Sale;

                  (3)      taxes paid or payable or required to be accrued as a
         result of the Asset Sale, in each case, after taking into account any
         available tax credits or deductions and any tax sharing arrangements;

                  (4)      amounts required to be applied to the repayment of
         Indebtedness (including all interest, premium, penalties, breakage,
         indemnities and fees in connection therewith), other than Indebtedness
         under a Credit Facility, secured by a Lien on the asset or assets that
         were the subject of such Asset Sale;

                  (5)      all distributions and other payments required to be
         made to minority interest holders in Subsidiaries or joint ventures as
         a result of such Asset Sale; and

                  (6)      any appropriate amounts to be provided by the seller
         as a reserve, in accordance with GAAP, against any liabilities
         associated with the property or other assets disposed of in such Asset
         Sale and retained by the Company or any of its Restricted Subsidiaries
         after such Asset Sale or as a reserve established in accordance with
         GAAP, for adjustment in the sales prices of the asset or assets but
         only for so long as such reserve is required 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) constitutes the lender;

                                       15

<PAGE>

                  (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
         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 or
         acknowledged in writing that they will not have any recourse to the
         stock (other than the stock of an Unrestricted Subsidiary pledged by
         the Company or any of its Restricted Subsidiaries) 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 Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.

         "Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes, the Additional Notes and the Exchange Notes shall
be treated as a single class for all purposes under this Indenture, and unless
the context otherwise requires, all references to the Notes shall include the
Initial Notes, any Additional Notes and the Exchange Notes.

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

         "Offering Circular" means that certain offering circular of the
Company, dated as of November 14, 2002.

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

         "Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.

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

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

         "Permitted Business" means any business that derives a majority of its
revenues from the businesses engaged in by the Company and its Restricted
Subsidiaries on November 22, 2002 and/or activities that are reasonably similar,
ancillary, complementary or related to, or a reasonable extension, development
or expansion of, the businesses in which the Company and its Restricted
Subsidiaries are engaged on November 22, 2002, including without limitation,
acting as a distributor for industrial, electric, utility or similar products.

                                       16

<PAGE>

         "Permitted Business Unit" means a store, branch, distribution center,
region or other similar unit of a Permitted Business or the operations and
assets of any of the foregoing.

         "Permitted Group" means the group of investors that is party to the
Stockholders Agreement, as the same may be amended, modified or supplemented
from time to time, provided that no single Person together with its Affiliates
(other than Permitted Holders referred to in clauses (1) and (2) of the
definition of Permitted Holders) Beneficially Owns more of the Voting Stock of
the Company or Holdings (as applicable) that is Beneficially Owned by such group
of investors than is then collectively Beneficially Owned by the Permitted
Holders referred to in clauses (1) and (2) of the definition of Permitted
Holders.

         "Permitted Holder" means:

                  (1)      J.P. Morgan Partners, LLC and its Affiliates (without
         giving effect to the proviso in the second sentence of the definition
         of Affiliate);

                  (2)      Thomas H. Lee Partners, L.P. and its Affiliates
         (without giving effect to the proviso in the second sentence of the
         definition of Affiliate); and

                  (3)      any Person acting in the capacity of underwriter in
         connection with a public or private offering of the Company's or
         Holdings' Equity Interests.

         "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 Restricted
         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 Section 4.10 hereof;

                  (5)      any acquisition of assets or Equity Interests solely
         in exchange for the issuance of Equity Interests (other than
         Disqualified Stock) of the Company;

                  (6)      any Investments received in compromise of obligations
         of such persons incurred in the ordinary course 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;

                  (7)      Hedging Obligations;

                  (8)      receivables owing to the Company or any Restricted
         Subsidiary and prepaid expenses if created or acquired in the ordinary
         course of business and payable or dischargeable in accordance with
         customary trade terms; provided, however, that such trade terms may
         include

                                       17

<PAGE>

         such concessionary trade terms as the Company or any such Restricted
         Subsidiary deems reasonable under the circumstances;

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

                  (10)     deposits, bid bonds and performance bonds with
         governmental authorities made in the ordinary course of business;

                  (11)     Investments existing on the date of this Indenture
         and Investments contributed to the common equity capital of the Company
         subsequent to the date of this Indenture;

                  (12)     endorsements of negotiable instruments and documents
         in the ordinary course of business;

                  (13)     Investments of a Person or any of its Subsidiaries
         existing at the time such Person becomes a Restricted Subsidiary of the
         Company or at the time such Person merges or consolidates with the
         Company or any of its Restricted Subsidiaries, in either case in
         compliance with this Indenture, provided that such Investments were not
         made by such Person in connection with, or in anticipation or
         contemplation of, such Person becoming a Restricted Subsidiary of the
         Company or such merger or consolidation;

                  (14)     the acquisition by a Receivables Subsidiary in
         connection with a Qualified Receivables Transaction of Equity Interests
         of a trust or other Person established by such Receivables Subsidiary
         to effect such Qualified Receivables Transaction, and any other
         Investment by the Company or a Restricted Subsidiary of the Company in
         a Receivables Subsidiary or any Investment by a Receivables Subsidiary
         in any other Person in connection with a Qualified Receivables
         Transaction; provided, that such other Investment is in the form of a
         note or other instrument that the Receivables Subsidiary or other
         Person is required to repay as soon as practicable from available cash
         collections less amounts required to be established as reserves
         pursuant to contractual agreements with entities that are not
         Affiliates of the Company entered into as part of a Qualified
         Receivables Transaction;

                  (15)     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 (15)
         since the date of this Indenture, not to exceed $20.0 million; and

                  (16)     repurchases of the Notes as long as the repurchased
         Notes are cancelled promptly after purchase.

         "Permitted Junior Securities" means:

                  (1)      Equity Interests in the Company or any Guarantor; or

                  (2)      debt securities that are subordinated to all Senior
         Debt (and any debt securities issued in exchange for Senior Debt) to
         substantially the same extent as, or to a greater extent than, the
         Notes and the Notes Guarantees are subordinated to Senior Debt under
         this Indenture;

                                       18

<PAGE>

provided that the term "Permitted Junior Securities" shall not include any
securities distributed pursuant to a plan of reorganization if the Indebtedness
under the Credit Agreement is treated as part of the same class as the Notes for
purposes of such plan of reorganization.

         "Permitted Liens" means:

                  (1)      Liens on assets of the Company or 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 the Guarantors;

                  (3)      Liens on property or assets of a Person existing at
         the time such Person is merged with or into or consolidated with the
         Company or any Subsidiary of the Company; 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 Subsidiary;

                  (4)      Liens on property existing at the time of acquisition
         of the property by the Company or any Subsidiary of the Company,
         provided that such Liens were in existence prior to the contemplation
         of such acquisition;

                  (5)      Liens to secure the performance of statutory
         obligations, surety or appeal bonds, performance bonds, supply bonds,
         construction bonds or other obligations of a like nature incurred in
         the ordinary course of business;

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

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

                  (8)      Liens for taxes, assessments or governmental charges
         or claims that are not yet delinquent or that are being contested in
         good faith by appropriate proceedings promptly instituted and
         diligently concluded, provided that any reserve or other appropriate
         provision as is required in conformity with GAAP has been made
         therefor;

                  (9)      Liens on assets of a Receivables Subsidiary incurred
         in connection with a Qualified Receivables Transaction;

                  (10)     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 $10.0 million at any one time
         outstanding;

                  (11)     judgment Liens not giving rise to an Event of Default
         so long as such Liens are adequately bonded and any appropriate legal
         proceedings which may have been duly initiated for the review of such
         judgment have not been finally terminated or the period within which
         such proceedings may be initiated has not expired;

                  (12)     Liens arising solely by virtue of any statutory or
         common law provisions relating to banker's Liens, rights of set-off or
         similar rights and remedies as to deposit accounts or other funds
         maintained with a depositary institution; provided that:

                                       19

<PAGE>

                           (a)     such deposit account is not a dedicated cash
                  collateral account and is not subject to restrictions against
                  access by the Company in excess of those set forth by
                  regulations promulgated by the Federal Reserve Board, and

                           (b)     such deposit account is not intended by the
                  Company or any of its Restricted Subsidiaries to provide
                  collateral to the depository institution;

                  (13)     Liens securing the Notes and any Note Guarantees; and

                  (14)     any interest or title of a lessor under any Capital
         Lease Obligation or operating lease.

         "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 if issued with original
         discount, the aggregate issue price) 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, premiums and defeasance
         costs incurred in connection therewith);

                   (2)     such Permitted Refinancing Indebtedness has a final
         maturity date no earlier than the final maturity date of, and has a
         Weighted Average Life to Maturity equal to or greater than the Weighted
         Average Life to Maturity of, the Indebtedness being extended,
         refinanced, renewed, replaced, defeased or refunded;

                   (3)     if the Indebtedness being extended, refinanced,
         renewed, replaced, defeased or refunded is subordinated in right of
         payment to the Notes or the Note Guarantees, such Permitted Refinancing
         Indebtedness is subordinated in right of payment to, the Notes or the
         Notes Guarantees, as the case may be, on terms at least as favorable to
         the Holders of 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 who 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.

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

         "Purchase Agreement" means that certain Purchase Agreement, dated as of
November 14, 2002, among the Company and the Initial Purchasers.

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

         "Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Company or any of its Restricted Subsidiaries
pursuant to which the Company or any of its Restricted Subsidiaries sells,
conveys or otherwise transfers to (i) a Receivables Subsidiary (in the case of

                                       20

<PAGE>

a transfer by the Company or any of its Restricted Subsidiaries) and (ii) any
other Person (in the case of a transfer by a Receivables Subsidiary), or grants
a security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable and
other assets which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.

         "Receivables Subsidiary" means a Subsidiary of the Company which
engages in no activities other than in connection with the financing of accounts
receivable and which is designated by the Board of Directors of the Company (as
provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness
or any other Obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any Restricted Subsidiary of the Company (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Qualified Receivables Transaction or (iii) subjects any
property or asset of the Company or any Restricted Subsidiary of the Company
(other than accounts receivable and related assets as provided in the definition
of "Qualified Receivables Transaction"), directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction, (b) with which
neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable and (c) with which neither the
Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such Subsidiary's financial condition or cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company will be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.

         "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of November 22, 2002, by and among National Waterworks
Holdings, Inc. and the stockholders listed in Annex 1 thereto.

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

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

         "Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee upon expiration of the Restricted Period and
for which interests in the Regulation S Temporary Global Note may be exchanged
as provided in Section 2.01(c) hereof.

         "Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A2 hereto deposited with or on behalf of and registered in
the name of the Depositary or its nominee,

                                       21

<PAGE>

issued in a denomination equal to the outstanding principal amount of Notes
initially sold in reliance on Rule 903 of Regulation S.

         "Representative" means the trustee, agent or representative (if any)
for an issuer of Senior Debt.

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

         "Restricted Definitive Note" means one or more Definitive Notes bearing
the Private Placement Legend.

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

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

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

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

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

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

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

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

         "Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases between the Company and a Wholly Owned Restricted Subsidiary
or between Wholly Owned Restricted Subsidiaries.

         "SEC" means the Securities and Exchange Commission.

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

         "Senior Debt" means:

                  (1)      all Indebtedness of the Company or any Guarantor
         outstanding under Credit Facilities (including interest accruing on or
         after the filing of any petition in bankruptcy or for reorganization of
         the Company or any Guarantor, regardless of whether or not a claim for
         post-filing interest is allowed in such proceedings);

                  (2)      all Hedging Obligations permitted to be incurred
         under the terms of this Indenture;

                  (3)      any other Indebtedness of the Company or any
         Guarantor permitted to be incurred under the terms of this Indenture,
         unless the instrument under which such Indebtedness is

                                       22

<PAGE>

         incurred expressly provides that it is on a parity with or subordinated
         in right of payment to the Notes or any Note Guarantee; and

                  (4)      all Obligations with respect to the items listed in
         the preceding clauses (1), (2) and (3).

Notwithstanding anything to the contrary in the preceding, Senior Debt will not
include:

                  (1)      any liability for federal, state, local or other
         taxes owed or owing by the Company;

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

                  (3)      any trade payables; or

                  (4)      the portion of any Indebtedness that is incurred in
         violation of this Indenture.

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

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

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

         "Special Interest" means all Special Interest then owing pursuant to
Section 2(c) of the Exchange and Registration Rights Agreement.

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

         "Stockholders' Agreement" means that certain Stockholders' Agreement,
dated as of November 22, 2002, by and among National Waterworks Holdings, Inc.
and the stockholders and investors that are party thereto.

         "Subscription and Stock Purchase Agreement" means those certain
Executive Subscription and Stock Purchase Agreements each dated as of November
22, 2002, by and between National Waterworks Holdings, Inc. and the executives
that are party thereto.

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

                  (1)      any corporation, association, partnership, limited
         liability company 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

                                       23

<PAGE>

         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).

         "Tax Sharing Agreement" means that certain Tax Sharing Agreement, dated
as of November 22, 2002, by and among National Waterworks Holdings, Inc. and
those direct or indirect domestic subsidiaries of National Waterworks Holdings,
Inc. that are parties thereto.

         "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.

         "Transactions" has the meaning set forth under "Offering Circular
Summary - The Transactions" in the Offering Circular.

         "Treasury Rate" means, as of the applicable redemption date, the yield
to maturity as of such redemption date of United States Treasury securities with
a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at
least two Business Days prior to such redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the period from such redemption date to December 1,
2007; provided, however, that if the period from such redemption date to
December 1, 2007 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.

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

         "Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing Notes that do not bear and are not required to
bear the Private Placement Legend and do not include any references to "Special
Interest."

         ""Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend and do not
include any references to "Special Interest."

         "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;

                                       24

<PAGE>

                  (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;

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

                  (5)      either (a) has at least one director on its Board of
         Directors that is not a director or executive officer of the Company or
         any of its Restricted Subsidiaries or (b) has at least one executive
         officer that is not a director or executive officer of the Company or
         any of its Restricted Subsidiaries.

         Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will 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 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such Section. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will 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 will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, 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(o) under the
Securities Act.

         "Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time, entitled generally to vote in the election of
the Board of Directors of such Person (without regard to the occurrence of any
contingency).

         "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 (x)
         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 (y) the number of
         years (calculated to the nearest one-twelfth) that will elapse between
         such date and the making of such payment; by

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

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

                                       25

<PAGE>

Section 1.02      Other Definitions.

<TABLE>
<CAPTION>
                                                                                         Defined in
Term                                                                                      Section
----                                                                                      -------
<S>                                                                                      <C>
"Affiliate Transaction".............................................................       4.11
"Asset Sale Offer"..................................................................       3.09
"Authentication Order"..............................................................       2.02
"Change of Control Offer"...........................................................       4.15
"Change of Control Payment".........................................................       4.15
"Change of Control Payment Date"....................................................       4.15
"Covenant Defeasance"...............................................................       8.03
"DTC"...............................................................................       2.03
"Event of Default"..................................................................       6.01
"Excess Proceeds"...................................................................       4.10
"incur".............................................................................       4.09
"Legal Defeasance"..................................................................       8.02
"Offer Amount"......................................................................       3.09
"Offer Period"......................................................................       3.09
"Paying Agent"......................................................................       2.03
"Permitted Debt"....................................................................       4.09
"Purchase Date".....................................................................       3.09
"Registrar".........................................................................       2.03
"Restricted Payments"...............................................................       4.07
"Series A Notes"....................................................................     preamble
"Series B Notes"....................................................................     preamble
</TABLE>

Section 1.03      Incorporation by Reference of Trust Indenture Act.

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

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

         "indenture securities" means the Notes;

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

         "indenture to be qualified" means this Indenture;

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

         "obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Guarantors, respectively.

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

Section 1.04      Rules of Construction.

         Unless the context otherwise requires:

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

                                       26

<PAGE>

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

                  (3)      "or" is not exclusive;

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

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

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

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

                                   ARTICLE 2.
                                   THE NOTES

Section 2.01      Form and Dating.

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

         The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, 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. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

         (b)      Global and Definitive Notes. Notes issued in global form will
be substantially in the form of Exhibit A1 or A2 attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Notes issued in definitive form will be
substantially in the form of Exhibit A1 attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note will represent such of the
outstanding Notes as will be specified therein and each shall provide that it
represents 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 will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.

         (c)      Temporary Global Notes. Notes initially offered and sold in
reliance on Regulation S will be issued initially in the form of the Regulation
S Temporary Global Note, which will be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Upon termination of the
Restricted Period, interests in the Regulation S Temporary Global Note may be
exchanged for

                                       27

<PAGE>

interests in the Regulation S Permanent Global Note upon the receipt by the
Trustee of written certification from Euroclear or Clearstream, as the case may
be, that Euroclear or Clearstream has received written certification from
beneficial owners of the Regulation S Temporary Global Notes that the Note or
Notes with respect to which such certifications are made are not owned by or for
persons who are U.S. Persons or for purposes of resale directly or indirectly to
a U.S. Person or to a person within the United States or its possessions (except
to the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b) hereof). Prior to the exchange of
interests in the Regulation S Temporary Global Notes for interests in the
Regulation S Permanent Global Note as provided above, neither the Holder nor the
beneficial owners of the Regulation S Temporary Global Note shall be entitled to
receive payment of interest thereon.

         Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Upon the exchange of all interests in the Regulation S
Temporary Global Notes for interests in the Regulation S Permanent Global Notes
as described above, the Trustee will cancel the Regulation S Temporary Global
Note. The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided. After the Restricted Period, beneficial
interests in the Regulation S Permanent Global Notes may be held through other
organizations participating in the DTC system.

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

Section 2.02      Execution and Authentication.

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

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

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

         The Trustee will, upon receipt of a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Notes for original
issue up to $200,000,000 aggregate principal amount of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Sections 2.07 and 2.13 hereof.

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

                                       28

<PAGE>

Section 2.03      Registrar and Paying Agent.

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

         The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.

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

Section 2.04      Paying Agent to Hold Money in Trust.

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

Section 2.05      Holder Lists.

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

Section 2.06      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. A beneficial
interest in a Global Note may not be exchanged for a Definitive Note unless (i)
the Depositary (x) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or (y) has ceased to be a clearing
agency registered under the Exchange Act and, in either case, the Company fails
to appoint a successor

                                       29

<PAGE>

depositary within 120 days after the date of such notice from the Depositary,
(ii) in the case of a Global Note held for an account of Euroclear or
Clearstream, Euroclear or Clearstream, as the case may be, (A) is closed for
business for a continuous period of 14 days (other than by reason of statutory
or other holidays) or (B) announces an intention permanently to cease business
or does in fact do so or (iii) there shall have occurred and be continuing an
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 Restricted Period and (y) the receipt
by the Trustee of any certificates required pursuant to Rule 903(b)(3)(ii)(B)
under the Securities Act.

         Upon the occurrence of either of the preceding events in clauses (i)
through (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 2.07 and 2.10 hereof. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

         (b)      Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer set forth
herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either
subparagraph (1) or (2) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:

                  (1)      Transfer of Beneficial Interests in the Same Global
         Note. Beneficial interests in any Restricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Restricted Global Note in accordance
         with the transfer restrictions set forth in the Private Placement
         Legend; provided, however, that prior to the expiration of the
         Restricted Period, transfers of beneficial interests in the Regulation
         S Temporary 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)
         and the interest transferred shall be held immediately thereafter
         through Euroclear or Clearstream. Beneficial interests in any
         Unrestricted Global Note may be transferred to Persons who take
         delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note.

                  (2)      All Other Transfers and Exchanges of Beneficial
         Interests in Global Notes. In connection with all transfers and
         exchanges of beneficial interests that are not subject to Section
         2.06(b)(1) above, the transferor of such beneficial interest must
         deliver to the Registrar either:

                           (A)     both:

                                   (i)       a written order from a Participant
                           or an Indirect Participant given to the Depositary
                           in accordance with the Applicable Procedures
                           directing the Depositary to credit or cause to be
                           credited a beneficial interest in another Global Note
                           in an amount equal to the beneficial interest to be
                           transferred or exchanged; and

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

                                       30

<PAGE>

                           (B)     subject to Section 2.06(a), both:

                                   (i)       a written order from a Participant
                           or an Indirect Participant given to the Depositary in
                           accordance with the Applicable Procedures directing
                           the Depositary to cause to be issued a Definitive
                           Note in an amount equal to the beneficial interest to
                           be transferred or exchanged; and

                                   (ii)      instructions given by the
                           Depositary to the Registrar containing information
                           regarding the Person in whose name such Definitive
                           Note shall be registered to effect the transfer or
                           exchange referred to in (i) 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 (A) the
                           expiration of the Restricted Period and (B) the
                           receipt by the Registrar of any certificates required
                           pursuant to Rule 903 under the Securities Act.

Upon consummation of an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions contained
in the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.

                  (3)      Transfer of Beneficial Interests to Another
         Restricted Global Note. A beneficial interest in any Restricted Global
         Note may be transferred to a Person who takes delivery thereof in the
         form of a beneficial interest in another Restricted Global Note if the
         transfer complies with the requirements of Section 2.06(b)(2)(A) above
         and the Registrar receives the following:

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

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

                           (C)     if the transferee will 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, certificates
                  and opinion of counsel required by item (3) thereof, if
                  applicable.

                  (4)      Transfer and Exchange of Beneficial Interests in a
         Restricted Global Note for Beneficial Interests in an Unrestricted
         Global Note. A beneficial interest in any Restricted Global Note may be
         exchanged by any holder thereof for a beneficial interest in an
         Unrestricted Global Note or transferred to a Person who takes delivery
         thereof in the form of a beneficial interest in an Unrestricted Global
         Note if the exchange or transfer complies with the requirements of
         Section 2.06(b)(2)(A) above and:

                           (A)     such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the
                  Exchange and Registration Rights Agreement and the holder of
                  the

                                       31

<PAGE>

                  beneficial interest to be transferred, in the case of an
                  exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that (x)
                  any Exchange Notes received by it are being acquired in the
                  ordinary course of business, and (y) it is not (i) a
                  Broker-Dealer, (ii) a Person participating in the
                  distribution of the Notes or Exchange Notes or (iii) a Person
                  who is an affiliate (as defined in Rule 144) of the Company;

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

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

                           (D)     the Registrar receives the following:

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

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

                  and, in each such case set forth in this subparagraph (D), an
                  opinion of counsel in form reasonably acceptable to the
                  Company and 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 2.02 hereof, 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.

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

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

                  (1)      Beneficial Interests in Restricted Global Notes to
         Restricted Definitive Notes. Subject to Section 2.06(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 of the following documentation:

                                       32

<PAGE>

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

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

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

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

                           (E)     if such beneficial interest 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)(d)
                  thereof;

                           (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
         2.06(h) hereof, and the Company shall execute and the Trustee shall
         authenticate and deliver to the Person designated in the instructions a
         Definitive Note in the appropriate principal amount. Any Definitive
         Note issued in exchange for a beneficial interest in a Restricted
         Global Note pursuant to this Section 2.06(c) shall be registered in
         such name or names and in such authorized denomination or denominations
         as the holder of such beneficial interest shall instruct the Registrar
         through instructions from the Depositary and the Participant or
         Indirect Participant. The Trustee shall deliver such Definitive Notes
         to the Persons in whose names such Notes are so registered. Any
         Restricted Definitive Note issued in exchange for a beneficial interest
         in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall
         bear the Private Placement Legend and shall be subject to all
         restrictions on transfer contained therein.

                  (2)      Beneficial Interests in Regulation S Temporary Global
         Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and
         (C) hereof, a beneficial interest in the Regulation S Temporary Global
         Note may not be exchanged for a Definitive Note or transferred to a
         Person who takes delivery thereof in the form of a Definitive Note
         prior to (A) the expiration of the Restricted Period and (B) the
         receipt by the Registrar of any certificates required pursuant to Rule

                                       33

<PAGE>

         903(b)(3)(ii)(B) under the Securities Act, except in the case of a
         transfer pursuant to an exemption from the registration requirements of
         the Securities Act other than Rule 903 or Rule 904.

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

                           (A)     such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the Exchange
                  and Registration Rights Agreement and the holder of such
                  beneficial interest, in the case of an exchange, or the
                  transferee, in the case of a transfer, certifies in the
                  applicable Letter of Transmittal that (x) any Exchange Notes
                  received by it are being acquired in the ordinary course of
                  business, and (y) it is not (i) a Broker-Dealer, (ii) a Person
                  participating in the distribution of the Notes or Exchange
                  Notes or (iii) a Person who is an affiliate (as defined in
                  Rule 144) of the Company;

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

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

                           (D)     the Registrar receives the following:

                                   (i)       if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           exchange such beneficial interest for a Definitive
                           Note that does not bear the Private Placement Legend,
                           a certificate from such holder in the form of Exhibit
                           C hereto, including the certifications in item (1)(b)
                           thereof; or

                                   (ii)      if the holder of such beneficial
                           interest in a Restricted Global Note proposes to
                           transfer such beneficial interest to a Person who
                           shall take delivery thereof in the form of a
                           Definitive Note that does not bear the Private
                           Placement Legend, 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
                  Registrar and 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.

                  (4)      Beneficial Interests in Unrestricted Global Notes to
         Unrestricted Definitive Notes. Subject to Section 2.06(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 conditions set forth in Section
         2.06(b)(2) hereof, the Trustee will cause the aggregate principal
         amount of the applicable Global Note to be reduced accordingly pursuant
         to Section 2.06(h) hereof, and the Company will execute and the Trustee
         will authenticate and deliver to the Person designated in the
         instructions an

                                       34

<PAGE>

         Unrestricted Definitive Note in the appropriate principal amount. Any
         Unrestricted Definitive Note issued in exchange for a beneficial
         interest pursuant to this Section 2.06(c)(4) will be registered in such
         name or names and in such authorized denomination or denominations as
         the holder of such beneficial interest requests through instructions to
         the Registrar from or through the Depositary and the Participant or
         Indirect Participant. The Trustee will deliver such Unrestricted
         Definitive Notes to the Persons in whose names such Notes are so
         registered. Any Definitive Note issued in exchange for a beneficial
         interest pursuant to this Section 2.06(c)(4) will not bear the Private
         Placement Legend.

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

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

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

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

                           (C)     if such Restricted Definitive Note is being
                  transferred to a Non-U.S. Person in an offshore transaction in
                  accordance with Rule 903 or Rule 904, a certificate to the
                  effect set forth in Exhibit B hereto, including the
                  certifications and, if applicable, opinion of counsel required
                  by 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 and opinion of counsel
                  required by 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)(d)
                  thereof;

                           (F)     if such Restricted Definitive Note 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 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 will cancel the Restricted Definitive Note,
                  increase or cause to be increased the aggregate principal
                  amount of, in the case of clause (A) above, the appropriate

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                  Restricted Global Note, in the case of clause (B) above, the
                  144A Global Note, in the case of clause (C) above, the
                  Regulation S Global Note, and in all other cases, the IAI
                  Global Note.

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

                           (A)     such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the Exchange
                  and Registration Rights Agreement and the Holder, in the case
                  of an exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that (x) any
                  Exchange Notes received by it are being acquired in the
                  ordinary course of business, and (y) it is not (i) a
                  Broker-Dealer, (ii) a Person participating in the distribution
                  of the Notes or Exchange Notes or (iii) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

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

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

                           (D)     the Registrar receives the following:

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

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

                  and, in each such case set forth in this subparagraph (D), an
                  opinion of counsel in form reasonably acceptable to the
                  Registrar and 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
         subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
         Definitive Notes and increase or cause to be increased the aggregate
         principal amount of the Unrestricted Global Note.

