Document:

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                                                                   EXHIBIT 10.39

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT (the "Agreement") is made as of the ___ day of
_________, 2001 (the "Agreement Date"), by and between Hayes Lemmerz
International, Inc. (the "Company") and ___________________ (the "Executive").

                  WHEREAS, the Company desires to provide for the employment of
the Executive on the terms and conditions set forth herein, in the best interest
of the Company and its constituencies; and

                  WHEREAS, the Executive desires to be employed by the Company
as provided herein; and

                  NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements of the parties herein contained, the parties
agree as follows:

                  1.       Employment. The Company agrees to employ the
Executive and the Executive agrees to be employed on a full-time basis by the
Company for the period and upon the terms and conditions hereinafter set forth.

                  2.       Term; Employment Period. The term of this Agreement
(the "Term") shall be two years, commencing on _____________, 2001 (the
"Effective Date"); provided, however, that commencing on the second day of the
Term and each day thereafter, the Term shall automatically be extended for one
additional day. The period during which the Executive is employed by the Company
pursuant to this Agreement is referred to herein as the "Employment Period." The
date on which the termination of the Executive's employment hereunder shall
become effective is referred to herein as the "Termination Date." Press releases
related to the Executive's commencement of employment hereunder shall be subject
to reasonable review and approval by the Executive.

                  3.       Position and Duties. During the Employment Period,
the Executive shall serve as __________________________ of the Company and shall
have such responsibilities, duties and authority as are customarily and
ordinarily exercised by executives in similar positions in similar businesses in
the United States and shall exercise such responsibilities, duties and authority
consistent with the foregoing as the Company's Chief Executive Officer or the
Company's Board of Directors (the "Board") shall determine from time to time.
During the Employment Period, the Executive shall report to the Company's Chief
Executive Officer. The Executive shall devote substantially all his working time
and efforts to the business and affairs of the Company and shall use his best
efforts to carry out his responsibilities faithfully and efficiently in a
professional manner. Notwithstanding the foregoing, it is understood that during
the Employment Period, subject to any conflict of interest policies of the
Company and Section 8, the Executive may (x) serve in any capacity with any
civic, charitable, educational or professional organization provided that such
service does not materially interfere with his duties and

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responsibilities hereunder and (y) make and manage personal investments of his
choice, and with the prior consent of the Company's Chief Executive Officer,
which shall not be unreasonably withheld, serve on the board of directors of one
(1) for-profit business enterprise.

                  4.       Place of Performance. During the Employment Period,
the Executive's place of performance of his services shall be at the Company's
____________________ (location), except for required travel by the Executive on
the Company's business or as may be reasonably required by the Company.

                  5.       Compensation and Benefits.

                           (a)      Salary. During the Employment Period, the
Company shall pay to the Executive an initial annual base salary of
_______________________ Thousand Dollars ($________) (as the same may be
increased from time to time, the "Base Salary"), such salary to be paid in
periodic installments in accordance with the Company's payroll practices as in
effect from time to time. The Base Salary shall be reviewed annually by the
compensation committee of the Board and may be increased from time to time in
accordance with normal business practices of the Company and, if so increased,
shall not thereafter be reduced.

                           (b)      Cash-Based Incentives. During the Employment
Period, the Executive shall be eligible to earn an annual bonus under the
Company's Short-Term Incentive Plan, or a successor plan thereto, as in effect
from time to time (the "Incentive Plan"), subject to achievement of performance
goals determined in accordance with the terms of the Incentive Plan (such annual
bonus, the "Annual Bonus"). Such performance goals shall include (i) a threshold
level below which no Annual Bonus shall be paid, (ii) a normative level that is
tied to the budget, which if obtained, would result in an Annual Bonus of sixty
percent (60%) of the Base Salary and (iii) an upside level, which if obtained,
would increase the Annual Bonus to a maximum of one hundred twenty percent
(120%) of the Base Salary. Any Annual Bonus payable to the Executive for the
Company's fiscal year ending January 31, 2002 will be on a pro rata basis based
upon the number of months the Executive worked for the Company during such
fiscal year. The Annual Bonus shall be payable in a cash lump sum at such time
as bonuses are ordinarily paid in accordance with the terms of the Incentive
Plan, but in no event later than 120 days after the end of each fiscal year of
the Company. Except as otherwise specifically provided in this Agreement, the
Executive shall only be eligible to receive the Annual Bonus if the Executive is
employed by the Company through the last day of February in the year in which
the Annual Bonus is to be paid.

                           (c)      Sign-On/Retention Bonus. Within one (1) day
after the Agreement Date, the Company shall pay the Executive a one-time
sign-on/retention bonus of _________________ thousand dollars ($________) (the
"Sign-on/Retention Bonus"), which will result in an after-tax payment to the
Executive of $________ (the "After-Tax Retention Bonus Payment Amount"). The
Sign-on/Retention Bonus is being paid on the condition that the Executive
remains in the employ of the Company for a period of not less than three (3)
years and, accordingly, the after-tax portion of the Sign-on/Retention Bonus
shall be subject to the set-off and repayment provisions set forth in Section
6(f).

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                           (d)      Equity-Based Incentives.

                                    (i)     Initial Option Grant.  The Company
         shall, effective as of the Effective Date, grant to the Executive an
         option (the "Initial Option") pursuant to the Company's 1996 Stock
         Option Plan or otherwise (the "Option Plan") to purchase up to
         _____________________ thousand (________) shares of the Company's
         common stock, par value $0.01 per share ("Common Stock"). The Initial
         Option shall consist of the maximum number of incentive stock options
         as permitted by the Internal Revenue Code of 1986, as amended. The
         Initial Option shall be evidenced by an agreement containing such terms
         and conditions as the Board shall determine are necessary and
         desirable, consistent with the terms of the Option Plan; provided,
         however, that the Initial Option shall:

                                    (1)      have a per share exercise price
                  equal to the closing price of the Common Stock on the New York
                  Stock Exchange ("NYSE") as of the Effective Date;

                                    (2)      become cumulatively vested and
                  exercisable with respect to twenty percent (20%) of the shares
                  covered thereby on each of the first five anniversaries of the
                  Effective Date;

                                    (3)      become fully vested and exercisable
                  with respect to one-hundred percent (100%) of the shares
                  covered thereby upon the occurrence of a Change in Control (as
                  defined below);

                                    (4)      upon a termination of employment
                  hereunder either by (w) death, pursuant to Section 6(b), (x)
                  Disability, pursuant to Section 6(c), (y) the Company without
                  Cause, pursuant to Section 6(e) or (z) the Executive for Good
                  Reason, pursuant to Section 6(e), become vested with respect
                  to:

                           -        sixty percent (60%) of the shares covered
                                    thereby if such termination occurs during
                                    the one year period commencing on the first
                                    anniversary of the Effective Date,

                           -        eighty percent (80%) of the shares covered
                                    thereby if such termination occurs during
                                    the one year period commencing on the second
                                    anniversary of the Effective Date and

                           -        one hundred percent (100%) of the shares
                                    covered thereby if such termination occurs
                                    any time on or after the third anniversary
                                    of the Effective Date; and

                                    (5)      notwithstanding the vesting and
                  exercise period stated in such Initial Option or the Option
                  Plan, the Executive shall have not less

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                  than a period expiring seven months following the Termination
                  Date to exercise such Initial Option.

         For purposes of this Agreement, a Change in Control shall be deemed to
have occurred upon the first of the following to occur:

                                            (1)      any Person (within the
                  meaning of Section 3(a)(9) of the Securities and Exchange Act
                  of 1934, as amended (the "Exchange Act"), as modified and used
                  in Sections 13(d) and 14(d) thereof), other than Joseph
                  Littlejohn & Levy Fund II, L.P. (or any affiliate (within the
                  meaning of Regulation D Rule 501(b) under the Securities Act
                  of 1933, as amended (the "Securities Act")) thereof), TSG
                  Capital Fund II, L.P. (or any affiliate thereof), or Canadian
                  Imperial Bank of Commerce (or affiliate thereof) (such
                  entitles, collectively, the "JLL Group"), is or becomes the
                  "Beneficial Owner" (within the meaning of Rule 13d-3 under the
                  Exchange Act) of fifty percent (50%) or more of either (1) the
                  then-outstanding Common Stock or (2) the combined voting power
                  of the then-outstanding voting securities of the Company
                  entitled to vote generally in the election of directors;

                                            (2)      the following individuals
                  cease for any reason to constitute a majority of the number of
                  directors then serving: individuals who, as of the Effective
                  Date, constitute the Board and any new director (other than a
                  director whose initial assumption of office is in connection
                  with an actual or threatened election contest, including but
                  not limited to a consent solicitation, relating to the
                  election of directors of the Company) whose appointment or
                  election by the Board or nomination for election by the
                  Company's stockholders was approved or recommended by a vote
                  of at least a majority of the directors then still in office
                  who either were directors on the date hereof or whose
                  appointment, election or nomination for election was
                  previously so approved or recommended;

                                            (3)      there is consummated a
                  merger or consolidation of the Company or any direct or
                  indirect subsidiary of the Company with any other corporation,
                  other than a merger or consolidation which would result in the
                  voting securities of the Company outstanding immediately prior
                  to such merger or consolidation continuing to represent
                  (either by remaining outstanding or by being converted into
                  voting securities of the surviving entity or any parent
                  thereof) at least fifty percent (50%) of the combined voting
                  power of the securities of the Company or such surviving
                  entity or any parent thereof outstanding immediately after
                  such merger or consolidation, provided, however, that it shall
                  not be a Change in Control under this clause (C) if (i)
                  directors appointed or nominated by the JLL Group or any
                  constituent member thereof continue immediately following such
                  transaction to constitute a majority of the Board and (ii) the
                  JLL Group or any constituent member thereof continues
                  immediately following such transaction to own securities
                  representing at least thirty-five percent (35%) of the
                  combined

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                  voting power of the securities of the Company or such
                  surviving entity or any parent thereof outstanding immediately
                  after such merger or consolidation; or

                                            (4)      the stockholders of the
                  Company approve a plan of complete liquidation or dissolution
                  of the Company or there is consummated an agreement for the
                  sale or disposition by the Company of all or substantially all
                  of its assets.

                                    (ii)    Additional Option Grants. Based upon
         the Executive's performance and annual review, the Executive shall be
         eligible during the Employment Period to receive additional stock
         option grants in such amounts and subject to such terms and conditions
         as the compensation committee of the Board shall determine in its sole
         discretion are necessary and desirable.

                                    (iii)   Antidilution. In addition to the
         antidilution provision contained in the Option Plan, in the event that
         during the employment period the Company shall issue shares of Common
         Stock in one transaction or a series of similar transaction in an
         amount exceeding five percent (5%) of the then outstanding shares of
         Common Stock, other than (i) as a result of stock split, stock dividend
         or similar transaction, (ii) upon the conversion of shares of
         Non-Voting Common Stock, par value $.01 per share, of the Company that
         are outstanding as of the Agreement Date, (iii) upon the exercise of
         warrants to purchase shares of Common Stock that are outstanding as of
         the Agreement Date or (iv) upon the exercise of employee stock options
         (each, an "Additional Issuance"), the Company shall grant to the
         Executive an option (the "Antidilution Option") pursuant to the Option
         Plan to purchase the number of shares of Common Stock necessary to
         cause the percentage of the outstanding shares of Common Stock subject
         to the Initial Option and the Antidilution Option to be equal to the
         percentage of the outstanding shares of Common Stock subject to the
         Initial Option immediately prior to such additional issuance of shares
         of Common Stock. The Antidilution Option shall be granted
         contemporaneously with the Additional Issuance, and the per share
         exercise price of the Additional Option shall be equal to the per share
         consideration received by the Company in such Additional Issuance, as
         determined by the Board.

                           (e)      Expenses. During the Employment Period, the
Company shall promptly reimburse the Executive for all reasonable out-of-pocket
expenses incurred by the Executive in connection with the business of the
Company and the performance of his duties under this Agreement in accordance
with the terms of the Company's policies as in effect from time to time.

                           (f)      Benefit Plans. During the Employment Period,
the Executive shall be entitled to participate in all of the employee benefit
plans, programs, agreements and arrangements provided to senior executives of
the Company, as such are in effect from time to time, on a basis no less
favorable than that provided to such senior executives; provided, however, that
health care insurance coverage shall commence the first day of the month

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following thirty (30) days after the Effective Date and the Company shall
reimburse the Executive for all COBRA premiums paid by the Executive or medical
costs actually incurred by the Executive or the Executive's dependents during
the period commencing on the Effective Date and ending on the date health care
coverage is made available to the Executive. In addition, for any welfare
benefit provided by the Company such as short term disability benefits which
depends upon the Executive's years of service in order to provide the maximum
level of benefits coverage, the Executive shall be deemed to have the requisite
years of service in order to receive the maximum level of benefits coverage.

                           (g)      Perquisites.  During the Employment Period,
the Executive shall be entitled to a Company car, membership in a country club
selected by the Executive at the level determined by the Company's policy
(including payment of an initiation fee as well as required dues and
assessments), financial, tax and estate planning (up to a maximum of $5,000 per
year), tax preparation, and an annual executive physical examination, each such
perquisite to be paid or provided commensurate with his position and in
accordance with the Company's policies as in effect on the Agreement Date. In
addition, the Company shall pay the reasonable legal fees and expenses incurred
by the Executive attendant to the review and preparation of this Agreement.

                           (h)      Vacations. During the Employment Period, the
Executive shall be entitled to vacation time, paid holidays and personal days,
determined in accordance with the Company's policy with respect to its senior
executives as in effect from time to time, it being understood that the
Executive shall be entitled to two (2) weeks vacation in 2001 and not less than
four weeks' vacation in any 12-month period during the Employment Period
thereafter.

                           (i)      Relocation. The Executive shall be entitled
to the relocation benefits described on Attachment A hereto (and any subsequent
enhancements thereto).

                  6.       Termination of Employment.

                           (a)      Accrued Benefits. In the event of the
termination of the Executive's employment hereunder for any reason, the
Executive (or his estate or representative, as applicable) shall be entitled to
receive any Base Salary, Annual Bonus, vacation time and expenses that have in
each case accrued but are unpaid as of the Termination Date, vested options as
well as any post-termination benefits to which he may be entitled pursuant to
the Company's retirement, insurance and other benefit plans, programs and
arrangements as in effect immediately prior to the Termination Date (the
"Accrued Benefits").

                           (b)      Death. The Executive's employment hereunder
shall terminate as of the date of his death. Upon the termination of the
Executive's employment hereunder because of his death, the Executive's estate or
representative, as the case may be, shall be entitled to receive the Accrued
Benefits and a lump sum payment in cash equal to (i) one year's Base Salary as
in effect on the Termination Date and (ii) the product of (x) sixty percent
(60%) of the Base Salary as in effect on the Termination Date, multiplied by a
fraction (y) the numerator of which shall be the number of months (including
fractions thereof) worked by the Executive during the Company's fiscal year in
which the Termination Date occurs and (z) the denominator of which

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shall be the number 12 (such amount under this clause (ii), the "Pro Rata Annual
Bonus"). In addition, those immediate family members who were participating in
the Company's medical benefit plan as of the date of the Executive's death shall
continue to participate in the Company's medical benefit plan at active employee
contribution rates for the one-year period immediately following the date of the
Executive's death.

                           (c)      Disability. The Executive's employment
hereunder may be terminated during the Employment Period if the Executive is
incapable of performing his principal duties hereunder because of physical or
mental incapacity for a period of 45 consecutive working days or for more than
90 working days in any 12-month period ("Disability"). In the event that the
Executive's employment is to be terminated pursuant to this Section 6(c), (i)
this Agreement shall terminate on the date specified in the notice of
termination delivered to the Executive (subject to Section 8(g) and Section 18),
(ii) the Executive shall as of such date resign from all of his positions,
duties and authorities hereunder but shall continue to be paid his Base Salary
and (iii) the Executive shall be placed on a medical leave of absence until the
earlier to occur of such date as he (A) qualifies for benefits under the
Company's long-term disability plan or (B) is able to return to work, following
which date his employment with the Company shall promptly be terminated. In the
case of a termination of the Executive's employment pursuant to this Section
6(c), for purposes of calculating benefits pursuant to clauses (B) and (C) of
this Section 6(c), the Termination Date shall be the date upon which portions of
this Agreement are terminated pursuant to the immediately preceding sentence and
for all other purposes, the Termination Date shall be the date upon which the
Executive's employment with the Company is terminated. In such event, the
Executive (or his representative, as applicable) shall be entitled to: (A) the
Accrued Benefits; (B) a lump sum payment in cash equal to one year's Base Salary
as in effect on the Termination Date; (C) the Pro Rata Annual Bonus; and (D) the
continuation of health and welfare benefits at the levels in effect as of the
Termination Date at no additional cost to the Executive than that which was in
effect as of the Termination Date for the one-year period immediately following
the Termination Date; provided, however, that such benefits shall be reduced to
the extent comparable benefits are made available to the Executive from a
successor employer, and the Executive shall be obligated to report such benefits
to the Company. It is acknowledged and agreed by the Executive that he shall be
precluded from terminating his employment hereunder for Good Reason in the event
that his employment hereunder is terminated pursuant to this Section 6(c).