                  (3)      Unrestricted Definitive Notes to Beneficial Interests
         in Unrestricted Global Notes. A Holder of an Unrestricted Definitive
         Note may exchange such Note for a beneficial interest in an
         Unrestricted Global Note or transfer such Definitive Notes to a Person
         who takes delivery thereof in the form of a beneficial interest in an
         Unrestricted Global Note at any time. Upon receipt of a request for
         such an exchange or transfer, the Trustee will cancel the applicable

                                       36

<PAGE>

         Unrestricted Definitive Note and increase or cause to be increased the
         aggregate principal amount of one of the Unrestricted Global Notes.

                  If any such exchange or transfer from a Definitive Note to a
         beneficial interest is effected pursuant to subparagraphs (2)(B),
         (2)(D) or (3) above at a time when an Unrestricted Global Note has not
         yet been issued, the Company will issue and, upon receipt of an
         Authentication Order in accordance with Section 2.02 hereof, the
         Trustee will authenticate one or more Unrestricted Global Notes in an
         aggregate principal amount 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 2.06(e), the Registrar will register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder must present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

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

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

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

                           (C)     if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit B hereto, including the certifications,
                  certificates and opinion of counsel required by item (3)
                  thereof, if applicable.

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

                           (A)     such exchange or transfer is effected
                  pursuant to the Exchange Offer in accordance with the Exchange
                  and Registration Rights Agreement and the Holder, in the case
                  of an exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that (x) any
                  Exchange Notes received by it are being acquired in the
                  ordinary course of business, and (y) it is not (i) a
                  Broker-Dealer, (ii) a Person participating in the distribution
                  of the Notes or Exchange Notes or (iii) a Person who is an
                  affiliate (as defined in Rule 144) of the Company;

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

                                       37

<PAGE>

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

                           (D)     the Registrar receives the following:

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

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

                  and, in each such case set forth in this subparagraph (D), an
                  opinion of counsel in form reasonably acceptable to the
                  Registrar and 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.

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

         (f)      Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Exchange and Registration Rights Agreement, the Company will
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee will authenticate:

                  (1)      one or more Unrestricted Global Notes in an aggregate
         principal amount equal to the principal amount of the beneficial
         interests in the Restricted Global Notes tendered into the Exchange
         Offer by Persons that certify in the applicable Letters of Transmittal
         that (A) any Exchange Notes received by it are being acquired in the
         ordinary course of business, (B) they are not Broker-Dealers, (C) they
         are not participating in a distribution of the Exchange Notes and (D)
         they are not affiliates (as defined in Rule 144) of the Company; and

                  (2)      Unrestricted Definitive Notes in an aggregate
         principal amount equal to the principal amount of the Restricted
         Definitive Notes accepted for exchange in the Exchange Offer by Persons
         that certify in the applicable Letters of Transmittal that (A) any
         Exchange Notes received by it are being acquired in the ordinary course
         of business, (B) they are not Broker-Dealers, (C) they are not
         participating in a distribution of the Exchange Notes and (D) they are
         not affiliates (as defined in Rule 144) of the Company.

         Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.

                                       38

<PAGE>

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

                  (1)      Private Placement Legend.

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

"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 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 SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS (1) IN THE CASE OF RULE 144A AND IAI
NOTES, TWO YEARS OR (2) IN THE CASE OF REGULATION S NOTES, 40 DAYS, AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR
ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, 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, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501 (a) (1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $100,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."

                           (B)     Notwithstanding the foregoing, any Global
                  Note or Definitive Note issued pursuant to subparagraphs
                  (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f)

                                       39

<PAGE>

                  of this Section 2.06 (and all Notes issued in exchange
                  therefor or substitution thereof) will not bear the Private
                  Placement Legend.

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

"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

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

"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, 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."

         (h)      Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a

                                       40

<PAGE>

Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary
at the direction of the Trustee to reflect such increase.

         (i)      General Provisions Relating to Transfers and Exchanges.

                  (1)      To permit registrations of transfers and exchanges,
         the Company will execute and the Trustee will authenticate Global Notes
         and Definitive Notes upon receipt of an Authentication Order in
         accordance with Section 2.02 or at the Registrar's request.

                  (2)      No service charge will be made to a Holder of a
         Global Note or to a Holder of a Definitive Note for any registration of
         transfer or exchange, but the Company may require payment of a sum
         sufficient to cover any transfer tax or similar governmental charge
         payable in connection therewith (other than any such transfer taxes or
         similar governmental charge payable upon exchange or transfer pursuant
         to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).

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

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

                  (5)      The Company will not be required:

                           (A)     to issue, to register the transfer of or to
                  exchange any Notes during a period beginning at the opening of
                  business 15 days before the day of any selection of Notes for
                  redemption under Section 3.02 hereof and ending at the close
                  of business on the day of selection;

                           (B)     to register the transfer of or to exchange
                  any Note selected for redemption in whole or in part, except
                  the unredeemed portion of any Note being redeemed in part; or

                           (C)     to register the transfer of or to exchange a
                  Note between a record date and the next succeeding interest
                  payment date.

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

                  (7)      The Trustee will authenticate Global Notes and
         Definitive Notes in accordance with the provisions of Section 2.02
         hereof.

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

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<PAGE>

Section 2.07      Replacement Notes.

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

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

Section 2.08      Outstanding Notes.

         The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof.

         If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

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

         If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.

Section 2.09      Treasury Notes.

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

Section 2.10      Temporary Notes.

         Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.

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<PAGE>

         Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.

Section 2.11      Cancellation.

         The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.

Section 2.12      Defaulted Interest.

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

Section 2.13      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 date of this Indenture, other than with
respect to the date of issuance and issue price. The Initial Notes issued on the
date of this Indenture, any Additional Notes and all Exchange Notes issued with
respect thereto shall be treated as a single class for all purposes under this
Indenture.

         With respect to any Additional Notes, the Company shall set forth in a
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 of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;

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

         (c)      whether such Additional Notes shall be transfer restricted
Notes and issued in the form of Initial Notes as set forth in Section 2.02 of
this Indenture or shall be issued in the form of Exchange Notes.

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01      Notices to Trustee.

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<PAGE>

         If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:

                  (1)      the clause of this Indenture pursuant to which the
         redemption shall occur;

                  (2)      the redemption date;

                  (3)      the principal amount of Notes to be redeemed; and

                  (4)      the redemption price.

Section 3.02      Selection of Notes to Be Redeemed or Purchased.

         If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes (or portion of
Notes) for redemption or purchase as follows:

                  (1)      if the Notes are listed on any national securities
         exchange, in compliance with the requirements of the principal national
         securities exchange on which the Notes are listed; or

                  (2)      if the Notes are not listed on any national
         securities exchange, on a pro rata basis, by lot or by such method as
         the Trustee shall deem fair and appropriate.

         In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.

         The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will 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 or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. No
Notes of $1,000 or less can be redeemed in part. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption or purchase also apply to portions of Notes called for redemption or
purchase.

Section 3.03      Notice of Redemption.

         Subject to the provisions of Sections 3.09 and 4.15 hereof, at least 30
days but not more than 60 days before a redemption date, the Company will mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of this Indenture pursuant to Articles 8 or 12 of
this Indenture.

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

                  (1)      the redemption date;

                  (2)      the redemption price;

                                       44

<PAGE>

                  (3)      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 will be issued upon
         cancellation of the original Note;

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

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

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

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

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

         At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.

Section 3.04      Effect of Notice of Redemption.

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

Section 3.05      Deposit of Redemption or Purchase Price.

         On the redemption or purchase price date, the Company will deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued interest and Special Interest, if any, on all
Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent
will promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Special Interest, if
any, on, all Notes to be redeemed or purchased.

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

                                       45

<PAGE>

Section 3.06      Notes Redeemed or Purchased in Part.

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

Section 3.07      Optional Redemption.

         (a)      At any time prior to December 1, 2005, 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 of 110.50% of the
principal amount thereof, plus accrued and unpaid interest and Special Interest,
if any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), with the Net Cash Proceeds from one or more Equity Offerings by the
Company or Holdings (so long as such Net Cash Proceeds are contributed by
Holdings to the Company as common equity); provided that:

                  (1)      at least 65% of the aggregate principal amount of
         Notes issued under this Indenture remains outstanding immediately after
         such redemption (excluding any Notes held by the Company and its
         Subsidiaries); and

                  (2)      the redemption must occur within 60 days of the date
         of the closing of such Equity Offering.

         (b)      The Notes may be redeemed, in whole or in part, at any time
prior to December 1, 2007, at the option of the Company upon not less than 30
nor more than 60 days prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest, 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).

         (c)      Except pursuant to the preceding paragraphs, the Notes are not
redeemable at the Company's option prior to December 1, 2007.

         (d)      On or after December 1, 2007 the Company may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, thereon, 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 December 1 of the
years indicated below:

<TABLE>
<CAPTION>
Year                                                                                        Percentage
----                                                                                        ----------
<S>                                                                                         <C>
2007.............................................................................                105.2
2008.............................................................................                103.5
2009.............................................................................                101.7
2010 and thereafter..............................................................               100.00%
</TABLE>

         (e)      Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof. Unless the
Company defaults in payment of the redemption price, on and after the redemption
date, interest will cease to accrue on the Notes or portions thereof called for
redemption.

                                       46

<PAGE>

Section 3.08      No Mandatory Redemption.

         The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.

Section 3.09      Offer to Purchase by Application of Excess Proceeds.

         In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.

         The Asset Sale Offer shall be made to all Holders 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 to redeem with the Excess Proceeds of Asset Sales. The Asset Sale Offer will
be completed no earlier than 30 days and no later than 60 days after notice of
the Asset Sale Offer is provided to the Holders, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company will apply all Excess Proceeds (the "Offer Amount") to the
purchase of Notes and such other pari passu Indebtedness (on a pro rata basis,
if applicable) or, if less than the Offer Amount has been tendered, all Notes
and other Indebtedness tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased will be made in the same manner as interest payments are
made.

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

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

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

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

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

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

                  (5)      that Holders electing to have a Note purchased
          pursuant to an Asset Sale Offer may elect to have Notes purchased in
         integral multiples of $1,000 only;

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

                                       47

<PAGE>

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

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

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

         On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.

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

                                   ARTICLE 4.
                                   COVENANTS

Section 4.01      Payment of Notes.

         The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Special Interest, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and
Special Interest, if any, will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest and Special Interest, if any, then due. The Company will
pay all Special Interest, if any, in the same manner on the dates and in the
amounts set forth in the Exchange and Registration Rights Agreement.

         The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the rate equal to 1% per annum in excess of the then applicable interest rate
on the Notes to the extent lawful; it will pay interest (including post-

                                       48

<PAGE>

petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest, if any (without regard to any
applicable grace period), at the same rate to the extent lawful.

Section 4.02      Maintenance of Office or Agency.

         The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.

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

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

Section 4.03      Reports.

         (a)      Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company will furnish to the
Holders of Notes, within the time periods specified in the SEC's rules and
regulations:

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

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

provided, however, if the Exchange Offer Registration Statement as declared
effective by the SEC includes audited financial statements of the Company for
the year ending December 31, 2002, then the first such reports required to be
filed and furnished to the Holders of the Notes by the Company following the
issue date of the Notes shall be the Form 10-Q for the quarter ending March 31,
2003. In addition, if at any time Holdings becomes a Guarantor of the Notes
(there being no obligation of Holdings to do so) and complies with the
requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any
successor provision), the reports, information and other documents required to
be filed and furnished to Holders of the Notes pursuant to this Section 4.03
may, at the option of the Company, be filed by and be those of Holdings rather
than the Company.

                                       49

<PAGE>

         In addition, following the consummation of the Exchange Offer
contemplated by the Exchange and Registration Rights Agreement, whether or not
required by the SEC, the Company will file a copy of all of the information and
reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company will at all times comply with TIA Section 314(a).

         (b)      For so long as any Notes remain outstanding and constitute
Registrable Securities (as defined in the Exchange and Registration Rights
Agreement), the Company will furnish to the Holders of such Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

Section 4.04      Compliance Certificate.

         (a)      The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default has occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.

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

         (c)      So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.

Section 4.05      Taxes.

         The Company and each of the Guarantors will pay, and will cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment would not
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole.

                                       50

<PAGE>

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

Section 4.07      Restricted Payments.

         (a)      The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:

                  (1)      declare or pay any dividend on, 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 Company's or any of its Restricted
         Subsidiaries' Equity Interests in their capacity as such (in each case,
         other than dividends or distributions payable (a) in Equity Interests
         (other than Disqualified Stock) of the Company or (b) to the Company or
         a Restricted Subsidiary of the Company);

                  (2)      purchase, redeem or otherwise acquire or retire for
         value (including, without limitation, 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 held by Persons
         other than the Company or a Restricted Subsidiary 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 Note Guarantees,
         except a payment of interest or principal at the Stated Maturity
         thereof (other than:

                           (A)     the purchase, repurchase or other acquisition
                  of any such subordinated Indebtedness purchased in
                  anticipation of satisfying a sinking fund obligation,
                  principal installment or final maturity, in each case due
                  within one year of the date of acquisition, and

                           (B)     intercompany Indebtedness described in clause
                  (6) of Section 4.09(b) hereof); or

                  (4)      make any Restricted Investment (all such payments and
         other actions set forth in these clauses (1) through (4) 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 as a consequence of such Restricted Payment;

                                       51

<PAGE>

                  (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 Section 4.09(a) hereof; 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), (6), (7), (9),
         (10) and (11) of paragraph (b) below, is less than the sum, without
         duplication, of:

                           (A)     50% of the Consolidated Net Income of the
                  Company for the period (taken as one accounting period) from
                  the beginning of the first fiscal quarter commencing after the
                  date of this Indenture to the end of the Company's most
                  recently ended fiscal quarter for which consolidated financial
                  statements of the Company are publicly available at the time
                  of such Restricted Payment (or, if such Consolidated Net
                  Income for such period is a deficit, less 100% of such
                  deficit), plus

                           (B)     100% of the aggregate Net Cash Proceeds
                  received by the Company subsequent to the date of this
                  Indenture (i) as a contribution to its common equity capital
                  or (ii) from the issue or sale of Equity Interests of the
                  Company (other than Disqualified Stock) or (iii) as a result
                  of the issue or sale of convertible or exchangeable
                  Disqualified Stock or convertible or exchangeable debt
                  securities of the Company or any Restricted Subsidiary 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), except any Net Cash Proceeds that have been utilized
                  for any other purpose under this Section 4.07 (other than
                  pursuant to clause (12) of Section 4.07(b) below), plus

                           (C)     100% of the fair market value, as determined
                  in good faith by the Board of Directors of the Company, such
                  determination to be conclusive and evidenced by an Officer's
                  Certificate delivered to the Trustee, of any Permitted
                  Business (including Capital Stock of a Permitted Business that
                  is or becomes a Restricted Subsidiary) received by the Company
                  or a Restricted Subsidiary of the Company as consideration for
                  the issuance by the Company subsequent to the date of this
                  Indenture of Capital Stock (other than Disqualified Stock) of
                  the Company or as a contribution to the common equity capital
                  of the Company, plus

                           (D)     to the extent that the Company or a
                  Restricted Subsidiary of the Company receives cash in respect
                  of any Restricted Investment that was made subsequent to the
                  date of this Indenture, the lesser of (i) the amount of cash
                  received with respect to such Restricted Investment (less the
                  cost of disposition, if any) and (ii) the initial amount of
                  such Restricted Investment, plus

                           (E)     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
                  originally designated as an Unrestricted Subsidiary.

         (b)      The provisions of Section 4.07(a) will not prohibit:

                                       52

<PAGE>

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

                  (2)      so long as no Default has occurred and is continuing
         or would be caused thereby, the making of any Restricted Payment with
         the Net Cash Proceeds of a substantially concurrent sale (other than to
         a Restricted Subsidiary of the Company) of Equity Interests of the
         Company (other than Disqualified Stock) or contribution to the common
         equity capital of the Company to the extent not previously utilized for
         any other purpose under this Section 4.07;

                  (3)      so long as no Default has occurred and is continuing
         or would be caused thereby, the redemption, repurchase, defeasance or
         other acquisition of subordinated Indebtedness of the Company or any
         Restricted Subsidiary of the Company, in exchange for, or with the net
         cash proceeds from a substantially concurrent issuance or sale of,
         Permitted Refinancing Indebtedness;

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

                  (5)      so long as no Default has occurred and is continuing
         or would be caused thereby, the payment of dividends, other
         distributions or amounts to Holdings in amounts equal to the amounts
         expended by Holdings to purchase, repurchase, retire or otherwise
         acquire for value Equity Interests of Holdings owned by employees,
         former employees, directors, former directors, consultants or former
         consultants of Holdings, the Company or any of its Subsidiaries (or
         permitted transferees, assigns, estates or heirs of such employees,
         former employees, directors, former directors, consultants or former
         consultants); provided, however, that the aggregate amount paid, loaned
         or advanced to Holdings pursuant to this clause (5) will not, in the
         aggregate, exceed $3.0 million per fiscal year of the Company (with
         amounts not used in any fiscal year carried forward to the next fiscal
         year and no further), plus the net proceeds of any key person life
         insurance received by the Company after the date of this Indenture,
         plus amounts contributed by Holdings to the common equity capital of
         the Company after the date of this Indenture as a result of the sale of
         Capital Stock (other than Disqualified Stock) to employees, officers,
         directors and consultants to the extent not previously utilized for any
         other purpose under this Section 4.07;

                  (6)      the payment of any dividends, distributions or other
         advances by the Company to Holdings to permit Holdings to pay franchise
         taxes and other fees and expenses required to maintain its existence
         and to provide for all other actual operating costs of Holdings,
         including, without limitation, in respect of director fees and
         expenses, administrative, legal and accounting services, of up to $1.0
         million per fiscal year;

                  (7)      the repurchase of Capital Stock deemed to occur upon
         exercise of stock options, warrants or other convertible securities to
         the extent the shares of such Capital Stock represent a portion of the
         exercise price of such options, warrants or convertible securities;

                  (8)      so long as no Default has occurred and is continuing
         or would be caused thereby, the declaration and payment of dividends or
         distributions to holders of any class or series of Disqualified Stock
         of the Company or preferred stock of its Restricted Subsidiaries issued
         after the date of this Indenture pursuant to Section 4.09 hereof.

                  (9)      any payments made, or the performance of any of the
         transactions contemplated, in connection with the Acquisition and the
         financing thereof and described in the Offering

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         Circular under the headings "Management" and "Certain Relationships and
         Related Party Transactions;"

                  (10)     so long as no Default has occurred and is continuing
         or would be caused thereby, any redemption, repurchase, retirement,
         defeasance or other acquisition for value of Disqualified Stock of the
         Company or a Restricted Subsidiary made by exchange for, or out of the
         net cash proceeds of the substantially concurrent sale of, Disqualified
         Stock of the Company or such Restricted Subsidiary, as the case may be;
         provided that any such new Disqualified Stock is issued by the issuer
         of the Disqualified Stock being redeemed, repurchased, retired,
         defeased or otherwise acquired for value and that such new Disqualified
         Stock is issued pursuant to Section 4.09 hereof;

                  (11)     so long as no Default has occurred and is continuing
         or would be caused thereby, other Restricted Payments in an aggregate
         amount not to exceed $15.0 million since the date of this Indenture; or

                  (12)     so long as no Default has occurred and is continuing
         or would be caused thereby, the payment of dividends on the Company's
         common stock (or dividends, distributions or advances to Holdings or
         any other direct or indirect parent of the Company to allow Holdings or
         such other direct or indirect parent to pay dividends on its common
         stock), following the first public offering of the Company's common
         stock (or of Holding's or such other direct or indirect parent's common
         stock, as the case may be) after the date of this Indenture, of,
         whichever is earlier, (i) in the case of the first public offering of
         the Company's common stock, up to 6% per annum of the Net Cash Proceeds
         received by the Company in such public offering or (ii) in the case of
         the first public offering of Holdings' or such other direct of indirect
         parent's common stock, up to 6% per annum of the amount contributed by
         Holdings (or contributed directly or indirectly by such other direct or
         indirect parent, as the case may be) to the Company from the Net Cash
         Proceeds received by Holdings or such other direct or indirect parent
         in such public offering.

         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 Section 4.07 will be determined by the Company's Board of Directors,
whose determination with respect thereto shall be conclusive, and evidenced by a
resolution to be delivered to the Trustee. For the avoidance of doubt, the
transactions contemplated by the Acquisition Agreement, the Credit Agreement,
the Purchase Agreement, the Exchange and Registration Rights Agreement, the
Stockholders Agreement, the Tax Sharing Agreement, the Registration Rights
Agreement, the Management Agreement, the Subscription and Stock Purchase
Agreement and the Fee Agreement will be addressed under Section 4.11 hereof and
will not be considered to be Restricted Payments.

Section 4.08      Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

         (a)      The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or 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

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<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.

         (b)      The restrictions in Section 4.08(a) will 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,
         extensions, supplements, refundings, replacements or refinancings of
         any of the foregoing, provided that the amendments, modifications,
         restatements, renewals, increases, extensions, supplements, refundings,
         replacement or refinancings of such instrument are not materially more
         restrictive, taken as a whole, with respect to such dividend and other
         payment restrictions than those contained in such agreement on the date
         of this Indenture;

                  (2)      this Indenture, the Notes and the Note Guarantees;

                  (3)      applicable law or any applicable rule or regulation;

                  (4)      any 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 or Capital Stock was incurred 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, provided 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 similar contracts entered into in the ordinary course of
         business or that restrict the subletting, assignment or transfer of any
         property or asset that is subject to a lease, license or similar
         contract;

                  (6)      purchase money obligations for property acquired in
         the ordinary course of business that restrict the transfer of such
         property; provided that any such encumbrance or restriction is released
         to the extent the underlying Lien is released or the related
         Indebtedness is repaid;

                  (7)      any agreement for the sale or other disposition of a
         Restricted Subsidiary or the assets of a Restricted Subsidiary pending
         the sale or other disposition of such assets or Restricted Subsidiary;

                  (8)      Permitted Refinancing Indebtedness, provided that the
         restrictions contained in the agreements governing such Permitted
         Refinancing Indebtedness are not materially more restrictive, taken as
         a whole, than those contained in the agreements governing the
         Indebtedness being refinanced;

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<PAGE>

                  (9)      Liens securing Indebtedness otherwise permitted to be
         incurred under Section 4.12 and Section 4.09 hereof that limit the
         right of the debtor to dispose of or transfer the assets subject to
         such Liens;

                  (10)     any transfer of, agreement to transfer, or option or
         right with respect to, any property or assets of the Company or any
         Restricted Subsidiary not otherwise prohibited by this Indenture;

                  (11)     provisions with respect to the disposition or
         distribution of assets or property and other customary provisions in
         joint venture agreements, asset sale agreements, stock sale agreements
         and other similar agreements entered into in the ordinary course of
         business;

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

                  (13)     Indebtedness permitted to be incurred pursuant to
         clause (4) of Section 4.09(b) hereof for property acquired in the
         ordinary course of business that only imposes encumbrances or
         restrictions on the property so acquired;

                  (14)     net worth provisions in leases and other agreements
         entered into by the Company or any Restricted Subsidiary in the
         ordinary course of business;

                  (15)     Indebtedness or other contractual requirements of a
         Receivables Subsidiary in connection with a Qualified Receivables
         Transaction, provided that such restrictions apply only to such
         Receivables Subsidiary; and

                  (16)     agreements governing Indebtedness permitted to be
         incurred pursuant to Section 4.09 hereof, provided that the provisions
         relating to such encumbrance or restriction contained in such
         Indebtedness, taken as a whole, are not materially more restrictive to
         the Company, as determined by the Board of Directors of the Company in
         their reasonable and good faith judgment, than the provisions contained
         in the Credit Agreement or this Indenture as in effect on the date of
         this Indenture.

Section 4.09      Incurrence of Indebtedness and Issuance of Preferred Stock.

         (a)      The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company or any
Guarantor may incur Indebtedness (including Acquired Debt), the Company may
issue Disqualified Stock and any Guarantor may issue preferred stock, if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which consolidated financial statements are publicly
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or preferred stock is issued would have
been at least 2.0 to 1, 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 the preferred stock or Disqualified Stock had been issued,
as the case may be, at the beginning of such four-quarter period.

         (b)      The provisions of Section 4.09(a) hereof will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):

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                  (1)      the incurrence by the Company or any Guarantor of
         Indebtedness and letters of credit under 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 the
         Guarantors thereunder) not to exceed the $325.0 million less

                           (A)     the aggregate amount of all Net Proceeds of
                  Asset Sales applied by the Company or any of its Restricted
                  Subsidiaries since the date of this Indenture to repay term
                  Indebtedness under a Credit Facility or to repay revolving
                  credit Indebtedness and effect a corresponding commitment
                  reduction thereunder, in each case, pursuant to Section 4.10
                  hereof and less

                           (B)     the amount of Indebtedness incurred and
                  outstanding in connection with a Qualified Receivables
                  Transaction pursuant to clause (13) of this paragraph;

                  (2)      the incurrence by the Company of Existing
         Indebtedness;

                  (3)      the incurrence by the Company of Indebtedness
         represented by the Notes to be issued on the date of this Indenture and
         the Exchange Notes to be issued pursuant to the Exchange and
         Registration Rights Agreement and the incurrence by any Guarantor of
         Indebtedness represented by any Note Guarantee related to the Notes or
         the Exchange Notes;

                  (4)      the incurrence by the Company or any Guarantor of
         Indebtedness represented by Capital Lease Obligations, mortgage
         financings or purchase money obligations (including borrowings under a
         Credit Facility) or Acquired Debt, in each case, incurred for the
         purpose of financing all or any part of the purchase price or cost of
         construction, development, maintenance, upgrade or improvement of
         property, plant, equipment or assets (in each case whether through the
         direct purchase of assets or through the purchase of Capital Stock of
         the Person owning such assets) used in the business of the Company or
         such Restricted Subsidiary, in an aggregate principal amount, including
         all Permitted Refinancing Indebtedness incurred to refund, refinance or
         replace any Indebtedness incurred pursuant to this clause (4), not to
         exceed, at any time outstanding, $15 million;

                  (5)      the incurrence by the Company or any Guarantor of
         Permitted Refinancing Indebtedness in exchange for, or the net proceeds
         of which are used to refund, refinance or replace Indebtedness (other
         than intercompany Indebtedness) that was permitted by this Indenture to
         be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), or
         (15) of this Section 4.09(b);

                  (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 (other than a
         Receivables Subsidiary); 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 Note 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 and (ii) any sale or other transfer
                  of any such Indebtedness to a Person that is not either the
                  Company or a Restricted Subsidiary of the Company; will

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<PAGE>

                  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)      shares of preferred stock of a Restricted Subsidiary
         issued to the Company or another Restricted Subsidiary; provided that
         any subsequent transfer of any Equity Interests or any other event
         which results in any such Restricted Subsidiary ceasing to be a
         Restricted Subsidiary or any other subsequent transfer of any such
         shares of preferred stock (except to the Company or any another
         Restricted Subsidiary) shall be deemed, in each case, to be an issuance
         of preferred stock;

                  (8)      the incurrence by the Company or any Guarantor of
         Hedging Obligations in the ordinary course of business or as may be
         required in connection with any Senior Debt and not for speculative
         purposes;

                  (9)      the guarantee by the Company or any Guarantor of
         Indebtedness of the Company or a Guarantor that was permitted to be
         incurred by another provision of this Section 4.09;

                  (10)     Indebtedness of the Company or any of its Restricted
         Subsidiaries in respect of workers' compensation claims, self-insurance
         obligations, indemnities, performance bonds, bankers' acceptances,
         letters of credit and surety, appeal or similar bonds provided by the
         Company or any of its Restricted Subsidiaries in the ordinary course of
         business and, in any such case, any reimbursement obligations in
         connection therewith;

                  (11)     Indebtedness of the Company or any Restricted
         Subsidiary to the extent the net proceeds thereof are promptly
         deposited to defease all outstanding Notes in full as pursuant to
         Section 8.02 hereof;

                  (12)     contingent liabilities arising out of endorsements of
         checks and other negotiable instruments for deposit or collection or
         overdraft protection in the ordinary course of business;

                  (13)     the incurrence by a Receivables Subsidiary of
         Indebtedness in a Qualified Receivables Transaction; provided that such
         Indebtedness is non-recourse to the Company or any of its Restricted
         Subsidiaries (except to the extent of customary representations,
         warranties, covenants and indemnities entered into in connection with a
         Qualified Receivables Transaction);

                  (14)     obligations of the Company and its Restricted
         Subsidiaries arising from agreements of the Company or a Restricted
         Subsidiary providing for indemnification, adjustment of purchase price
         or similar obligations, in each case incurred or assumed in connection
         with the disposition of any business, assets or a Subsidiary of the
         Company in accordance with the terms of this Indenture, other than
         Guarantees by the Company or any Restricted Subsidiary of the Company
         of Indebtedness incurred by any Person acquiring all or any portion of
         such business, assets or a Subsidiary of the Company for the purpose of
         financing such acquisition; provided, however, that the maximum
         aggregate liability in respect of all such obligations shall not exceed
         the gross proceeds, including the fair market value as determined in
         good faith by a majority of the Board of Directors of the Company of
         non-cash proceeds (the fair market value of such non-cash proceeds
         being measured at the time it is received and without giving effect to
         any subsequent changes in value), actually received by the Company and
         its Restricted Subsidiaries in connection with such disposition; and

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                  (15)     the incurrence by the Company or any of its
         Restricted Subsidiaries of additional Indebtedness, the issuance by the
         Company of Disqualified Stock or the issuance by a Restricted
         Subsidiary of preferred stock in an aggregate principal amount or
         liquidation preference at any time outstanding, including all Permitted
         Refinancing Indebtedness incurred to refund, refinance or replace any
         Indebtedness, Disqualified Stock or preferred stock incurred pursuant
         to this clause (15), not to exceed $30.0 million.

         For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (15) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09. Indebtedness under Credit Facilities
outstanding on the date on which Notes are first issued and authenticated under
this Indenture will initially be deemed to have been incurred pursuant to clause
(1) of Section 4.09(b). Indebtedness permitted by this Section 4.09 need not be
permitted by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section 4.09 permitting such Indebtedness.

         The accrual of interest, the accretion or amortization of original
issue discount, the payment of interest and dividends on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment or accrual
of dividends on Disqualified Stock or preferred stock in the form of additional
shares of the same class of Disqualified Stock or preferred stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
or preferred stock for purposes of this Section 4.09.

Section 4.10      Asset Sales.

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

                  (1)      the Company (or the Restricted Subsidiary, as
         the case may be) receives consideration (including by way of relief
         from, or by any other person assuming sole responsibility for, any
         liabilities, contingent or otherwise) 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;

                  (2)      in the case of Asset Sales involving consideration in
         excess of $10.0 million, the fair market value is determined by the
         Company's Board of Directors and evidenced by a resolution of the Board
         of Directors set forth in an Officers' Certificate delivered to the
         Trustee promptly after the consummation of such Asset Sale; 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 (A) cash or Cash Equivalents, (B) all or substantially all of the
         assets of one or more Permitted Business Units, (C) Capital Stock in
         one or more Persons engaged in a Permitted Business that are or thereby
         become Restricted Subsidiaries of the Company, or (D) any combination
         of the items referred to in clauses (A) through (C) above. For purposes
         of this provision, each of the following will be deemed to be cash:

                           (A)     any liabilities, as shown on the Company's or
                  such Restricted Subsidiary's most recent balance sheet, of the
                  Company or any Restricted Subsidiary (other than liabilities
                  that are by their terms subordinated to the Notes or any Note
                  Guarantee) that are assumed by the transferee of any such
                  assets pursuant to a customary

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<PAGE>

                  novation agreement that releases the Company or such
                  Restricted Subsidiary from further liability;

                           (B)     any securities, notes or other obligations
                  received by the Company or any such Restricted Subsidiary from
                  such transferee that are promptly converted by the Company or
                  such Restricted Subsidiary into cash, to the extent of the
                  cash received in that conversion; and

                           (C)     any Designated Non-cash Consideration
                  received by the Company or any of its Restricted Subsidiaries
                  in the Asset Sale having an aggregate fair market value, taken
                  together with all other Designated Non-cash Consideration
                  received pursuant to this clause (C) that is at the time
                  outstanding, not to exceed $5.0 million (with the fair market
                  value of each item of Designated Non-cash Consideration being
                  measured at the time received and without giving effect to
                  subsequent changes in value).

                  Within 365 days after the receipt of any Net Proceeds from an
         Asset Sale, the Company (or such Restricted Subsidiary, as the case may
         be) may apply such Net Proceeds at its option:

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

                  (2)      to acquire all or substantially all of the assets of,
         or a majority of the Voting Stock of, another Permitted Business;

                  (3)      to acquire all or substantially all of the assets of
         one or more Permitted Business Units;

                  (4)      to make a capital expenditure; or

                  (5)      to acquire other long-term assets that are used or
         useful in a Permitted Business;

it being understood that the Company may apply Net Proceeds received by any of
its Restricted Subsidiaries in any of the foregoing manners and any Restricted
Subsidiary of the Company may apply Net Proceeds received by the Company or
another Restricted Subsidiary of the Company in any of the foregoing manners.

         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.

         Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." On the
366th day after an Asset Sale, if the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company will make an Asset Sale Offer to all Holders
of Notes and all holders of any 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 such indebtedness with the proceeds of
sales of assets in accordance with Section 3.09 hereof 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 price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase, and will be payable in cash.
If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
this Indenture. If the

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aggregate principal amount of Notes and other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
will select the Notes and such other pari passu Indebtedness to be purchased on
a pro rata basis on the basis of the aggregate principal amount of tendered
Notes and pari passu Indebtedness, if any. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.

         The Company will comply with the requirements of Section 14(e) of and
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
provisions of Section 3.09 or 4.10 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 those provisions of this Indenture by
virtue of such conflict.

Section 4.11      Transactions with Affiliates.

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

                  (1)      the Affiliate Transaction is on terms that are no
         less favorable to the Company or the relevant Restricted Subsidiary
         than those that would have been obtained in a comparable transaction by
         the Company or such Restricted Subsidiary with an unrelated Person; and

                  (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 $10.0 million, a resolution of the
                  Board of Directors set forth in an Officers' Certificate
                  certifying that such Affiliate Transaction complies with
                  clause (1) of this Section 4.11(a) and that such Affiliate
                  Transaction has been approved by a majority of the
                  disinterested members of the Board of Directors in good faith;
                  and

                           (B)     with respect to any Affiliate Transaction or
                  series of related Affiliate Transactions involving aggregate
                  consideration in excess of $20.0 million, an opinion as to the
                  fairness to the Holders of such Affiliate Transaction from a
                  financial point of view issued by an accounting, appraisal or
                  investment banking firm of national standing.

         (b)      The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:

                  (1)      any employment agreement entered into by the Company
         or any of its Restricted Subsidiaries in the ordinary course of
         business;

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

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

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                  (4)      payment of reasonable directors fees to Persons who
         are not employees of Holdings, the Company or its Subsidiaries and
         other reasonable fees, compensation, benefits and indemnities paid or
         entered into by the Company or its Restricted Subsidiaries in the
         ordinary course of business to or with the officers, directors or
         employees of the Company and its Restricted Subsidiaries;

                  (5)      sales, grants, awards or issuances of Equity
         Interests (other than Disqualified Stock), including the exercise of
         options and warrants, to Affiliates, officers, directors or employees
         of the Company or any contribution to the common equity capital of the
         Company by Affiliates of the Company;

                  (6)      transactions involving the Company or any of its
         Restricted Subsidiaries, on the one hand, and JPMorgan Securities Inc.,
         JPMorgan Chase Bank or Chase Lincoln First Commercial Corp. on the
         other hand, in connection with this offering, the Acquisition and
         transactions related thereto, the Credit Agreement and any amendment,
         modification, supplement, extension, refinancing, replacement,
         work-out, restructuring and other transactions related thereto, or any
         management, financial advisory, financing, underwriting or placement
         services or any other investment banking, banking or similar services,
         which payments are approved by a majority of the disinterested members
         of the Board of Directors in good faith;

                  (7)      as long as the Company is a member of a consolidated
         (or combined) group filing a consolidated (or combined) return of which
         Holdings is the parent, payments pursuant to the tax allocation
         agreement as in effect on the date of this Indenture (or as the same
         may be amended, modified or replaced from time to time so long as any
         such amendment, modification or replacement, taken as a whole, is no
         less favorable to the Holders than the contract or agreement as in
         effect on the date of this Indenture) to permit Holdings to pay taxes
         that are then due and owing and are attributable to the operations of
         the Company;

                  (8)      Restricted Payments and Permitted Investments (other
         than Permitted Investments contemplated by clause (15) of the
         definition of "Permitted Investments") that are permitted by Section
         4.07 hereof.

                  (9)      transactions effected as part of a Qualified
         Securitization Transaction permitted under the Section 4.09 hereof.

                  (10)     the existence or performance by the Company or any of
         its Restricted Subsidiaries of the provisions of the Acquisition
         Agreement, the Credit Agreement, the Purchase Agreement, the Exchange
         and Registration Rights Agreement, the Stockholders Agreement, the
         Registration Rights Agreement, the Subscription and Stock Purchase
         Agreement, the Fee Agreement and any other agreements (other than the
         Management Agreement, which is addressed in clause (11) below)
         described under the caption "Management" or "Certain Relationships and
         Related Party Transactions" of the Offering Circular or any amendment
         thereto or replacement agreement therefor or any transaction
         contemplated thereby so long as such amendment or replacement is not
         more disadvantageous to the Holders of the Notes in any material
         respect than the original agreement as in effect on the date of this
         Indenture; and

                  (11)     so long as no Default has occurred and is continuing
         or would be caused thereby, the existence or performance by the Company
         or any of its Restricted Subsidiaries of the provisions of the
         Management Agreement described under the caption "Certain Relationships
         and Related Party Transactions" of the Offering Circular any amendment
         thereto or replacement agreement therefor or any transaction
         contemplated thereby so long as such amendment or

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         replacement is not more disadvantageous to the Holders of the Notes in
         any material respect than the original agreement as in effect on the
         date of this Indenture.

Section 4.12      Liens.

         The Company will not and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness (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
on an equal and ratable basis with the obligations so secured until such time as
such obligations are no longer secured by a Lien.

Section 4.13      Business Activities.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
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:

                  (1)      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
         Subsidiary; and

                  (2)      the rights (charter and statutory) and material
         licenses and franchises of the Company and its Restricted Subsidiaries;

provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Restricted Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes; provided, further, however, that a determination of the Board of
Directors of the Company shall not be required in the event of a merger or
consolidation, or sale of all or substantially all of the assets, of one or more
Restricted Subsidiaries of the Company with or into or to another Restricted
Subsidiary of the Company organized under the laws of the United States or a
State thereof or the District of Columbia, in accordance with the terms of this
Indenture.

Section 4.15      Offer to Repurchase Upon Change of Control.

         (a)      Upon the occurrence of a Change of Control and the Company
does not exercise its option to redeem the Notes pursuant to Section 3.07
hereof, the Company will make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (equal to $1,000 or an integral multiple of
$1,000) of each Holder's Notes at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and Special
Interest, if any, on the Notes repurchased, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and stating:

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                  (1)      that the Change of Control Offer is being made
         pursuant to this Section 4.15 and that all Notes tendered will be
         accepted for payment;

                  (2)      the purchase price and the purchase date, which shall
         be no earlier than 30 days and no later than 60 days from the date such
         notice is mailed (the "Change of Control Payment Date");

                  (3)      that any Note not tendered will continue to accrue
         interest;

                  (4)      that, unless the Company defaults in the payment of
         the Change of Control Payment, all Notes accepted for payment pursuant
         to the Change of Control Offer will cease to accrue interest and
         Special Interest, if any, after the Change of Control Payment Date;

                  (5)      that Holders electing to have any Notes purchased
         pursuant to a Change of Control Offer will be required to surrender the
         Notes, with the form entitled "Option of Holder to Elect Purchase" 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 Control Payment Date;

                  (6)      that Holders will be entitled to withdraw their
         election if the Paying Agent receives, not later than the close of
         business on the second Business Day preceding the Change of Control
         Payment Date, a telegram, telex, facsimile transmission or letter
         setting forth the name of the Holder, the principal amount of Notes
         delivered for purchase, and a statement that such Holder is withdrawing
         his election to have the Notes purchased; and

                  (7)      that Holders whose Notes are being purchased only in
         part will be issued new Notes equal in principal amount to the
         unpurchased portion of the Notes surrendered, which unpurchased portion
         must be equal to $1,000 in principal amount or an integral multiple
         thereof.

         The Company will comply with the requirements of Section 14(e) 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 in Control. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 4.15, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such conflict.

         (b)      On the Change of Control Payment Date, the Company will, to
the extent lawful:

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

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

                  (3)      deliver or cause to be delivered to the Trustee the
         Notes so 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 will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be

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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 principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

         In the event that at the time of the Change of Control the terms of any
agreement governing Senior Debt of the Company or its Subsidiaries restrict or
prohibit the repurchase of Notes pursuant to this Section 4.15, then prior to
the mailing of notice to Holders of Notes provided for above, but in any event
within 60 days following a Change of Control, the Company will either (1) repay
all outstanding Senior Debt or offer to repay all such Senior Debt and repay the
Indebtedness of each lender who has accepted the offer or (2) obtain the
requisite consents, if any, under all agreements governing outstanding Senior
Debt to permit the repurchase of Notes required by this Section 4.15.

         (c)      Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.

Section 4.16      No Senior Subordinated Debt.

         The Company will 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 Note Guarantee.

Section 4.17      Future Subsidiary Guarantees.

         If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary or if any Restricted Subsidiary becomes a
Domestic Subsidiary after the date of this Indenture, then that newly acquired
or created Domestic Subsidiary (other than a Receivables Subsidiary) will become
a Guarantor and execute a supplemental indenture and deliver an Opinion of
Counsel satisfactory to the Trustee within 20 Business Days of the date on which
it was acquired or created or became a Domestic Subsidiary, provided, however,
that all Subsidiaries that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries will not have to comply with the
requirements of this Section 4.17. Each Note Guarantee will be limited to an
amount not to exceed the maximum amount that can be Guaranteed by that Domestic
Subsidiary without rendering the Note Guarantee, as it relates to such Domestic
Subsidiary, void or voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. The forms of such Note Guarantee and supplemental indenture
are attached as Exhibits E and F hereto, respectively.

Section 4.18      Designation of Restricted and Unrestricted Subsidiaries

         The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if no Default has occurred and is continuing at the time
of the designation and 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

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designation and will reduce the amount available for Restricted Payments under
Section 4.07(a) 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. In addition, no such designation may be made unless the
proposed Unrestricted Subsidiary does not own any Capital Stock in any
Restricted Subsidiary that is not simultaneously subject to designation as 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.

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01      Merger, Consolidation, or Sale of Assets.

         The Company shall not, directly or indirectly, consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey 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 or other
                  disposition has been made is either (i) a corporation
                  organized or existing under the laws of the United States, any
                  state of the United States or the District of Columbia or (ii)
                  a partnership or limited liability company organized or
                  existing under the laws of the United States, any state
                  thereof or the District of Columbia that has at least one
                  Restricted Subsidiary that is a corporation organized or
                  existing under the laws of the United Sates, any state thereof
                  or the District of Columbia, which corporation becomes a
                  co-issuer of the Notes pursuant to a supplemental indenture
                  duly and validly executed by the Trustee;

                  (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 or other disposition
         has been made assumes all the obligations of the Company under the
         Notes, this Indenture and the Exchange and 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, the Company or the Person formed by or
         surviving any such consolidation or merger (if other than the Company),
         or to which such sale, assignment, transfer, conveyance or other
         disposition has been made would, 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 Section 4.09(a) hereof.

         Notwithstanding clauses (3) and (4) above, the Company may merge a
consolidate with a Restricted Subsidiary incorporated solely for the purpose of
organizing the Company in another jurisdiction.

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         In addition, the Company will not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Restricted Subsidiaries.

Section 5.02      Successor Corporation Substituted.

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

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

Section 6.01      Events of Default.

         Each of the following is an "Event of Default":

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

                  (2)      the Company defaults in the payment when due (at
         maturity, upon redemption or otherwise) of the principal of, or
         premium, if any, on the Notes, including in connection with an Asset
         Sale Offer or Change of Control Offer, whether or not prohibited by the
         subordination provisions of this Indenture;

                  (3)      the Company or any of its Restricted Subsidiaries
         fails to comply with the provisions of Section 5.01 hereof;

                  (4)      the Company or any of its Restricted Subsidiaries
         fail to comply for 30 days after written notice referred to in Section
         6.02 hereof (specifying the default and demanding that the same be
         remedied) with any obligations under Sections 4.10 and 4.15 hereof (in
         each case, other than a failure to purchase the Notes, which is covered
         by clause (2) above) and Sections 4.07 and 4.09 hereof;

                  (5)      the Company or any of its Restricted Subsidiaries
         fail to observe or perform any other covenant, representation, warranty
         or other agreement in this Indenture or the Notes or the Note
         Guarantees for 60 days after written notice referred to in Section 6.02
         hereof (specifying the default and demanding that the same be
         remedied);

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                  (6)      a default occurs under any mortgage, indenture or
         instrument under which there may be issued or by which there may be
         secured or evidenced any Indebtedness for money borrowed by the Company
         or any of its Significant Subsidiaries or any group of Restricted
         Subsidiaries of the Company that, taken together, would constitute a
         Significant Subsidiary (or the payment of which is guaranteed by the
         Company, any of its Significant Subsidiaries or any group of Restricted
         Subsidiaries of the Company that, taken together, would constitute a
         Significant Subsidiary) 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 principal of,
                  or interest or premium, if any, on such Indebtedness within
                  any applicable grace period provided in such Indebtedness (a
                  "Payment Default"); or

                           (B)     results in the acceleration of such
                  Indebtedness prior to its expressed maturity,

          and, in each case, the principal amount of any such Indebtedness,
          together with the principal amount of any other Indebtedness
          contemplated by clause (A) or (B) above, aggregates $15.0 million or
          more and such default continues for 10 days after receipt of written
          notice referred to in Section 6.02 hereof (specifying the default and
          demanding that the same be remedied);

                  (7)      a final judgment or final judgments for the payment
         of money are entered by a court or courts of competent jurisdiction
         against the Company or any of its Significant Subsidiaries or any group
         of Restricted Subsidiaries of the Company that, taken together, would
         constitute a Significant Subsidiary, which judgment or judgments are
         not paid, discharged or stayed for a period of 60 days; provided that
         the aggregate of all such undischarged judgments exceeds $15.0 million
         (net of any amounts covered by insurance or pursuant to which the
         Company is indemnified or for which payments are guaranteed in
         accordance with the Acquisition Agreement, to the extent that the third
         party under such agreement honors its obligations thereunder);

                  (8)      the Company or any of its Significant Subsidiaries or
         any group of Restricted Subsidiaries that, taken together, 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 custodian of
                  it or for all or substantially all of its property,

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

                           (E)     generally is not paying its debts as they
                  become due; or

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

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                           (A)     is for relief against the Company or any of
                  its Significant Subsidiaries or any group of Restricted
                  Subsidiaries that, taken together, would constitute a
                  Significant Subsidiary in an involuntary case;

                           (B)     appoints a custodian of the Company or any of
                  its Significant Subsidiaries or any group of Restricted
                  Subsidiaries that, taken together, would constitute a
                  Significant Subsidiary or for all or substantially all of the
                  property of the Company or any of its Significant Subsidiaries
                  or any group of Restricted Subsidiaries that, taken together,
                  would constitute a Significant Subsidiary; or

                           (C)     orders the liquidation of the Company or any
                  of its Significant Subsidiaries or any group of Restricted
                  Subsidiaries that, taken together, would constitute a
                  Significant Subsidiary;

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

                  (10)     except as permitted by this Indenture, any Note
         Guarantee of a Guarantor that is a Significant Subsidiary or Note
         Guarantees of any group of Guarantors that, taken together, would
         constitute a Significant Subsidiary 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 that is a Significant
         Subsidiary, any group of Guarantors that, taken together, would
         constitute a Significant Subsidiary or any Person acting on behalf of
         any such Guarantor or group, shall deny or disaffirm its obligations
         under its Note Guarantee and such default continues for ten days after
         receipt of the notice referred to in Section 6.02 hereof.

Section 6.02      Acceleration.

         In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Company or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken together, 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
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately, and upon any such declaration, the
Notes shall become due and payable immediately; provided, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement is
outstanding, such acceleration will not be effective until the earlier of (1)
the acceleration of such Indebtedness under the Credit Agreement or (2) five
Business Days after receipt by the Company of written notice of such
acceleration. A Default under clauses (4), (5), (6) or (10) of Section 6.01
hereof will not constitute an Event of Default until the Trustee notifies the
Company or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes notify the Company and the Trustee of the Default and the
Company or its Subsidiary, as applicable, does not cure such Default within the
time specified in clauses (4), (5), (6) or (10) after receipt of such notice.

         The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.

Section 6.03      Other Remedies.

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

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

Section 6.04      Waiver of Past Defaults.

         Holders of not less than a majority in aggregate principal amount 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 Special Interest, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

Section 6.05      Control by Majority.

         Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any 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:

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

                  (2)      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;

                  (3)      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;

                  (4)      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

                  (5)      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.

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

Section 6.07      Rights of Holders of Notes to Receive Payment.

         Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Special 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 or any other obligor on the
Notes for the whole amount of principal of, premium and Special 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.

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

                  First:   to the Trustee, 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;

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                  Second:  to Holders of Notes for amounts due and unpaid on the
         Notes for principal, premium and Special 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 Special Interest, if any and interest, respectively; and

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

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

Section 6.11      Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
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 will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

         (b)      Except during the continuance of a Default:

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

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

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

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

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

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

         (d)      Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.

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

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

Section 7.02      Rights of Trustee.

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

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

         (c)      The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.

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

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

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

Section 7.03      Individual Rights of Trustee.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would

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have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.

Section 7.04      Trustee's Disclaimer.

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

Section 7.05      Notice of Defaults.

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

Section 7.06      Reports by Trustee to Holders of the Notes.

         (a)      Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA 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
will comply with TIA Section 313(b)(2) to the extent applicable. The Trustee
will also transmit by mail all reports as required by TIA Section 313(c).

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

Section 7.07      Compensation and Indemnity.

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

         (b)      The Company and the Guarantors will indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company and the Guarantors (including this Section 7.07) and
defending itself against any claim

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(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. The Trustee will
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company will not relieve the Company or
any of the Guarantors of their obligations hereunder. The Company or the
Guarantors will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. Neither the Company nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.

         (c)      The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture. The
Company and the Guarantors need not reimburse any expense or indemnity against
any loss or liability incurred by the Trustee as a result its negligence or bad
faith.

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

         (e)      When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) 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)      A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.

         (b)      The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in 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:

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

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

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

                  (4)      the Trustee becomes incapable of acting.

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

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

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

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

Section 7.09      Successor Trustee by Merger, etc.

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

Section 7.10      Eligibility; Disqualification.

         There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.

         This Indenture will 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).

Section 7.11      Preferential Collection of Claims Against Company.

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

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01      Option to Effect Legal Defeasance or Covenant Defeasance.

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

Section 8.02      Legal Defeasance and Discharge.

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         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 will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:

                  (1)      the rights of Holders of outstanding Notes to receive
         payments in respect of the principal of, or interest or premium and
         Special Interest, if any, on such Notes when such payments are due from
         the trust referred to in Section 8.04 hereof;

                  (2)      the Company's obligations with respect to such Notes
         under Article 2 and Section 4.02 hereof;

                  (3)      the rights, powers, trusts, duties and immunities of
         the Trustee hereunder and the Company's and the Guarantors' obligations
         in connection therewith; and

                  (4)      this Article 8.

         Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.

Section 8.03      Covenant Defeasance.

         Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations contained in:

                  (1)      Sections 3.09, 4.03, 4.05, 4.07, 4.08, 4.09, 4.10,
         4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof;

                  (2)      the operation of the default provisions specified in
         clauses (3) (with respect to an Asset Sale Offer or a Change of Control
         Offer only), (4), (5), (6), (7) and, with respect to Significant
         Subsidiaries only, clauses (8) and (9) of Section 6.01 hereof; and

                  (3)      clause (4) of Section 5.01 hereof

with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes will thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants and provisions,
but will continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Notes will not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Note Guarantees, the Company and the
Guarantors may omit to comply with and will have no liability in respect of any
term, condition or limitation set forth in any such

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covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply will not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes and Note Guarantees will be unaffected thereby.

         The Company may exercise its Legal Defeasance option notwithstanding
its prior exercise of its Covenant Defeasance option. If the Company exercises
its Legal Defeasance option, payment of the Notes may not be accelerated because
of an Event of Default with respect to the Notes. If the Company exercises its
Covenant Defeasance option, payment of the Notes may not be accelerated because
of an Event of Default specified in clause (3) (with respect to an Asset Sale
Offer or a Change of Control Offer only), (4), (5), (6), (7) or (9) (with
respect to Significant Subsidiaries or a group which constitutes a Significant
Subsidiary only) under "Events of Default" above or because of the failure of
the Company to comply with clause (4) of Section 5.01 hereof.

Section 8.04      Conditions to Legal or Covenant Defeasance.

         In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:

                  (1)      the Company must irrevocably deposit with the
         Trustee, in trust, for the benefit of the Holders, cash in United
         States dollars, non-callable Government Securities, or a combination
         thereof, in such amounts as will be sufficient, in the opinion of a
         nationally recognized firm of independent public accountants, to pay
         the principal of, premium and Special Interest, if any, and interest on
         the outstanding Notes on the stated date for payment thereof or on the
         applicable redemption date, as the case may be, and the Company must
         specify whether the Notes are being defeased to 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:

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

                           (B)     since the date of this Indenture, there has
                  been a change in the applicable federal income tax law,

                  in either case to the effect that, and based thereon such
                  Opinion of Counsel shall confirm that, the Holders of the
                  outstanding Notes will not recognize income, gain or loss for
                  federal income tax purposes as a result of such Legal
                  Defeasance and will be subject to federal 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 must deliver 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;

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                  (4)      no Default or Event of Default shall have occurred
         and be continuing on the date of such deposit (other than a Default or
         Event of Default resulting from the borrowing of funds to be applied to
         such deposit);

                  (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 and is not prohibited by
         Article 10 hereof;

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

                  (7)      the Company must deliver to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent provided for or relating to the Legal Defeasance or the
         Covenant Defeasance have been complied with.

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

Section 8.05      Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.

         Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Special Interest, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.

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

         Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06      Repayment to Company.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or Special
Interest, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium or Special Interest, if any, or interest has

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

Section 8.07      Reinstatement.

         If the Trustee or Paying Agent is unable to apply any 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 Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Special Interest, if any, or interest on any Note following the reinstatement of
its obligations, the Company will be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01      Without Consent of Holders of Notes.

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

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

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

                  (3)      to provide for the assumption of the Company's or any
         Guarantor's obligations to the Holders of the Notes by a successor to
         the Company or a Guarantor pursuant to Article 5 or Article 11 hereof;

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

                  (5)      to add a Guarantor;

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

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                  (7)      to provide for the issuance of Additional Notes in
         accordance with the limitations set forth in this Indenture as of the
         date hereof; or

                  (8)      to make any change in the subordination provisions of
         this Indenture that would limit or terminate the benefits available to
         any holder of Senior Debt of the Company (or any Representative) under
         such subordination provisions; or

                  (9)      to secure the Notes and the Note Guarantees.