                           (d)      For Cause; Without Good Reason. The
Executive's employment hereunder may be terminated during the Employment Period
(i) by the Company for Cause (as defined below) or (ii) by the Executive without
Good Reason (as defined below). In the event that the Company terminates the
Executive's employment hereunder for Cause, the Termination Date shall be the
date specified in the notice of termination for Cause delivered by the Company
to the Executive. In the event that the Executive terminates his employment
hereunder without Good Reason, the Termination Date shall be no earlier than 30
days following the date on which a notice of termination is delivered by the
Executive to the Company. In the event that the Executive's employment hereunder
is terminated pursuant to this Section 6(d), the Executive shall be entitled to
the Accrued Benefits.

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                         (e)     Without Cause; For Good Reason. The Executive's
employment hereunder may be terminated during the Employment Period (i) by the
Company without Cause or (ii) by the Executive for Good Reason. In the event
that the Executive's employment is terminated pursuant to this Section 6(e)
(whether by the Company or by the Executive), the Termination Date shall be no
earlier than 30 days following the date on which a notice of termination is
delivered by one party to the other. In the event that the Executive's
employment is terminated pursuant to this Section 6(e), the Executive (or his
estate or representative, as the case may be) shall be entitled to receive (A)
the Accrued Benefits; (B) a lump sum payment in cash equal to one year's Base
Salary as in effect on the Termination Date; (C) the Pro Rata Annual Bonus; (D)
the continuation of health and welfare benefits at the levels in effect as of
the Termination Date at no additional cost to the Executive than that which was
in effect as of the Termination Date for a period of one year; provided, that
such benefits shall be reduced to the extent comparable benefits are made
available to the Executive from a successor employer, and the Executive shall be
obligated to report such benefits to the Company; (E) executive level career
outplacement services by a mutually agreeable outplacement firm and paid for as
incurred by the Company; and (D) the title to the Executive's Company vehicle.

                         (f)     Set-Off and Reimbursement of Sign-On/Retention
Bonus. Notwithstanding anything to the contrary contained herein, if the
Executive does not commence employment with the Company on or before the
Effective Date, (i) the full amount of the Sign-On/Retention Bonus shall be
repaid by the Executive to the Company no later than three days after the
Effective Date, and (ii) the Executive shall pay the Company's expenses
(including reasonable attorney's fees and expenses) incurred in recovering the
Sign-On/Retention Bonus from the Executive. In addition, notwithstanding
anything to the Contrary contained herein, in the event that, during the initial
three-year period of the Term, without taking into account any extensions
thereof, the Executive's employment hereunder is terminated by (i) by the
Company For Cause pursuant to Section 6(d) or by the Executive without Good
Reason pursuant to Section 6(d), then and only then, the Company shall have the
right to set-off the Repayment Amount (as defined below) against any payments
due to the Executive hereunder and the Executive shall immediately repay to the
Company the balance, if any, of the Repayment Amount that is not set-off by the
Company pursuant to this Section 6(f). For purposes of this Agreement, the
"Repayment Amount" shall equal the product of (i) the After-Tax Retention
Payment Amount multiplied by (ii) a fraction (A) the numerator of which is the
difference between 1,095 less the number of days the Executive has been employed
by the Company and (B) the denominator of which is 1,095 (Repayment Amount =
$__________ x (1,095 - numbers of day employed) / 1,095).

                           (g)      Definition of "Cause" and "Good Reason".

                           For purposes of this Agreement, "Cause" means: (i)
the willful failure of the Executive to perform his material duties with the
Company which have been duly assigned to the Executive and which duties are
commensurate with those of the position for which Executive is then employed,
and which failure is not cured (if capable of cure) within 15 days after receipt
of written notice of such failure, which notice identifies the manner in which
the Executive has

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willfully failed to perform, (ii) the engaging by the Executive in willful
conduct which is demonstrably injurious to the Company, monetarily or otherwise,
(iii) the conviction of the Executive of any crime or offense constituting a
felony, or (iv) a failure by the Executive to comply with any material provision
of this Agreement, which failure is not cured (if capable of cure) within 15
days after receipt of written notice of such non-compliance by the Executive.
Termination of the Executive for Cause shall mean termination by action of at
least a majority of the Company's Board of Directors, at a meeting duly called
and held upon at least 15 days' written notice to the Executive specifying the
particulars of the action or inaction alleged to constitute Cause and at which
meeting the Executive and his counsel were entitled to be present and given
adequate opportunity to be heard. For purposes of clauses (i) and (ii) of this
definition, action or inaction by the Executive shall not be considered
"willful" unless done or omitted by him (A) intentionally or not in good faith
and (B) without reasonable belief that his action or inaction was in the best
interest of the Company, and shall not include failure to act by reason of total
or partial incapacity due to physical or mental illness.

                           For purposes of this Agreement, "Good Reason" means:
(i) a material adverse alteration in the nature or status of the Executive's
position, duties, responsibilities or authority from those in effect as of the
Effective Date; (ii) a material reduction in the Executive's Base Salary or
level of employee benefits (other than across-the-board reductions applied
similarly to all of the Company's senior executives occurring after the second
anniversary of the Effective Date); (iii) failure to pay or provide any of the
compensation set forth in this Agreement (except for an across-the-board
deferral of compensation applied similarly to all of the Company's senior
executives occurring after the second anniversary of the Effective Date) which
is not cured within 15 days after receipt by the Company of written notice
thereof; (iv) the relocation of the Executive's principal place of employment
more than 30 miles from its location as of the Effective Date except for
required travel on the Company's business; (v) assignment of duties or
responsibilities to the Executive which are materially inconsistent with the
provisions of this Agreement; or (vi) a failure by the Company to comply with
any material provision of this Agreement, which failure is not cured (if capable
of cure) within 15 days after receipt of written notice of such non-compliance
by the Company.

                           (h)      Change in Control Severance Provisions. The
provisions set forth in Attachment B hereto are hereby incorporated into this
Agreement. The Executive hereby acknowledges that in the event he becomes
entitled to the payment set forth in Section 6.1(A) of Attachment B hereto, that
such payment will be in lieu of any other payments to be made pursuant to the
terms of this Agreement.

                           (i)      Release Agreement. Notwithstanding anything
to the contrary contained in this Section 6, the Executive shall be required to
execute the Company's then current standard release agreement as a condition to
receiving any of the payments and benefits provided for in this Section 6 or
Attachment B. It is acknowledged and agreed that the then current standard
release agreement shall be a mutual release and shall not diminish or terminate
Executive's rights under this Agreement including, but not limited to, those
delineated in Sections 6(j), 7 and 16 herein.

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                           (j)      No Mitigation. Upon termination of the
Executive's employment with the Company, subject to the Executive's affirmative
obligations pursuant to Section 6(c) and 6(e), the Executive shall be under no
obligation to seek other employment or otherwise mitigate the obligations of the
Company under this Agreement.

                  7.       Directors' and Officers' Insurance; Indemnification.
In addition to any rights to indemnification to which the Executive is entitled
under the Company's Restated Certificate of Incorporation and Bylaws, the
Company shall indemnify the Executive at all times during and after the
Employment Period to the maximum extent permitted under the Delaware Business
Corporation Act or any successor provision thereof, and any and all applicable
state law, and shall pay the Executive's expenses (including reasonable
attorneys' fees and expenses, which shall be paid in advance by the Company as
incurred, subject to recoupment in accordance with applicable law) in defending
any civil action, suit or proceeding in advance of the final disposition of such
action, suit or proceeding to the maximum extent permitted under such applicable
state laws for the Executive's action or inaction on behalf of the Company under
the terms of this Agreement including but not limited to any acts or alleged
acts arising out of events prior to the Executive's employment by the Company
which obligation shall survive the termination of the Executive's employment or
the termination of the other provisions of this Agreement.

                  8.       Confidential Information; Removal of Documents;
Non-Competition; etc. For purposes of this Section 8, "Company" shall mean the
Company, its subsidiaries and affiliates.

                 (a)                Confidentiality. Except as otherwise
provided in this Agreement, at all times during and after the Employment Term,
the Executive shall keep secret and retain in strictest confidence, any and all
Confidential Information (as defined below) relating to the Company, and shall
use such Confidential Information only in furtherance of the performance by the
Executive of the Executive's duties to the Company and not for personal benefit
or the benefit of any interest adverse to the Company's interests. For purposes
of this Agreement, "Confidential Information" shall mean any information
including without limitation plans, specifications, models, samples, data,
customer lists and customer information, computer programs and documentation,
and other technical and/or business information, in whatever form, tangible or
intangible, that can be communicated by whatever means available at such time,
that relates to the Company's current Business or future business contemplated
during the Employment Period, products, services and development, or information
received from others that the Company is obligated to treat as confidential or
proprietary; provided, however, that such Confidential Information shall not
include any information that (i) has become generally available to the public
other than as a result of a disclosure by the Executive, or (ii) was available
to or became known to the Executive prior to the disclosure of such information
on a non-confidential basis without breach of any duty of confidentiality from
any party to the Company, and the Executive shall not disclose such Confidential
Information to any person or entity other than the Company, except as may be
required by law or court or administrative order (in which event the Executive
shall so notify the Company as promptly as practicable). Upon termination of the
Executive's employment hereunder for any reason, the Executive shall return to
the Company all copies,

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reproductions and summaries of Confidential Information in the Executive's
possession and erase the same from all media in the Executive's possession, and,
if the Company so requests, shall certify in writing that the Executive has done
so. All Confidential Information is and shall remain the property of the Company
(or, in the case of information that the Company receives from a third party
which it is obligated to treat as confidential, then the property of such third
party).

                           (b)      Non-Competition.

                                    (i)     During the Employment Period, the
         Executive shall not engage in Competition (as defined below) with the
         Company. For purposes of this Agreement, "Competition" by the Executive
         shall mean the Executive's engaging in, or otherwise directly or
         indirectly being employed by or acting as a consultant or lender to, or
         being a director, officer, employee, principal, agent, stockholder,
         member, owner or partner of, or permitting the Executive's name to be
         used in connection with the activities of any other business or
         organization anywhere which competes, directly or indirectly, with the
         Business of the Company as the same shall be constituted at the
         Termination Date or which, during the six-month period prior to the
         Executive's termination, the Company had made substantial plans with
         the intention of establishing operations.

                                    (ii)    For the one year period commencing
         on the Termination Date, the Executive shall not engage in Competition
         with the Company in any locality or region in which the Company had
         operations at the time of, or within six months prior to, the
         Executive's termination, or in which, during the six-month period prior
         to the Executive's termination, the Company had made substantial plans
         with the intention of establishing operations in such locality or
         region; provided, however, that it shall not be a violation of this
         sub-paragraph or the sub-paragraph hereinabove for the Executive to be
         or become the registered or beneficial owner of up to three percent
         (3%) of any class of the capital stock of a competing corporation
         registered under the Exchange Act, provided that the Executive does not
         actively participate in the business of such corporation until such
         time as this covenant expires.

                           (c)      Non-Solicitation. For the one year period
commencing on the Termination Date, the Executive agrees that the Executive
shall not, directly or indirectly, for the Executive's benefit or for the
benefit of any other person, firm or entity, engage any of the following
conduct:

                                    (i)      solicit from any customer doing
         business with the Company as of the Termination Date, business of the
         same or of a similar nature to the business of the Company with such
         customer;

                                    (ii)     solicit from any known potential
         customer of the Company business of the same or of a similar nature to
         that which has been the subject of a known written or oral bid, offer
         or proposal by the Company, or of substantial preparation with a

                                       11
<PAGE>

         view to making such a bid, proposal or offer, within six months prior
         to the Executive's termination;

                                    (iii)   solicit the employment or services
         of, or hire, any person who was known to be employed by or was a known
         consultant to the Company upon the termination of the Executive's
         employment, or within six months prior thereto; or

                                    (iv)    otherwise interfere with the
         business or accounts of the Company.

                           (d)      Intellectual Property. All Intellectual
Property (as defined below) and Technology (as defined below) created,
developed, obtained or conceived of by the Executive during the Employment
Period, and all business opportunities presented to the Executive during the
Employment Period, shall be owned by and belong exclusively to the Company,
provided that they reasonably relate to the Business, and the Executive shall
(i) promptly disclose any such Intellectual Property, Technology or business
opportunity to the Company, and (ii) execute and deliver to the Company, without
additional compensation, such instruments as the Company may require from time
to time to evidence its ownership of any such Intellectual Property, Technology
or business opportunity. For purposes of this Agreement, (A) the term
"Intellectual Property" means and includes any and all trademarks, trade names,
service marks, service names, patents, copyrights, and applications therefor,
and (B) the term "Technology" means and includes any and all trade secrets,
proprietary information, invention, discoveries, know-how, formulae, processes
and procedures.

                           (e)      The Executive acknowledges that the services
to be rendered by the Executive to the Company are of a special and unique
character, which gives this Agreement a peculiar value to the Company, the loss
of which may not be reasonably or adequately compensated for by damages in an
action at law, and that a material breach or threatened breach by the Executive
of any of the provisions contained in this Section 8 shall cause the Company
irreparable injury. The Executive therefore agrees that the Company shall be
entitled, in addition to any other right or remedy, to a temporary, preliminary
and permanent injunction, without the necessity of proving the inadequacy of
monetary damages or the posting of any bond or security, enjoining or
restraining the Executive from any such violation or threatened violations.

                           (f)      The Executive further acknowledges and
agrees that due to the uniqueness of the Executive's services and confidential
nature of the information the Executive shall possess, the covenants set forth
herein are reasonable and necessary for the protection of the business and
goodwill of the Company.

                           (g)      Continuing Operation. Any termination of the
Executive's employment or of this Agreement shall have no effect on the
continuing operation of this Section 8.

                  9.       Severability. It is the desire and intent of the
parties that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public

                                       12
<PAGE>
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision or portion of this Agreement shall be
adjudicated to be invalid or unenforceable, this Agreement shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made.

                  10.      Notices. All communications, requests, consents and
other notices provided for in this Agreement shall be in writing and shall be
deemed give if delivered by hand or mailed by first class mail, postage prepaid,
to the last known address of the recipient.

                  11.      Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflicts of laws provisions.

                  12.      Assignment. Neither this Agreement nor any rights or
duties hereunder may be assigned by the Executive without the prior written
consent of the Company. The Company shall have the right at any time to assign
this Agreement to its successors and assigns; provided, however, that the
assignee or transferee is the successor to all or substantially all of the
business and assets of the Company and such assignee or transferee expressly
assumes all of the obligations, duties and liabilities of the Company set forth
in this Agreement.

                  13.      Amendments. No provisions of this Agreement shall be
altered, amended, revoked or waived except by an instrument in writing, signed
by each party to this Agreement.

                  14.      Binding Effect. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives, heirs, successors and
assigns.

                  15.      Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constituted one and the same
instrument.

                  16.      Arbitration. Any dispute, controversy or question
arising under, out of, or relating to this Agreement (or the breach thereof),
or, the Executive's employment with the Company or termination thereof, shall be
referred for arbitration in the State of Michigan to a neutral arbitrator
selected by the Executive and the Company and this shall be the exclusive and
sole means for resolving such dispute. Such arbitration shall be conducted in
accordance with the National Rules for Resolution of Employment Disputes of the
American Arbitration Association. The arbitrator shall have the discretion to
award reasonable attorneys' fees, costs and expenses to the prevailing party.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

                  17.      Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the parties and supersedes all prior
understandings, agreements or

                                       13
<PAGE>

representations by or between the parties, whether written or oral, which relate
in any way to the subject matter hereof.

                  18.      Survivorship. The provisions of this Agreement
necessary to carry out the intention of the parties as expressed herein shall
survive the termination or expiration of this Agreement.

                  19.      Waiver. Except as provided herein, the waiver by
either party of the other party's prompt and complete performance, or breach or
violation, of any provision of this Agreement shall not operate nor be construed
as a waiver of any subsequent breach or violation, and the failure by any party
hereto to exercise any right or remedy which it may possess hereunder shall not
operate nor be construed as a bar to the exercise of such right or remedy by
such party upon the occurrence of any subsequent breach or violation.