         However, no amendment may be made to the subordination provisions of
this Indenture that adversely affects the rights of any holder of Senior Debt of
the Company or any Guarantor then outstanding unless the holders of such Senior
Debt (or any group or Representative thereof authorized to give a consent)
consent to such change.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company 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 will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02      With Consent of Holders of Notes.

         Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof), the Note Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including, without limitation, Additional Notes, if any) 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 (other than a Default or Event of Default in the payment of the
principal of, premium or Special Interest, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Note Guarantees or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 hereof shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.

         It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.

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         After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance or generally by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

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

                  (2)      reduce the principal of or change the fixed maturity
         of any Note or alter or waive any of the provisions with respect to the
         redemption of the Notes except as provided above with respect to
         Sections 3.09, 4.10 and 4.15 hereof;

                  (3)      reduce the rate of or change the time for payment of
         interest, including default interest, on any Note;

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

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

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

                  (7)      make any change in Section 6.04 or 6.07 hereof or in
         the foregoing amendment and waiver provisions;

                  (8)      waive a redemption payment with respect to any Note
         (other than a payment required by Sections 3.09, 4.10 and 4.15 hereof);

                  (9)      impair the right of any Holder to receive payment of
         principal of, and interest or any Special Interest on, such Holder's
         Notes on or after the due dates therefor or to institute suit for the
         enforcement of any payment on or with respect to such Holder's Notes;
         or

                  (10)     release any Guarantor from any of its obligations
         under its Note Guarantee or this Indenture, except in accordance with
         the terms of this Indenture.

Section 9.03      Compliance with Trust Indenture Act.

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

Section 9.04      Revocation and Effect of Consents.

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         (a)      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 on which the Trustee receives an Officers'
Certificate from the Company certifying that the requisite number of consents
have been received. When an amendment, supplement or waiver becomes effective,
it shall bind every Holder. An amendment, supplement or waiver becomes effective
upon the (i) receipt by the Company or the Trustee of the requisite number of
consents, (ii) satisfaction of conditions to effectiveness as set forth in this
Indenture and any indenture supplemental hereto containing such amendment or
waiver and (iii) execution of such amendment or waiver (or supplemental
indenture) by the Company, any Guarantors and the Trustee.

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

Section 9.05      Notation on or Exchange of Notes.

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

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

Section 9.06      Trustee to Sign Amendments, etc.

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

Section 10.01     Agreement to Subordinate.

         The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt of the Company (whether outstanding on

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the date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of such Senior Debt.

Section 10.02     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, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:

                  (1)      holders of Senior Debt will be entitled to receive
         payment in full of all Obligations due in respect of such Senior Debt
         (including interest after the commencement of any bankruptcy proceeding
         at the rate specified in the applicable Senior Debt whether or not such
         interest is an allowed claim in any such proceeding) before the Holders
         of Notes will be entitled to receive any payment or distribution with
         respect to the Notes (except that Holders of Notes may receive and
         retain Permitted Junior Securities and payments made from any
         defeasance trust created pursuant to Section 8.01 hereof); and

                  (2)      until all Obligations with respect to Senior Debt (as
         provided in clause (1) above) are paid in full, any distribution to
         which Holders would be entitled but for this Article 10 will be made to
         holders of Senior Debt (except that Holders of Notes may receive and
         retain Permitted Junior Securities and payments made from any
         defeasance trust created pursuant to Section 8.01 hereof), as their
         interests may appear.

Section 10.03     Default on Designated Senior Debt.

         (a)      The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes, may
not make any deposits with the Trustee pursuant to Section 8.01 hereof and may
not acquire from the Trustee or any Holder any Notes for cash or property (other
than Permitted Junior Securities and payments made from any defeasance trust
created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:

                  (1)      payment default on Designated Senior Debt occurs and
         is continuing; or

                  (2)      any other default occurs and is continuing on any
         series of Designated Senior Debt that permits holders of that series of
         Designated Senior Debt to accelerate its maturity and the Trustee
         receives a notice of such default (a "Payment Blockage Notice") from
         the Company or the holders of, or the Representative of, any Designated
         Senior Debt. If the Trustee receives any such Payment Blockage Notice,
         no subsequent Payment Blockage Notice will be effective for purposes of
         this Section unless and until (A) at least 365 days have elapsed since
         the delivery of the immediately prior Payment Blockage Notice and (B)
         all scheduled payments of principal, premium and Special Interest, if
         any, and interest on the Notes that have come due have been paid in
         full in cash.

                  Not more than one Payment Blockage Notice may be given in any
         consecutive 365-day period, irrespective of the number of defaults with
         respect to all Designated Senior Debt during such period, provided that
         if any Payment Blockage Notice is delivered to the Trustee by or on
         behalf of the Representative of Designated Senior Debt of the Company
         (other than the holders of Indebtedness under the Credit Agreement), a
         Representative of holders of Indebtedness under the Credit Agreement
         may give another Payment Blockage Notice within such period. However,
         in

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         no event may the total number of days during which any payment blockage
         period or periods on the Notes is in effect exceed 179 days in the
         aggregate during any consecutive 365-day period, and there must be at
         least 186 days during any consecutive 365-day period during which no
         payment blockage period is in effect.

                  The failure to make any payment on the Notes by reason of the
         subordination provisions of this Indenture will not be construed as
         preventing the occurrence of an Event of Default with respect to the
         Notes by reason of the failure to make a required payment. Upon
         termination of any period of payment blockage, the Company will be
         required to resume making any and all required payments under the
         Notes, including any missed payments. No nonpayment default that
         existed or was continuing on the date of delivery of any Payment
         Blockage Notice to the Trustee will be, or be made, the basis for a
         subsequent Payment Blockage Notice.

         (b)      The Company may and will resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:

                  (1)      in the case of a payment default on Designated Senior
         Debt, upon the date upon which such default is cured or waived, or

                  (2)      in the case of a nonpayment default on Designated
         Senior Debt, upon the earlier of the date on which such nonpayment
         default is cured or waived or 179 days after the date on which the
         applicable Payment Blockage Notice is received, unless the maturity of
         any Designated Senior Debt has been accelerated,

if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition. Notwithstanding the foregoing, the
Company may make payment on the Notes if the Company and the Trustee receive
written notice approving such payment from the Representative of the Designated
Senior Debt with respect to which either of the events set forth in clauses (1)
and (2) of this paragraph has occurred and is continuing.

Section 10.04     Acceleration of Notes.

         If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify the Representative of Senior Debt of the
acceleration.

Section 10.05     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 Permitted Junior Securities
and payments made from any defeasance trust created pursuant to Section 8.01
hereof) at a time when the payment is prohibited by these subordination
provisions and the Trustee or such Holder, as applicable, has actual knowledge
that such payment is prohibited by Section 10.02 or 10.03 hereof, such payment
will be held by the Trustee or such Holder, in trust for the benefit of, and
will be paid forthwith over and delivered, upon written request, to, the holders
of Senior Debt as their interests may appear or their Representative under the
agreement, indenture or other document (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 those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied

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covenants or obligations with respect to the holders of Senior Debt will be read
into this Indenture against the Trustee. The Trustee will not be deemed to owe
any fiduciary duty to the holders of Senior Debt, and will not be liable to any
such holders if the Trustee pays over or distributes to or on behalf of Holders
or the Company or any other Person money or assets to which any holders of
Senior Debt are then entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.

Section 10.06     Notice by Company.

         The Company will 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 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.

Section 10.07     Subrogation.

         After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes will 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 of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.

Section 10.08     Relative Rights.

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

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

                  (2)      affect the relative rights of Holders of Notes and
         creditors of the Company other than their rights in relation to holders
         of Senior Debt; or

                  (3)      prevent the Trustee or any Holder of Notes 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 of Notes.

         If the Company fails because of this Article 10 to pay principal of,
premium or interest or Special Interest, if any, on a Note on the due date, the
failure is still a Default or Event of Default.

Section 10.09     Subordination May Not Be Impaired by Company.

         No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes may 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 10.10     Distribution or Notice to Representative.

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         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 10, the Trustee and the Holders of Notes will 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
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

Section 10.11     Rights of Trustee and Paying Agent.

         Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will 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 has 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 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.

         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 10.12     Authorization to Effect Subordination.

         Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.

Section 10.13     Amendments.

         No amendment or modification may be made to the provisions of this
Article 10 that adversely affects the rights of any holder of Senior Debt of the
Company then outstanding without the written consent of the holders of such
Senior Debt or any group or Representative thereof authorized to give consent.
In addition, any amendment to, or waiver of, the provisions of this Article 10
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 voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).

                                  ARTICLE 11.
                                NOTE GUARANTEES

Section 11.01     Guarantee.

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         (a)      Subject to this Article 11, 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:

                  (1)      the principal of, premium and Special 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

                  (2)      in case of any extension of time of payment or
         renewal of any Notes or any of such other obligations, the same will be
         promptly paid in full when due or performed in accordance with the
         terms of the extension or renewal, whether at stated maturity, by
         acceleration or otherwise.

         Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the 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 of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. 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 Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

         (c)      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
Note Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.

         (d)      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 Note 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 Note Guarantee. 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 Note Guarantee.

Section 11.02     Subordination of Note Guarantee.

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         The Obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 will be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the Notes are junior and subordinated to Senior
Debt of the Company. For the purposes of the foregoing sentence, the Trustee and
the Holders will have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.

Section 11.02     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 Note 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
Note 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 11, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.

Section 11.03     Execution and Delivery of Note Guarantee.

         To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.

         Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.

         If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.

         The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.

         In the event that the Company creates or acquires any Domestic
Subsidiary after the date of this Indenture, if required by Section 4.17 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.17 hereof and this Article 11, to the extent applicable.

Section 11.04     Guarantors May Consolidate, etc., on Certain Terms.

         Except as otherwise provided in Section 11.06, 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

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                  (2)      either:

                           (a)     subject to Section 11.06 hereof, the Person
         acquiring the property in any such sale or disposition or the Person
         formed by or surviving any such consolidation or merger, if other than
         such Guarantor, unconditionally assumes all the obligations of that
         Guarantor under this Indenture, the Notes and the Note Guarantee
         pursuant to a supplemental indenture in form and substance reasonably
         satisfactory to the Trustee on the terms set forth herein or therein;
         and

                           (b)     in the case of a sale or disposition
         constituting an Asset Sale, the Net Proceeds of such sale or other
         disposition are applied in accordance with the applicable provisions of
         this Indenture, including without limitation, Sections 3.09 and 4.10
         hereof.

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

         Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.

Section 11.05     Release of Guarantor.

         (a)      In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note Guarantee; provided that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Sections 3.09 and 4.10 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Sections 3.09 and 4.10 hereof, the
Trustee will execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Note Guarantee.

         (b)      If the Company designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with the applicable
provisions of this Indenture, such Guarantor will be released and relieved of
any obligations under its Note Guarantee.

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         (c)      The Guarantors will be released and relieved of any
obligations under their Note Guarantees upon any legal defeasance in accordance
with the terms of this Indenture.

         (d)      A Guarantor will be released and relieved of any obligations
under its Note Guarantee if such Guarantor is or becomes a Receivables
Subsidiary.

         Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.

                                  ARTICLE 12.
                           SATISFACTION AND DISCHARGE

Section 12.01     Satisfaction and Discharge.

         This Indenture will be discharged and will cease to be of further
effect as to all Notes and the Note Guarantees issued hereunder, when:

                  (1)      either:

                           (a)     all Notes that have been authenticated
         (except lost, stolen or destroyed Notes that have been replaced or paid
         and Notes for whose payment money has theretofore been deposited in
         trust and thereafter repaid to the Company) have been delivered to the
         Trustee for cancellation; or

                           (b)     all Notes that have not been delivered to the
         Trustee for cancellation have become due and payable by reason of the
         mailing of a notice of redemption or otherwise or will become due and
         payable within one year 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 delivered to the Trustee for cancellation
         for principal, premium and Special Interest, if any, and accrued
         interest to the date of maturity or redemption;

                  (2)      no Default or Event of Default has occurred and is
         continuing on the date of such deposit or will occur as a result of
         such deposit and such deposit will not result in a breach or violation
         of, or constitute a default under, any other instrument to which the
         Company or any Guarantor is a party or by which the Company or any
         Guarantor is bound;

                  (3)      the Company or any Guarantor has paid or caused to be
         paid all sums payable by it under this Indenture; and

                  (4)      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 to satisfaction and
discharge have been satisfied.

                                       91

<PAGE>

         Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.

Section 12.02     Application of Trust Money.

         Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

         If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.

                                  ARTICLE 13.
                                 MISCELLANEOUS

Section 13.01     Trust Indenture Act Controls.

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

Section 13.02     Notices.

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

         If to the Company and/or any Guarantor:

         National Waterworks, Inc.
         200 West Highway 6, Suite 620
         Waco, TX 76712
         Attention: Chief Financial Officer

         With a copy to:

         O'Melveny & Myers LLP
         30 Rockefeller Plaza
         New York, NY 10012

                                       92

<PAGE>

         Telecopier No.: (212) 728-5950
         Attention: James M. Lurie, Esq.

         If to the Trustee:

         Well Fargo Bank Minnesota, N.A.
         213 Court Street, Suite 703
         Middletown, CT 06457
         Telecopier No.: (860) 704-6219
         Attention: Corporate Trust Services

         The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

         All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.

         Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA 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 will
not affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.

Section 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:

                  (1)      an Officers' Certificate in form and substance
         reasonably satisfactory to the Trustee (which must include the
         statements set forth in Section 13.05 hereof) stating that, in the
         opinion of the signers, all conditions precedent and covenants, if any,
         provided for in this Indenture relating to the proposed action have
         been satisfied; and

                  (2)      an Opinion of Counsel in form and substance
         reasonably satisfactory to the Trustee (which must include the
         statements set forth in Section 13.05 hereof) stating that, in the
         opinion of such counsel, all such conditions precedent and covenants
         have been satisfied.

                                       93

<PAGE>

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)) must comply with the provisions of TIA
Section 314(e) and must include:

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

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

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

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

Section 13.06     Rules by Trustee and Agents.

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

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

         No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Note Guarantees, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be effective
to waive liabilities under the federal securities laws.

Section 13.08     Governing Law.

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

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.

                                       94

<PAGE>

         All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.06.

Section 13.11     Severability.

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

Section 13.12     Counterpart Originals.

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

Section 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 will in no
way modify or restrict any of the terms or provisions hereof.

                         [Signatures on following page]

                                       95

<PAGE>

                                   SIGNATURES

Dated as of November 22, 2002
                                      NATIONAL WATERWORKS, INC.

                                      By: /s/ Harry K. Hornish
                                          -------------------------------
                                          Name: Harry K. Hornish
                                          Title: President & CEO

Attest:

/s/ Barbara Caviness
-------------------------------
Name: Barbara Caviness
Title: Notary Public

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION, as trustee

                                      By: /s/ Frank McDonald
                                          -------------------------------
                                          Name: Frank McDonald
                                          Title: Vice President

                                       96

<PAGE>

                                                                      EXHIBIT A1

                                 [Face of Note]
================================================================================

                           CUSIP/ISIN: 638477AA7 / US638477AA74 [Rule 144A Note]
                                 CUSIP/ISIN: 638477AC3 / US638477AC31 [IAI Note]

         10.50% [Series A] [Series B] Senior Subordinated Notes due 2012

No. ___                                                           $____________

                            NATIONAL WATERWORKS, INC.

promises to pay to CEDE & CO.

or registered assigns,

the principal sum of___________________________________________________________

Dollars on December 1, 2012.

Interest Payment Dates: June 1 and December 1

Record Dates: May 15 and November 15

Dated: November 22, 2002

                                   NATIONAL WATERWORKS, INC.

                                   By: ________________________________________
                                       Name:  Harry K. Hornish, Jr.
                                       Title: President, Chief Executive Officer
                                                and Director

                                   By: ________________________________________
                                       Name:  Mechelle Slaughter
                                       Title: Chief Financial Officer

                                                      (SEAL)

This is one of the Notes referred to
in the within-mentioned Indenture:

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
 as Trustee

By: ___________________________________
          Authorized Signatory

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

                                      A1-1

<PAGE>

                                 [Back of Note]
            10.50% [Series A] [Series B] Subordinated Notes due 2012

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]

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

                  (1)      INTEREST. National Waterworks, Inc., a Delaware
         corporation (the "Company"), promises to pay interest on the principal
         amount of this Note at 10.50% per annum from November 22, 2002 until
         maturity and shall pay the Special Interest, if any, payable pursuant
         to Section 2(c) of the Exchange and Registration Rights Agreement
         referred to below. The Company will pay interest and Special Interest,
         if any, semi-annually in arrears on June 1 and December 1 of each year,
         or if any such day is not a Business Day, on the next succeeding
         Business Day (each, an "Interest Payment Date"). Interest on the Notes
         will accrue from the most recent date to which interest has been paid
         or, if no interest has been paid, from the date of issuance; provided
         that if there is no existing Default in the payment of interest, and if
         this Note is authenticated between a record date referred to on the
         face hereof and the next succeeding Interest Payment Date, interest
         shall accrue from such next succeeding Interest Payment Date; provided,
         further, that the first Interest Payment Date shall be June 1, 2003.
         The Company will pay interest (including post-petition interest in any
         proceeding under any Bankruptcy Law) on overdue principal and premium,
         if any, from time to time on demand at a rate that is 1% per annum in
         excess of the rate then in effect to the extent lawful; it will pay
         interest (including post-petition interest in any proceeding under any
         Bankruptcy Law) on overdue installments of interest and Special
         Interest, if any, (without regard to any applicable grace periods) from
         time to time on demand at the same rate to the extent lawful. Interest
         will be computed on the basis of a 360-day year of twelve 30-day
         months.

                  (2)      METHOD OF PAYMENT. The Company will pay interest on
         the Notes (except defaulted interest) and Special Interest, if any, to
         the Persons who are registered Holders of Notes at the close of
         business on the May 15 or November 15 next preceding the Interest
         Payment Date, even if such Notes are canceled after such record date
         and on or before such Interest Payment Date, except as provided in
         Section 2.12 of the Indenture with respect to defaulted interest. The
         Notes will be payable as to principal, premium and Special Interest, if
         any, and interest at the office or agency of the Company maintained for
         such purpose within or without the City and State of New York, or, at
         the option of the Company, payment of interest and Special Interest, if
         any, may be made by check mailed to the Holders at their addresses set
         forth in the register of Holders; provided that payment by wire
         transfer of immediately available funds will be required with respect
         to principal of and interest, premium and Special Interest, if any, on,
         all Global Notes and any other Notes with a principal amount greater
         than $5.0 million if the Holder of such Note will have provided wire
         transfer instructions to the Company or the Paying Agent. Such payment
         will be in such coin or currency of the United States of America as at
         the time of payment is legal tender for payment of public and private
         debts.

                  (3)      PAYING AGENT AND REGISTRAR. Initially, Wells Fargo
         Bank Minnesota, National Association, the Trustee under the Indenture,
         will act as Paying Agent and Registrar. The

                                      A1-2

<PAGE>

         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 22, 2002 (the "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 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 unsecured obligations of the
         Company. The Company shall be entitled to issue Additional Notes
         pursuant to Section 2.13 of the Indenture.

                  (5)      OPTIONAL REDEMPTION.

                           (a)     Except as set forth in subparagraphs (b) and
         (c) of this Paragraph 5, the Company will not have the option to redeem
         the Notes prior to December 1, 2007. On or after December 1, 2007, the
         Company will have the option to redeem the Notes, in whole or in part,
         upon not less than 30 nor more than 60 days' notice, at the redemption
         prices (expressed as percentages of principal amount) set forth below
         plus accrued and unpaid interest and Special Interest, if any, thereon
         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 December 1 of the years indicated below:

<TABLE>
<CAPTION>
Year                                                                  Percentage
----                                                                  ----------
<S>                                                                   <C>
2007............................................................           105.2
2008............................................................           103.5
2009............................................................           101.7
2010 and thereafter.............................................          100.00%
</TABLE>

                           (b)     Notwithstanding the provisions of
         subparagraph (a) of this Paragraph 5, at any time prior to December 1,
         2005, the Company may redeem Notes on any one or more occasions with
         the Net Cash Proceeds from one or more Equity Offerings by the Company
         or Holdings (so long as such Net Cash Proceeds are contributed by
         Holdings to the Company as common equity) at a redemption price equal
         to 110.50% of the aggregate principal amount thereof, plus accrued and
         unpaid interest and Special Interest, if any, thereon 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); provided that at least 65% in aggregate principal amount
         of the Notes issued under the Indenture remains outstanding immediately
         after the occurrence of such redemption (excluding the Notes held by
         the Company and its Subsidiaries) and that such redemption occurs
         within 60 days of the date of the closing of such Equity Offering.

                           (c)     Notwithstanding the provisions of
         subparagraph (a) of this Paragraph 5, the Notes may be redeemed, in
         whole or in part, at any time prior to December 1, 2007, at the option
         of the Company upon not less than 30 nor more than 60 days prior
         notice, at a redemption price equal to 100% of the principal amount of
         the Notes redeemed plus the Applicable Premium as of, and accrued and
         unpaid interest and Special Interest, if any, thereon 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).

                                      A1-3

<PAGE>

                  (6)      NO MANDATORY REDEMPTION. The Company will not be
         required to make mandatory redemption on sinking fund payments with
         respect to the Notes.

                  (7)      REPURCHASE AT OPTION OF HOLDER.

                           (a)     If there is a Change of Control, the Company
         will be required to make an offer (a "Change of Control Offer") to
         repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of each Holder's Notes at a purchase price equal to 101% of
         the aggregate principal amount thereof plus accrued and unpaid interest
         and Special Interest thereon, if any, to the date of purchase (subject
         to the right of Holders of record on the relevant record date to
         receive interest due on the relevant interest payment date) (the
         "Change of Control Payment"). Within 30 days following any Change of
         Control, the Company will mail a notice to each Holder setting forth
         the procedures governing the Change of Control Offer as required by the
         Indenture. Holders of Notes that are the subject of an offer to
         purchase will receive a Change of Control 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.

                           (b)     If the Company or a Restricted Subsidiary
         consummates any Asset Sales, on the 366th day after an Asset Sale, if
         the aggregate amount of Excess Proceeds exceeds $15.0 million, the
         Company will make an Asset Sale Offer to all Holders of Notes and all
         holders of any other Indebtedness that is pari passu with the Notes
         containing provisions similar to those set forth in the Indenture with
         respect to offers to purchase or to redeem with the Excess Proceeds of
         Asset Sales pursuant to Section 3.09 of the Indenture to purchase the
         maximum principal amount of Notes and other pari passu Indebtedness
         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 Special Interest thereon, if any, to
         the date fixed for the closing of such offer, in accordance with the
         procedures set forth in the Indenture. To the extent that the aggregate
         amount of Notes and other pari passu Indebtedness tendered pursuant to
         an Asset Sale Offer is less than the Excess Proceeds, the Company (or
         such Subsidiary) may use such deficiency for any purpose not otherwise
         prohibited by the Indenture. If the aggregate principal amount of Notes
         and other pari passu Indebtedness surrendered by holders thereof
         exceeds the amount of Excess Proceeds, the Trustee shall select the
         Notes and other pari passu Indebtedness to be purchased on a pro rata
         basis. Holders of Notes that are the subject of an offer to purchase
         will receive an Asset Sale Offer from the Company prior to any related
         purchase date and may elect to have such Notes purchased by completing
         the form entitled "Option of Holder to Elect Purchase" on the reverse
         of the Notes.

                  (8)      NOTICE OF REDEMPTION. Notice of redemption will be
         mailed at least 30 days but not more than 60 days before the redemption
         date to each Holder whose Notes are to be redeemed at its registered
         address. Notes in denominations larger than $1,000 may be redeemed in
         part but only in whole multiples of $1,000, unless all of the Notes
         held by a Holder are to be redeemed. On and after the redemption date
         interest ceases to accrue on Notes or portions thereof called for
         redemption.

                  (9)      DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
         registered form without coupons in denominations of $1,000 and integral
         multiples of $1,000. The transfer of Notes may be registered and Notes
         may be exchanged as provided in the Indenture. The Registrar and the
         Trustee may require a Holder, among other things, to furnish
         appropriate endorsements and transfer documents and the Company may
         require a Holder to pay any taxes and fees required by law or permitted
         by the Indenture. The Company need not exchange or

                                      A1-4

<PAGE>

         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 or any Note selected for redemption
         in whole or in part, except the unredeemed portion of any Note being
         redeemed in part.

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

                  (11)     AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
         exceptions, the Indenture , the Note 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 and
         Additional Notes, if any, voting as a single class, and any existing
         default or compliance with any provision of the Indenture, the Note
         Guarantees or the Notes may be waived with the consent of the Holders
         of a majority in principal amount of the then outstanding Notes and
         Additional Notes, if any, voting as a single class. Without the consent
         of any Holder of a Note, the Indenture, the Note Guarantees or the
         Notes may be amended or supplemented to cure any ambiguity, defect or
         inconsistency, to provide for uncertificated Notes in addition to or in
         place of certificated Notes, to provide for the assumption of the
         Company's or any Guarantor's obligations to Holders of the Notes in
         case of a merger or consolidation, to make any change that would
         provide any additional rights or benefits to the Holders of the Notes
         or that does not adversely affect the legal rights under the Indenture
         of any such Holder, to add a Guarantor, to comply with the requirements
         of the SEC in order to effect or maintain the qualification of the
         Indenture under the Trust Indenture Act, to provide for the Issuance of
         Additional Notes in accordance with the limitations set forth in the
         Indenture, to make any change in the subordination provisions of the
         Indenture that would limit or terminate the benefits available to any
         holder of Senior Debt or to secure the Notes and the Note Guarantees.

                  (12)     DEFAULTS AND REMEDIES. Events of Default include: (i)
         default for 30 days in the payment when due of interest or Special
         Interest on the Notes; (ii) default in payment when due of principal of
         or premium, if any, on the Notes when the same becomes due and payable
         at maturity, upon redemption (including in connection with an offer to
         purchase) or otherwise, (iii) failure by the Company or any of its
         Restricted Subsidiaries to comply with Section 5.01 of the Indenture;
         (iv) failure by the Company or any of its Restricted Subsidiaries for
         30 days after written notice to comply with Sections 4.10 and 4.15 of
         the Indenture (in each case, other than a failure to purchase the
         Notes, which is covered by clause (ii) above) and Sections 4.07 and
         4.09 of the Indenture; (v) failure by the Company or any of its
         Restricted Subsidiaries for 60 days after written notice to comply with
         certain other agreements in the Indenture, the Notes or the Note
         Guarantees; (vi) default under certain other agreements relating to
         Indebtedness of the Company which default results in the acceleration
         of such Indebtedness prior to its express maturity and such default
         continues for 10 days after written notice; (vii) certain final
         judgments for the payment of money that remain undischarged for a
         period of 60 days; (viii) certain events of bankruptcy or insolvency
         with respect to the Company or any of its Significant Subsidiaries or
         any group of Subsidiaries that, taken together, would constitute a
         Significant Subsidiary; and (ix) except as permitted by the Indenture,
         any Note Guarantee of a Guarantor that is a Significant Subsidiary or
         Note Guarantees of any Group of Guarantors that, taken together, would
         constitute a Significant Subsidiary 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
         its behalf shall deny or disaffirm its obligations under such
         Guarantor's Note Guarantee. If any Event of Default occurs and is
         continuing, the Trustee or the Holders of at least 25% in principal

                                      A1-5

<PAGE>

         amount of the then outstanding Notes may declare all the Notes to be
         due and payable provided, that so long as any Indebtedness permitted to
         be incurred pursuant to the Credit Agreement is outstanding, such
         acceleration will not be effective until the earlier of (1) the
         acceleration of such Indebtedness under the Credit Agreement or (2)
         five Business Days after receipt by the Company of written notice of
         such acceleration. Notwithstanding the foregoing, in the case of an
         Event of Default arising from certain events of bankruptcy or
         insolvency with respect to the Company or any of its Significant
         Subsidiaries or any group of Restricted Subsidiaries that, taken
         together, would constitute a Significant Subsidiary, all outstanding
         Notes will become due and payable without further action or notice. A
         Default under clauses (iv), (v), (vi) or (ix) will not constitute an
         Event of Default until the Trustee notifies the Company or the Holders
         of at least 25% in aggregate principal amount of the outstanding Notes
         notify the Company and the Trustee of the Default and the Company or
         its Subsidiary, as applicable, does not cure such default within the
         time specified in clauses (iv), (v), (vi) or (ix) after receipt of such
         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 on, or the principal of, the Notes. The Company is required to
         deliver to the Trustee annually a statement regarding compliance with
         the Indenture, and the Company is required upon becoming aware of any
         Default or Event of Default, to deliver to the Trustee a statement
         specifying such Default or Event of Default.

                  (13)     SUBORDINATION. Payment of principal, interest and
         premium and Special Interest, if any, on the Notes is subordinated to
         the prior payment of Senior Debt on the terms provided in the
         Indenture.

                  (14)     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.

                  (15)     NO RECOURSE AGAINST OTHERS. A director, officer,
         employee, incorporator or stockholder, of the Company or any of the
         Guarantors, as such, will not have any liability for any obligations of
         the Company or such Guarantor under the Notes, the Note Guarantees or
         the Indenture or for any claim based on, in respect of, or by reason
         of, such obligations or their creation. Each Holder by accepting a Note
         waives and releases all such liability. The waiver and release are part
         of the consideration for the issuance of the Notes.

                  (16)     AUTHENTICATION. This Note will not be valid until
         authenticated by the manual signature of the Trustee or an
         authenticating agent.

                  (17)     ABBREVIATIONS. Customary abbreviations may be used in
         the name of a Holder or an assignee, such as: TEN COM (= tenants in
         common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
         with right of survivorship and not as tenants in common), CUST (=
         Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                                      A1-6

<PAGE>

                  (18)     ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
         NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
         provided to Holders of Notes under the Indenture, Holders of Restricted
         Global Notes and Restricted Definitive Notes will have all the rights
         set forth in the Exchange and Registration Rights Agreement dated as of
         November 22, 2002, among the Company and the other parties named on the
         signature pages thereof or, in the case of Additional Notes, Holders of
         Restricted Global Notes and Restricted Definitive Notes will have the
         rights set forth in one or more registration rights agreements, if any,
         among the Company, any Guarantors and the other parties thereto,
         relating to rights given by the Company and any Guarantors to the
         purchasers of any Additional Notes (collectively, the "Registration
         Rights Agreement").

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

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

                  National Waterworks, Inc.
                  200 West Highway 6, Suite 620
                  Waco, TX  76712
                  Attention:  Chief Financial Officer

                                      A1-7

<PAGE>

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: __________________________________
                                                (Insert assignee's legal name)

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

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

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

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

Date: _______________

                               Your Signature: _________________________________
                                      (Sign exactly as your name appears on the
                                                  face of this Note)

Signature Guarantee*: ____________________

*        Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                      A1-8

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate 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 (or
other signature guarantor acceptable to the Trustee).

                                      A1-9

<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:

<TABLE>
<CAPTION>
                                                                     Principal Amount
                  Amount of decrease in   Amount of increase in    of this Global Note
                    Principal Amount        Principal Amount         following such      Signature of authorized
                          of                       of                   decrease          officer of Trustee or
Date of Exchange    this Global Note         this Global Note         (or increase)             Custodian
----------------    ----------------         ----------------         -------------             ---------
<S>               <C>                     <C>                      <C>                   <C>
</TABLE>

*  This schedule should be included only if the Note is issued in global form.

                                      A1-10

<PAGE>

                                                                      EXHIBIT A2

                  [Face of Regulation S Temporary Global Note]
================================================================================

                                                               CUSIP: U6374XAA7
                                                             ISIN: USU6374XAA73

         10.50% [Series A] [Series B] Senior Subordinated Notes due 2012

No. ___                                                             $__________

                            NATIONAL WATERWORKS, INC.

promises to pay to CEDE & CO.

or registered assigns,

the principal sum of __________________________________________________________

Dollars on December 1, 2012.

Interest Payment Dates: June 1 and December 1

Record Dates: May 15 and November 15

Dated: November 22, 2002

                                   NATIONAL WATERWORKS, INC.

                                   By: __________________________________
                                       Name:  Harry K. Hornish, Jr.
                                       Title: President, Chief Executive Officer
                                                and Director

                                   By: __________________________________
                                       Name:  Mechelle Slaughter
                                       Title: Chief Financial Officer

                                                     (SEAL)

This is one of the Notes referred to
in the within-mentioned Indenture:

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
 as Trustee

By: _________________________
      Authorized Signatory

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

                                      A2-1

<PAGE>

                  [Back of Regulation S Temporary Global Note]
            10.50% [Series A] [Series B] Subordinated Notes due 2012

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.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 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 SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS (1) IN THE CASE OF RULE 144A NOTES AND
IAI NOTES, TWO YEARS OR (2) IN THE CASE OF REGULATION S NOTES, 40 DAYS, AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY

                                      A2-2

<PAGE>

PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, 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, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501 (a)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $100,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

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

                  (1)      INTEREST. National Waterworks, Inc., a Delaware
         corporation (the "Company"), promises to pay interest on the principal
         amount of this Note at 10.50% per annum from November 22, 2002 until
         maturity and shall pay the Special Interest, if any, payable pursuant
         to Section 2(c) of the Exchange and Registration Rights Agreement
         referred to below. The Company will pay interest and Special Interest,
         if any, semi-annually in arrears on June 1 and December 1 of each year,
         or if any such day is not a Business Day, on the next succeeding
         Business Day (each, an "Interest Payment Date"). Interest on the Notes
         will accrue from the most recent date to which interest has been paid
         or, if no interest has been paid, from the date of issuance; provided
         that if there is no existing Default in the payment of interest, and if
         this Note is authenticated between a record date referred to on the
         face hereof and the next succeeding Interest Payment Date, interest
         shall accrue from such next succeeding Interest Payment Date; provided,
         further, that the first Interest Payment Date shall be June 1, 2003.
         The Company will pay interest (including post-petition interest in any
         proceeding under any Bankruptcy Law) on overdue principal and premium,
         if any, from time to time on demand at a rate that is 1% per annum in
         excess of the rate then in effect to the extent lawful; it will pay
         interest (including post-petition interest in any proceeding under any
         Bankruptcy Law) on overdue installments of interest and Special
         Interest, if any, (without regard to any applicable grace periods) from
         time to time on demand at the same rate to the extent lawful. Interest
         will be computed on the basis of a 360-day year of twelve 30-day months

                  Until this Regulation S Temporary Global Note is exchanged for
         one or more Regulation S Permanent Global Notes, the Holder hereof
         shall not be entitled to receive payments of interest hereon; until so
         exchanged in full, this Regulation S Temporary Global Note shall in all
         other respects be entitled to the same benefits as other Notes under
         the Indenture.

                                      A2-3

<PAGE>

                  (2)      METHOD OF PAYMENT. The Company will pay interest on
         the Notes (except defaulted interest) and Special Interest, if any, to
         the Persons who are registered Holders of Notes at the close of
         business on the May 15 or November 15 next preceding the Interest
         Payment Date, even if such Notes are canceled after such record date
         and on or before such Interest Payment Date, except as provided in
         Section 2.12 of the Indenture with respect to defaulted interest. The
         Notes will be payable as to principal, premium and Special Interest, if
         any, and interest at the office or agency of the Company maintained for
         such purpose within or without the City and State of New York, or, at
         the option of the Company, payment of interest and Special Interest, if
         any, may be made by check mailed to the Holders at their addresses set
         forth in the register of Holders; provided that payment by wire
         transfer of immediately available funds will be required with respect
         to principal of and interest, premium and Special Interest, if any, on,
         all Global Notes and any other Notes with a principal amount greater
         than $5.0 million if the Holder of such Note will have provided wire
         transfer instructions to the Company or the Paying Agent. Such payment
         will be in such coin or currency of the United States of America as at
         the time of payment is legal tender for payment of public and private
         debts.

                  (3)      PAYING AGENT AND REGISTRAR. Initially, Wells Fargo
         Bank Minnesota, National Association, the Trustee under the Indenture,
         will act as Paying Agent and Registrar. The Company may change any
         Paying Agent or Registrar without notice to any Holder. The Company or
         any of its Subsidiaries may act in any such capacity.

                  (4)      INDENTURE. The Company issued the Notes under an
         Indenture dated as of November 22, 2002 (the "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 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 unsecured obligations of the
         Company. The Company shall be entitled to issue Additional Notes
         pursuant to Section 2.13 of the Indenture.

                  (5)      OPTIONAL REDEMPTION.

                           (a)     Except as set forth in subparagraphs (b) and
         (c) of this Paragraph 5, the Company will not have the option to redeem
         the Notes prior to December 1, 2007. On or after December 1, 2007, the
         Company will have the option to redeem the Notes, in whole or in part,
         upon not less than 30 nor more than 60 days' notice, at the redemption
         prices (expressed as percentages of principal amount) set forth below
         plus accrued and unpaid interest and Special Interest, if any, thereon
         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 December 1 of the years indicated below:

<TABLE>
<CAPTION>
Year                                                                     Percentage
----                                                                     ----------
<S>                                                                      <C>
2007..............................................................            105.2
2008..............................................................            103.5
2009..............................................................            101.7
2010 and thereafter...............................................           100.00%
</TABLE>

                           (b)     Notwithstanding the provisions of
         subparagraph (a) of this Paragraph 5, at any time prior to December 1,
         2005, the Company may redeem Notes on any one or more

                                      A2-4

<PAGE>

         occasions with the Net Cash Proceeds from one or more Equity Offerings
         by the Company or Holdings (so long as such Net Cash Proceeds are
         contributed by Holdings to the Company as common equity) at a
         redemption price equal to 110.50% of the aggregate principal amount
         thereof, plus accrued and unpaid interest and Special Interest, if any,
         thereon 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); provided that at least 65% in
         aggregate principal amount of the Notes issued under the Indenture
         remains outstanding immediately after the occurrence of such redemption
         (excluding the Notes held by the Company and its Subsidiaries) and that
         such redemption occurs within 60 days of the date of the closing of
         such Equity Offering.

                           (c)     Notwithstanding the provisions of
         subparagraph (a) of this Paragraph 5, the Notes may be redeemed, in
         whole or in part, at any time prior to December 1, 2007, at the option
         of the Company upon not less than 30 nor more than 60 days prior
         notice, at a redemption price equal to 100% of the principal amount of
         the Notes redeemed plus the Applicable Premium as of, and accrued and
         unpaid interest and Special Interest, if any, thereon 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).

                  (6)      NO MANDATORY REDEMPTION.

                  The Company will not be required to make mandatory redemption
         on sinking fund payments with respect to the Notes.

                  (7)      REPURCHASE AT OPTION OF HOLDER.

                           (a)     If there is a Change of Control, the Company
         will be required to make an offer (a "Change of Control Offer") to
         repurchase all or any part (equal to $1,000 or an integral multiple
         thereof) of each Holder's Notes at a purchase price equal to 101% of
         the aggregate principal amount thereof plus accrued and unpaid interest
         and Special Interest thereon, if any, to the date of purchase (subject
         to the right of Holders of record on the relevant record date to
         receive interest due on the relevant interest payment date) (the
         "Change of Control Payment"). Within 30 days following any Change of
         Control, the Company will mail a notice to each Holder setting forth
         the procedures governing the Change of Control Offer as required by the
         Indenture. Holders of Notes that are the subject of an offer to
         purchase will receive a Change of Control 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.

                           (b) If the Company or a Restricted Subsidiary
         consummates any Asset Sales, on the 366th day after an Asset Sale, if
         the aggregate amount of Excess Proceeds exceeds $15.0 million, the
         Company will make an Asset Sale Offer to all Holders of Notes and all
         holders of any other Indebtedness that is pari passu with the Notes
         containing provisions similar to those set forth in the Indenture with
         respect to offers to purchase or to redeem with the Excess Proceeds of
         Asset Sales pursuant to Section 3.09 of the Indenture to purchase the
         maximum principal amount of Notes and other pari passu Indebtedness
         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 Special Interest thereon, if any, to
         the date fixed for the closing of such offer, in accordance with the
         procedures set forth in the Indenture. To the extent that the aggregate
         amount of Notes and other pari passu Indebtedness tendered pursuant to
         an Asset Sale Offer is less than the Excess Proceeds, the Company (or
         such Subsidiary) may use such

                                      A2-5

<PAGE>

         deficiency for any purpose not otherwise prohibited by the Indenture.
         If the aggregate principal amount of Notes and other pari passu
         Indebtedness surrendered by holders thereof exceeds the amount of
         Excess Proceeds, the Trustee shall select the Notes and other pari
         passu Indebtedness to be purchased on a pro rata basis. Holders of
         Notes that are the subject of an offer to purchase will receive an
         Asset Sale Offer from the Company prior to any related purchase date
         and may elect to have such Notes purchased by completing the form
         entitled "Option of Holder to Elect Purchase" on the reverse of the
         Notes.

                  (8)      NOTICE OF REDEMPTION. Notice of redemption will be
         mailed at least 30 days but not more than 60 days before the redemption
         date to each Holder whose Notes are to be redeemed at its registered
         address. Notes in denominations larger than $1,000 may be redeemed in
         part but only in whole multiples of $1,000, unless all of the Notes
         held by a Holder are to be redeemed. On and after the redemption date
         interest ceases to accrue on Notes or portions thereof called for
         redemption.

                  (9)      DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
         registered form without coupons in denominations of $1,000 and integral
         multiples of $1,000. The transfer of Notes may be registered and Notes
         may be exchanged as provided in the Indenture. The Registrar and the
         Trustee may require a Holder, among other things, to furnish
         appropriate endorsements and transfer documents and the Company may
         require a Holder to pay any taxes and fees required by law or permitted
         by the Indenture. The Company need not exchange or register the
         transfer of any Note or portion of a Note selected for redemption,
         except for the unredeemed portion of any Note being redeemed in part.
         Also, the Company need not exchange or register the transfer of any
         Notes 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 or any Note selected for redemption
         in whole or in part, except the unredeemed portion of any Note being
         redeemed in part.

                  This Regulation S Temporary Global Note is exchangeable in
         whole or in part for one or more Global Notes only (i) on or after the
         termination of the 40-day restricted period (as defined in Regulation
         S) and (ii) upon presentation of certificates (accompanied by an
         opinion of counsel, if applicable) required by Article 2 of the
         Indenture. Upon exchange of this Regulation S Temporary Global Note for
         one or more Global Notes, the Trustee shall cancel this Regulation S
         Temporary Global Note.

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

                  (11)     AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
         exceptions, the Indenture , the Note 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 and
         Additional Notes, if any, voting as a single class, and any existing
         default or compliance with any provision of the Indenture, the Note
         Guarantees or the Notes may be waived with the consent of the Holders
         of a majority in principal amount of the then outstanding Notes and
         Additional Notes, if any, voting as a single class. Without the consent
         of any Holder of a Note, the Indenture, the Note Guarantees or the
         Notes may be amended or supplemented to cure any ambiguity, defect or
         inconsistency, to provide for uncertificated Notes in addition to or in
         place of certificated Notes, to provide for the assumption of the
         Company's or any Guarantor's obligations to Holders of the Notes in
         case of a merger or consolidation, to make any change that would
         provide any additional rights or benefits to the Holders of the Notes
         or that does not adversely affect the legal rights under the Indenture
         of any such Holder, to add a Guarantor, to comply with the requirements
         of

                                      A2-6

<PAGE>

         the SEC in order to effect or maintain the qualification of the
         Indenture under the Trust Indenture Act, to provide for the Issuance of
         Additional Notes in accordance with the limitations set forth in the
         Indenture, to make any change in the subordination provisions of the
         Indenture that would limit or terminate the benefits available to any
         holder of Senior Debt or to secure the Notes and the Note Guarantees.

                  (12)     DEFAULTS AND REMEDIES. Events of Default include: (i)
         default for 30 days in the payment when due of interest or Special
         Interest on the Notes; (ii) default in payment when due of principal of
         or premium, if any, on the Notes when the same becomes due and payable
         at maturity, upon redemption (including in connection with an offer to
         purchase) or otherwise, (iii) failure by the Company or any of its
         Restricted Subsidiaries to comply with Section 5.01 of the Indenture;
         (iv) failure by the Company or any of its Restricted Subsidiaries for
         30 days after written notice to comply with Sections 4.10 and 4.15 of
         the Indenture (in each case, other than a failure to purchase the
         Notes, which is covered by clause (ii) above) and Sections 4.07 and
         4.09 of the Indenture; (v) failure by the Company or any of its
         Restricted Subsidiaries for 60 days after written notice to comply with
         certain other agreements in the Indenture, the Notes or the Note
         Guarantees; (vi) default under certain other agreements relating to
         Indebtedness of the Company which default results in the acceleration
         of such Indebtedness prior to its express maturity and such default
         continues for 10 days after written notice; (vii) certain final
         judgments for the payment of money that remain undischarged for a
         period of 60 days; (viii) certain events of bankruptcy or insolvency
         with respect to the Company or any of its Significant Subsidiaries or
         any group of Subsidiaries that, taken together, would constitute a
         Significant Subsidiary; and (ix) except as permitted by the Indenture,
         any Note Guarantee of a Guarantor that is a Significant Subsidiary or
         Note Guarantees of any Group of Guarantors that, taken together, would
         constitute a Significant Subsidiary 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
         its behalf shall deny or disaffirm its obligations under such
         Guarantor's Note Guarantee. If any Event of Default occurs and is
         continuing, the Trustee or the Holders of at least 25% in principal
         amount of the then outstanding Notes may declare all the Notes to be
         due and payable provided, that so long as any Indebtedness permitted to
         be incurred pursuant to the Credit Agreement is outstanding, such
         acceleration will not be effective until the earlier of (1) the
         acceleration of such Indebtedness under the Credit Agreement or (2)
         five Business Days after receipt by the Company of written notice of
         such acceleration. Notwithstanding the foregoing, in the case of an
         Event of Default arising from certain events of bankruptcy or
         insolvency with respect to the Company or any of its Significant
         Subsidiaries or any group of Restricted Subsidiaries that, taken
         together, would constitute a Significant Subsidiary, all outstanding
         Notes will become due and payable without further action or notice. A
         Default under clauses (iv), (v), (vi) or (ix) will not constitute an
         Event of Default until the Trustee notifies the Company or the Holders
         of at least 25% in aggregate principal amount of the outstanding Notes
         notify the Company and the Trustee of the Default and the Company or
         its Subsidiary, as applicable, does not cure such default within the
         time specified in clauses (iv), (v), (vi) or (ix) after receipt of such
         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 on, or the principal of, the Notes. The Company is required to
         deliver to the Trustee annually a statement regarding compliance with
         the Indenture,

                                      A2-7

<PAGE>

         and the Company is required upon becoming aware of any Default or Event
         of Default, to deliver to the Trustee a statement specifying such
         Default or Event of Default.

                  (13)     SUBORDINATION. Payment of principal, interest and
         premium and Special Interest, if any, on the Notes is subordinated to
         the prior payment of Senior Debt on the terms provided in the
         Indenture.

                  (14)     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.

                  (15)     NO RECOURSE AGAINST OTHERS. A director, officer,
         employee, incorporator or stockholder, of the Company or any of the
         Guarantors, as such, will not have any liability for any obligations of
         the Company or such Guarantor under the Notes, the Note Guarantees or
         the Indenture or for any claim based on, in respect of, or by reason
         of, such obligations or their creation. Each Holder by accepting a Note
         waives and releases all such liability. The waiver and release are part
         of the consideration for the issuance of the Notes.

                  (16)     AUTHENTICATION. This Note will not be valid until
         authenticated by the manual signature of the Trustee or an
         authenticating agent.

                  (17)     ABBREVIATIONS. Customary abbreviations may be used in
         the name of a Holder or an assignee, such as: TEN COM (= tenants in
         common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
         with right of survivorship and not as tenants in common), CUST (=
         Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                  (18)     ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
         NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
         provided to Holders of Notes under the Indenture, Holders of Restricted
         Global Notes and Restricted Definitive Notes will have all the rights
         set forth in the Exchange and Registration Rights Agreement dated as of
         November 22, 2002, among the Company and the other parties named on the
         signature pages thereof or, in the case of Additional Notes, Holders of
         Restricted Global Notes and Restricted Definitive Notes will have the
         rights set forth in one or more registration rights agreements, if any,
         among the Company, any Guarantors and the other parties thereto,
         relating to rights given by the Company and any Guarantors to the
         purchasers of any Additional Notes (collectively, the "Registration
         Rights Agreement").

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

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

                  National Waterworks, Inc.
                  200 West Highway 6, Suite 620

                                      A2-8

<PAGE>

                  Waco, TX  76712
                  Attention: Chief Financial Officer

                                      A2-9

<PAGE>

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: _________________________________
                                               (Insert assignee's legal name)

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

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

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

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

Date: _______________

                                   Your Signature: ____________________________
                                          (Sign exactly as your name appears on
                                                  the face of this Note)

Signature Guarantee*: ___________________

*             Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor acceptable to the Trustee).

                                      A2-10

<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 appropriate 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 (or
other signature guarantor acceptable to the Trustee).

                                      A2-11

<PAGE>

           SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

         The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:

<TABLE>
<CAPTION>
                                                                    Principal Amount
                  Amount of decrease in   Amount of increase in   of this Global Note
                     Principal Amount        Principal Amount        following such     Signature of authorized
                            of                      of                  decrease         officer of Trustee or
Date of Exchange     this Global Note        this Global Note         (or increase)            Custodian
----------------     ----------------        ----------------         -------------            ---------
<S>               <C>                     <C>                     <C>                   <C>
</TABLE>

                                      A2-12

<PAGE>

                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

NATIONAL WATERWORKS, INC.
200 West Highway 6, Suite 620
Waco, Texas 76712

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
213 Court St., Suite 703
Middletown, CT 06457

         Re:  10.50% Series A Senior Subordinated Notes due 2012

         Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and Wells Fargo Bank Minnesota, 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 of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:

                             [CHECK ALL THAT APPLY]

         1. [ ]  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably 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.

         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,

                                      B-1

<PAGE>

(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 Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). In the case of clause (iv) above,
such certification shall be supported by an opinion of counsel provided by the
Transferor or Transferee (a copy of which the Transferor has 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 Regulation S Global Note , the Regulation S
Temporary 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 THE IAI GLOBAL 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. In addition, this
         certification shall be supported by an opinion of counsel provided by
         the Transferor or Transferee (a copy of which the Transferor has
         attached to this certification), to the effect that such Transfer is
         in compliance with the Securities Act and that the restrictions on
         transfer contained in the Indenture and in the Private Placement
         Legend are no longer required in order to maintain compliance with
         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 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 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

                                      B-2

<PAGE>

         Private Placement Legend printed on the IAI Global Note and/or the
         Definitive Notes and in the Indenture and the Securities Act.

         4. [ ]  CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

         (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. In addition, there is attached to this certification the opinion
of counsel required by the Indenture that such transfer is in compliance with
the Securities Act and that the restrictions on transfer contained in the
Indenture and in the Private Placement Legend are no longer 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. In addition, there is attached to this
certification the opinion of counsel required by the Indenture that such
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained in the Indenture and in the Private Placement Legend are no
longer 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. In addition, there is attached to this
certification the opinion of counsel required by the Indenture that such
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained in the Indenture and in the Private Placement Legend are no
longer 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.

                                      B-3

<PAGE>

                                              [Insert Name of Transferor]

                                   By:__________________________________________
                                    Name:
                                    Title:

         Dated:  _______________________

         TO BE COMPLETED BY TRANSFEREE IF TRANSFER PURSUANT TO RULE 144A

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

                                              [Insert Name of Transferor]

                                   By:__________________________________________
                                    Name:
                                    Title:

         Dated:  _______________________

                                      B-4

<PAGE>

                           ANNEX A TO CERTIFICATE OF TRANSFER

         1.       The Transferor owns and proposes to transfer the following:

                                [CHECK ONE OF (a) OR (b)]

                        (a) [ ] a beneficial interest in the:

                            (i)    [ ] 144A Global Note (CUSIP _________), or

                            (ii)   [ ] Regulation S Global Note (CUSIP
                                       _________), or

                            (iii)  [ ] IAI Global Note (CUSIP _________); or

                        (b) [ ] a Restricted Definitive Note.

         2.       After the Transfer the Transferee will hold:

                                      [CHECK ONE]

                        (a) [ ] a beneficial interest in the:

                            (i)    [ ] 144A Global Note (CUSIP _________), or

                            (ii)   [ ] Regulation S Global Note (CUSIP
                                       _________), or

                            (iii)  [ ] IAI Global Note (CUSIP _________); or

                            (iv)   [ ] Unrestricted Global Note (CUSIP
                                       _________); or

                        (b) [ ] a Restricted Definitive Note; or

                        (c) [ ] an Unrestricted Definitive Note,

                        in accordance with the terms of the Indenture.

                                      B-5

<PAGE>

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

NATIONAL WATERWORKS, INC.
200 West Highway 6, Suite 620
Waco, Texas 76712

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
213 Court St., Suite 703
Middletown, CT 06457

             Re: 10.50% Series A Senior Subordinated Notes due 2012

         Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and Wells Fargo Bank Minnesota, 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 Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States. In addition, there
is attached to this certification the opinion of counsel required by the
Indenture that such exchange is in compliance with the Securities Act and that
the restrictions on transfer contained in the Indenture and in the Private
Placement Legend are no longer required in order to maintain compliance with the
Securities Act.

         (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

                                      C-1

<PAGE>

securities laws of any state of the United States. In addition, there is
attached to this certification the opinion of counsel required by the Indenture
that such exchange is in compliance with the Securities Act and that the
restrictions on transfer contained in the Indenture and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

         (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. In addition, there is attached to this certification the
opinion of counsel required by the Indenture that such exchange is in compliance
with the Securities Act and that the restrictions on transfer contained in the
Indenture and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.

         (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. In addition, there
is attached to this certification the opinion of counsel required by the
Indenture that such exchange is in compliance with the Securities Act and that
the restrictions on transfer contained in the Indenture and in the Private
Placement Legend are no longer required in order to maintain compliance with the
Securities Act.

         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 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

                                      C-2

<PAGE>

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
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

NATIONAL WATERWORKS, INC.
200 West Highway 6, Suite 620
Waco, Texas 76712

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
213 Court St., Suite 703
Middletown, CT 06457

                  Re:  10.50% Series A Senior Subordinated Notes due 2012

         Reference is hereby made to the Indenture, dated as of November 22,
2002 (the "Indenture"), between National Waterworks, Inc., as issuer (the
"Company"), and Wells Fargo Bank Minnesota, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

         In connection with our proposed purchase of $____________ aggregate
principal amount of:

         (a) [ ]        a beneficial interest in a Global Note, or

         (b) [ ]        a Definitive Note,

         we confirm that:

         1.       We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to 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").

         2.       We 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. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) pursuant to a registration statement that has been declared
effective under the Securities Act, (C) for so long as the Notes are eligible
for resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe 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, (D) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (E) to an institutional "Accredited Investor" within the meaning
of Rule 501 (a) (1), (2), (3) or (7) under the Securities Act that is an
institutional Accredited Investor acquiring the Notes for its own account or for
the account of such an institutional Accredited Investor, in each case in a
minimum principal amount of the Notes of $100,000, for investment purposes and
not with a view to or for offer or sale in connection with any distribution in
violation of the Securities Act, or (F) pursuant to another available exemption
from the registration requirements of the Securities Act, subject to the
Company's and the Trustee's right prior to any such offer, sale or transfer
pursuant to clauses (D),

                                      D-1

<PAGE>

         (E) or (F) to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (F) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

         3.       We understand that, on any proposed resale of the Notes or
beneficial interest therein, we 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. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

         4.       We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under 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 our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment for an indefinite period of time, including a
complete loss of such investment.