                  20.      Captions. The captions of this Agreement are for
convenience and reference only and in no way define, describe, extend or limit
the scope or intent of this Agreement or the intent of any provision hereof.

                  21.      Construction. The parties acknowledge that this
Agreement is the result of arm's-length negotiations between sophisticated
parties each afforded representation by legal counsel. Each and every provision
of this Agreement shall be construed as though both parties participated equally
in the drafting of same, and any rule of construction that a document shall be
construed against the drafting party shall not be applicable to this Agreement.

                                       14
<PAGE>
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                   By:_____________________________

                                   HAYES LEMMERZ INTERNATIONAL, INC.

                                   By:_____________________________
                                   Name:  Curtis J. Clawson
                                   Title: President and Chief Executive Officer

                                       15
<PAGE>
                                                                    Attachment A

                        SUMMARY OF RELOCATION PROVISIONS

In principle, the Company will arrange and/or reimburse the cost of the
following items arising from your relocation area to the Northville/Detroit
area.

         1.       The Company will arrange transportation of personal and
household effects to include packing, unpacking, transportation, insurance,
storage, etc. Excluded from this provision would be unusual personal items such
as boats, travel trailers, etc. CONTACT JIM MULLINS IN NORTHVILLE, MI AT (734)
737-5195 TO ARRANGE YOUR MOVE.

         2.       The Company will reimburse expenses in the event of having to
be in temporary accommodations for a period of up to ninety (90) days, if
necessary.

         3.       One (1) round trip extended three (3) day weekend to your
place of residence every third week during the above described temporary living
period.

         4.       You will be reimbursed for up to 2 three-day house hunting
trips for your spouse.

         5.       Providing you currently own or are buying your principle
residence, in the event you sell your current residence, the Company will
reimburse you for normal closing cost expenses, real estate commission, and
legal fees, but excluding points. AT THE TIME YOU ARE LISTING YOUR PROPERTY AND
PRIOR TO CONTACTING REALTORS, PLEASE CONTACT TOM NOTEMAN (ALSO IN NORTHVILLE) AT
734-737-5170. He will provide you with information regarding marketing
assistance of the sale of your residence.

         6.       Provided that you currently own or are buying your current
principle residence, should you elect to purchase a home at your new location
during your first year of employment, the Company will reimburse you for most
closing cost related expenses, but excluding, in most cases, mortgage
origination fees and points.

         7.       Should you purchase a home in the Northville/Detroit area
during your first year of employment, payment of the equivalent of one-month's
base salary for incidental expenses incurred in connection with relocation will
be issued by the Company. You will not be required to submit receipts. This
allowance is paid in lump sum at the time you relocate your principle residence
to the new work location. This incidental expense allowance will be treated as
ordinary income and not grossed up.

         8.       Home warranties and repairs to either residence required for
loan approvals are not included.

                                      A-1
<PAGE>

         9.       The Company will "gross up" the taxable portion of your
relocation costs according to the Company's formula (except as indicated in item
7 above).

         10.      You will be eligible to receive the benefits under the
Company's Home Purchase Program which is currently being established that
will provide a buy-out after 120 days.

                                      A-2
<PAGE>
                                                                    Attachment B

                               SEVERANCE AGREEMENT

         1.       Defined Terms. Unless otherwise defined in this Attachment B,
the terms that are defined in the Employment Agreement (the "Employment
Agreement") shall have the same meanings when used herein as that are ascribed
to such terms in the Employment Agreement.

         2.       Term of Agreement. The Term of this Agreement shall commence
on the Effective Date hereof and shall continue in effect through the third
anniversary thereof; provided, however, that commencing on the first anniversary
of the Effective Date and each anniversary thereafter (each such date a "Renewal
Date"), the Term shall automatically be extended for one additional year unless,
on or prior to such Renewal Date, the Company or the Executive shall have given
notice not to extend the Term; and further provided, however, that if a Change
in Control shall have occurred during the Term, the Term shall expire no earlier
than twenty-four (24) months beyond the month in which such Change in Control
occurred.

         3.       Immediate Effect of Change in Control. Promptly following a
Change in Control, the Executive shall be entitled to the immediate payment of
all unpaid compensation amounts (including the pro rata bonus payment for the
current fiscal year under any bonus plan for which he is eligible ("Pro-rata
Bonus") and all unpaid bonuses with respect to any prior fiscal year) with
respect to the Executive's employment. For purposes of this Section 3, Pro-rata
Bonus shall be an amount equal to the product of (1) the product of (x) the
Executive's base salary as in effect immediately prior to the Change in Control
and (y) the greater of (A) the Executive's normative bonus percentage for the
fiscal year in which the Change in Control occurs and (B) the Executive's
estimated bonus percentage calculated in good faith by the Company's Finance
Department determined by projecting performance through the end of the fiscal
year in which the Change in Control occurs and (2) a fraction, the numerator of
which is the number of days in the fiscal year in which the Change in Control
occurs through the date of the Change in Control, and the denominator of which
is 365. The Pro-rata Bonus paid shall be subtracted from the amount otherwise
due the Executive as a bonus for the fiscal year in which the Change in Control
occurs, but such Pro-rata Bonus becomes a vested benefit upon a Change in
Control and in no event shall the Executive have to repay all or any portion of
the Pro-rata Bonus.

         4.       Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 9.1
hereof, no Severance Payments shall be payable under this Agreement unless there
shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company on or following a Change in Control and during the
Term. This Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing between the
Executive and the Company, the Executive shall not have any right to be retained
in the employ of the Company.

                                      B-1
<PAGE>

         5.  Compensation Other Than Severance Payments.

         5.1 Following a Change in Control and during the Term, during any
period that the Executive fails to perform the Executive's full-time duties with
the Company as a result of incapacity due to physical or mental illness, the
Company shall pay the Executive's full salary to the Executive at the rate in
effect at the commencement of any such period, together with all compensation
and benefits payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement (other than the Company's short- or
long-term disability plan, as applicable, to the extent such benefits would be
duplicative and their nonpayment would not prejudice Executive's future
entitlement to benefits) maintained by the Company during such period, until the
Executive's employment is terminated by the Company for Disability.

         5.2 If the Executive's employment shall be terminated for any reason on
or following a Change in Control and during the Term, the Company shall pay the
Executive's full salary to the Executive through the Date of Termination at the
rate in effect immediately prior to the Date of Termination or, if higher, the
rate in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all compensation and
benefits payable to the Executive through the Date of Termination under the
terms of the Company's compensation and benefit plans, programs or arrangements
as in effect immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason (including all unpaid bonuses
with respect to any prior fiscal year). In addition, if the Executive's
employment is terminated on or following a Change in Control and during the
Term, other than (A) by the Company for Cause, (B) by reason of death or
Disability, or (C) by the Executive without Good Reason, then the Company shall
pay Executive an amount equal to the product of (1) the product of (x) the
Executive's base salary as in effect immediately prior to the Date of
Termination, or, if higher, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason (the greater of
such amounts, the "Base Salary") and (y) the Executive's normative bonus
percentage for the year in which the Date of Termination occurs, or if higher,
the normative bonus percentage for the fiscal year in which the Change in
Control occurs or the normative bonus percentage in effect immediately prior to
the first occurrence of an event or circumstance constituting Good Reason (the
greatest of such percentages, the "Bonus Percentage") and (2) a fraction, the
numerator of which is the number of days in the fiscal year in which the Date of
Termination occurs through the date of the Date of Termination, and the
denominator of which is 365; it being understood that, if the Date of
Termination is in the same fiscal year as the Change in Control, the Pro-rata
Bonus calculated pursuant to Section 3 shall be subtracted from the amount
payable pursuant to this sentence of Section 5.2 but shall not reduce the amount
payable below zero.

         5.3 If the Executive's employment shall be terminated for any reason on
or following a Change in Control and during the Term, the Company shall pay to
the Executive the Executive's normal post-termination compensation and benefits
as such payments become due. Such post-termination compensation and benefits
shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of Termination or, if
more favorable to the

                                      B-2
<PAGE>
Executive, as in effect immediately prior to the occurrence of the first event
or circumstance constituting Good Reason.

         6.  Severance Payments.

         6.1 If the Executive's employment is terminated on or following a
Change in Control and during the Term, other than (A) by the Company for Cause,
(B) by reason of death or Disability, or (C) by the Executive without Good
Reason, then the Company shall pay the Executive the amounts, and provide the
Executive the benefits, described in this Section 6.1 ("Severance Payments") and
Section 6.2, in addition to any payments and benefits to which the Executive is
entitled under Section 5 hereof or otherwise (except as provided herein). For
purposes of this Agreement, the Executive's employment shall be deemed to have
been terminated following a Change in Control by the Company without Cause or by
the Executive with Good Reason, if (i) the Executive's employment is terminated
by the Company without Cause prior to a Change in Control (whether or not a
Change in Control ever occurs) and such termination was at the request or
direction of a Person who enters into an agreement with the Company the
consummation of which would constitute a Change in Control, (ii) the Executive
terminates his employment for Good Reason prior to a Change in Control (whether
or not a Change in Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of such Person, or
(iii) the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason and such termination or the circumstance or
event which constitutes Good Reason is otherwise in connection with or in
anticipation of a Change in Control (whether or not a Change in Control ever
occurs).

         (A) In lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination and in lieu of any severance benefit
otherwise payable to the Executive (whether pursuant to any employment
agreement, plan, policy or otherwise), the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to two times the sum of (i) the Base
Salary and (ii) the product of (x) the Base Salary and (y) the Bonus Percentage.

         (B)    For the twenty-four (24) month period immediately following the
Date of Termination, the Company shall arrange to provide the Executive and his
dependents life, disability, accident and health insurance benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents immediately prior
to the first occurrence of an event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to the Executive immediately
prior to such date or occurrence; provided, however, that, unless the Executive
consents to a different method (after taking into account the effect of such
method on the calculation of "parachute payments" pursuant to Section 6.2
hereof), such health insurance benefits shall be provided through a third-party
insurer. Benefits otherwise receivable by the Executive pursuant to this Section
6.1 (B) shall be reduced to the extent benefits of the same type are received by
or made available to the Executive by another Employer of the Executive during
the twenty-four (24) month period following the Executive's termination of
employment (and any such benefits received by or made available to the Executive
shall be reported to the Company by the Executive); provided, however, that the
Company shall reimburse the Executive for the excess, if any, of the cost

                                       B-3
<PAGE>
of such benefits to the Executive over such cost immediately prior to the Date
of Termination or, if more favorable to the Executive, the first occurrence of
an event or circumstance constituting Good Reason.

         (C)      For purposes of COBRA health benefit continuation under
section 4980B of the Code, the cessation of benefits pursuant to Section 6.1(B)
shall be treated as though such cessation is the "qualifying event" under
section 4980B(f)(3) of the Code for purposes of determining the period of
coverage.

         (D)      The Company shall pay to the Executive a lump sum amount equal
to one hundred thousand dollars ($100,000).

         (E)      The Company shall, at its sole expense as incurred, provide
Executive with "key executive level" outplacement services at a cost of no more
than fifteen percent (15%) of the sum of (1) Base Salary and (2) the Bonus
Percentage multiplied by Base Salary.

         6.2      (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control or any Person affiliated with
the Company or such Person) (all such payments and benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the "Total Payments") will be
subject to the Excise Tax, the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and any penalties, interest
or fees incurred by the Executive as a result of any payment under Section 6.2
being made later than five business days prior to the due date of the excise tax
with respect to which it is paid and any Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments.

                  (B)      For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as "parachute payments" (within
the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change in Control, the
Company's independent auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of
section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within
the meaning of section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest

                                      B-4
<PAGE>
marginal rate of taxation in the state and locality of the Executive's residence
or the Executive's place of business, whichever is higher, on the Date of
Termination (or if there is not yet a Date of Termination, then the date on
which the Gross-Up Payment is calculated for purposes of this Section 6.2), net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.

                  (C)      In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the Executive shall repay to the Company,
within five (5) business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (including that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive),
to the extent that such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive's taxable income and wages for
purposes of federal, state and local income and employment taxes, plus interest
on the amount of such repayment at 120% of the rate provided in section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any
portion of the amount to be repaid to the Company has been paid to any tax
authority, repayment thereof shall not be required until actual refund or credit
of such portion has been made to Executive, and interest payable to the Company
shall not exceed the interest received or credited to Executive by such tax
authority. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (including any interest, penalties or
additions payable by the Executive with respect to such excess and the Gross-Up
Payment attributable to the Excise Tax and federal, state, and local income and
employment taxes imposed on the Gross-Up Payment being made to the Executive)
within five (5) business days following the time that the amount of such excess
is finally determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Excise Tax with
respect to the Total Payments.

         6.3 The payments provided in subsections (A), of Section 6.1 hereof and
in Section 6.2 hereof shall be made not later than the fifth day following the
Date of Termination (or if there is no Date of Termination, then the date on
which the Gross-up Payment is calculated for purposes of Section 6.2 hereof);
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Company or, in the case of
payments under Section 6.2 hereof, in accordance with Section 6.2 hereof, of the
minimum amount of such payments to which the Executive is clearly entitled and
shall pay the remainder of such payments (together with interest on the unpaid
remainder (or on all such payments to the extent the Company fails to make such
payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event later than
the thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the

                                      B-5
<PAGE>
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at 120% of the rate provided in section 1274(b)(2)(B) of
the Code).

         6.4 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Executive's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.

         7. Termination Procedures and Compensation During Dispute.

         7.1 Notice of Termination. After a Change in Control and during the
Term, any purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with Section 10 of the
Employment Agreement. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the purpose
of considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.

         7.2 Date of Termination. "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change in Control
and during the Term, shall mean (i) if the Executive's employment is terminated
for Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by the Executive, shall not be less
than fifteen (15) days nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given).

         7.3 Dispute Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be extended
until the earlier of (i) the date prior to the date on which the Term ends or
(ii) the date on which the dispute is finally

                                      B-6
<PAGE>
resolved, either by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided, however, that the Date
of Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party providing notice pursues the resolution of
such dispute with reasonable diligence.

         7.4 Compensation During Dispute. If a purported termination occurs on
or following a Change in Control and during the Term and the Date of Termination
is extended in accordance with Section 7.3 hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given or, if higher, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason (including, but
not limited to, Base Salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was given, until the
Date of Termination, as determined in accordance with Section 7.3 hereof.
Amounts paid under this Section 7.4 are in addition to all other amounts due
under this Agreement (other than those due under the first sentence of Section
5.2 hereof) and shall not be offset against or reduce any other amounts due
under this Agreement.

         8. No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement (other than
Section 6.1(B) hereof) shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

         9. Successors; Binding Agreement.

         9.1 This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. In addition to any obligations
imposed by law upon any successor to the Company, the Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree in writing to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. The Company will require any
ultimate parent entity, as defined in 16 C.F.R. 8801,1(a)(3), of any Person who
acquires 90% of the outstanding shares of common stock of the Company or the
outstanding voting securities of the Company entitled to vote generally in the
election of directors (including through a merger in which the Company does not
survive or as a result of which the Company becomes a subsidiary of another
Person or a consolidation involving the Company and another Person) to assume
and agree in writing to perform as a joint and several obligor of the Company
(including any successor to the Company), this Agreement in the same manner and
to the same extent as the Company. Failure of the Company to obtain such
assumption and agreement in writing from a successor or its parent as described
in the preceding sentences after notice and a reasonable cure period (not to
exceed ten days from the date such notice is received) shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the

                                      B-7
<PAGE>
same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.

         9.2 This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.

         10. Insurance and Indemnification. From and after a Change in Control,
including after the termination of Executive's employment, the Company shall
indemnify, defend and hold the Executive harmless from and against any and all
expenses, liabilities, damages, costs, judgments, penalties, fines and amounts
paid in settlement, incurred in good faith by Executive in connection with any
proceeding involving Executive by reason of Executive's being or having been an
officer, director, employee or agent of the Company (or any affiliate of the
Company) to the fullest extent permitted by law, whether or not Executive is, or
is threatened to be made, a party to any threatened, pending, or completed
proceeding, and whether or not Executive is successful in such proceeding. In
addition, upon receipt from Executive of (i) a written request for an
advancement of reasonable expenses which Executive reasonably believes will be
subject to indemnification hereunder and (ii) a written undertaking by Executive
to repay any such amounts if it shall ultimately be determined that the
Executive is not entitled to indemnification under this Agreement or otherwise,
the Company shall advance such expenses to Executive or pay such expenses for
Executive, all in advance of the final disposition of any such matter. From and
after a Change in Control, including after the termination of Executive's
employment hereunder, Executive shall have coverage under a director's and
officer's liability insurance policy in amounts no less than, and on terms no
less favorable than those, provided to senior executive officers of the Company
from time to time.