         5.       We are acquiring the Notes or beneficial interest therein for
our own account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion and are purchasing for our account or for the account of such an
institutional "accredited investor" at least $100,000 principal amount of Notes.

         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

                          FORM OF NOTATION OF GUARANTEE

         For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of November 22, 2002 (the "Indenture")
between National Waterworks, Inc. (the "Company") and Wells Fargo Bank
Minnesota, National Association, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium and Special Interest, if any, and
interest on the Notes (as defined in the Indenture), whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note
Guarantee, including provisions providing that this Note Guarantee of a
Guarantor is subordinated in right of payment to the prior payment of all Senior
Debt of such Guarantor. Each Holder of a Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Note Guarantee shall cease to
be so subordinated and subject in right of payment upon any defeasance of this
Note in accordance with the provisions of the Indenture.

                                   [NAME OF GUARANTOR(S)]

                                   By:__________________________________________
                                   Name:
                                   Title:

                                      E-1

<PAGE>

                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                      TO BE DELIVERED BY FUTURE GUARANTORS

         SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among _______________(the "Guaranteeing Subsidiary"), a
subsidiary of National Waterworks, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), the Company and Wells Fargo Bank Minnesota,
National Association, as trustee under the indenture referred to below (the
"Trustee").

                               W I T N E S S E T H

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of November 22, 2002 providing
for the issuance of an aggregate principal amount of up to $200,000,000 of
10.50% Senior Subordinated Notes due 2012 (the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1.       CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         2.       AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:

                           (a)     Along with any other Guarantors, to jointly
                  and severally Guarantee to each Holder of a Note authenticated
                  and delivered by the Trustee and to the Trustee and its
                  successors and assigns, the Notes or the obligations of the
                  Company hereunder or thereunder, that:

                           (i)     the principal of, and premium and Special
                 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, the
                 same will be promptly paid in full when due or performed in
                 accordance with the terms of the extension or renewal, whether
                 at stated maturity, by acceleration or otherwise. Failing
                 payment when due of any amount so guaranteed or any performance
                 so guaranteed for whatever reason, the Guarantors shall be
                 jointly and severally obligated to pay the same immediately.

                                      F-1

<PAGE>

                           (b)     The obligations hereunder shall be
                  unconditional, irrespective of the validity, regularity or
                  enforceability of the Notes or the Indenture, the absence of
                  any action to enforce the same, any waiver or consent by any
                  Holder of the Notes with respect to any provisions hereof or
                  thereof, the recovery of any judgment against the Company, any
                  action to enforce the same or any other circumstance which
                  might otherwise constitute a legal or equitable discharge or
                  defense of a Guarantor.

                           (c)     The following is hereby waived: 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.

                           (d)     This Note Guarantee shall not be discharged
                  except by complete performance of the obligations contained in
                  the Notes and the Indenture, and the Guaranteeing Subsidiary
                  accepts all obligations of a Guarantor under the Indenture.

                           (e)     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 Note Guarantee, to the extent theretofore
                  discharged, shall be reinstated in full force and effect.

                           (f)     The Guaranteeing Subsidiary shall not be
                  entitled to any right of subrogation in relation to the
                  Holders in respect of any obligations guaranteed hereby until
                  payment in full of all obligations guaranteed hereby.

                           (g)     As between the Guarantors, on the one hand,
                  and the Holders and the Trustee, on the other hand, (x) the
                  maturity of the obligations guaranteed hereby may be
                  accelerated as provided in Article 6 of the Indenture for the
                  purposes of this Note Guarantee, notwithstanding any stay,
                  injunction or other prohibition preventing such acceleration
                  in respect of the obligations guaranteed hereby, and (y) in
                  the event of any declaration of acceleration of such
                  obligations as provided in Article 6 of the Indenture, such
                  obligations (whether or not due and payable) shall forthwith
                  become due and payable by the Guarantors for the purpose of
                  this Note Guarantee.

                           (h)     The Guarantors shall 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 Note Guarantee.

                           (i)     Pursuant to Section 11.03 of the Indenture,
                  after giving effect to any maximum amount and all other
                  contingent and fixed liabilities that are relevant under any
                  applicable Bankruptcy Law or fraudulent conveyance 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 Article 11 of the Indenture, this new Note
                  Guarantee shall be limited to the maximum amount permissible
                  such that the obligations of such Guarantor under this Note
                  Guarantee will not constitute a fraudulent transfer or
                  conveyance.

         3.       EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.

                                      F-2

<PAGE>

         4.       GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.

                           (a)     Except as otherwise provided in Section 11.06
                  of the Indenture, the Guaranteeing Subsidiary may not sell or
                  otherwise dispose of all 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:

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

                           (ii)    either (A) subject to Sections 11.05 and
                  11.06 of the Indenture, 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, pursuant to a
                  supplemental indenture in form and substance reasonably
                  satisfactory to the Trustee, under the Notes, the Indenture
                  and the Note Guarantee on the terms set forth herein or
                  therein; or (B) in the case of a sale or disposition
                  constituting an Asset Sale, the Net Proceeds of such sale or
                  other disposition are applied in accordance with the
                  applicable provisions of the Indenture, including without
                  limitation, Sections 3.09 and 4.10 thereof.

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

                           (c)     Except as set forth in Articles 4 and 5 and
                  Section 11.06 of Article 11 of the Indenture, and
                  notwithstanding clauses (i) and (ii) of clause (a) above,
                  nothing contained in the Indenture or in any of the Notes
                  shall prevent any consolidation or merger of a Guarantor with
                  or into the Company or another Guarantor, or shall prevent any
                  sale or conveyance of the property of a Guarantor as an
                  entirety or substantially as an entirety to the Company or
                  another Guarantor.

         5.       RELEASES.

                           (a)     In the event of any sale or other disposition
                  of all or substantially all of the assets of any Guarantor, by
                  way of merger, consolidation or otherwise, or a sale or other
                  disposition of all of the capital stock of any Guarantor, in
                  each case to a Person that is not (either before or after
                  giving effect to such transaction) a Subsidiary of the
                  Company, then such Guarantor (in the event of a sale or other
                  disposition, by way of merger, consolidation or otherwise, of
                  all of the Capital Stock of such Guarantor) or the corporation
                  acquiring the property (in the event of a sale or other
                  disposition of all or substantially all of the assets of such
                  Guarantor) will be released and relieved of any

                                      F-3

<PAGE>

                  obligations under its Note Guarantee; provided that the Net
                  Proceeds of such sale or other disposition are applied in
                  accordance with the applicable provisions of the Indenture,
                  including without limitation Sections 3.09 and 4.10 of the
                  Indenture. Upon delivery by the Company to the Trustee of an
                  Officers' Certificate and an Opinion of Counsel to the effect
                  that such sale or other disposition was made by the Company in
                  accordance with the provisions of the Indenture, including
                  without limitation Sections 3.09 and 4.10 of the Indenture,
                  the Trustee shall execute any documents reasonably required in
                  order to evidence the release of any Guarantor from its
                  obligations under its Note Guarantee.

                           (b)     If the Company designates any Restricted
                  Subsidiary that is a Guarantor as an Unrestricted Subsidiary
                  in accordance with the applicable provisions of the Indenture,
                  such Guarantor will be released and relieved of any
                  obligations under its Note Guarantee.

                           (c)     The Guarantors will be released and relieved
                  of any obligations under their Note Guarantees upon any legal
                  defeasance in accordance with the terms of this Indenture.

                           (d)     A Guarantor will be released and relieved of
                  any obligations under its Note Guarantee if such Guarantor is
                  or becomes a Receivables Subsidiary.

                           (e)     Any Guarantor not released from its
                  obligations under its Note Guarantee shall remain liable for
                  the full amount of principal of and interest on the Notes and
                  for the other obligations of any Guarantor under the Indenture
                  as provided in Article 11 of the Indenture.

         6.       NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Note
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.

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

         8.       COUNTERPARTS. 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.

         9.       EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

         10.      THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.

                                      F-4

<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.

         Dated:  _______________, 20___

                                          [GUARANTEEING SUBSIDIARY]

                                          By:  _______________________________
                                          Name:
                                          Title:

                                          NATIONAL WATERWORKS, INC.

                                          By:  _______________________________
                                          Name:
                                          Title:

                                          [EXISTING GUARANTORS]

                                          By:  _______________________________
                                          Name:
                                          Title:

                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION,
                                            as Trustee

                                          By:  _______________________________
                                                Authorized Signatory

                                      F-5<PAGE>
                                                                     EXHIBIT 4.3

                                                                  CONFORMED COPY

                            NATIONAL WATERWORKS, INC.

                    10.50% SENIOR SUBORDINATED NOTES DUE 2012

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                               November 22, 2002

Goldman, Sachs & Co.,
J.P. Morgan Securities Inc.
UBS Warburg LLC
     c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004

Ladies and Gentlemen:

         National Waterworks, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 10.50% Senior
Subordinated Notes due 2012. As an inducement to the Purchasers to enter into
the Purchase Agreement and in satisfaction of a condition to the obligations of
the Purchasers thereunder, the Company agrees with the Purchasers for the
benefit of holders (as defined herein) from time to time of the Registrable
Securities (as defined herein) and the Market-Maker (as defined herein) as
follows:

         1.       Certain Definitions. For purposes of this Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:

                  "Base Interest" shall mean the amount of interest that would
         otherwise accrue on the Securities under the terms thereof and the
         Indenture, without giving effect to the provisions of this Agreement.

                  The term "broker-dealer" shall mean any broker or dealer
         registered with the Commission under the Exchange Act.

                  "Closing Date" shall mean the date on which the Securities are
         initially issued.

                  "Commission" shall mean the United States Securities and
         Exchange Commission, or any other federal agency at the time
         administering the Exchange Act or the Securities Act, whichever is the
         relevant statute for the particular purpose.

                  "Effective Time," shall mean in the case of (i) an Exchange
         Registration, the time and date as of which the Commission declares the
         Exchange Registration Statement effective or as of which the Exchange
         Registration Statement otherwise becomes effective and (ii) a Shelf
         Registration, the time and date as of which the Commission declares the
         Shelf Registration Statement effective or as of which the Shelf
         Registration Statement otherwise becomes effective.

<PAGE>

                  "Electing Holder" shall mean any holder of Registrable
         Securities that has returned a completed and signed Notice and
         Questionnaire to the Company in accordance with Section 3(d)(ii)
         hereof.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
         or any successor thereto, as the same shall be amended from time to
         time.

                  "Exchange Offer" shall have the meaning assigned thereto in
         Section 2(a) hereof.

                  "Exchange Registration" shall have the meaning assigned
         thereto in Section 3(c) hereof.

                  "Exchange Registration Statement" shall have the meaning
         assigned thereto in Section 2(a) hereof.

                  "Exchange Securities" shall have the meaning assigned thereto
         in Section 2(a) hereof.

                  The term "holder" shall mean each of the Purchasers and other
         persons who acquire Registrable Securities from time to time (including
         any successors or assigns), in each case for so long as such person
         owns any Registrable Securities and the Market-Maker, if applicable.

                  "Indenture" shall mean the Indenture, dated as of November 22,
         2002, between the Company and Wells Fargo Bank Minnesota, National
         Association, as Trustee, as the same shall be amended from time to
         time.

                  "Market-Maker" shall have the meaning assigned thereto in
         Section 7(a) hereof.

                  "Market-Making Registration Statement" shall have the meaning
         assigned thereto in Section 7(a)(i)(A) hereof.

                  "Market-Maker's Information" shall have the meaning assigned
         thereto in Section 7(d) hereof.

                  "Notice and Questionnaire" means a Notice of Registration
         Statement and Selling Securityholder Questionnaire substantially in the
         form of Exhibit A hereto and containing such additional information as
         the Company shall reasonably request in order to allow it to comply
         with applicable securities law.

                  The term "person" shall mean a corporation, association,
         partnership, limited liability company, organization, business,
         individual, government or political subdivision thereof or governmental
         agency.

                  "Purchase Agreement" shall mean the Purchase Agreement, dated
         as of November 14, 2002, between the Purchasers and the Company
         relating to the Securities.

                  "Purchasers" shall mean the Purchasers named in Schedule I to
         the Purchase Agreement.

                                       2

<PAGE>

                  "Registrable Securities" shall mean the Securities; provided,
         however, that a Security shall cease to be a Registrable Security when
         (i) in the circumstances contemplated by Section 2(a) hereof, the
         Security has been exchanged for an Exchange Security in an Exchange
         Offer as contemplated in Section 2(a) hereof (provided that any
         Exchange Security that, pursuant to the last two sentences of Section
         2(a), is included in a prospectus for use in connection with resales by
         broker-dealers shall be deemed to be a Registrable Security with
         respect to Sections 5, 6 and 10 until resale of such Registrable
         Security has been effected within the 180-day period referred to in
         Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
         hereof, a Shelf Registration Statement registering such Security under
         the Securities Act has been declared or becomes effective and such
         Security has been sold or otherwise transferred by the holder thereof
         pursuant to and in a manner contemplated by such effective Shelf
         Registration Statement; (iii) such Security is sold pursuant to Rule
         144 under circumstances in which any legend borne by such Security
         relating to restrictions on transferability thereof, under the
         Securities Act or otherwise, is removed by the Company or pursuant to
         the Indenture; (iv) such Security is eligible to be sold pursuant to
         paragraph (k) of Rule 144; or (v) such Security shall cease to be
         outstanding.

                  "Registration Default" shall have the meaning assigned thereto
         in Section 2(c) hereof.

                  "Registration Default Period" shall have the meaning assigned
         thereto in Section 2(c) hereof.

                  "Registration Expenses" shall have the meaning assigned
         thereto in Section 4 hereof.

                  "Resale Period" shall have the meaning assigned thereto in
         Section 2(a) hereof.

                  "Restricted Holder" shall mean (i) a holder that is an
         affiliate of the Company within the meaning of Rule 405, (ii) a holder
         who acquires Exchange Securities outside the ordinary course of such
         holder's business, (iii) a holder who has arrangements or
         understandings with any person to participate in the Exchange Offer for
         the purpose of distributing Exchange Securities and (iv) a holder that
         is a broker-dealer, but only with respect to Exchange Securities
         received by such broker-dealer pursuant to an Exchange Offer in
         exchange for Registrable Securities acquired by the broker-dealer
         directly from the Company.

                  "Rule 144," "Rule 158," "Rule 405" and "Rule 415" shall mean,
         in each case, such rule promulgated under the Securities Act (or any
         successor provision), as the same shall be amended from time to time.

                  "Securities" shall mean, collectively, the 10.50% Senior
         Subordinated Notes due 2012 of the Company to be issued and sold to the
         Purchasers, and securities issued in exchange therefor or in lieu
         thereof pursuant to the Indenture.

                  "Securities Act" shall mean the Securities Act of 1933, or any
         successor thereto, as the same shall be amended from time to time.

                  "Shelf Registration" shall have the meaning assigned thereto
         in Section 2(b) hereof.

                                       3

<PAGE>

                  "Shelf Registration Statement" shall have the meaning assigned
         thereto in Section 2(b) hereof.

                  "Special Interest" shall have the meaning assigned thereto in
         Section 2(c) hereof.

                  "Trust Indenture Act" shall mean the Trust Indenture Act of
         1939, or any successor thereto, and the rules, regulations and forms
         promulgated thereunder, all as the same shall be amended from time to
         time.

         Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.

         2.       Registration Under the Securities Act.

                  (a)      Except as set forth in Section 2(b) below, the
Company agrees to file under the Securities Act, as soon as practicable, but no
later than 90 days after the Closing Date, a registration statement relating to
an offer to exchange (such registration statement, the "Exchange Registration
Statement", and such offer, the "Exchange Offer") any and all of the Securities
for a like aggregate principal amount of debt securities issued by the Company,
which debt securities are identical to the Securities (and are entitled to the
benefits of a trust indenture which is substantially identical to the Indenture
or is the Indenture and which has been qualified under the Trust Indenture
Act), except that they have been registered pursuant to an effective
registration statement under the Securities Act and do not contain provisions
for the additional interest contemplated in Section 2(c) below (such new debt
securities hereinafter called "Exchange Securities"). The Company agrees to use
all commercially reasonable efforts to cause the Exchange Registration
Statement to become effective under the Securities Act as soon as practicable,
but no later than 180 days after the Closing Date. The Exchange Offer will be
registered under the Securities Act on an appropriate form and will comply with
all applicable tender offer rules and regulations under the Exchange Act. The
Company further agrees to use all commercially reasonable efforts to commence
and complete the Exchange Offer promptly, but no later than 45 days after such
registration statement has become effective, hold the Exchange Offer open for
at least 30 days and exchange Exchange Securities for all Registrable
Securities that have been properly tendered and not withdrawn on or prior to
the expiration of the Exchange Offer. The Exchange Offer shall be deemed to
have been completed upon the earlier to occur of (i) the Company having
exchanged, pursuant to the Exchange Offer, the Exchange Securities for all
outstanding Registrable Securities pursuant to the Exchange Offer and (ii) the
Company having exchanged, pursuant to the Exchange Offer, Exchange Securities
for all Registrable Securities that have been properly tendered and not
withdrawn before the expiration of the Exchange Offer, which shall be on a date
that is at least 30 days following the commencement of the Exchange Offer. The
Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in any resales by any holder of Exchange Securities that is
a broker-dealer holding securities for its own account as a result of
market-making activities or other trading activities and (y) to keep such
Exchange Registration Statement effective for a period (the "Resale Period")
beginning when Exchange Securities are first issued in the Exchange Offer and
ending upon the earlier of the expiration of the 180th day after the Exchange
Offer has been completed or such time as such broker-dealers no longer own any
such Exchange Securities. With respect to such Exchange Registration Statement,

                                       4

<PAGE>

such holders shall have the benefit of the rights of indemnification and
contribution set forth in Sections 6(a), (c), (d) and (e) hereof.

                  (b)      If (i) either (x) the Exchange Offer is not permitted
under applicable law or rules or regulations of the Commission or (y) on or
prior to the time the Exchange Offer is completed existing Commission
interpretations are changed such that the debt securities received by holders
other than Restricted Holders in the Exchange Offer for Registrable Securities
are not or would not be, upon receipt, transferable by each such holder without
restriction under the Securities Act, (ii) the Exchange Offer has not been
completed within 225 days following the Closing Date or (iii) if, prior to the
consummation of the Exchange Offer, any holder shall notify the Company in
writing that it holds any Securities acquired by it that have, or that are
reasonably likely to be determined to have, the status of an unsold allotment in
the initial distribution of the Securities (any such notice to specify the
amount of Securities so held), or any holder notifies the Company in writing
that it believes that it is not entitled to participate in the Exchange Offer
(other than because it has an understanding or arrangement with any person to
participate in the distribution of the Exchange Securities) (any such notice to
specify the amount of Securities held by such holder as to which it may not so
participate and a brief explanation as to the reasons therefore) and such holder
has not received a written opinion of counsel to the Company, reasonably
acceptable to such holder, to the effect that such holder is legally permitted
to participate in the Exchange Offer, the Company shall, in lieu of (or, in the
case of clause (iii), in addition to) conducting the Exchange Offer contemplated
by Section 2(a), file under the Securities Act as soon as practicable, but no
later than the later of 90 days after the time such obligation to file arises, a
"shelf" registration statement providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, (x) in the case of clauses
(i) and (ii) above, all of the Registrable Securities, and (y) in the case of
clause (iii) above, the principal amount of Registrable Securities subject to
clause (iii) above, in each case pursuant to Rule 415 or any similar rule that
may be adopted by the Commission (such filing, the "Shelf Registration" and such
registration statement, the "Shelf Registration Statement"). The Company agrees
to use all commercially reasonable efforts to cause the Shelf Registration
Statement to become or be declared effective no later than 180 days after such
obligation to file arises and to keep such Shelf Registration Statement
continuously effective for a period ending on the earlier of the second
anniversary of the Effective Time or such time as there are no longer any
Registrable Securities outstanding, provided, however, that no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder. The Company
further agrees to supplement or make amendments to the Shelf Registration
Statement, as and when required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment prior to its being
used or promptly following its filing with the Commission.

                  (c)      In the event that (i) the Company has not filed the
Exchange Registration Statement (other than in the circumstances contemplated by
clause (i) of Section 2(b)) or Shelf Registration Statement with the Commission
on or before the date on which such registration statement is required to be
filed pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange
Registration Statement (other than in the circumstances contemplated by clause
(i) of Section 2(b)) or Shelf Registration Statement has not become effective or
been declared effective by the Commission on or before the date on which such
registration statement is required to become or be declared effective pursuant
to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer has not been
completed within 45 days after the initial effective date of the

                                       5

<PAGE>

Exchange Registration Statement relating to the Exchange Offer (if the Exchange
Offer is then required to be made), other than in circumstances contemplated by
clause (i) of Section 2(b) above and other than with respect to any Registrable
Securities for which notice has been provided to the Company by any holders
pursuant to clause (iii) of Section 2(b) above, or (iv) any Exchange
Registration Statement (other than in the circumstances contemplated by clause
(i) of Section 2(b)) or Shelf Registration Statement required by Section 2(a) or
2(b) hereof is filed and declared effective but shall thereafter either be
withdrawn by the Company or shall become subject to an effective stop order
issued pursuant to Section 8(d) of the Securities Act suspending the
effectiveness of such registration statement (except as specifically permitted
herein including pursuant to Section 2(f)) without being succeeded immediately
by an additional registration statement filed and declared effective (each such
event referred to in clauses (i) through (iv), a "Registration Default" and each
period during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Section 10(b), the Company
shall pay to each holder of Registrable Securities (but not in respect of any
Registrable Securities for any period after such securities cease to be
Registrable Securities) special interest ("Special Interest"), in addition to
the Base Interest, which Special Interest shall accrue at a per annum rate of
0.25% for the first 90 days of the Registration Default Period, at a per annum
rate of 0.50% for the second 90 days of the Registration Default Period, at a
per annum rate of 0.75% for the third 90 days of the Registration Default Period
and at a per annum rate of 1.0% thereafter for the remaining portion of the
Registration Default Period. Notwithstanding anything to the contrary in this
Section 2(c), the Company shall not be required to pay Special Interest to a
holder of Registrable Securities if such holder failed to comply with its
obligations to make the representations set forth in Section 2(e) or failed to
provide the information required to be provided by it pursuant to Section
3(d)(ii).

                  (d)      The Company shall take all actions necessary or
advisable to be taken by it to ensure that the transactions contemplated herein
are effected as so contemplated.

                  (e)      Each holder participating in the Exchange Offer shall
be required to represent to the Company in writing (which may be contained in
the applicable letter of transmittal) that at the time of the consummation of
the Exchange Offer (i) any Exchange Securities received by such holder will be
acquired in the ordinary course of business, (ii) such holder will have no
arrangements or understanding with any person to participate in the distribution
of the Securities or the Exchange Securities within the meaning of the
Securities Act, (ii) such holder is not an affiliate of the Company or, if it is
such an affiliate, such holder will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable, and (iv)
if such holder is a broker-dealer, that it will deliver a prospectus in
connection with any resale of such Exchange Securities.

                  (f)      Notwithstanding any other provisions of this Exchange
and Registration Rights Agreement (but subject to the further provisions of this
Section 2(f)), the Company may for valid business reasons, including, without
limitation, a potential acquisition, divestiture of assets or other material
corporate event or transaction, issue a notice that the Shelf Registration
Statement is no longer effective or the prospectus included therein is no longer
usable for offers and sales of Registrable Securities covered by the Shelf
Registration Statement and may issue any notice suspending use of the Shelf
Registration Statement required under applicable law to be issued; provided that
the use of the Shelf Registration Statement shall not be suspended for more than
60 days in the aggregate in any consecutive 12-month period. The provisions of
the foregoing sentence of this Section 2(f) shall also be applicable to the
Exchange Registration Statement during the Resale Period; provided that the use
of such Exchange Registration

                                       6

<PAGE>

Statement shall not be suspended for more than 60 days in the aggregate in any
consecutive 12-month period; provided, further, that the Resale Period shall be
extended for the number of days that the use of the Exchange Registration
Statement was suspended.

                  (g)      Any reference herein to a registration statement as
of any time shall be deemed to include any document incorporated, or deemed to
be incorporated, therein by reference as of such time and any reference herein
to any post-effective amendment to a registration statement as of any time shall
be deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time. Any references herein to a prospectus
shall, except where the context otherwise requires, include any prospectus (or
amendment or supplement thereto) filed with the Commission pursuant to Section 7
of this Exchange and Registration Rights Agreement.

         3.       Registration Procedures. If the Company files a
registration statement pursuant to Section 2(a) or Section 2(b), the following
provisions shall apply:

                  (a)      At or before the Effective Time of the Exchange Offer
or the Shelf Registration, as the case may be, the Company shall qualify the
Indenture under the Trust Indenture Act.

                  (b)      In the event that such qualification would require
the appointment of a new trustee under the Indenture, the Company shall appoint
a new trustee thereunder pursuant to the applicable provisions of the Indenture.