         11. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:

         (A) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.

         (B) "Agreement" shall mean this Attachment B to the Employment
Agreement.

         (B) "Auditor" shall have the meaning set forth in Section 6.2 hereof.

         (C) "Base Amount" shall have the meaning set forth in section
280G(b)(3) of the Code.

         (D) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

                                      B-8
<PAGE>

         (E) "Company" shall mean Hayes Lemmerz International, Inc. and, except
in determining under Section 15(G) hereof whether or not any Change in Control
of the Company has occurred, shall include any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

         (F) "Excise Tax" shall mean any excise tax imposed under section 4999
of the Code or any similar state or local tax or any interest or penalties
incurred by Executive with respect to such excise tax.

         (G) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) including a
"group" within the meaning of Section 13(d)(3) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

         (H) "Retirement" shall be deemed the reason for the termination by the
Executive of the Executive's employment if such employment is terminated in
accordance with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees.

                                      B-9<PAGE>

                                                                     EXHIBIT 4.1
================================================================================

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

                           SYNAGRO TECHNOLOGIES, INC.

                     and each of the Guarantors named herein

                    9 1/2% Senior Subordinated Notes due 2009

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

                                    INDENTURE

                           Dated as of April 17, 2002

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

                Wells Fargo Bank Minnesota, National Association

                                     Trustee

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

================================================================================
<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; 13.05
             (b)(1).................................................................             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
<S>                   <C>                                                                                       <C>

                                                              ARTICLE 1.
                                                    DEFINITIONS AND INCORPORATION
                                                             BY REFERENCE

   Section 1.01       Definitions.................................................................................1
   Section 1.02       Other Definitions..........................................................................21
   Section 1.03       Incorporation by Reference of Trust Indenture Act..........................................21
   Section 1.04       Rules of Construction......................................................................22

                                                              ARTICLE 2.
                                                              THE NOTES

   Section 2.01       Form and Dating............................................................................22
   Section 2.02       Execution and Authentication...............................................................23
   Section 2.03       Registrar and Paying Agent.................................................................23
   Section 2.04       Paying Agent to Hold Money in Trust........................................................23
   Section 2.05       Holder Lists...............................................................................24
   Section 2.06       Transfer and Exchange......................................................................24
   Section 2.07       Replacement Notes..........................................................................35
   Section 2.08       Outstanding Notes..........................................................................35
   Section 2.09       Treasury Notes.............................................................................35
   Section 2.10       Temporary Notes............................................................................35
   Section 2.11       Cancellation...............................................................................36
   Section 2.12       Defaulted Interest.........................................................................36

                                                              ARTICLE 3.
                                                      REDEMPTION AND PREPAYMENT

   Section 3.01       Notices to Trustee.........................................................................36
   Section 3.02       Selection of Notes to Be Redeemed or Purchased.............................................36
   Section 3.03       Notice of Redemption.......................................................................37
   Section 3.04       Effect of Notice of Redemption.............................................................38
   Section 3.05       Deposit of Redemption or Purchase Price....................................................38
   Section 3.06       Notes Redeemed or Purchased in Part........................................................38
   Section 3.07       Optional Redemption........................................................................38
   Section 3.08       Mandatory Redemption.......................................................................39
   Section 3.09       Offer to Purchase by Application of Excess Proceeds........................................39

                                                              ARTICLE 4.
                                                              COVENANTS

   Section 4.01       Payment of Notes...........................................................................41
   Section 4.02       Maintenance of Office or Agency............................................................41
   Section 4.03       Reports....................................................................................41
   Section 4.04       Compliance Certificate.....................................................................42
   Section 4.05       Taxes......................................................................................43
   Section 4.06       Stay, Extension and Usury Laws.............................................................43
   Section 4.07       Restricted Payments........................................................................43
   Section 4.08       Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..................46
   Section 4.09       Incurrence of Indebtedness and Issuance of Preferred Stock.................................47
   Section 4.10       Asset Sales................................................................................50
</Table>

                                       i
<PAGE>

<Table>
<S>                   <C>                                                                                       <C>
   Section 4.11       Transactions with Affiliates...............................................................52
   Section 4.12       Liens......................................................................................53
   Section 4.13       Business Activities........................................................................53
   Section 4.14       Corporate Existence........................................................................53
   Section 4.15       Change of Control..........................................................................53
   Section 4.16       No Senior Subordinated Debt................................................................55
   Section 4.17       Sale and Leaseback Transactions............................................................55
   Section 4.18       Limitation on Issuances and Sales of Equity Interests of
                      Wholly Owned Restricted Subsidiaries.......................................................55
   Section 4.19       Payments for Consent.......................................................................56
   Section 4.20       Additional Guarantees......................................................................56
   Section 4.21       Designation of Restricted and Unrestricted Subsidiaries....................................56

                                                              ARTICLE 5.
                                                              SUCCESSORS

   Section 5.01       Merger, Consolidation, or Sale of Assets...................................................57
   Section 5.02       Successor Corporation Substituted..........................................................57

                                                              ARTICLE 6.
                                                        DEFAULTS AND REMEDIES

   Section 6.01       Events of Default..........................................................................58
   Section 6.02       Acceleration...............................................................................59
   Section 6.03       Other Remedies.............................................................................60
   Section 6.04       Waiver of Past Defaults....................................................................60
   Section 6.05       Control by Majority........................................................................61
   Section 6.06       Limitation on Suits........................................................................61
   Section 6.07       Rights of Holders of Notes to Receive Payment..............................................61
   Section 6.08       Collection Suit by Trustee.................................................................61
   Section 6.09       Trustee May File Proofs of Claim...........................................................62
   Section 6.10       Priorities.................................................................................62
   Section 6.11       Undertaking for Costs......................................................................62

                                                              ARTICLE 7.
                                                               TRUSTEE

   Section 7.01       Duties of Trustee..........................................................................63
   Section 7.02       Rights of Trustee..........................................................................63
   Section 7.03       Individual Rights of Trustee...............................................................64
   Section 7.04       Trustee's Disclaimer.......................................................................64
   Section 7.05       Notice of Defaults.........................................................................64
   Section 7.06       Reports by Trustee to Holders of the Notes.................................................64
   Section 7.07       Compensation and Indemnity.................................................................65
   Section 7.08       Replacement of Trustee.....................................................................65
   Section 7.09       Successor Trustee by Merger, etc...........................................................66
   Section 7.10       Eligibility; Disqualification..............................................................66
   Section 7.11       Preferential Collection of Claims Against Company..........................................67

                                                              ARTICLE 8.
                                               LEGAL DEFEASANCE AND COVENANT DEFEASANCE

   Section 8.01       Option to Effect Legal Defeasance or Covenant Defeasance...................................67
   Section 8.02       Legal Defeasance and Discharge.............................................................67
   Section 8.03       Covenant Defeasance........................................................................67
</Table>

                                       ii
<PAGE>

<Table>
<S>                   <C>                                                                                       <C>
   Section 8.04       Conditions to Legal or Covenant Defeasance.................................................68
   Section 8.05       Deposited Money and Government Securities to be Held in Trust;
                      Other Miscellaneous Provisions.............................................................69
   Section 8.06       Repayment to Company.......................................................................69
   Section 8.07       Reinstatement..............................................................................70

                                                              ARTICLE 9.
                                                   AMENDMENT, SUPPLEMENT AND WAIVER

   Section 9.01       Without Consent of Holders of Notes........................................................70
   Section 9.02       With Consent of Holders of Notes...........................................................71
   Section 9.03       Compliance with Trust Indenture Act........................................................72
   Section 9.04       Revocation and Effect of Consents..........................................................72
   Section 9.05       Notation on or Exchange of Notes...........................................................72
   Section 9.06       Trustee to Sign Amendments, etc............................................................72

                                                             ARTICLE 10.
                                                            SUBORDINATION

   Section 10.01      Agreement to Subordinate...................................................................73
   Section 10.02      Liquidation; Dissolution; Bankruptcy.......................................................73
   Section 10.03      Default on Designated Senior Debt..........................................................73
   Section 10.04      Acceleration of Notes......................................................................74
   Section 10.05      When Distribution Must Be Paid Over........................................................74
   Section 10.06      Notice by Company..........................................................................75
   Section 10.07      Subrogation................................................................................75
   Section 10.08      Relative Rights............................................................................75
   Section 10.09      Subordination May Not Be Impaired by Company...............................................75
   Section 10.10      Distribution or Notice to Representative...................................................75
   Section 10.11      Rights of Trustee and Paying Agent.........................................................76
   Section 10.12      Authorization to Effect Subordination......................................................76
   Section 10.13      Amendments.................................................................................76

                                                             ARTICLE 11.
                                                           NOTE GUARANTEES

   Section 11.01      Guarantee..................................................................................76
   Section 11.02      Subordination of Note Guarantee............................................................77
   Section 11.03      Limitation on Guarantor Liability..........................................................77
   Section 11.04      Execution and Delivery of Note Guarantee...................................................78
   Section 11.05      Guarantors May Consolidate, etc., on Certain Terms.........................................78
   Section 11.06      Release of Note Guaranty...................................................................79

                                                             ARTICLE 12.
                                                      satisfaction and discharge

   Section 12.01      Satisfaction and Discharge.................................................................79
   Section 12.02      Application of Trust Money.................................................................80

                                                             ARTICLE 13.
                                                            MISCELLANEOUS

   Section 13.01      Trust Indenture Act Controls...............................................................81
   Section 13.02      Notices....................................................................................81
   Section 13.03      Communication by Holders of Notes with Other Holders of Notes..............................82
   Section 13.04      Certificate and Opinion as to Conditions Precedent.........................................82
</Table>

                                       iii
<PAGE>

<Table>
<S>                   <C>                                                                                       <C>
   Section 13.05      Statements Required in Certificate or Opinion..............................................82
   Section 13.06      Rules by Trustee and Agents................................................................82
   Section 13.07      No Personal Liability of Directors, Officers, Employees and Equityholders..................83
   Section 13.08      Governing Law..............................................................................83
   Section 13.09      No Adverse Interpretation of Other Agreements..............................................83
   Section 13.10      Successors.................................................................................83
   Section 13.11      Severability...............................................................................83
   Section 13.12      Counterpart Originals......................................................................83
   Section 13.13      Table of Contents, Headings, etc...........................................................83
</Table>

                                    EXHIBITS

Exhibit A       FORM OF NOTE
Exhibit B       FORM OF CERTIFICATE OF TRANSFER
Exhibit C       FORM OF CERTIFICATE OF EXCHANGE
Exhibit D       FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
                INVESTOR
Exhibit E       FORM OF NOTE GUARANTEE
Exhibit F       FORM OF SUPPLEMENTAL INDENTURE

                                       iv
<PAGE>

         INDENTURE dated as of April 17, 2002 between Synagro Technologies,
Inc., a Delaware corporation (the "Company"), the Guarantors (as defined) and
Wells Fargo Bank Minnesota, National Association, as trustee (the "Trustee").

         The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 9 1/2% Senior Subordinated Notes due 2009 (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 A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the 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.

         "Additional Notes" means an unlimited amount of Notes (other than the
Initial Notes) issued under this Indenture in accordance with Sections 2.02 and
4.09 hereof, as part of the same class 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
Restricted Subsidiary of the Company) in whom a Receivables Subsidiary makes an
Investment in connection with a Qualified Receivables Transaction will be deemed
to be an Affiliate of the Company or any of its Restricted Subsidiaries solely
by reason of such Investment.

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

         "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
<PAGE>

                  (1) the sale, lease, conveyance or other disposition of any
         assets or rights, other than sales of inventory in the ordinary course
         of business consistent with past practices by the Company or any of its
         Restricted Subsidiaries; 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 and/or Section 5.01 and not by Section 4.10; and

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

         Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:

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

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

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

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

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

                  (6) a Restricted Payment or Permitted Investment that is
         permitted under Section 4.07;

                  (7) the licensing of intellectual property to third Persons on
         customary terms as determined by the Board of Directors in good faith;

                  (8) the sale 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 80% of the book value
         thereof as determined in accordance with GAAP, it being understood
         that, for the purposes of this clause (8), 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;
         and

                  (9) a transfer of accounts receivable and related assets of
         the type specified in the definition of "Qualified Receivables
         Transaction" (or a fractional undivided interest therein) by a
         Receivables Subsidiary in a Qualified Receivables Transaction.

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

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

                                       2
<PAGE>

         "Beneficial Owner" has the meaning assigned to such term in Rule l3d-3
and Rule l3d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section l3(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, the board of directors of
         the general partner of the partnership; and

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

         "Broker Dealer" has the meaning set forth in the 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.

         "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 12 months from the date
         of acquisition;

                  (3) certificates of deposit, eurodollar time deposits or
         bankers' acceptances, with maturities of not more than one year after
         the date of acquisition, overnight bank deposits and overnight Federal
         Funds transactions that are issued or sold by any lender party to the
         Credit Agreement or with any commercial banking institution that is a
         member of the Federal Reserve System and having combined capital and
         surplus in excess of $500.0 million;

                                       3
<PAGE>

                  (4) marketable direct obligations issued by any state of the
         United States of America or any political subdivision of any such state
         or any public instrumentality thereof maturing within one year from the
         date of acquisition thereof and, at the time of acquisition, having one
         of the two highest ratings obtainable from either Standard & Poor's
         Rating Services or Moody's Investors Services, Inc.;

                  (5) repurchase obligations with any financial institution
         meeting the qualifications specified in clause (3) or (4) above which
         is secured by a fully perfected security interest in any obligation of
         the type described in any of clauses (1) through (4) above or (6) below
         and which has a market value at the time such repurchase agreement is
         entered into of not less than 100% of the repurchase obligation of such
         financial institution hereunder;

                  (6) commercial paper, maturing within 12 months after the date
         of acquisition, or corporate demand notes, in each case (unless issued
         by a bank or its holding company) having the highest rating obtainable
         from Moody's Investors Service, Inc. or Standard & Poor's Rating
         Services; and

                  (7) investments in short-term asset management accounts
         offered by any financial institution for the purpose of investing in
         loans to any corporation (other than the Company or any Affiliate of
         the Company), state or municipality, in each case organized under the
         laws of any state of the United States or the District of Columbia.

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

                  (1) 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
         l3(d)(3) of the Exchange Act);

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

                  (3) the consummation of any transaction (including, without
         limitation, any merger or consolidation) the result of which is that
         any "person" (as defined above), other than the Principals and their
         Related Parties, becomes the Beneficial Owner, directly or indirectly,
         of more than 50% of the Voting Stock of the Company, measured by voting
         power rather than number of shares; or

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

         "Clearstream" means Clearstream Banking, S.A.

         "Company" means Synagro Technologies, 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

                                       4
<PAGE>
         any deferred payment obligations, the interest component of all
         payments associated with Capital Lease Obligations, imputed interest
         with respect to Attributable Debt, commissions, discounts and other
         fees and charges incurred in respect of letter of credit or bankers'
         acceptance financings, and net of the effect of all payments made or
         received pursuant to Hedging Obligations or changes in fair market
         value of any Hedging Obligation), 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
         items (excluding any such non-cash items to the extent that it
         represents an accrual of or reserve for cash expenses in any future
         period or amortization of a prepaid cash expense that was paid in a
         prior period) of such Person and its Restricted Subsidiaries for such
         period to the extent that such depreciation, amortization and other
         non-cash items were deducted in computing such Consolidated Net Income;
         plus

                  (4) all 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;

                  (2) the Net Income of any Restricted Subsidiary will be
         excluded to the extent that the declaration or payment of dividends or
         similar distributions by that Restricted Subsidiary of that Net Income
         is not at the date of determination permitted without any prior
         governmental approval (that has not been obtained) or, directly or
         indirectly, by operation of the terms of its charter or any agreement,
         instrument, judgment, decree, order, statute, rule or governmental
         regulation applicable to that Restricted Subsidiary or its stockholders
         (except to the extent of the amount of dividends or distributions that
         have actually been paid in cash to the Company or one or more of its
         Restricted Subsidiaries that is not subject to any such restrictions);

                  (3) the Net Income (or loss) of any Person acquired in a
         pooling of interests transaction for any period prior to the date of
         such acquisition will be excluded;

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

                  (5) the net loss of any Person, other than a Restricted
         Subsidiary of the Company, will be excluded;

                  (6) items classified as extraordinary, unusual or nonrecurring
         losses or charges (including, without limitation, severance, relocation
         and other restructuring costs), and related tax effects according to
         GAAP, will be excluded;

                  (7) the amount of dividends or distributions paid in cash by
         any Unrestricted Subsidiary Guarantor to any Person or its Restricted
         Subsidiary in excess of such Unrestricted Subsidiary's Net Income
         (computed in accordance with clause (1) of this defined term) will be
         included; and

                                       5
<PAGE>

                  (8) non-cash charges relating to employee benefit or other
         management compensation plans of the Company or any of its Restricted
         Subsidiaries or any non-cash compensation charge arising from any grant
         of stock, stock options or other equity-based awards of the Company or
         any of its Restricted Subsidiaries (excluding in each case any non-cash
         charge to the extent that it represents an accrual of or reserve for
         cash expenses in any future period or amortization of a prepaid cash
         expense incurred in a prior period) in each case, to the extent that
         such non-cash charges are deducted in computing such Consolidated Net
         Income will be excluded.

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

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

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

         "Corporate Trust Office of the Trustee" 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 Second Amended and Restated
Credit Agreement, dated as of August 14, 2000, by and among the Company, Bank of
America, N.A., as administrative agent, and the other lenders party thereto,
providing for up to $150 million of borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.

         "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, renewed, refunded, replaced or refinanced in whole
or in part from time to time.

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

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 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 Noncash Consideration" means any noncash consideration
received by the Company or any of its Restricted Subsidiaries in connection with
an Asset Sale that is designated as Designated Noncash

                                       6
<PAGE>

Consideration pursuant to an Officers' Certificate setting forth the fair market
value of such noncash consideration and the basis of the valuation.

         "Designated Senior Debt" means:

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

                  (2) after payment in full of all Obligations under the Credit
         Agreement and termination of all commitments to extend credit
         thereunder, any other Senior Debt permitted under this Indenture the
         principal amount of which is $25.0 million or more.

         "Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale 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 such repurchase or
redemption complies with Section 4.07.

         "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 any Foreign Subsidiary that guarantees or
otherwise provides direct credit support for any Indebtedness of the Company.

         "Eligible Accounts Receivable" means the face amount of all accounts
receivable owned by the Company and its Restricted Subsidiaries as of the end of
the most recent fiscal quarter preceding such date that were not more than 90
days past due.

         "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 (1) a public offering of common equity
securities or (2) a private placement of common equity securities yielding gross
proceeds to the issuer of at least $25.0 million.

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

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

         "Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.

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

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

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

                                       7
<PAGE>

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

                  (1) the consolidated interest expense of such Person and its
         Restricted Subsidiaries for such period, whether paid or accrued,
         including, without limitation, amortization of debt issuance costs and
         original issue discount, non-cash interest payments, the interest
         component of any deferred payment obligations, the interest component
         of all payments associated with Capital Lease Obligations, imputed
         interest with respect to Attributable Debt, commissions, discounts 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) the product of (a) all dividends, whether paid or accrued
         and whether or not in cash, on any series of preferred stock of such
         Person or any of its Restricted Subsidiaries, other than dividends on
         Equity Interests paid solely in Equity Interests of the Company (other
         than Disqualified Stock), or to the Company or a Restricted Subsidiary
         of the Company, times (b) a fraction, the numerator of which is one and
         the denominator of which is one minus the then current combined
         effective 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 preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio 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, but including Pro Forma Cost Savings, but
         without giving effect to clause (3) of the proviso set forth in the
         definition of Consolidated Net Income;

                  (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
         from the four quarter reference period on a pro forma basis (as
         provided above); and

                                       8
<PAGE>

                  (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 from the
         four quarter reference period on a pro forma basis (as provided above),
         but only to the extent that the obligations giving rise to such Fixed
         Charges will not be obligations of the specified Person or any of its
         Restricted Subsidiaries following the Calculation Date.

         "Foreign Subsidiary" means any Restricted Subsidiary of the Company
that was formed under laws other than those of the United States or any state of
the United States or the District of Columbia.

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

         "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.

         "GTCR Subordinated Notes" means the Company's 12% Subordinated Notes
due 2008, issued in January 2000 to GTCR Golder Rauner, LLC.

         "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 each of:

                  (1) the Company's Domestic Subsidiaries existing on the date
         hereof and party hereto; and

                  (2) any other subsidiary that executes a Note Guarantee in
         accordance with the provisions of this Indenture, including any
         Unrestricted Subsidiary Guarantor; 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; and

                  (2) other agreements or arrangements designed to protect such
         Person against fluctuations in interest rates or currency exchange
         rates or commodity prices.

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

                                       9
<PAGE>

         "IAI Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold 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 balance deferred and unpaid of the
         purchase price of any property, except any such balance that
         constitutes an accrued expense or trade payable; or

                  (6) representing any Hedging Obligations.

         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;

                  (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.

         "Indenture" means this indenture, dated as of the date hereof, between
the Company, the Guarantors and Wells Fargo Bank Minnesota, National
Association, as trustee, 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 $150 million aggregate principal amount
of Notes issued under this Indenture on the date hereof.

         "Initial Purchasers" mean Lehman Brothers Inc. and Banc of America
Securities 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 commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such

                                       10
<PAGE>

that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted 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 Company's Investments in such Restricted Subsidiary
that were not sold or disposed of in an amount determined as provided in Section
4.07. The acquisition by the Company or any Restricted Subsidiary of the Company
of a Person that holds an Investment in a third Person will be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person in
an amount equal to the fair market value of the Investments held by the acquired
Person in such third Person in an amount determined as provided in Section 4.07.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City and State of New York, in Houston, Texas 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 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.

         "Liquidated Damages" means all liquidated damages then owing pursuant
to the Registration Rights Agreement.

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

                  (1) any gain (or loss), together with any related provision
         for taxes on such gain (or loss), realized in connection with: (a) any
         Asset Sale; or (b) the disposition of any securities by such Person or
         any of its Restricted Subsidiaries or the extinguishment of any
         Indebtedness of such Person or any of its Restricted Subsidiaries; and

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

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

         "Non-Recourse Debt" means Indebtedness:

                                       11
<PAGE>

                  (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;

                  (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 in writing that
         they will not have any recourse to the stock or assets of the Company
         or any of its Restricted Subsidiaries.

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

         "Note 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 of this
Indenture. The Initial Notes and the Additional 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
and any Additional Notes.

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

         "Offering Memorandum" means the offering memorandum relating to the
Notes dated April 8, 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 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 the lines of business conducted by the
Company and its Subsidiaries on the date of this Indenture and any businesses
reasonably related, incidental or ancillary thereto.

         "Permitted Investments" means:

                  (1) any Investment in the Company or in a Restricted
         Subsidiary of the Company, provided, however, that Investments in
         Foreign Subsidiaries shall not exceed 10% of Total Assets in the
         aggregate;

                                       12
<PAGE>

                  (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;

                  (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;

                  (5) any acquisition of assets 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) any Investment existing on the date of this Indenture;

                  (9) loans and advances to employees and officers of the
         Company and its Restricted Subsidiaries in the ordinary course of
         business having an aggregate principal amount not to exceed $2.0
         million at any one time outstanding;

                  (10) loans to management employees of the Company and its
         Restricted Subsidiaries for the purchase of Equity Interests having an
         aggregate principal amount not to exceed $3.0 million at any one time
         outstanding;

                  (11) accounts receivable created or acquired in the ordinary
         course of business;

                  (12) Guarantees by the Company of Indebtedness otherwise
         permitted to be incurred by Restricted Subsidiaries of the Company
         under this Indenture;

                  (13) 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; and

                  (14) 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 (14)
         that are at any time

                                       13
<PAGE>

         outstanding, not to exceed $15.0 million, without giving effect to any
         reduction for any writedown or writeoff of such Investment or reduction
         to the extent credit has already been given under paragraph 3(C)(i)
         of Section 4.07.

         "Permitted Junior Securities" means:

                  (1) common Equity Interests in the Company or any Guarantor
         (other than Disqualified Stock); or

                  (2) debt or preferred equity securities of the Company or any
         Guarantor issued pursuant to a plan of reorganization consented to by
         each class of Senior Debt; provided that all such securities 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 Note Guarantees are subordinated
         to Senior Debt under this Indenture.

         "Permitted Liens" means:

                  (1) Liens securing Senior Debt and other Obligations with
         respect thereto;

                  (2) Liens in favor of the Company or the Guarantors;

                  (3) Liens on property of a Person existing at the time such
         Person is merged with or into or consolidated with the Company or any
         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 incurred or deposits made to secure the performance
         of statutory obligations, surety or appeal bonds, performance bonds or
         other obligations of a like nature incurred in the ordinary course of
         business;

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

                  (7) 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;

                  (8) Liens incurred in connection with the business of the
         Company or any Subsidiary of the Company with respect to obligations
         that do not exceed $10.0 million at any one time outstanding;

                  (9) Liens on assets of Unrestricted Subsidiaries or
         Unrestricted Subsidiary Guarantors that secure Non-Recourse Debt of
         Unrestricted Subsidiaries or of Unrestricted Subsidiary Guarantors,
         respectively;

                  (10) Liens incurred or deposits made in the ordinary course of
         business in connection with worker's compensation, unemployment
         insurance and other types of social security, including any Lien
         securing letters of credit issued in the ordinary course of business
         consistent with past practice in

                                       14
<PAGE>

         connection therewith, or to secure the performance of tenders,
         statutory obligations, surety and appeal bonds, bids, leases,
         government contracts, performance and return-of-money bonds and other
         similar obligations (exclusive of obligations for the payment of
         borrowed money) incurred in the ordinary course of business;

                  (11) judgment Liens not giving rise to an Event of Default;

                  (12) Liens upon specific items of inventory or other goods and
         proceeds of any Person securing such Person's obligations in respect of
         banker's acceptances issued or created for the account of such Person
         to facilitate the purchase, shipment, or storage of such inventory or
         other goods;

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

                  (14) Liens encumbering deposits made to secure obligations
         arising from statutory, regulatory, contractual, or warranty
         requirements of the Company or any of its Restricted Subsidiaries,
         including rights of offset and set-off;

                  (15) Liens securing Indebtedness incurred in reliance on
         Section 4.09(b)(4) so long as such Lien extends to no assets other than
         the assets acquired;

                  (16) Leases or subleases granted to others that do not
         materially interfere with the ordinary course of business of the
         Company and its Restricted Subsidiaries;

                  (17) Liens arising from filing Uniform Commercial Code
         financing statements regarding leases;

                  (18) Liens securing the Notes and the Note Guarantees;

                  (19) Liens securing Hedging Obligations that are permitted by
         this Indenture to be incurred;

                  (20) Liens on assets of the Company or a Receivables
         Subsidiary incurred in connection with a Qualified Receivables
         Transaction; and

                  (21) banker's Liens and rights of set-off.

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

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

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

                                       15
<PAGE>

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

         "Principals" means GTCR Golder Rauner, LLC and TCW/Crescent Mezzanine,
L.L.C.

         "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.

         "Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs and related adjustments associated with the acquisition of a
business that are attributable to that period and that (i) are calculated on a
basis that is consistent with Regulation S-X under the Securities Act as in
effect and applied as of the date of this Indenture or (ii) have actually been
implemented by the business that was the subject of the acquisition within three
months of the date of the acquisition and prior to the Calculation Date and that
are supportable and quantifiable by the underlying accounting records of such
business and are described, as provided below, in an Officers' Certificate, as
if, in the case of each of clause (i) and (ii), all such reductions in costs and
related adjustments had been effected as of the beginning of such period.

         "Providence Soils" means Providence Soils, LLC, and any successor
thereto.

         "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 (1) a Receivables Subsidiary (in the case of a
transfer by the Company or any of its Restricted Subsidiaries) and (2) 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.

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

         "Receivables Subsidiary" means a Subsidiary of the Company that engages
in no activities other than in connection with the financing of accounts
receivable and that is designated by the Board of Directors of the Company (as
provided below) as a Receivables Subsidiary (1) no portion of the Indebtedness
or any other Obligations (contingent or otherwise) of which (a) is guaranteed by
the Company or any Restricted Subsidiary of the Company (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction), (b) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction or (c) subjects
any property or asset of the Company or any Restricted Subsidiary of

                                       16
<PAGE>

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, (2) 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 arc
not Affiliates of the Company, other than fees payable in the ordinary course of
business in connection with servicing accounts receivable and (3) 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 the Registration Rights
Agreement, dated as of April 17, 2002, between the Company, the Guarantors 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,
the Guarantors 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.

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

         "Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.

         "Related Party" means:

                  (1) any direct or indirect controlling stockholder or
         controlling general partner, 50% (or more) owned Subsidiary, or
         immediate family member (in the case of an individual) of any
         Principal; or

                  (2) any trust, corporation, partnership or other entity, the
         beneficiaries, stockholders, partners, owners or Persons beneficially
         holding an 50% or more controlling interest of which consist of any one
         or more Principals and/or such other Persons referred to in the
         immediately preceding clause (1).

         "Representative" means the Trustee or other trustee, agent or
representative for any 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 a Definitive Note bearing the
Private Placement Legend.

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

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

                                       17
<PAGE>

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

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

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

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

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

         "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;

                  (2) all Surety Obligations of the Company or any Guarantor;

                  (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 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) and (3) (and, with respect to clause (1) and any
         Hedging Obligations, it being understood that such Obligations (i)
         include all interest on such Indebtedness accruing after the filing of
         a petition initiating any proceeding under any state, federal or
         foreign bankruptcy law, whether or not such interest is allowed or
         allowable in such proceeding and (ii) shall be determined without
         giving effect to any reduction in the amount of any Indebtedness
         necessary to render the obligation of any Guarantor with respect
         thereto not voidable or avoidable under applicable law).

         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 the
         Subsidiaries of the Company;

                  (3) any trade payables; or

                  (4) the portion of any Indebtedness that is incurred in
         violation of this Indenture; provided that Indebtedness under a Credit
         Facility will not cease to be Senior Debt under this clause (4) if the
         lenders obtained a certificate from an executive officer of the Company
         as of the date of the incurrence of such Indebtedness to the effect
         that such Indebtedness was permitted to be incurred by this Indenture.

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

                                       18
<PAGE>

         "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.

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

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

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

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

         "Surety Obligations" means the incurrence by the Company or any of its
Guarantors of obligations in respect of performance and surety bonds and
completion guarantees obtained by the Company or such Guarantor in the ordinary
course of business.

         "Synagro-Baltimore" means Synagro-Baltimore, L.L.C., and any successor
thereto.

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

         "Total Assets" means, as of any date, the consolidated assets of the
Company and its Guarantors as of such date calculated in accordance with GAAP.

         "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 Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.

         "Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

         "Unrestricted Subsidiary" means Synagro-Baltimore, Providence Soils and
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;

                                       19
<PAGE>

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

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

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

                  (5) 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 and 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. 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 by Section 4.09, the Company will be in default of such
covenant. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation 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 by Section 4.09, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.

         "Unrestricted Subsidiary Guarantor" means Synagro-Baltimore, Providence
Soils and any other Domestic Subsidiary the Board of Directors elects to become
an Unrestricted Subsidiary Guarantor as permitted by Section 4.21.

         "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 to vote in the election of the Board of
Directors of such Person.

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

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

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

                                       20
<PAGE>

         "Wholly Owned Restricted Subsidiary" of any specified 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),
will at the time be owned by such Person or by one or more Wholly-Owned
Restricted Subsidiaries of such Person and one or more Wholly-Owned Restricted
Subsidiaries of such Person.

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
        "Payment Blockage Notice"...........................................................       10.03
        "Payment Default"...................................................................       6.01
        "Permitted Debt"....................................................................       4.09
        "Purchase Date".....................................................................       3.09
        "Registrar".........................................................................       2.03
        "Restricted Payments"...............................................................       4.07
</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
Note Guarantees, respectively.

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

                                       21
<PAGE>

Section 1.04 Rules of Construction.

         Unless the context otherwise requires:

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

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

                  (3) "or" is not exclusive;

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

                  (5) "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 A 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 Notes. Notes issued in global form will be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note 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) 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

                                       22
<PAGE>

beneficial interests in the Regulation S 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 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 in the aggregate principal amount stated in such Authentication Order. The
aggregate principal amount of Notes outstanding at any time hereunder is
unlimited except as set forth in Article 4 hereof (including, without
limitation, Section 4.09).

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

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 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 Subsidiaries may act as Paying Agent or Registrar only with the prior
written consent of the administrative agent under the Credit Agreement.

         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 Liquidated Damages, 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

                                       23
<PAGE>

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 ss. 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 ss. 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. All Global Notes will be exchanged by
the Company for Definitive Notes if:

                  (1) the Company delivers to the Trustee notice from the
         Depositary that it is unwilling or unable to continue to act as
         Depositary or that it is no longer a clearing agency registered under
         the Exchange Act and, in either case, a successor Depositary is not
         appointed by the Company within 120 days after the date of such notice
         from the Depositary; or

                  (2) the Company in its sole discretion determines that the
         Global Notes (in whole but not in part) should be exchanged for
         Definitive Notes and delivers a written notice to such effect to the
         Trustee.