                  (c)      Except in the circumstances contemplated by clause
(i) of Section 2(b), in connection with the Company's obligations with respect
to the registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

                           (i)     prepare and file with the Commission, as soon
         as practicable but in any case within the time period specified in
         Section 2(a), an Exchange Registration Statement on any form which may
         be utilized by the Company and which shall permit the Exchange Offer
         and resales of Exchange Securities by broker-dealers during the Resale
         Period to be effected as contemplated by Section 2(a), and use all
         commercially reasonable efforts to cause such Exchange Registration
         Statement to become effective as soon as practicable thereafter, but in
         any case within the time period specified in Section 2(a);

                           (ii)    prepare and file with the Commission such
         amendments and supplements to such Exchange Registration Statement and
         the prospectus included therein as may be necessary to effect and
         maintain the effectiveness of such Exchange Registration Statement for
         the period and purposes contemplated in Section 2(a) hereof and as may
         be required by the applicable rules and regulations of the Commission
         and the instructions applicable to the form of such Exchange
         Registration Statement, and promptly provide each broker-dealer covered
         by clause (x) of the penultimate sentence of Section 2(a) hereof with
         such number of copies of the prospectus included therein (as then
         amended or supplemented), in conformity in all material respects with
         the requirements of the Securities Act and the Trust Indenture Act and
         the rules and regulations of the Commission thereunder, as such
         broker-dealer reasonably may request prior to the expiration of the
         Resale Period, for use in connection with resales of Exchange
         Securities;

                                       7

<PAGE>

                           (iii)   promptly notify (which notice if given
         during the Resale Period pursuant to clauses (B)-(F) below shall be
         accompanied by an instruction to suspend use of the prospectus until
         requisite changes have been made if in the Company's reasonable
         judgment such suspension is necessary) each broker-dealer covered by
         clause (x) of the penultimate sentence of Section 2(a) hereof that has
         requested or received copies of the prospectus included in the Exchange
         Registration Statement, and confirm such advice in writing, (A) when
         such Exchange Registration Statement or the prospectus included therein
         or any prospectus amendment or supplement or post-effective amendment
         has been filed, and, with respect to such Exchange Registration
         Statement or any post-effective amendment, when the same has become
         effective, (B) of any request by the Commission for amendments or
         supplements to such Exchange Registration Statement or prospectus or
         for additional information, (C) of the issuance by the Commission of
         any stop order suspending the effectiveness of such Exchange
         Registration Statement or the initiation or threatening of any
         proceedings for that purpose, (D) if at any time the representations
         and warranties of the Company contemplated by Section 5 cease to be
         true and correct in all material respects, (E) of the receipt by the
         Company of any notification with respect to the suspension of the
         qualification of the Exchange Securities for sale in any jurisdiction
         or the initiation or threatening of any proceeding for such purpose, or
         (F) at any time during the Resale Period when a prospectus is required
         to be delivered under the Securities Act, that such Exchange
         Registration Statement, prospectus, prospectus amendment or supplement
         or post-effective amendment does not conform in all material respects
         to the applicable requirements of the Securities Act and the Trust
         Indenture Act and the rules and regulations of the Commission
         thereunder or contains an untrue statement of a material fact or omits
         to state any material fact required to be stated therein or necessary
         to make the statements therein not misleading in light of the
         circumstances then existing;

                           (iv)    in the event that the Company would be
         required, pursuant to Section 3(c)(iii)(F) above, to notify any
         broker-dealers holding Exchange Securities, without delay prepare and
         furnish to each such holder a reasonable number of copies of a
         prospectus supplemented or amended so that, as thereafter delivered to
         purchasers of such Exchange Securities during the Resale Period, such
         prospectus shall conform in all material respects to the applicable
         requirements of the Securities Act and the Trust Indenture Act and the
         rules and regulations of the Commission thereunder and shall not
         contain an untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading in light of the circumstances then
         existing;

                           (v)     use its best efforts to obtain the withdrawal
         of any order suspending the effectiveness of such Exchange Registration
         Statement or any post-effective amendment thereto at the earliest
         practicable date;

                           (vi)    use its best efforts to (A)  register or
         qualify the Exchange Securities under the securities laws or blue sky
         laws of such jurisdictions as are contemplated by Section 2(a) no later
         than the commencement of the Exchange Offer, (B) keep such
         registrations or qualifications in effect and comply with such laws so
         as to permit the continuance of offers, sales and dealings therein in
         such jurisdictions until the expiration of the Resale Period and (C)
         take any and all other actions as may be reasonably necessary or
         advisable to enable each broker-dealer holding Exchange Securities to
         consummate the disposition thereof in such jurisdictions; provided,
         however, that the Company shall not be required for any such purpose to
         (1) qualify as a

                                       8

<PAGE>

         foreign corporation in any jurisdiction wherein it would not otherwise
         be required to qualify but for the requirements of this Section
         3(c)(vi), (2) consent to general service of process in any such
         jurisdiction or subject itself to taxation in any such jurisdiction or
         (3) make any changes to its certificate of incorporation or by-laws or
         any agreement between it and its stockholders or between it or its
         parent and its parent's stockholders;

                           (vii)   use its best efforts to obtain the consent or
         approval of each governmental agency or authority, whether federal,
         state or local, which may be required to effect the Exchange
         Registration, the Exchange Offer and the offering and sale of Exchange
         Securities by broker-dealers during the Resale Period;

                           (viii)  provide a CUSIP number for all Exchange
         Securities, not later than the applicable Effective Time; and

                           (ix)    comply with all applicable rules and
         regulations of the Commission, and make generally available to its
         securityholders as soon as practicable but no later than eighteen
         months after the effective date of such Exchange Registration
         Statement, an earning statement of the Company and its subsidiaries
         complying with Section 11(a) of the Securities Act (including, at the
         option of the Company, Rule 158 thereunder).

                  (d)      In connection with the Company's obligations with
respect to the Shelf Registration, if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

                           (i)     prepare and file with the Commission, as soon
         as practicable but in any case within the time period specified in
         Section 2(b), a Shelf Registration Statement on any form which may be
         utilized by the Company and which shall register all of the Registrable
         Securities for resale by the holders thereof in accordance with such
         method or methods of disposition as may be specified by such of the
         holders as may be Electing Holders and use commercially reasonable
         efforts to cause such Shelf Registration Statement to become effective
         as soon as practicable but in any case within the time period specified
         in Section 2(b);

                           (ii)    not less than 30 calendar days prior to the
         Effective Time of the Shelf Registration Statement, mail the Notice and
         Questionnaire to the holders of Registrable Securities; no holder shall
         be entitled to be named as a selling securityholder in the Shelf
         Registration Statement as of the Effective Time, and no holder shall be
         entitled to use the prospectus forming a part thereof for resales of
         Registrable Securities at any time, unless such holder has returned a
         completed and signed Notice and Questionnaire to the Company by the
         deadline for response set forth therein; provided, however, holders of
         Registrable Securities shall have at least 25 calendar days from the
         date on which the Notice and Questionnaire is first mailed to such
         holders to return a completed and signed Notice and Questionnaire to
         the Company;

                           (iii)   [intentionally left blank];

                           (iv)    as soon as practicable prepare and file with
         the Commission such amendments and supplements to such Shelf
         Registration Statement and the prospectus included therein as may be
         necessary to effect and maintain the effectiveness of such

                                       9

<PAGE>

         Shelf Registration Statement for the period specified in Section 2(b)
         hereof and as may be required by the applicable rules and regulations
         of the Commission and the instructions applicable to the form of such
         Shelf Registration Statement, and furnish to the Electing Holders
         copies of any such supplement or amendment simultaneously with or prior
         to its being used or filed with the Commission;

                           (v)     comply with the provisions of the Securities
         Act with respect to the disposition of all of the Registrable
         Securities covered by such Shelf Registration Statement in accordance
         with the intended methods of disposition by the Electing Holders
         provided for in such Shelf Registration Statement;

                           (vi)    provide (A) the Electing Holders, (B) the
         underwriters (which term, for purposes of this Exchange and
         Registration Rights Agreement, shall include a person deemed to be an
         underwriter within the meaning of Section 2(a)(11) of the Securities
         Act), if any, thereof, (C) any sales or placement agent therefor, (D)
         counsel for any such underwriter or agent and (E) not more than one
         counsel for all the Electing Holders a copy of such Shelf Registration
         Statement, each prospectus included therein or filed with the
         Commission and each amendment or supplement thereto;

                           (vii)   for a reasonable period prior to the
         effectiveness of such Shelf Registration Statement, and throughout the
         period specified in Section 2(b), make available at reasonable times at
         the Company's principal place of business or such other reasonable
         place for inspection by the persons referred to in Section 3(d)(vi) who
         shall certify to the Company that they have a current intention to sell
         the Registrable Securities pursuant to the Shelf Registration such
         financial and other information and books and records of the Company,
         and cause the officers, employees, counsel and independent certified
         public accountants of the Company to respond to such inquiries, as
         shall be reasonably necessary, in the judgment of the respective
         counsel referred to in such Section, to conduct a reasonable
         investigation within the meaning of Section 11 of the Securities Act;
         provided, however, that each such party shall be required to maintain
         in confidence and not to disclose to any other person any such
         information or records, until such time as (A) such information becomes
         a matter of public record (whether by virtue of its inclusion in such
         registration statement or otherwise), or (B) such person shall be
         required so to disclose such information pursuant to a subpoena or
         order of any court or other governmental agency or body having
         jurisdiction over the matter (subject to the requirements of such
         order, and only after such person shall have given the Company prompt
         prior written notice of such requirement and a reasonable opportunity
         to obtain a protective order to prevent the disclosure pursuant to such
         subpoena or order);

                           (viii)  promptly notify (which notice if given
         during the Resale Period pursuant to clauses (B)-(F) below shall be
         accompanied by an instruction to suspend use of the prospectus until
         requisite changes have been made if in the Company's reasonable
         judgment such suspension is necessary) each of the Electing Holders,
         any sales or placement agent therefor and any underwriter thereof
         (which notification may be made through any managing underwriter that
         is a representative of such underwriter for such purpose) and confirm
         such advice in writing, (A) when such Shelf Registration Statement or
         the prospectus included therein or any prospectus amendment or
         supplement or post-effective amendment has been filed, and, with
         respect to such Shelf Registration Statement or any post-effective
         amendment, when the same has become effective, (B) of any request by
         the Commission for amendments or supplements to such

                                       10

<PAGE>

         Shelf Registration Statement or prospectus or for additional
         information, (C) of the issuance by the Commission of any stop order
         suspending the effectiveness of such Shelf Registration Statement or
         the initiation or threatening of any proceedings for that purpose, (D)
         if at any time the representations and warranties of the Company
         contemplated by Section 5 cease to be true and correct in all material
         respects, (E) of the receipt by the Company of any notification with
         respect to the suspension of the qualification of the Registrable
         Securities for sale in any jurisdiction or the initiation or
         threatening of any proceeding for such purpose, or (F) if at any time
         when a prospectus is required to be delivered under the Securities Act,
         that such Shelf Registration Statement, prospectus, prospectus
         amendment or supplement or post-effective amendment does not conform in
         all material respects to the applicable requirements of the Securities
         Act and the Trust Indenture Act and the rules and regulations of the
         Commission thereunder or contains an untrue statement of a material
         fact or omits to state any material fact required to be stated therein
         or necessary to make the statements therein not misleading in light of
         the circumstances then existing;

                           (ix)    use its best efforts to obtain the withdrawal
         of any order suspending the effectiveness of such registration
         statement or any post-effective amendment thereto at the earliest
         practicable date;

                           (x)     if reasonably requested by any managing
         underwriter or underwriters, any placement or sales agent or any
         Electing Holder, promptly incorporate in a prospectus supplement or
         post-effective amendment such information as is required by the
         applicable rules and regulations of the Commission and as such managing
         underwriter or underwriters, such agent or such Electing Holder
         specifies should be included therein relating to the terms of the sale
         of such Registrable Securities, including information with respect to
         the principal amount of Registrable Securities being sold by such
         Electing Holder, the name and description of such Electing Holder, and
         any placement or sales agent or underwriter, the offering price of such
         Registrable Securities and any discount, commission or other
         compensation payable in respect thereof, the purchase price being paid
         therefor by any such underwriters and with respect to any other terms
         of the offering of the Registrable Securities to be sold by such
         Electing Holder or agent or to such underwriters; and make all required
         filings of such prospectus supplement or post-effective amendment
         within the time periods required by the Securities Act;

                           (xi)    furnish to each Electing Holder, each
         placement or sales agent, if any, therefor, each underwriter, if any,
         thereof and the respective counsel referred to in Section 3(d)(vi) (A)
         a conformed copy of such Shelf Registration Statement and each such
         amendment and supplement thereto (and, if requested in writing by such
         Electing Holder, agent or underwriter, all exhibits thereto and
         documents incorporated by reference therein) and (B) as many copies of
         the prospectus included in such Shelf Registration Statement (including
         each preliminary prospectus and any summary prospectus) and any
         amendment or supplement thereto, in conformity in all material respects
         with the applicable requirements of the Securities Act and the Trust
         Indenture Act and the rules and regulations of the Commission
         thereunder, and such other documents, as such Electing Holder, agent,
         if any, and underwriter, if any, may reasonably request in order to
         facilitate the offering and disposition of the Registrable Securities
         owned by such Electing Holder, offered or sold by such agent or
         underwritten by such underwriter and to permit such Electing Holder,
         agent and underwriter to satisfy the prospectus delivery requirements
         of the Securities Act; and the Company hereby

                                       11

<PAGE>

         consents to the use of such prospectus (including such preliminary and
         summary prospectus) and any amendment or supplement thereto by each
         such Electing Holder and by any such agent and underwriter, in each
         case in the form most recently provided to such person by the Company,
         in connection with the offering and sale of the Registrable Securities
         covered by the prospectus (including such preliminary and summary
         prospectus) or any supplement or amendment thereto but subject to the
         provisions of Section 2(f);

                           (xii)   use all commercially reasonable efforts to
         (A) register or qualify the Registrable Securities to be included in
         such Shelf Registration Statement under such securities laws or blue
         sky laws of such jurisdictions as any Electing Holder and each
         placement or sales agent, if any, therefor and underwriter, if any,
         thereof shall reasonably request in writing and (B) keep such
         registrations or qualifications in effect and comply with such laws so
         as to permit the continuance of offers, sales and dealings therein in
         such jurisdictions during the period the Shelf Registration is required
         to remain effective under Section 2(b) above and (C) take any and all
         other actions as may be reasonably necessary or advisable to enable
         each such Electing Holder, agent, if any, and underwriter, if any, to
         consummate the disposition in such jurisdictions of such Registrable
         Securities; provided, however, that the Company shall not be required
         for any such purpose to (1) qualify as a foreign corporation in any
         jurisdiction wherein it would not otherwise be required to qualify but
         for the requirements of this Section 3(d)(xii), (2) consent to general
         service of process in any such jurisdiction or subject itself to
         taxation in any such jurisdiction or (3) make any changes to its
         certificate of incorporation or by-laws or any agreement between it and
         its stockholders;

                           (xiii)  use all commercially reasonable efforts to
         obtain the consent or approval of each governmental agency or
         authority, whether federal, state or local, which may be required to
         effect the Shelf Registration or the offering or sale in connection
         therewith or to enable the selling holder or holders to offer, or to
         consummate the disposition of, their Registrable Securities;

                           (xiv)   Unless any Registrable Securities shall be
         in book-entry only form, cooperate with the Electing Holders and the
         managing underwriters, if any, to facilitate the timely preparation and
         delivery of certificates representing Registrable Securities to be
         sold, which certificates, if so required by any securities exchange
         upon which any Registrable Securities are listed, shall be penned,
         lithographed or engraved, or produced by any combination of such
         methods, on steel engraved borders, and which certificates upon the
         sale thereof pursuant to the Shelf Registration Statement shall not
         bear any restrictive legends; and, in the case of an underwritten
         offering, enable such Registrable Securities to be in such
         denominations and registered in such names as the managing underwriters
         may request at least two business days prior to any sale of the
         Registrable Securities;

                           (xv)    provide a CUSIP number for all Registrable
         Securities, not later than the applicable Effective Time;

                           (xvi)   enter into one or more underwriting
         agreements, agency agreements, "best efforts" underwriting agreements
         or similar agreements, as appropriate, in each case in customary form
         and including customary representations and warranties as are generally
         applicable to any such agreement and customary provisions relating to
         indemnification and contribution substantially consistent with those

                                       12

<PAGE>

         contained in Section 8 of the Purchase Agreement, and take such other
         actions in connection therewith, in each case as any Electing Holders
         aggregating at least 50% in aggregate principal amount of the
         Registrable Securities covered by the Shelf Registration Statement
         shall request in order to expedite or facilitate the disposition of
         such Registrable Securities; provided, however, that notwithstanding
         anything to the contrary contained in this Exchange and Registration
         Rights Agreement, the Company shall not be required to enter into any
         such agreements more than twice pursuant to this Exchange and
         Registration Rights Agreement; provided, further, that no agreement
         entered into pursuant to this clause (xvi) shall require the Company to
         pay Registration Expenses except as provided in Section 4 hereof;

                           (xvii)  if requested in writing by Electing
         Holders owning in the aggregate at least a majority in principal amount
         of the Registrable Securities covered by the Shelf Registration
         Statement or the managing underwriter, if any, therefore, use its
         reasonable best efforts (A) to obtain an opinion of counsel to the
         Company in customary form and covering such matters, of the type
         customarily covered by such an opinion, addressed to such Electing
         Holder or Electing Holders and the placement or sales agent, if any,
         therefor and the underwriters, if any, thereof and dated the effective
         date of such Shelf Registration Statement (and if such Shelf
         Registration Statement contemplates an underwritten offering of a part
         or all of the Registrable Securities, dated the date of the closing
         under the underwriting agreement relating thereto) (it being agreed
         that the matters to be covered by such opinion shall include the due
         incorporation and good standing of the Company and its subsidiaries;
         the qualification of the Company and its subsidiaries to transact
         business as foreign corporations; the due authorization, execution and
         delivery of the relevant agreement of the type referred to in Section
         3(d)(xvi) hereof; the due authorization, execution, authentication and
         issuance, and the validity and enforceability, of the Securities; the
         absence of material legal or governmental proceedings involving the
         Company; the absence of governmental approvals required to be obtained
         in connection with the Shelf Registration, the offering and sale of the
         Registrable Securities, this Exchange and Registration Rights Agreement
         or any agreement of the type referred to in Section 3(d)(xvi) hereof,
         except such approvals as may be required under state securities or blue
         sky laws or the rules of the NASD or as have been obtained; the
         material compliance as to form of such Shelf Registration Statement and
         any documents incorporated by reference therein and of the Indenture
         with the requirements of the Securities Act and the Trust Indenture Act
         and the rules and regulations of the Commission thereunder,
         respectively; and, as of the date of the opinion and of the Shelf
         Registration Statement or most recent post-effective amendment thereto,
         as the case may be, the absence from such Shelf Registration Statement
         and the prospectus included therein, as then amended or supplemented,
         and from the documents incorporated by reference therein (in each case
         other than the financial statements and other financial information
         contained therein) of an untrue statement of a material fact or the
         omission to state therein a material fact necessary to make the
         statements therein not misleading (in the case of such documents, in
         the light of the circumstances existing at the time that such documents
         were filed with the Commission under the Exchange Act)); (B) obtain a
         "cold comfort" letter or letters from the independent certified public
         accountants of the Company addressed to the Electing Holder or Electing
         Holders, the placement or sales agent, if any, therefor or the
         underwriters, if any, thereof, dated (i) the effective date of such
         Shelf Registration Statement and (ii) the effective date of any
         prospectus supplement to the prospectus included in such Shelf
         Registration Statement or post-effective amendment to such Shelf
         Registration Statement which includes unaudited or audited financial
         statements as of a

                                       13

<PAGE>

         date or for a period subsequent to that of the latest such statements
         included in such prospectus (and, if such Shelf Registration Statement
         contemplates an underwritten offering pursuant to any prospectus
         supplement to the prospectus included in such Shelf Registration
         Statement or post-effective amendment to such Shelf Registration
         Statement which includes unaudited or audited financial statements as
         of a date or for a period subsequent to that of the latest such
         statements included in such prospectus, dated the date of the closing
         under the underwriting agreement relating thereto), such letter or
         letters to be in customary form and covering such matters of the type
         customarily covered by letters of such type, all if and to the extent
         permitted by Statement of Auditing Standards ("SAS") No. 72, as amended
         by SAS 76 and SAS 86; (C) deliver such customary documents and
         certificates, including officers' certificates, as may be reasonably
         requested by any Electing Holders of at least 50% in aggregate
         principal amount of the Registrable Securities covered by the Shelf
         Registration Statement or the placement or sales agent, if any,
         therefor and the managing underwriters, if any, thereof to evidence the
         accuracy of the representations and warranties made pursuant to any
         agreement entered into pursuant to Section 3(d)(xvi) hereof or those
         contained in Section 5(a) hereof and the compliance with or
         satisfaction of any agreements or conditions contained in the
         underwriting agreement or other agreement entered into by the Company
         pursuant to Section 3(d)(xvi) hereof; and (D) undertake such
         obligations relating to expense reimbursement, indemnification and
         contribution as are provided in Section 6 hereof;

                           (xviii) notify in writing each holder of Registrable
         Securities of any proposal by the Company to amend or waive any
         provision of this Exchange and Registration Rights Agreement pursuant
         to Section 10(h) hereof and of any amendment or waiver effected
         pursuant thereto, each of which notices shall contain the text of the
         amendment or waiver proposed or effected, as the case may be;

                           (xix)   in the event that any broker-dealer
         registered under the Exchange Act shall underwrite any Registrable
         Securities or participate as a member of an underwriting syndicate or
         selling group or "assist in the distribution" (within the meaning of
         the Conduct Rules (the "Conduct Rules) of the National Association of
         Securities Dealers, Inc. ("NASD") or any successor thereto, as amended
         from time to time) thereof, whether as a holder of such Registrable
         Securities or as an underwriter, a placement or sales agent or a broker
         or dealer in respect thereof, or otherwise, assist such broker-dealer
         in complying with the requirements of such Conduct Rules, including by
         (A) if such Conduct Rules shall so require, engaging a "qualified
         independent underwriter" (as defined in such Conduct Rules) to
         participate in the preparation of the Shelf Registration Statement
         relating to such Registrable Securities, to exercise usual standards of
         due diligence in respect thereto and, if any portion of the offering
         contemplated by such Shelf Registration Statement is an underwritten
         offering or is made through a placement or sales agent, to recommend
         the yield of such Registrable Securities, (B) indemnifying any such
         qualified independent underwriter to the extent of the indemnification
         of underwriters provided in Section 6 hereof (or to such other
         customary extent as may be requested by such underwriter), and (C)
         providing such information to such broker-dealer as may be required in
         order for such broker-dealer to comply with the requirements of the
         Conduct Rules; and

                           (xx)    comply with all applicable rules and
         regulations of the Commission, and make generally available to its
         securityholders as soon as practicable but in any event not later than
         eighteen months after the effective date of such Shelf

                                       14

<PAGE>

         Registration Statement, an earning statement of the Company and its
         subsidiaries complying with Section 11(a) of the Securities Act
         (including, at the option of the Company, Rule 158 thereunder).

                  (e)      If any event contemplated by Section 2(f), Section
3(c)(iii)(B)-(F) or Section 3(d)(viii)(B)-(F) occurs during the period for which
the Company is required to maintain an effective Exchange Registration Statement
or Shelf Registration Statement, as applicable, the Company will, to the extent
required after the end of the applicable periods referred to in Section 2(f),
without delay prepare and furnish to each broker-dealer in the case of the
Exchange Registration Statement, and to each of the Electing Holders, each
placement or sales agent, if any, and each underwriter, if any, in the case of
the Shelf Registration Statement, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Exchange Securities or Registrable Securities, as applicable, such prospectus
shall conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing. In the case of (i) the Shelf Registration Statement, each holder of
Registrable Securities to be registered pursuant thereto agrees by acquisition
of such Registrable Securities that, and (ii) the Exchange Registration
Statement during the Resale Period, each holder of Exchange Securities subject
to the prospectus delivery requirements of the Securities Act agrees that, upon
receipt of any notice from the Company pursuant to, as applicable, Section 2(f),
Section 3(c)(iii)(B)-(F) or Section 3(d)(viii)(B)-(F), such holder will
forthwith discontinue disposition of such Registrable Securities or Exchange
Securities, as applicable, pursuant to the applicable registration statement
until such holder shall have received copies of such amended or supplemented
prospectus or until advised in writing by the Company that the use of the
applicable prospectus may be resumed, and if so directed by the Company, such
holder shall deliver to the Company (at the Company's expense) all copies, other
than permanent file copies, then in such holder's possession of the prospectus
covering such Registrable Securities or Exchange Securities, as applicable, at
the time of receipt of such notice.

                  (f)      In the event of a Shelf Registration, in addition to
the information required to be provided by each Electing Holder in its Notice
and Questionnaire, the Company may require such Electing Holder to furnish to
the Company such additional information regarding such Electing Holder and such
Electing Holder's intended method of distribution of Registrable Securities as
may be required in order to comply with the Securities Act. Each such Electing
Holder agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Electing Holder to the
Company or of the occurrence of any event in either case as a result of which
any prospectus relating to such Shelf Registration contains or would contain an
untrue statement of a material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
or omits to state any material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to furnish
to the Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such Electing Holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

                                       15

<PAGE>

                  (g)      Until the expiration of two years after the Closing
Date, the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144) to, resell any of the Securities that have been reacquired
by any of them except to the Company or pursuant to an effective registration
statement under the Securities Act.

         4.       Registration Expenses. The Company agrees to bear and to pay
or cause to be paid promptly all expenses incident to the Company's performance
of or compliance with this Exchange and Registration Rights Agreement, including
(a) all Commission and any NASD registration, filing and review fees and
expenses including reasonable fees and disbursements of counsel for any
underwriters in connection with such registration, filing and review, (b) all
fees and expenses in connection with the qualification of the Securities for
offering and sale under the State securities and blue sky laws referred to in
Section 3(c)(vi) and Section 3(d)(xii) hereof and determination of their
eligibility for investment under the laws of such jurisdictions as any managing
underwriters or the Electing Holders may designate, including any reasonable
fees and disbursements of one counsel for all of the Electing Holders and
counsel for any underwriters in connection with such qualification and
determination, (c) all expenses relating to the preparation, printing,
production, distribution and reproduction of each registration statement
required to be filed hereunder, each prospectus included therein or prepared for
distribution pursuant hereto, each amendment or supplement to the foregoing, the
expenses of preparing the Securities for delivery and the expenses of printing
or producing any underwriting agreements, agreements among underwriters, selling
agreements and blue sky or legal investment memoranda and all other documents in
connection with the offering, sale or delivery of Securities to be disposed of
(including certificates representing the Securities), (d) messenger, telephone
and delivery expenses relating to the offering, sale or delivery of Securities
and the preparation of documents referred in clause (c) above, (e) fees and
expenses of the Trustee under the Indenture, any agent of the Trustee and any
counsel for the Trustee, (f) internal expenses (including all salaries and
expenses of the Company's officers and employees performing legal or accounting
duties), (g) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
opinions or "cold comfort" letters required by or incident to such performance
and compliance), (h) the reasonable fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xix)
hereof, (i) the reasonable fees, disbursements and expenses of one counsel for
the Electing Holders retained in connection with a Shelf Registration, as
selected by the Electing Holders of at least a majority in aggregate principal
amount of the Registrable Securities held by Electing Holders (which counsel
shall be reasonably satisfactory to the Company), (j) any fees charged by
securities rating services for rating the Securities, and (k) the reasonable
fees, expenses and disbursements of any other persons, including special
experts, retained by the Company in connection with such registration
(collectively, the "Registration Expenses"). To the extent that any Registration
Expenses are incurred, assumed or paid by any holder of Registrable Securities
or underwriter thereof, the Company shall reimburse such person for the full
amount of the Registration Expenses so incurred, assumed or paid promptly after
receipt of a request therefor. Notwithstanding the foregoing, the holders of the
Registrable Securities being registered shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Registrable Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly), other
than the counsel and experts specifically referred to above.

         5.       Representations and Warranties. The Company represents and
warrants to, and agrees with, each Purchaser and each of the holders from time
to time of Registrable Securities that:

                                       16

<PAGE>

                  (a)      Each registration statement covering Registrable
Securities and each prospectus (including any preliminary or summary prospectus)
contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof
and any further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as the
case may be, and, in the case of an underwritten offering of Registrable
Securities, at the time of the closing under the underwriting agreement relating
thereto, will conform in all material respects to the requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and at all times subsequent to
the Effective Time when a prospectus would be required to be delivered under the
Securities Act, other than from (i) such time as a notice has been given to
holders of Registrable Securities pursuant to Section 3(d)(viii)(F) or Section
3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an amended or
supplemented prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof,
each such registration statement, and each prospectus (including any summary
prospectus) contained therein or furnished pursuant to Section 3(d) or Section
3(c) hereof, as then amended or supplemented, will conform in all material
respects to the requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a holder of Registrable Securities or any underwriter or placement or
sales agent therefore in each case expressly for use therein.

                  (b)      Any documents incorporated by reference in any
prospectus referred to in Section 5(a) hereof, when they become or became
effective or are or were filed with the Commission, as the case may be, will
conform or conformed in all material respects to the requirements of the
Exchange Act and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by a holder of Registrable Securities or any
underwriter or placement or sales agent therefore in each case expressly for use
therein.

                  (c)      The compliance by the Company with all of the
provisions of this Exchange and Registration Rights Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any subsidiary of the Company is
a party or by which the Company or any subsidiary of the Company is bound or to
which any of the property or assets of the Company or any subsidiary of the
Company is subject, nor will such action result in any violation of the
provisions of the certificate of incorporation, as amended, or the by-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
subsidiary of the Company or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by this Exchange and Registration Rights
Agreement, except the registration under the Securities Act of the Securities

                                       17

<PAGE>

or the Exchange Securities, qualification of the Indenture under the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required within the rules and regulations of the NASD
and under State securities or blue sky laws in connection with the offering and
distribution of the Securities.

                  (d)      This Exchange and Registration Rights Agreement has
been duly authorized, executed and delivered by the Company.