         Upon the occurrence of either of the preceding events in (1) or (2)
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. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(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 comparable to those 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

                                       24
<PAGE>

         Period, transfers of beneficial interests in the Regulation S Global
         Note may not be made to a U.S. Person or for the account or benefit of
         a U.S. Person (other than Initial Purchasers). 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. No written orders or instructions shall be
         required to be delivered to the Registrar to effect the transfers
         described in this Section 2.06(b)(1).

                  (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

                           (B) 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 (1) above. 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) 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;

                                       25
<PAGE>

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

                           (C) if the transferee 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) above and:

                           (A) such exchange or transfer is effected pursuant to
                  the Exchange Offer in accordance with the Registration Rights
                  Agreement and the holder of the beneficial interest to be
                  transferred, in the case of an exchange, or the transferee, in
                  the case of a transfer, certifies in the applicable Letter of
                  Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
                  participating in the distribution of the 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 Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the 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), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

         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

                                       26
<PAGE>

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. 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:

                           (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 in
                  item (2) thereof;

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

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

                           (F) if such 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

                                       27
<PAGE>

names such Notes are so registered. Any 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 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 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 it is not (i) a Broker-Dealer, (ii) a Person
                  participating in the distribution of the 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 Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the 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), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  (3) Beneficial Interests in Unrestricted Global Notes to
         Unrestricted Definitive Notes. If any holder of a beneficial interest
         in an Unrestricted Global Note proposes to exchange such beneficial
         interest for a Definitive Note or to transfer such beneficial interest
         to a Person who takes delivery thereof in the form of a 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 a Definitive Note in the appropriate principal amount. Any
         Definitive Note issued in exchange for a beneficial interest pursuant
         to this Section 2.06(c)(3) 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

                                       28
<PAGE>

         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)(3) 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 in item (2) thereof;

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

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

                           (F) if such Restricted Definitive Note is being
                  transferred to 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
                  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

                                       29
<PAGE>

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 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 it is not (i) a
                  Broker-Dealer, (ii) a Person participating in the distribution
                  of the 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 Registration
                  Rights Agreement;

                           (C) such transfer is effected by a Broker-Dealer
                  pursuant to the Exchange Offer Registration Statement in
                  accordance with the 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), if
                  the Registrar so requests or if the Applicable Procedures so
                  require, an Opinion of Counsel in form reasonably acceptable
                  to the Registrar to the effect that such exchange or transfer
                  is in compliance with the Securities Act and that the
                  restrictions on transfer contained herein and in the Private
                  Placement Legend are no longer required in order to maintain
                  compliance with the Securities Act.

                  Upon satisfaction of the conditions of any of the
         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
         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.

                                       30
<PAGE>

         (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 in
                  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 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 it is not (i) a
                  Broker-Dealer, (ii) a Person participating in the distribution
                  of the 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
                  Registration Rights Agreement;

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

                                       31
<PAGE>

                           Definitive Note, a certificate from such Holder in
                           the form of Exhibit B hereto, including the
                           certifications in item (4) thereof;

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

                  (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 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) they are not Broker-Dealers, (B) they are not participating in
         a distribution of the Exchange Notes and (z) 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.

         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.

         (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 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A

                                       32
<PAGE>

TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES."

                           (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) 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."

         (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 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

                                       33
<PAGE>

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 Holder will be required to pay 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.

                                       34
<PAGE>

Section 2.07 Replacement Notes.

         If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company 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.

         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.

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

                                       35
<PAGE>

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 ten 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.

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01 Notices to Trustee.

         If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it 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 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.

                                       36
<PAGE>

         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. 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 Section 3.09 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;

                  (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.

                                       37
<PAGE>

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.

         One Business Day prior to 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 Liquidated
Damages, 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 Liquidated Damages, 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 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 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 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.

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 April 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 (including any Additional Notes, if any) at a
redemption price of 109.5% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date, with the
net cash proceeds of one or more Equity Offerings by the Company; provided that:

                  (1) at least 65% of the aggregate principal amount of Notes
         issued under this Indenture remains outstanding immediately after the
         occurrence of such redemption; and

                  (2) the redemption must occur within 90 days of the date of
         the closing of such Equity Offering.

         (b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to April 1, 2006. The Company is not
prohibited, however, from acquiring the Notes by means other than a redemption,
whether pursuant to a tender offer or otherwise, assuming such acquisition does
not otherwise violate the terms of this Indenture.

                                       38
<PAGE>

         (c) After April 1, 2006 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 Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the 12-month period beginning on
April 1 of the years indicated below:

<Table>
<Caption>
        Year                                             Percentage
        ----                                             ----------
<S>                                                      <C>
        2006.........................................       104.750%
        2007.........................................       102.375%
        2008 and thereafter..........................       100.000%
</Table>

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

Section 3.08 Mandatory 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 redeem with the proceeds of sales and assets. The Asset Sale Offer will
remain open for a period of at least 20 Business Days following its commencement
and not more than 30 Business Days, 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
Liquidated Damages, 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 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;

                                       39
<PAGE>

                  (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 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;

                  (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.

                                       40
<PAGE>

                                   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 Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, 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 then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

         The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(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 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 on the annual financial statements by the Company's
         certified independent accountants; and

                                       41
<PAGE>

                  (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.

         In addition, following the consummation of the Exchange Offer
contemplated by the 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.

(b) In addition, the Company and the Guarantors, for so long as any Notes remain
outstanding (but not the Exchange Notes), will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule l44A(d)(4) under the
Securities Act, if any such information is required to be delivered.

         If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries that are not Guarantors, then the quarterly and annual financial
information required by the preceding paragraph will include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," of the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company.

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.

                                       42
<PAGE>

Section 4.05 Taxes.

         The Company 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 is not adverse in any material respect
to the Holders of the Notes.

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 or make any other payment or
         distribution on account of the Company's or such Restricted
         Subsidiary's 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 such Restricted Subsidiary's
         Equity Interests in their capacity as such (other than dividends or
         distributions payable in Equity Interests (other than Disqualified
         Stock) of the Company or to the Company or another 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 or any of its Restricted
         Subsidiaries) (a) any Equity Interests of the Company, (b) any Equity
         Interests of any direct or indirect parent of the Company or (c) any
         Equity Interests of any Restricted Subsidiary of the Company that are
         owned by an Affiliate of the Company that is not 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
         of such Restricted Subsidiaries, except a payment of interest or
         principal at the Stated Maturity thereof; or

                  (4) make any Restricted Investment (all such payments and
         other actions set forth in these clauses (1) through (4) of this
         Section 4.07(a) above being collectively referred to as "Restricted
         Payments"),

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

                  (1) no Default or Event of Default has occurred and is
         continuing or would occur as a consequence of such Restricted Payment;

                  (2) the Company would, at the time of such Restricted Payment
         and after giving pro forma effect thereto as if such Restricted Payment
         had been made at the beginning of the applicable four-

                                       43
<PAGE>

         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 clause (a) of Section 4.09; and

                  (3) such Restricted Payment, together with the aggregate
         amount of all other Restricted Payments made by the Company and its
         Restricted Subsidiaries after the date of this Indenture (excluding
         Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7)
         and (8) of Section 4.07(b)), 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 April 1,
                  2002 to the end of the Company's most recently ended fiscal
                  quarter for which internal financial statements are available
                  at the time of such Restricted Payment (or, if such
                  Consolidated Net Income for such period is a deficit, less
                  100% of such deficit); plus

                           (B) 100% of the aggregate net cash proceeds received
                  by the Company since the date of this Indenture as a
                  contribution to its common equity capital or from the issue or
                  sale of Equity Interests of the Company (other than
                  Disqualified Stock), or the amount by which Indebtedness is
                  reduced on the Company's balance sheet upon the conversion or
                  exchange of any Indebtedness of the Company or its Restricted
                  Subsidiaries into Equity Interests of the Company (other than
                  Disqualified Stock or Equity Interests (or debt securities),
                  sold to a Subsidiary of the Company); plus

                           (C) except, in order to avoid duplication, to the
                  extent any such payment or proceeds have been included in the
                  calculation of Consolidated Net Income, or included in clause
                  (14) of the definition of Permitted Investments an amount
                  equal to the sum of (i) the net reduction in Restricted
                  Investments that were made by the Company or any Restricted
                  Subsidiary since the date of this Indenture in any Person
                  resulting from repurchases, repayments or redemptions of such
                  Investments by such Person, proceeds realized on the sale of
                  such Investments and proceeds representing the return of
                  capital (excluding dividends and distributions), in each case
                  received by the Company or any Restricted Subsidiary, and (ii)
                  to the extent such Person is an Unrestricted Subsidiary, the
                  portion (proportionate to the Company's equity interest in
                  such Subsidiary) of the fair market value of the net assets of
                  an Unrestricted Subsidiary at the time such Unrestricted
                  Subsidiary is designated a Restricted Subsidiary; provided,
                  however, that, the foregoing sum shall not exceed, in the case
                  of any Person or Unrestricted Subsidiary, the amount of
                  Restricted Investments previously made (and treated as a
                  Restricted Payment) by the Company or any Restricted
                  Subsidiary in such Person or Unrestricted Subsidiary.

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

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

                  (2) so long as no Default has occurred and is continuing or
         caused thereby, the redemption, repurchase, retirement, defeasance or
         other acquisition of any subordinated Indebtedness of the Company or
         any Restricted Subsidiary or of any Equity Interests of the Company in
         exchange for, or out of the net cash proceeds of the substantially
         concurrent sale (other than to a Restricted Subsidiary of the Company)
         of, Equity Interests of the Company (other than Disqualified Stock);
         provided that the amount of any such net cash proceeds that are
         utilized for any such redemption, repurchase, retirement, defeasance or
         other acquisition will be excluded from paragraph (3)(B) of the
         preceding paragraph;

                                       44
<PAGE>

                  (3) so long as no Default has occurred and is continuing or
         caused thereby, the defeasance, redemption, repurchase or other
         acquisition of subordinated Indebtedness of the Company or any
         Restricted Subsidiary with the net cash proceeds from an incurrence of
         Permitted Refinancing Indebtedness;

                  (4) the payment of any dividend by a Restricted Subsidiary of
         the Company to the Company or to another Restricted Subsidiary of the
         Company;

                  (5) so long as no Default has occurred and is continuing or
         would be caused thereby, the repurchase, redemption or other
         acquisition or retirement for value of any Equity Interests of the
         Company held by any former or current employees, officers, directors or
         consultants of the Company or any of its Restricted Subsidiaries or
         their respective estates, spouses or family members under any
         management equity plan or stock option or other management or employee
         benefit plan, in an aggregate amount not to exceed $2.0 million in any
         calendar year pursuant to this clause (5); provided that the Company
         may carry forward and make in a subsequent calendar year, in addition
         to the amounts permitted for such calendar year, the amount of such
         purchases, redemptions or other acquisitions or retirements for value
         permitted to have been made but not made in any preceding calendar year
         up to a maximum of $5.0 million in any calendar year pursuant to this
         clause (5); and provided further, that such amount in any calendar year
         may be increased by the cash proceeds of key man life insurance
         policies received by the Company and its Restricted Subsidiaries after
         the date of this Indenture less any amount previously applied to the
         payment of Restricted Payments pursuant to this clause (5); provided
         further, that cancellation of the Indebtedness owing to the Company
         from employees, officers, directors and consultants of the Company or
         any of its Restricted Subsidiaries in connection with a repurchase of
         Equity Interests of the Company from such Persons will not be deemed to
         constitute a Restricted Payment for purposes of this covenant or any
         other provisions of this Indenture;

                  (6) repurchases of Capital Stock of the Company deemed to
         occur upon the cashless exercise of stock options and warrants;

                  (7) the repayment of approximately $52.8 million of the GTCR
         Subordinated Notes within six Business Days after the date of this
         Indenture; and

                  (8) so long as no Default has occurred and is continuing or
         would be caused thereby, other Restricted Payments not otherwise
         permitted pursuant to this Section 4.07 in an aggregate amount not to
         exceed $10.0 million since the date of this Indenture.

         (c) 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 Board of Directors whose
resolution with respect thereto will be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company will deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.

                                       45
<PAGE>

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 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) However, the preceding 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,
         supplements, refundings, replacements or refinancings of those
         agreements, provided that the amendments, modifications, restatements,
         renewals, increases, supplements, refundings, replacement or
         refinancings are no more restrictive, taken as a whole, with respect to
         such dividend and other payment restrictions than those contained in
         those agreements on the date of this Indenture;

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

                  (3) applicable law or rules and regulations promulgated
         thereunder;

                  (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
         and other similar agreements entered into in the ordinary course of
         business and consistent with past practices;

                  (6) purchase money obligations for property acquired in the
         ordinary course of business that impose restrictions on that property
         of the nature described in clause (3) of Section 4.08(a);

                  (7) any agreement for the sale or other disposition of Capital
         Stock or assets of a Restricted Subsidiary or an agreement entered into
         for the sale of specified assets that restricts distributions by that
         Restricted Subsidiary pending the sale or other disposition;

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

                                       46
<PAGE>

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

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

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

                  (12) restrictions on the transfer of assets subject to any
         Lien permitted under this Indenture imposed by the holder of such Lien;

                  (13) Indebtedness incurred after the date of this Indenture in
         accordance with the terms of this Indenture; provided that the
         restrictions contained in the agreements governing the new Indebtedness
         are, in the good faith judgment of the Board of Directors of the
         Company, not materially less favorable, taken as a whole, to the
         Holders of the Notes than those contained in the agreements governing
         Indebtedness that were in effect on the date of this Indenture;

                  (14) 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

                  (15) any encumbrances or restrictions imposed by any
         amendments, modifications, restatements, renewals, increases,
         supplements, refundings, replacements or refinancings of the contracts,
         instruments or obligations referred to in clauses (1) through (14)
         above; provided that such amendments, modifications, restatements,
         renewals, increases, supplements, refundings, replacements or
         refinancings are, in the good faith judgment of the Board of Directors
         of the Company, not materially less favorable, taken as a whole, to the
         Holders of Notes than those contained in the applicable contracts,
         instruments or obligations prior to such amendment, modification,
         restatement, renewal, increase, supplement, refunding, replacement or
         refinancing.

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 and any Guarantor may incur Indebtedness
(including Acquired Debt) or 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 internal financial statements
are 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) Section 4.09(a) will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "Permitted Debt"):

                                       47
<PAGE>

                  (1) the incurrence by the Company and any Restricted
         Subsidiary of Indebtedness and letters of credit under Credit
         Facilities in an aggregate principal amount at any one time outstanding
         under this Section 4.09(b)(1) (with letters of credit being deemed to
         have a principal amount equal to the maximum potential liability of the
         Company and its Restricted Subsidiaries thereunder) not to exceed the
         greater of (A) $150.0 million less 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 any term
         Indebtedness under a Credit Facility or to repay any revolving credit
         Indebtedness under a Credit Facility and effect a corresponding
         permanent commitment reduction thereunder pursuant to Section 4.10
         (provided that such amount shall be reduced to the extent of any
         reduction or elimination of any commitment under any Credit Facility
         resulting from or relating to the formation of any Receivables
         Subsidiary or the consummation of any Qualified Receivables
         Transaction) and (B) 80% of the book value of Eligible Accounts
         Receivable of the Company and its Restricted Subsidiaries;

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

                  (3) the incurrence by the Company or any of its Restricted
         Subsidiaries that is a Guarantor of Indebtedness represented by the
         Notes and the related Note Guarantees to be issued on the date of this
         Indenture and the Exchange Notes and the related Note Guarantees to be
         issued pursuant to the Registration Rights Agreement;

                  (4) the incurrence by the Company or any of its Restricted
         Subsidiaries of Indebtedness represented by Capital Lease Obligations,
         mortgage financings or purchase money obligations, in each case,
         incurred for the purpose of financing all or any part of the purchase
         price or cost of construction or improvement of property (real or
         personal), plant or equipment 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 Section 4.09(b)(4),
         not to exceed $10.0 million at any time outstanding;

                  (5) the incurrence by the Company or any of its Restricted
         Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
         the net proceeds of which are used to refund, refinance or replace
         Indebtedness (other than intercompany Indebtedness) that was permitted
         by this Indenture to be incurred under Section 4.09(a) or clauses (2),
         (3), (4), (5), (10), (11) or (14) 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; 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 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 Section 4.09(b)(6);

                  (7) the incurrence by the Company or any of its Restricted
         Subsidiaries of Hedging Obligations that are incurred for the purpose
         of fixing or hedging interest rate risk with respect to any floating
         rate or

                                       48
<PAGE>

         fixed Indebtedness that is permitted by the terms of this Indenture to
         be outstanding or for the purpose of fixing or hedging currency
         exchange rate risk or commodity price risk arising in the ordinary
         course of business;

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

                  (9) the accrual of interest, the accretion or amortization of
         original issue discount, the payment of interest on any Indebtedness in
         the form of additional Indebtedness with the same terms, and the
         payment of dividends on Disqualified Stock in the form of additional
         shares of the same class of Disqualified Stock will not be deemed to be
         an incurrence of Indebtedness or an issuance of Disqualified Stock for
         purposes of this Section 4.09; provided, in each such case, that the
         amount thereof is included in Fixed Charges of the Company as accrued;

                  (10) the incurrence by the Company or any of its Restricted
         Subsidiaries of Indebtedness constituting reimbursement obligations
         with respect to letters of credit issued in the ordinary course of
         business, including, without limitation, letters of credit in respect
         of workers' compensation claims or self-insurance, or other
         Indebtedness with respect to reimbursement type obligations regarding
         workers' compensation claims or self insurance; provided, however,
         that, in each case, upon the drawing of such letters of credit or the
         incurrence of such Indebtedness, such obligations are reimbursed within
         30 days following such drawing or incurrence;

                  (11) the incurrence by the Company or any of its Restricted
         Subsidiaries of Indebtedness arising from agreements of the Company or
         such 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
         Capital Stock by the Company or a Restricted Subsidiary, other than
         guarantees of Indebtedness incurred by any Person acquiring all or any
         portion of such business, assets or Capital Stock for the purpose of
         financing such acquisition; provided that:

                           (A) such Indebtedness is not reflected on the balance
                  sheet of the Company or any Restricted Subsidiary (contingent
                  obligations referred to in a footnote or footnotes to
                  financial statements and not otherwise reflected on the
                  balance sheet will not be deemed to be reflected on that
                  balance sheet for purposes of this Section 4.09(b)(11)(A));
                  and

                           (B) the maximum assumable liability in respect of
                  that Indebtedness shall at no time exceed the gross proceeds,
                  including noncash proceeds (the fair market value of those
                  noncash proceeds being measured at the time received and
                  without giving effect to any subsequent changes in value),
                  actually received by the Company and/or that Restricted
                  Subsidiary in connection with that disposition;

                  (12) the incurrence by the Company or any of its Guarantors of
         obligations in respect of performance and surety bonds and completion
         guarantees provided by the Company or such Guarantors in the ordinary
         course of business (including Surety Obligations);

                  (13) the incurrence by the Company or any of its Restricted
         Subsidiaries of subordinated Indebtedness issued to former employees to
         repurchase stock from such former employees in an aggregate principal
         amount at any time outstanding not to exceed $2.5 million;

                  (14) the incurrence by the Company or any of its Restricted
         Subsidiaries of additional Indebtedness in an aggregate principal
         amount (or accreted value, as applicable) at any time

                                       49
<PAGE>

         outstanding, including all Permitted Refinancing Indebtedness incurred
         to refund, refinance or replace any Indebtedness incurred pursuant to
         this Section 4.09(b)(14), not to exceed $25.0 million;

                  (15) the incurrence by Foreign Subsidiaries of Indebtedness in
         an aggregate principal amount at any one time outstanding not to exceed
         the greater of (a) $15.0 million and (b) 80% of the book value of
         Eligible Accounts Receivable of all such Foreign Subsidiaries; and

                  (16) the incurrence by a Receivables Subsidiary of
         Indebtedness in a Qualified Receivables Transaction that is without
         recourse to the Company or to any other Restricted Subsidiary of the
         Company or their assets (other than such Receivables Subsidiary and its
         assets and, as to the Company or any Restricted Subsidiary of the
         Company, other than pursuant to representations, warranties, covenants,
         performance guarantees (so long as such guarantees are not guarantees
         of payment obligations) and indemnities customary for such
         transactions) and the payment of which is not guaranteed by any such
         Person.

         (c) 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 (16)
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 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 be deemed to have been incurred on such date in reliance on
the exception provided by clause (1) of the definition of Permitted Debt.

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 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) 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; and

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

                           (A) any liabilities, as shown on the Company's most
                  recent consolidated balance sheet, of the Company or any
                  Restricted Subsidiary (other than contingent liabilities and
                  liabilities that are by their terms subordinated to the Notes
                  or any Note Guarantee of such Restricted Subsidiary) that are
                  either (i) expressly assumed by the transferee of any such
                  assets pursuant to a customary novation agreement that
                  releases the Company or such Restricted Subsidiary from
                  further liability or (ii) otherwise released from further
                  liability by operation of law, as confirmed in the case of
                  subclause (ii), at the time such release is effected, by the
                  Company delivering to the Trustee an opinion of counsel
                  acceptable to the Trustee; and

                           (B) any securities, notes or other obligations
                  received by the Company or any such Restricted Subsidiary from
                  such transferee that are converted by the Company or such

                                       50
<PAGE>

                  Restricted Subsidiary into cash within 90 days following the
                  closing of such Asset Sale, to the extent of the cash received
                  in that conversion; and

                           (C) any Designated Noncash Consideration received by
                  the Company or any of its Restricted Subsidiaries in any Asset
                  Sale having a fair market value, taken together with all other
                  Designated Noncash Consideration received pursuant to this
                  clause (C) that is at the time outstanding, not to exceed 5%
                  of Total Assets at the time of the receipt of such Designated
                  Noncash Consideration.

         Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply those Net Proceeds at its option:

                  (1) to repay Senior Debt and, if the Senior Debt repaid is
         revolving credit Indebtedness, to correspondingly permanently 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 make a capital expenditure;

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

                  (5) to redeem the Notes with the Net Proceeds of such Asset
         Sale pursuant to Section 3.09 hereof; or

                  (6) any combination of the foregoing.

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 paragraphs of this Section 4.10 will constitute
"Excess Proceeds." When 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 other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid interest
and Liquidated Damages, 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 those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
other pari passu Indebtedness tendered 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. 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 Rule 14e-l 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 Section 3.09 or
this Section 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 Section 3.09 or this Section 4.10 of this Indenture by virtue
of such conflict.

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<PAGE>

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 $5.0 million, a resolution of the
                  Board of Directors set forth in an Officers' Certificate
                  certifying that such Affiliate Transaction complies with this
                  Section 4.11 and that such Affiliate Transaction has been
                  approved by a majority of the disinterested members of the
                  Board of Directors; and

                           (B) with respect to any Affiliate Transaction or
                  series of related Affiliate Transactions involving aggregate
                  consideration in excess of $10.0 million, an opinion as to the
                  fairness to the Company 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):

                  (1) any employment agreement or other compensation
         arrangements or agreements entered into by the Company or any of its
         Restricted Subsidiaries in the ordinary course of business of the
         Company or such Restricted Subsidiary;

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

                  (3) transactions between or among the Company and/or any of
         its Unrestricted Subsidiary Guarantors in the ordinary course of
         business on terms that are no less favorable to the Company than those
         that would have been obtained in a comparable transaction by the
         Company or such Restricted Subsidiary with an unrelated Person (other
         than Asset Sales);

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

                  (5) payment of reasonable directors fees to directors of the
         Company or any of its Restricted Subsidiaries and the provision and
         payment of customary indemnification to directors and officers of the
         Company;

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

                  (7) Restricted Payments that are permitted by Section 4.07
         hereof;

                  (8) loans or advances by the Company and its Restricted
         Subsidiaries to employees of the Company and its Restricted
         Subsidiaries that are entered into in the ordinary course of business
         and that

                                       52
<PAGE>

         are approved by the Board of Directors of the Company in good faith;
         provided that the aggregate principal amount of all such loans or
         advances do not exceed $2.5 million at any one time outstanding;

                  (9) transactions effected pursuant to any agreement described
         under "Certain Relationships and Related Transactions" of the Offering
         Memorandum relating to the Notes dated April 8, 2002 as the same are in
         effect on the date of this Indenture or any amendment, modification or
         replacement to such agreement (so long as the amendment, modification
         or replacement is not disadvantageous to the Holders of the Notes in
         any respect);

                  (10) transactions effected pursuant to the terms of the
         Company's preferred stock, as the same are in effect on the date of
         this Indenture or any amendment, modification or replacement to such
         terms (so long as the amendment, modification or replacement is not
         disadvantageous to the Holders of the Notes in any respect); and

                  (11) transactions between a Receivables Subsidiary and any
         Person in which the Receivables Subsidiary has an Investment.

Section 4.12 Liens.

         The Company will not, and will not permit any of its Subsidiaries to
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness, Attributable Debt or trade payables
(other than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired, unless all payments due under this Indenture and the Notes
are secured 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 Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its 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 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), licenses and
         franchises of the Company and its Subsidiaries; provided, however, that
         the Company shall not be required to preserve any such right, license
         or franchise, or the corporate, partnership or other existence of any
         of its Subsidiaries, if the Board of Directors shall determine that the
         preservation thereof is no longer desirable in the conduct of the
         business of the Company and its Subsidiaries, taken as a whole, and
         that the loss thereof is not adverse in any material respect to the
         Holders of the Notes.

Section 4.15 Change of Control.

         (a) Upon the occurrence of a Change of Control, 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)

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<PAGE>

of each Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
on the Notes repurchased, if any, to the date of purchase (the "Change of
Control Payment"). Within ten 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:

                  (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 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 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 Section 3.09 or 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 Section 3.09 or this Section 4.15 by virtue of
such conflict.

         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.

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<PAGE>

         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 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 of $1,000.

         Prior to complying with any of the provisions of this Section 4.15, but
in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or 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. 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.

         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 in right of
payment to any Senior Debt of the Company and senior 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 in right of payment to
the Senior Debt of such Guarantor and senior in right of payment to such
Guarantor's Note Guarantee.

Section 4.17 Sale and Leaseback Transactions.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:

                  (1) the Company or that Restricted Subsidiary, as applicable,
         could have (a) incurred Indebtedness in an amount equal to the
         Attributable Debt relating to such sale and leaseback transaction under
         the Fixed Charge Coverage Ratio test in Section 4.09(a) and (b)
         incurred a Lien to secure such Indebtedness pursuant to Section 4.12
         hereof;

                  (2) the gross cash proceeds of that sale and leaseback
         transaction are at least equal to the fair market value, as determined
         in good faith by the Board of Directors and set forth in an Officers'
         Certificate delivered to the Trustee, of the property that is the
         subject of that sale and leaseback transaction; and

                  (3) the transfer of assets in that sale and leaseback
         transaction is permitted by, and the Company applies the proceeds of
         such transaction in compliance with, Section 4.10 hereof.

Section 4.18 Limitation on Issuances and Sales of Equity Interests of Wholly
Owned Restricted Subsidiaries.

         The Company will not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary that exists on the
date of this Indenture (or any successor of any such Wholly Owned Restricted
Subsidiary by way of merger, consolidation or sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the

                                       55
<PAGE>

assets of such Restricted Subsidiary) of the Company to any Person (other than
the Company or a Wholly Owned Restricted Subsidiary of the Company), unless:

                  (1) such transfer, conveyance, sale, lease or other
         disposition is of all the Equity Interests in such Wholly Owned
         Restricted Subsidiary; and

                  (2) the cash Net Proceeds from such transfer, conveyance,
         sale, lease or other disposition are applied in accordance with Section
         4.10 hereof.

         In addition, the Company will not permit any such Wholly Owned
Restricted Subsidiary of the Company to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or to another such
Wholly Owned Restricted Subsidiary of the Company. Nothing in this Section 4.18
shall prevent any pledge of equity interests of any Subsidiary pursuant to the
Credit Agreement.

Section 4.19 Payments for Consent.

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

Section 4.20 Additional Guarantees.

         If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary that is not a Receivables Subsidiary after
the date of this Indenture, then that newly acquired or created Domestic
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, except for Domestic
Subsidiaries that have been properly designated as Unrestricted Subsidiaries in
accordance with this Indenture for so long as they continue to constitute
Unrestricted Subsidiaries and except that the Company may, in its sole
discretion, elect within 10 Business Days of the date on which such Domestic
Subsidiary was acquired or created, to have such properly designated
Unrestricted Subsidiary become an Unrestricted Subsidiary Guarantor under this
Indenture, in which case such Unrestricted Subsidiary Guarantor shall execute a
supplemental indenture and deliver an opinion of counsel satisfactory to the
Trustee within 20 Business Days of the date on which such Unrestricted
Subsidiary was acquired or created. The form of such Note Guarantee is attached
as Exhibit E hereto.

Section 4.21 Designation of Restricted and Unrestricted Subsidiaries.

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

                                       56
<PAGE>

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01 Merger, Consolidation, or Sale of Assets.

         The Company will not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or (2) sell, assign, transfer, convey 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)
                  is 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 States, 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, the
         Indenture and the Registration Rights Agreement pursuant to agreements
         reasonably satisfactory to the Trustee;

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

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

         In addition, the Company may 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 Domestic 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

                                       57
<PAGE>

the "Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets 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 Liquidated Damages 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, 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 Sections 4.10, 4.15 or 5.01 hereof;

                  (4) the Company or any of its Restricted Subsidiaries fails to
         observe or perform any other covenant, representation, warranty or
         other agreement in this Indenture for 60 days after notice to the
         Company by the Trustee or the Holders of at least 25% in aggregate
         principal amount of the Notes then outstanding voting as a single
         class;

                  (5) 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 Restricted Subsidiaries (or the payment of which is
         guaranteed by the Company or any of its Restricted Subsidiaries),
         whether such Indebtedness or guarantee now exists, or is created after
         the date of this Indenture, if that default:

                           (A) is caused by a failure to pay principal on such
                  Indebtedness at the Stated Maturity thereof (a "Payment
                  Default"); or

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

                  and, in each case, the principal amount of any such
                  Indebtedness which has not been paid or has been accelerated,
                  together with the principal amount of any other such
                  Indebtedness which has not been paid or the maturity of which
                  has been so accelerated, aggregates $10.0 million or more;

                  (6) failure by the Company or any of its Restricted
         Subsidiaries to pay for 60 days from the date on which such obligation
         first arose reimbursement, indemnification or similar obligations
         aggregating more than $15.0 million relating to Surety Obligations as
         to which to the issuing or providing party or parties have made
         payments under the documentation relating thereto;

                                       58
<PAGE>

                  (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 Restricted Subsidiaries, which
         judgment or judgments are not paid, discharged or stayed for a period
         of 60 days after such judgment becomes final and non-appealable;
         provided that the aggregate of all such undischarged judgments exceeds
         $10.0 million;

                  (8) except as permitted by this Indenture, any Note Guarantee
         (other than a Note Guarantee issued by a Subsidiary that is not a
         Significant Subsidiary or any group of Subsidiaries 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 behalf of any Guarantor, shall deny or disaffirm its
         obligations under its Note Guarantee (other than a Note Guarantee
         issued by a Subsidiary that is not a Significant Subsidiary or any
         group of Subsidiaries that, taken together, would constitute a
         Significant Subsidiary); and

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

                           (A) commences a voluntary case,

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

                           (C) consents to the appointment of a 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

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

                           (A) is for relief against the Company or any of its
                  Significant Subsidiaries or any group of Restricted
                  Subsidiaries that, taken as a whole, 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 as a whole, 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 as a
                  whole, 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 as a whole, would constitute a
                  Significant Subsidiary;

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

Section 6.02 Acceleration.

         In the case of an Event of Default specified in clause (9) or (10) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries

                                       59
<PAGE>

that, taken as a whole, would constitute a Significant Subsidiary, all
outstanding Notes will become due and payable immediately without further action
or notice. If any other Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately.

         Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (9) or (10) of Section 6.01 hereof occurs with respect to the Company,
any of its Restricted Subsidiaries that are Significant Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or 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.

         If an Event of Default occurs on or after April 1, 2006 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to April 1, 2006
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on April 1 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):

<Table>
<Caption>
        YEAR                                                                               PERCENTAGE
        ----                                                                               ----------
<S>                                                                                        <C>
        2002.............................................................................     109.500%
        2003.............................................................................     108.718%
        2004.............................................................................     107.937%
        2005.............................................................................     107.156%
</Table>

Section 6.03 Other Remedies.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, 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 Liquidated Damages, if any, or interest
on, the Notes (including in connection with an

                                       60
<PAGE>

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.

         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 Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08 Collection Suit by Trustee.

         If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as Trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, 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.

                                       61
<PAGE>

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

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

                  Second: to Holders of Notes for amounts due and unpaid on the
         Notes for principal, premium and Liquidated Damages, 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 Liquidated Damages, 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.

                                       62
<PAGE>

                                   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 an Event of 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;

                  (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 or 6.06 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.