                  (e)      The Company does not have any subsidiaries as of the
Closing Date.

         6.       Indemnification.

                  (a)      Indemnification by the Company. The Company will
indemnify and hold harmless each of the holders of Registrable Securities
included in the Exchange Registration Statement, each of the Electing Holders of
Registrable Securities included in the Shelf Registration Statement, the
Market-Maker in respect of Securities included in the Market-Making Registration
Statement and each person who participates as a placement or sales agent or as
an underwriter in any offering or sale of such Registrable Securities pursuant
to the Shelf Registration Statement against any losses, claims, damages or
liabilities, joint or several, to which such holder, Electing Holder,
Market-Maker, agent or underwriter may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Exchange
Registration Statement, Market-Making Registration Statement or Shelf
Registration Statement, as the case may be, under which such Registrable
Securities were registered under the Securities Act, or any preliminary, final
or summary prospectus contained therein or furnished by the Company to any such
holder, Electing Holder, Market-Maker, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse such
holder, such Electing Holder, such Market-Maker, such agent and such underwriter
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable to any such
person in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
or preliminary, final or summary prospectus, or amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein.

                  (b)      Indemnification by the Holders, the Market-Maker and
any Agents and Underwriters. As a condition to (x) including any Registrable
Securities in any registration statement filed pursuant to Section 2(b), (y)
Section 7(a) hereof and (z) to entering into any underwriting agreement or other
agreement contemplated by Section 3(d)(xvi), each Electing Holder of such
Registrable Securities, the Market-Maker and each underwriter or sales or
placement agent named in any such underwriting or other agreement hereby agrees,
severally and not jointly, to (i) indemnify and hold harmless the Company and
(except with respect to the Market-Maker) all other holders of Registrable
Securities, against any losses, claims, damages or liabilities to which the
Company or (except with respect to the Market-Maker) such other holders of
Registrable Securities may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained

                                       18

<PAGE>

in such registration statement, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to any such Electing Holder,
Market-Maker, agent or underwriter, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Electing Holder, Market-Maker,
underwriter or agent expressly for use therein, and (ii) reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such Electing Holder shall be required to
undertake liability to any person under this Section 6(b) for any amounts in
excess of the dollar amount of the proceeds to be received by such Electing
Holder from the sale of such Electing Holder's Registrable Securities pursuant
to such registration; provided, further, that in no event shall the Market-Maker
be liable under this Section 6(b) for an amount in excess of the net proceeds
received by the Market-Maker from the sale of such Securities. For purposes of
this Section 6, any information provided by the Market-Maker shall be limited to
the Market-Maker's Information (as defined in Section 7(d)).

                  (c)      Notices of Claims, Etc. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 6, notify such
indemnifying party in writing of the commencement of such action; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under the
indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, such indemnifying party shall not be liable to such indemnified party
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. In any proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the contrary; (ii) the indemnifying party has failed within a
reasonable time to retain counsel reasonably satisfactory to the indemnified
party; (iii) the indemnified party shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to the indemnifying party; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood and agreed that the indemnifying party shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any

                                       19

<PAGE>

pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim 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 any indemnified party.

                  (d)      Contribution. If for any reason the indemnification
provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying parry and the indemnified
party in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 6(d) were determined by pro rata allocation (even if the holders, the
Electing Holders, the Market-Maker or any agents or underwriters or all of them
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 this Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no holder or Electing Holder shall be required
to contribute any amount in excess of the amount by which the dollar amount of
the proceeds received by such holder or Electing Holder from the sale of any
Registrable Securities or Securities in the case of the Market-Maker (after
deducting any fees, discounts and commissions applicable thereto) exceeds 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, and no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The holders', Electing Holders' and any underwriters'
obligations in this Section 6(d) to contribute shall be several in proportion to
the principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.

                  (e)      The obligations of the Company under this Section 6
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each officer, director and
partner of each holder, agent, Market-Maker and underwriter and each person, if
any, who controls any holder, agent, Market-Maker or underwriter within the
meaning of the Securities Act; and the obligations of the holders and any

                                       20

<PAGE>

agents or underwriters contemplated by this Section 6 shall be in addition to
any liability which the respective holder, agent, Market-Maker or underwriter
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any registration statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the meaning
of the Securities Act.

         7.       Market-Making.

                  (a)      For so long as any of the Securities or Exchange
Securities are outstanding and J. P. Morgan Securities Inc. (in such capacity,
the "Market-Maker") or any of its affiliates (as defined in the rules and
regulations of the Commission) owns any equity securities of the Company or any
of its affiliates and proposes to make a market in the Securities or Exchange
Securities as part of its business in the ordinary course, the following
provisions shall apply for the sole benefit of the Market-Maker:

                           (i)     The Company shall (A) on the date that the
         Exchange Registration Statement is filed with the Commission, file a
         registration statement (the "Market-Making Registration Statement")
         (which may be the Exchange Registration Statement or the Shelf
         Registration Statement if permitted by the rules and regulations of the
         Commission) and use its reasonable best efforts to cause such
         Market-Making Registration Statement to be declared effective by the
         Commission on or prior to the consummation of the Exchange Offer; (B)
         periodically amend such Market-Making Registration Statement so that
         the information contained therein complies with the requirements of
         Section 10(a) under the Securities Act; (C) amend the Market-Making
         Registration Statement or supplement the related prospectus when
         necessary to reflect any material changes in the information provided
         therein; and (D) amend the Market-Making Registration Statement when
         required to do so in order to comply with Section 10(a)(3) of the
         Securities Act; provided, however, that (1) prior to filing the
         Market-Making Registration Statement, any amendment thereto or any
         supplement to the related prospectus, the Company will furnish to the
         Market-Maker copies of all such documents proposed to be filed, which
         documents will be subject to the review of the Market-Maker and its
         counsel, (2) the Company will not file the Market-Making Registration
         Statement, any amendment thereto or any supplement to the related
         prospectus to which the Market-Maker and its counsel shall reasonably
         object unless the Company is advised by counsel that such Market-Making
         Registration Statement, amendment or supplement is required to be filed
         and (3) the Company will provide the Market-Maker and its counsel with
         copies of the Market-Making Registration Statement and each amendment
         and supplement filed.

                           (ii)    The Company shall notify the Market-Maker
         and, if requested by the Market-Maker, confirm such advice in writing,
         (A) when any post-effective amendment to the Market-Making Registration
         Statement or any amendment or supplement to the related prospectus has
         been filed, and, with respect to any post-effective amendment, when the
         same has become effective; (B) of any request by the Commission for any
         post-effective amendment to the Market-Making Registration Statement,
         any supplement or amendment to the related prospectus or for additional
         information; (C) the issuance by the Commission of any stop order
         suspending the effectiveness of the Market-Making Registration
         Statement or the initiation of any proceedings for that purpose; (D) of
         the receipt by the Company of any notification with respect to the
         suspension of the qualification of the Securities or Exchange
         Securities for

                                       21

<PAGE>

         sale in any jurisdiction or the initiation or threatening of any
         proceedings for such purpose; (E) of the happening of any event that
         makes any statement made in the Market-Making Registration Statement,
         the related prospectus or any amendment or supplement thereto untrue or
         that requires the making of any changes in the Market-Making
         Registration Statement, such prospectus or any amendment or supplement
         thereto, in order to make the statements therein not misleading; and
         (F) of any advice from a nationally recognized statistical rating
         organization that such organization has placed the Company under
         surveillance or review with negative implications or has determined to
         downgrade the rating of the Securities or Exchange Securities or any
         other debt obligation of the Company whether or not such downgrade
         shall have been publicly announced.

                           (iii)   If any event contemplated by Section 7(a)(ii)
         (B) through (E) occurs during the period for which the Company is
         required to maintain an effective Market-Making Registration Statement,
         the Company shall promptly prepare and file with the Commission a
         post-effective amendment to the Market-Making Registration Statement or
         a supplement to the related prospectus or file any other required
         document so that the prospectus will not include an untrue statement of
         a material fact or omit 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.

                           (iv)    In the event of the issuance of any stop
         order suspending the effectiveness of the Market-Making Registration
         Statement or of any order suspending the qualification of the
         Securities or Exchange Securities for sale in any jurisdiction, the
         Company shall use promptly its reasonable best efforts to obtain its
         withdrawal.

                           (v)     The Company shall furnish to the
         Market-Maker, without charge, (i) at least one conformed copy of the
         Market-Making Registration Statement and any post-effective amendment
         thereto; and (ii) as many copies of the related prospectus and any
         amendment or supplement thereto as the Market-Maker may reasonably
         request.

                           (vi)    The Company shall consent to the use of the
         prospectus contained in the Market-Making Registration Statement or any
         amendment or supplement thereto by the Market-Maker in connection its
         market making activities.

                           (vii)   Notwithstanding the foregoing provisions of
         this Section 7, the Company may for valid business reasons, including
         without limitation, a potential acquisition, divestiture of assets or
         other material corporate event or transaction, issue a notice that the
         Market-Making Registration Statement is no longer effective or the
         prospectus included therein is no longer usable for offers and sales of
         Securities or Exchange Securities and may issue any notice suspending
         use of the Market-Making Registration Statement required under
         applicable securities laws to be issued; provided that the use of the
         Market-Making Registration Statement shall not be suspended for more
         than 60 days in the aggregate in any consecutive 12-month period. The
         Market-Maker agrees that upon receipt of any notice from the Company
         pursuant to this Section 7(a)(vii), it will discontinue use of the
         Market-Making Registration Statement until receipt of copies of the
         supplemented or amended prospectus relating thereto or until advised in
         writing by the Company that the use of the Market-Making Registration
         Statement may be resumed.

                                       22

<PAGE>

                  (b)      In connection with the Market-Making Registration
Statement, the Company shall (i) make reasonably available for inspection by a
representative of, and counsel acting for, the Market-Maker all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries and (ii) use its reasonable best efforts to have
its officers, directors, employees, accountants and counsel supply all relevant
information reasonably requested by such representative or counsel or the
Market-Maker.

                  (c)      Prior to the effective date of the Market-Making
Registration Statement, the Company will use its reasonable best efforts to
register or qualify such Securities or Exchange Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as the Market-Maker
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities or Exchange Securities covered by the Market-Making Registration
Statement; provided that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.

                  (d)      The Company represents that the Market-Making
Registration Statement, any post-effective amendments thereto, any amendments or
supplements to the related prospectus and any documents filed by it under the
Exchange Act will, when they become effective or are filed with the Commission,
as the case may be, conform in all respects to the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission thereunder and will not, as of the effective date of such
Market-Making Registration Statement or post-effective amendments and as of the
filing date of amendments or supplements to such prospectus or filings under the
Exchange Act, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Market-Making Registration Statement or the related
prospectus in reliance upon and in conformity with written information furnished
to the Company by the Market-Maker specifically for inclusion therein, which
information the parties hereto agree will be limited to the statements
concerning the Market-Making activities of the Market-Maker to be set forth on
the cover page and in the "Underwriting" section of the prospectus (the
"Market-Maker's Information").

                  (e)      At the time of effectiveness of the Market-Making
Registration Statement (unless it is the same as the time of effectiveness of
the Exchange Registration Statement or the Shelf Registration Statement) and
concurrently with each time the Market-Making Registration Statement or the
related prospectus shall be amended or such prospectus shall be supplemented,
the Company shall (if requested in writing by the Market-Maker) furnish the
Market-Maker and its counsel with a certificate of its Chairman of the Board of
Directors or Chief Financial Officer to the effect that:

                           (i)     the Market-Making Registration Statement
         has been declared effective; (ii) in the case of an amendment or
         supplement, such amendment has become effective under the Securities
         Act as of the date and time specified in such certificate, if
         applicable; if required, such amendment or supplement to the prospectus
         was filed with the Commission pursuant to the subparagraph of Rule
         424(b) under the Securities Act specified in such certificate on the
         date specified therein; (iii) to the knowledge of such officers, no
         stop order suspending the effectiveness of the Market-Making
         Registration Statement has been issued and no proceeding for that
         purpose is pending or threatened

                                       23

<PAGE>

         by the Commission; (iv) such officers have carefully examined the
         Market-Making Registration Statement and the prospectus (and, in the
         case of an amendment or supplement, such amendment or supplement) and
         as of the date of such Market-Making Registration Statement, amendment
         or supplement, as applicable, the Market-Making Registration Statement
         and the prospectus, as amended or supplemented, if applicable, did not
         include any untrue statement of a material fact and did not omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein not misleading.

                  (f)      At the time of effectiveness of the Market-Making
Registration Statement (unless it is the same as the time of effectiveness of
the Exchange Registration Statement or the Shelf Registration Statement) and
concurrently with each time the Market-Making Registration Statement or the
related prospectus shall be amended or such prospectus shall be supplemented,
the Company shall (if requested in writing by the Market-Maker) furnish the
Market-Maker and its counsel with the written opinion of counsel for the Company
satisfactory to the Market-Maker to the effect that:

                           (i)     the Market-Making Registration Statement
         has been declared effective; (ii) in the case of an amendment or
         supplement, such amendment has become effective under the Securities
         Act as of the date and time specified in such opinion, if applicable;
         if required, such amendment or supplement to the prospectus was filed
         with the Commission pursuant to the subparagraph of Rule 424(b) under
         the Securities Act specified in such opinion on the date specified
         therein; (iii) to the knowledge of such counsel, no stop order
         suspending the effectiveness of the Market-Making Registration
         Statement has been issued and no proceeding for that purpose is pending
         or threatened by the Commission; and (iv) such counsel has reviewed the
         Market-Making Registration Statement and the prospectus (and, in the
         case of an amendment or supplement, such amendment or supplement) and
         participated with officers of the Company and independent public
         accountants for the Company in the preparation of such Market-Making
         Registration Statement and prospectus (and, in the case of an amendment
         or supplement, such amendment or supplement) and has no reason to
         believe that (except for the financial statements and other financial
         and statistical data contained therein as to which no belief is
         required) as of the date of such Market-Making Registration Statement,
         amendment or supplement, as applicable, the Market-Making Registration
         Statement and the prospectus, as amended or supplemented, if
         applicable, contained any 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.

                  (g)      At the time of effectiveness of the Market-Making
Registration Statement (unless it is the same as the time of effectiveness of
the Exchange Registration Statement or the Shelf Registration Statement) and
concurrently with each time the Market-Making Registration Statement or the
related prospectus shall be amended or such prospectus shall be supplemented to
include audited annual financial information, the Company shall (if requested in
writing by the Market-Maker) furnish the Market-Maker and its counsel with a
letter of KPMG LLC (or other independent public accountants for the Company of
nationally recognized standing) in form satisfactory to the Market-Maker,
addressed to the Market-Maker and dated the date of delivery of such letter, (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and, (ii) in all other respects, substantially in the form of
the letter delivered to the Initial Purchasers pursuant to Section 7(c) of the
Purchase Agreement, with, in the case of an

                                       24

<PAGE>

amendment or supplement to include audited financial information, such changes
as may be necessary to reflect the amended or supplemented financial
information.

                  (h)      The Company, on the one hand, and the Market-Maker,
on the other hand, hereby agree to indemnify each other, and, if applicable,
contribute to the other, in accordance with Section 6 of this Agreement.

                  (i)      The agreements contained in this Section 7 and the
representations, warranties and agreements contained in this Agreement shall
survive all offers and sales of the Securities and Exchange Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.

                  (j)      The Company will comply with the provisions of this
Section 7 at its own expense and will reimburse the Market-Maker for its
reasonable out-of-pocket expenses associated with this Section 7 (including
reasonable fees of outside counsel).

                  (k)      For purposes of this Section 7, any reference to the
terms "amend", "amendment" or "supplement" with respect to the Market-Making
Registration Statement or the prospectus contained therein shall be deemed to
refer to and include the filing under the Exchange Act of any document deemed to
be incorporated therein by reference.

         8.       Underwritten Offerings.

                  (a)      Selection of Underwriters. If any of the Registrable
Securities covered by the Shelf Registration are to be sold pursuant to an
underwritten offering, the managing underwriter or underwriters thereof shall be
designated by Electing Holders holding at least a majority in aggregate
principal amount of the Registrable Securities to be included in such offering,
provided that such designated managing underwriter or underwriters is or are
reasonably acceptable to the Company.

                  (b)      Participation by Holders. Each holder of Registrable
Securities hereby agrees with each other such holder that no such holder may
participate in any underwritten offering hereunder unless such holder (i) agrees
to sell such holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

         9.       Rule 144. The Company covenants to the holders of Registrable
Securities and the Market-Maker that to the extent it shall be required to do
so under the Exchange Act, the Company shall timely file the reports required
to be filed by it under the Exchange Act or the Securities Act (including the
reports under Section 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities
Act) and the rules and regulations adopted by the Commission thereunder, and
shall take such further action as any holder of Registrable Securities or the
Market-Maker may reasonably request, all to the extent required from time to
time to enable such holder or Market-Maker to sell Registrable Securities or
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities or the Market-

                                       25

<PAGE>

Maker in connection with that holder's sale pursuant to Rule 144, the Company
shall deliver to such holder or Market-Maker a written statement as to whether
it has complied with such requirements. Notwithstanding the foregoing, nothing
in this Section 9 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.

         10.      Miscellaneous.

                  (a)      No Inconsistent Agreements. The Company represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this Exchange
and Registration Rights Agreement.

                  (b)      Specific Performance. The parties hereto acknowledge
that there would be no adequate remedy at law if the Company fails to perform
any of its obligations hereunder and that the Purchasers and the holders from
time to time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Purchasers and such holders, in addition
to any other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of the Company under
this Exchange and Registration Rights Agreement in accordance with the terms and
conditions of this Exchange and Registration Rights Agreement, in any federal or
state court located in the Borough of Manhattan, the State of New York or the
State of Texas.

                  (c)      Notices. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, if delivered personally
or by courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: If to the
Company, to it at 200 West Highway 6, Suite 620, Waco, Tx 76712, Attention:
Chief Financial Officer (with copy to O'Melveny & Myers LLP, 30 Rockefeller
Plaza, New York, NY 10112, Attention: James M. Lurie, Esq.), if to the
Market-Maker, to it at 270 Park Avenue, New York, NY 10017, Attention: Pierre
Maman, and if to a holder, to the address of such holder set forth in the
security register or other records of the Company, or to such other address as
the Company or any such holder may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

                  (d)      Parties in Interest. All the terms and provisions of
this Exchange and Registration Rights Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the parties hereto and the
holders from time to time of the Registrable Securities and the respective
successors and assigns of the parties hereto and such holders. In the event that
any transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Exchange and
Registration Rights Agreement, and by taking and holding such Registrable
Securities such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by all of the applicable terms
and provisions of this Exchange and Registration Rights Agreement. If the
Company shall so request, any such successor, assign or transferee shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
applicable terms hereof.

                  (e)      Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Exchange
and Registration Rights

                                       26

<PAGE>

Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made by
or on behalf of any holder of Registrable Securities, any director, officer or
partner of such holder, any agent or underwriter or any director, officer or
partner thereof, the Company or any officer or director of the Company or any
controlling person of any of the foregoing, and shall survive delivery of and
payment for the Registrable Securities pursuant to the Purchase Agreement and
the transfer and registration of Registrable Securities by such holder and the
consummation of an Exchange Offer.

                  (F)      GOVERNING LAW. THIS EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

                  (g)      Headings. The descriptive headings of the several
Sections and paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning or
interpretation of this Exchange and Registration Rights Agreement.

                  (h)      Entire Agreement; Amendments. This Exchange and
Registration Rights Agreement and the other writings referred to herein
(including the Indenture and the form of Securities) or delivered pursuant
hereto which form a part hereof contain the entire understanding of the parties
with respect to its subject matter. This Exchange and Registration Rights
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Exchange and Registration Rights
Agreement may be amended and the observance of any term of this Exchange and
Registration Rights Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the holders of at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding (and,
with respect to the provisions of Section 7, by the Market-Maker). Each holder
of any Registrable Securities at the time or thereafter outstanding and the
Market-Maker shall be bound by any amendment or waiver effected pursuant to this
Section 10(h), whether or not any notice, writing or marking indicating such
amendment or waiver appears on such Registrable Securities or is delivered to
such holder.

                  (i)      Inspection. For so long as this Exchange and
Registration Rights Agreement shall be in effect, this Exchange and Registration
Rights Agreement and a complete list of the names and addresses of all the
holders of Registrable Securities shall be made available for inspection and
copying on any business day by any holder of Registrable Securities for proper
purposes only (which shall include any purpose related to the rights of the
holders of Registrable Securities under the Securities, the Indenture and this
Agreement) at the offices of the Company at the address thereof set forth in
Section 10(c) above and at the office of the Trustee under the Indenture.

                  (j)      Counterparts. This agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.

                                       27

<PAGE>

         If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel six signed copies of this Exchange and Registration Rights
Agreement, and upon the acceptance hereof by you, on behalf of each of the
Purchasers, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Purchasers and the Company. It is understood that
your acceptance of this letter on behalf of each of the Purchasers is pursuant
to the authority set forth in a form of Agreement among Purchasers, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.

                              Very truly yours,

                              National Waterworks, Inc.

                              By: /s/ Harry K. Hornish
                                  -------------------------------------------
                                  Name: Harry K. Hornish
                                  Title: President and Chief Executive Officer

Accepted as of the date hereof:

Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
UBS Warburg LLC

By: /s/ Goldman, Sachs & Co.
    --------------------------------
     (Goldman, Sachs & Co.)

                                       28

<PAGE>

                                                                       EXHIBIT A

                           NATIONAL WATERWORKS, INC.

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                         DEADLINE FOR RESPONSE. [DATE]*

The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the NATIONAL WATERWORKS, INC. (the
"Company") 10.50% Senior Subordinated Notes due 2012 (the "Securities") are
held.

The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof. In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]*. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact NATIONAL
WATERWORKS, INC., 200 West Highway 6, Suite 620, Waco, Tx 76712 (254) 772-5335.

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

*        Not less than 25 calendar days from date of mailing.

<PAGE>

                            NATIONAL WATERWORKS, INC.

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire

                                     (Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between NATIONAL WATERWORKS, INC.
(the "Company") and the Purchasers named therein. Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form [__] (the "Shelf Registration Statement") for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities
Act"), of the Company's 10.50% Senior Subordinated Notes due 2012 (the
"Securities"). A copy of the Exchange and Registration Rights Agreement has been
filed as an Exhibit to the Shelf Registration Statement. All capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the
Exchange and Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement. In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Company's counsel at the address set
forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners
of Registrable Securities who do not complete, execute and return this Notice
and Questionnaire by such date (i) will not be named as selling securityholders
in the Shelf Registration Statement and (ii) may not use the Prospectus forming
a part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

The term "Registrable Securities" is defined in the Exchange and Registration
Rights Agreement.

                                       2

<PAGE>

                                    ELECTION

The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original parry thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Exchange and Registration Rights Agreement.

The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:

                                       3

<PAGE>

                                  QUESTIONNAIRE

(1)      (a)    Full Legal Name of Selling Securityholder:

         (a)   Full Legal Name of Registered Holder (if not the same as in (a)
               above) of Registrable Securities Listed in Item (3) below:

         (b)   Full Legal Name of DTC Participant (if applicable and if not the
               same as (b) above) Through Which Registrable Securities Listed in
               Item (3) below are Held:

(2)      Address for Notices to Selling Securityholder:
         _________________
         _________________
         _________________
         Telephone:       _________________
         Fax:             _________________
         Contact Person:  _________________

(3)      Beneficial Ownership of Securities:

         Except as set forth below in this Item (3), the undersigned does not
         beneficially own any Securities.

         (a)   Principal amount of Registrable Securities beneficially
               owned: __________________
               CUSIP No(s). of such Registrable Securities:  __________________

         (b)   Principal amount of Securities other than Registrable Securities
               beneficially owned: _____________________________________________
               _________________________________________________________________
               CUSIP No(s). of such other Securities: __________________________

         (c)   Principal amount of Registrable Securities which the undersigned
               wishes to be included in the Shelf Registration Statement: ______
               _________________________________________________________________
               CUSIP No(s). of such Registrable Securities to be included in the
               Shelf Registration Statement: ___________________________________

(4)      Beneficial Ownership of Other Securities of the Company:

         Except as set forth below in this Item (4), the undersigned Selling
         Securityholder is not the beneficial or registered owner of any other
         securities of the Company, other than the Securities listed above in
         Item (3).

         State any exceptions here:

(5)      Relationships with the Company:

         Except as set forth below, neither the Selling Securityholder nor any
         of its affiliates, officers, directors or principal equity holders (5%
         or more) has held any position or office or has had any other material
         relationship with the Company (or its predecessors or affiliates)
         during the past three years.

         State any exceptions here:

<PAGE>

(6)      Plan of Distribution:

         Except as set forth below, the undersigned Selling Securityholder
         intends to distribute the Registrable Securities listed above in Item
         (3) only as follows (if at all): Such Registrable Securities may be
         sold from time to time directly by the undersigned Selling
         Securityholder or, alternatively, through underwriters, broker-dealers
         or agents. Such Registrable Securities may be sold in one or more
         transactions at fixed prices, at prevailing market prices at the time
         of sale, at varying prices determined at the time of sale, or at
         negotiated prices. Such sales may be effected in transactions (which
         may involve crosses or block transactions) (i) on any national
         securities exchange or quotation service on which the Registered
         Securities may be listed or quoted at the time of sale, (ii) in the
         over-the-counter market, (iii) in transactions otherwise than on such
         exchanges or services or in the over-the-counter market, or (iv)
         through the writing of options. In connection with sales of the
         Registrable Securities or otherwise, the Selling Securityholder may
         enter into hedging transactions with broker-dealers, which may in turn
         engage in short sales of the Registrable Securities in the course of
         hedging the positions they assume. The Selling Securityholder may also
         sell Registrable Securities short and deliver Registrable Securities to
         close out such short positions, or loan or pledge Registrable
         Securities to broker-dealers that in turn may sell such securities.

         State any exceptions here:

By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.

In the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in connection with the preparation of the
Shelf Registration Statement and related Prospectus.

In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:

                                       2

<PAGE>

         (i)      To the Company:

                                        National Waterworks, Inc.
                                        200 West Highway 6, Suite 620
                                        Waco, Tx 76712
                                        Attention: Chief Financial Officer

         (ii)     With a copy to:

                                        O'Melveny & Myers LLP
                                        30 Rockefeller Plaza
                                        New York, NY 10112
                                        Attention: James M. Lurie, Esq.

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of New
York.

                                       3

<PAGE>

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:_______________________

      __________________________________________________________________________
      Selling Securityholder
      (Print/type full legal name of beneficial owner of Registrable Securities)

      By:_______________________________________________________________________
      Name:
      Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

                                        O'Melveny & Myers LLP
                                        30 Rockefeller Plaza
                                        New York, NY 10112
                                        Attention: James M. Lurie, Esq.

                                       4

<PAGE>
                                                                       EXHIBIT B

             NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Wells Fargo Bank Minnesota, National Association
National Waterworks, Inc.
c/o Wells Fargo Bank Minnesota, National Association
213 Court St., Suite 703
Middletown, CT 06457

Attention: Trust Officer

     Re:  National Waterworks, Inc. (the "Company")
          10.50% Senior Subordinated Notes due 2012

Dear Sirs:

Please be advised that _________________________________________________ has
transferred $___________ aggregate principal amount of the above-referenced
Notes pursuant to an effective Registration Statement on Form [_____] (File No.
333-_____) filed by the Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a "Selling Holder" in the
Prospectus dated _____________ __, 2002 or in supplements thereto, and that the
aggregate principal amount of the Notes transferred are the Notes listed in
such Prospectus opposite such owner's name.

Dated:

                                        Very truly yours,

                                        ________________________________________
                                        (Name)

                                        By:_____________________________________
                                            (Authorized Signature)

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