                                       63
<PAGE>

         (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 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 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
Liquidated Damages, 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

                                       64
<PAGE>

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). 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 Guarantor 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 (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 such Guarantor 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.

         (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(9) or (10) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

         (f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.

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.

                                       65
<PAGE>

         (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. Except when an
Event of Default has occurred or is occurring, the Company may remove the
Trustee (with or without cause) by so notifying the Trustee in writing. If an
Event of Default has occurred or is occurring, 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.

         (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.

                                       66
<PAGE>

         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.

         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 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, 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 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
         Liquidated Damages, 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 under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and 4.21
hereof and clause (4) of Section 5.01 hereof

                                       67
<PAGE>

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, 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, 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 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. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5)
hereof will not constitute Events of Default.

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 Liquidated Damages, 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 Stated 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 in the
         United States 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 in the United
         States 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;

                  (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.

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 Liquidated Damages, 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
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) 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

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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
Liquidated Damages, 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 a
         Guarantor's obligations to the Holders of the Notes by a successor to
         the Company pursuant to Article 5 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 comply with requirements of the SEC in order to effect
         or maintain the qualification of this Indenture under the TIA;

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

         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

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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.

         (a) Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.09, 4.10 and 4.15 hereof) 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 Liquidated Damages, 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 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).

         (b) Without the consent of at least 75% in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange offer for, or purchase of, such Notes), no waiver or amendment
to this Indenture may make any change in the provisions of Article 10 hereof
that adversely affects the rights of any Holder of 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 shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.

         (c) 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 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 in Section 9.02(a) with
         respect to Sections 3.09, 4.10 and 4.15 hereof and in Section 9.02(b)
         with respect to Article 10;

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<PAGE>

                  (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 Liquidated Damages, 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 Sections 6.04 or 6.07 hereof, or the rights of Holders of
         Notes to receive payments of principal of, or interest or premium or
         Liquidated Damages, if any, on the Notes;

                  (7) waive a redemption payment with respect to any note (other
         than as provided in Section 9.02(a) with respect to a payment required
         by Section 4.10 or 4.15);

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

                  (9) make any change to this Section 9.02.

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.

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

Section 9.05 Notation on or Exchange of Notes.

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

         Failure to make the appropriate notation or issue a new Note 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
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it.

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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 in cash of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.

Section 10.02 Liquidation; Dissolution; Bankruptcy.

         Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, or
in an assignment for the benefit of creditors or in any marshaling of the
Company's assets and liabilities:

                  (1) holders of Senior Debt will be entitled to receive payment
         in full in cash 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) 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 in cash, 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 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 in cash if:

                  (1) a payment default on Designated Senior Debt occurs and is
         continuing beyond any applicable grace period in the agreement,
         indenture or other document governing such Designated Senior Debt; 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
         (x) if the Credit Agreement is in effect, the administrative agent
         thereunder or (y) if the Credit Agreement is not in effect, the holders
         of

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         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
         360 days have elapsed since the effectiveness of the immediately prior
         Payment Blockage Notice and (B) all scheduled payments of principal,
         premium and Liquidated Damages, if any, and interest on the Notes that
         have come due have been paid in full in cash.

         No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee may be, or may be made,
the basis for a subsequent Payment Blockage Notice unless such default shall
have been cured or waived for a period of not less than 90 days.

         (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, upon the date upon which
         such default is cured or waived, or

                  (2) in the case of a nonpayment default, upon the earliest of
         (a) the date on which such nonpayment default is cured or waived, (b)
         179 days after the date on which the applicable Payment Blockage Notice
         is received, and (c) the Trustee receives notice from the
         Representative for the Designated Senior Debt that gave such Payment
         Blockage Notice rescinding the Payment Blockage Notice, 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.

Section 10.04 Acceleration of Notes.

         If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify holders 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 Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 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 cash 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 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.

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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 in cash 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 Liquidated Damages, 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 Liquidated Damages, 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.

         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

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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 three 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.

         The provisions of this Article 10 may not be amended or modified
without the written consent of the holders of all Senior Debt. 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.

                                   ARTICLE 11.
                                 NOTE GUARANTEES

Section 11.01 Guarantee.

         (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 Liquidated Damages, 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

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                  (2) in case of any extension of time of payment or renewal of
         any Notes or any of such other obligations, that same will be promptly
         paid in full when due or performed in 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 covenants 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.

         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 11.03 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, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such

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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 11.04 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 4.20 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.20 hereof and this Article 11, to the extent applicable.

Section 11.05 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

                  (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 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, this Indenture and the Note Guarantee on
         the terms set forth herein or therein; and

                           (b) the Net Proceeds of such sale or other
         disposition are applied in accordance with the applicable provisions of
         this Indenture, including without limitation, Section 4.10 hereof.

         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

                                       78
<PAGE>

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 11.06 Release of Note Guaranty.

         The Note Guarantee of a Guarantor will be released:

                  (1) 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 to
         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 Section 4.10 hereof;

                  (2) if the Company designates any Restricted Subsidiary that
         is a Guarantor as an Unrestricted Subsidiary in accordance with Section
         4.18;

                  (3) if the Company designates any Unrestricted Subsidiary
         Guarantor to no longer be a Guarantor in accordance with the provisions
         of this Indenture that would be applicable if such Unrestricted
         Subsidiary Guarantor were treated as if it were a Restricted Subsidiary
         that the Company had designated as an Unrestricted Subsidiary in
         accordance with clause (2) above; or

                  (4) in connection with the sale, disposition or transfer of
         all of the assets of a Guarantor to another Guarantor or the Company.

         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 issued hereunder, when:

                  (1) either:

                                       79
<PAGE>

                           (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 Liquidated Damages, 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.

         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.

                                       80
<PAGE>

                                   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:

         Synagro Technologies, Inc.
         1800 Bering Drive - Suite 1000
         Houston, Texas 77057
         Telecopier No.: (713) 369-1750
         Attention: Alvin L. Thomas II, Esq., General Counsel

         With a copy to:

         Locke Liddell & Sapp LLP
         600 Travis
         Suite 3200
         Houston, Texas 77002
         Telecopier No.: (713) 223-3717
         Attention: Michael T. Peters, Esq.

         If to the Trustee:

         Wells Fargo Bank Minnesota, National Association
         505 Main Street, Suite 301
         Fort Worth, Texas 76102
         Telecopier No.: (817) 885-8650
         Attention:  Ms. Melissa Scott

         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

                                       81
<PAGE>

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.

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.

                                       82
<PAGE>

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

         No director, officer, employee, incorporator, stockholder, member or
managing member 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.

         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 11.05.

Section 13.11 Severability.

         In case any provision in this Indenture or in the Notes 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]

                                       83
<PAGE>

                                   SIGNATURES

Dated as of April 17, 2002

                          SYNAGRO TECHNOLOGIES, INC.

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Executive Vice President and Secretary

                          SYNAGRO MIDWEST, INC.,
                          SYNAGRO OF MICHIGAN, INC.,
                          SYNAGRO OF WISCONSIN, INC.,
                          SYNAGRO OF MINNESOTA - REHBEIN, INC.,
                          SYNAGRO MIDWEST - ENVIROLAND, INC.,
                          SYNAGRO SOUTHWEST, INC.,
                          SYNAGRO OF TEXAS-CDR, INC.,
                          SYNAGRO OF TEXAS-VITAL-CYCLE, INC.,
                          SYNAGRO SOUTHEAST, INC.,
                          SYNAGRO OF NORTH CAROLINA-EWR, INC.,
                          SYNAGRO OF NORTH CAROLINA-AMSCO, INC.,
                          SYNAGRO OF FLORIDA - A&J, INC.,
                          SYNAGRO OF FLORIDA - ANTI-POLLUTION, INC.,
                          SYNAGRO OF FLORIDA - DAVIS WATER, INC.,
                          SYNAGRO OF FLORIDA - ECOSYSTEMS, INC.,
                          SYNAGRO NORTHEAST, INC.,
                          COMPOSTING CORPORATION OF AMERICA,
                          ORGANI-GRO, INC.,
                          ST INTERCO, INC.,
                          ENVIRONMENTAL PROTECTION & IMPROVEMENT COMPANY, INC.,
                          SYNAGRO MID-ATLANTIC, INC.,
                          SYNAGRO WEST, INC.,
                          SYNAGRO COMPOSTING COMPANY OF CALIFORNIA, INC.,
                          SYNAGRO OF CALIFORNIA, INC.,
                          NEW ENGLAND TREATMENT COMPANY, INC.,
                          FAIRHAVEN RESIDUAL SYSTEMS, INC.,
                          NETCO-CONNECTICUT, INC.,
                          NETCO-RESIDUALS MANAGEMENT SYSTEMS, INC.,
                          NETCO-WATERBURY SYSTEMS, INC., F/K/A
                          NETCO-WATERBURY, INC.,
                          NEW HAVEN RESIDUALS SYSTEMS, INC.,
                          RESIDUAL TECHNOLOGIES SYSTEMS, INC.,
                          RESIDUALS PROCESSING, INC.,
                          FUTURE - TECH ENVIRONMENTAL SERVICES, INC.,
                          SYNAGRO - WWT, INC.,
                          SOARING VISTA PROPERTIES, INC.,
                          NYOFCO HOLDINGS, INC.,
                          SYNAGRO - WCWNJ, INC.,
                          SYNAGRO - BALTIMORE, L.L.C.,
                          SYNAGRO DIGESTION, INC., AND

                                       84
<PAGE>

                          SYNAGRO TEXAS, INC.

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          RESIDUAL TECHNOLOGIES, LIMITED PARTNERSHIP

                          By Residuals Technologies Systems, Inc., its
                          general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          FAIRHAVEN RESIDUALS, LIMITED PARTNERSHIP

                          By Fairhaven Residuals Systems, Inc., its
                          general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          NETCO-WATERBURY, LIMITED PARTNERSHIP

                          By NETCO-Waterbury Systems, Inc., its general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          NETCO-RESIDUALS MANAGEMENT, LIMITED PARTNERSHIP

                          By NETCO-Residuals Management Systems, Inc, its
                          general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          NEW HAVEN RESIDUALS, LIMITED PARTNERSHIP

                          By New Haven Residuals Systems, Inc., its
                          general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                                       85
<PAGE>

                          PROVIDENCE SOILS, LLC

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Alvin L. Thomas II, Manager

                          SYNAGRO MANAGEMENT, L.P.

                          By Synagro Texas, Inc., its general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          NEW YORK ORGANIC FERTILIZER COMPANY

                          By Synagro - WWT, Inc., its general partner

                          By: /s/ Alvin L. Thomas II
                             ---------------------------------------------------
                              Name:  Alvin L. Thomas II
                              Title: Secretary

                          ATLANTA RESIDUALS COMPANY, LLC

                          By: /s/ Mark Rome
                             ---------------------------------------------------
                              Name:  Mark Rome
                              Title: Vice-President

                          SYNAGRO DELAWARE, INC.

                          By: /s/ Mark B. McCormick
                             ---------------------------------------------------
                              Name:  Mark B. McCormick
                              Title: Secretary

                                       86
<PAGE>

                          WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

                          By:  /s/ Melissa A. Scott
                             ---------------------------------------------------
                               Name:  Melissa A. Scott
                               Title: Corporate Trust Officer

                                       87
<PAGE>
                                   SCHEDULE I

                             SCHEDULE OF GUARANTORS

         The following schedule lists each Guarantor under this Indenture as of
the date of this Indenture:

Synagro Midwest, Inc.,
Synagro of Michigan, Inc.,
Synagro of Wisconsin, Inc.,
Synagro of Minnesota - Rehbein, Inc.,
Synagro Midwest - Enviroland, Inc.,
Synagro Southwest, Inc.,
Synagro of Texas-CDR, Inc.,
Synagro of Texas-Vital-Cycle, Inc.,
Synagro Southeast, Inc.,
Synagro of North Carolina-EWR, Inc.,
Synagro of North Carolina-Amsco, Inc.,
Synagro of Florida - A&J, Inc.,
Synagro of Florida - Anti-Pollution, Inc.,
Synagro of Florida - Davis Water, Inc.,
Synagro of Florida - Ecosystems, Inc.,
Synagro Northeast, Inc.,
Composting Corporation of America,
Organi-Gro, Inc.,
ST Interco, Inc.,
Environmental Protection & Improvement Company, Inc.,
Synagro Mid-Atlantic, Inc.,
Synagro West, Inc.,
Synagro Composting Company of California, Inc.,
Synagro of California, Inc.,
New England Treatment Company, Inc.,
Fairhaven Residual Systems, Inc.,
NETCO-Connecticut, Inc.,
NETCO-Residuals Management Systems, Inc.,
NETCO-Waterbury Systems, Inc., f/k/a NETCO-Waterbury, Inc.,
New Haven Residuals Systems, Inc.,
Residual Technologies Systems, Inc.,
Residuals Processing, Inc.,
Future - Tech Environmental Services, Inc.,
Synagro - WWT, Inc.,
Soaring Vista Properties, Inc.,
NYOFCO Holdings, Inc.,
Synagro - WCWNJ, Inc.,
Synagro - Baltimore, L.L.C.,
Synagro Digestion, Inc.,
Synagro Texas, Inc., and
Synagro Delaware, Inc
Residual Technologies, Limited Partnership
Fairhaven Residuals, Limited Partnership
NETCO-Waterbury, Limited Partnership
NETCO-Residuals Management, Limited Partnership

                                      I-1
<PAGE>

New Haven Residuals, Limited Partnership
Providence Soils, LLC
Synagro Management, L.P.
New York Organic Fertilizer Company
Atlanta Residuals Company, LLC

                                      I-2
<PAGE>
                                                                       EXHIBIT A

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

                                                         CUSIP/CINS ____________

                    9 1/2% Senior Subordinated Notes due 2009

No. ___                                                            $____________

                           SYNAGRO TECHNOLOGIES, INC.

promises to pay to CEDE & CO.

or registered assigns,

the principal sum of ___________________________________________________________

Dollars on April 1, 2009.

Interest Payment Dates:  April 1 and October 1

Record Dates:  March 15 and September 15

Dated:  April 17, 2002

                                          SYNAGRO TECHNOLOGIES, INC.

                                          By:___________________________________
                                             Name:
                                             Title:

                                          By:___________________________________
                                             Name:
                                             Title:

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

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
  as Trustee

By:_______________________________
        Authorized Signatory

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

                                      A-1
<PAGE>

                                 [Back of Note]
                    9 1/2% Senior Subordinated Notes due 2009

[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]

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

                  (1) INTEREST. Synagro Technologies, Inc., a Delaware
         corporation (the "Company"), promises to pay interest on the principal
         amount of this Note at 9 1/2% per annum from April 17, 2002 until
         maturity and shall pay the Liquidated Damages, if any, payable pursuant
         to Section 5 of the Registration Rights Agreement referred to below.
         The Company will pay interest and Liquidated Damages, if any,
         semi-annually in arrears on April 1 and October 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 October 1, 2002.
         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 equal to the rate
         then in effect; it will pay interest (including post-petition interest
         in any proceeding under any Bankruptcy Law) on overdue installments of
         interest and Liquidated Damages, 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 Liquidated Damages, if any, to
         the Persons who are registered Holders of Notes at the close of
         business on the March 15 or September 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 Liquidated Damages,
         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 Liquidated
         Damages, 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 Liquidated Damages,
         if any, on, all Global Notes and all other Notes the Holders of which
         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; provided that Liquidated Damages
         may be paid through the issuance of Additional Notes having an Accreted
         Value at the time of issuance equal to the amount of Liquidated Damages
         so paid.

                  (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

                                      A-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 April 17, 2002 (the "Indenture") between the Company, the
         Guarantors and the Trustee. The terms of the Notes include those stated
         in the Indenture and those made part of the Indenture by reference to
         the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
         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.

                  (5) Optional Redemption.

         (a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to April 1, 2006.
Thereafter, 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 Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the 12-month period beginning on
April 1 of the years indicated below:

<TABLE>
<CAPTION>
        Year                                                                                  Percentage
        ----                                                                                  ----------
<S>                                                                                           <C>
        2006.............................................................................        104.750%
        2007.............................................................................        102.375%
        2008 and thereafter..............................................................        100.000%
</TABLE>

         (b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to April 1, 2005, the Company may redeem up to
35% of the aggregate principal amount of the Notes issued under the Indenture
(including additional notes if any) on any one or more occasions with the net
cash proceeds of one or more Equity Offerings by the Company at a redemption
price of 109.5% of the aggregate principal amount plus accrued and unpaid
interest and Liquidated Damages, if any, to the redemption date; provided that
at least 65% in aggregate principal amount of the Notes issued under the
Indenture (including additional notes, if any) remains outstanding immediately
after the occurrence of such redemption and that such redemption occurs within
90 days of the date of the closing of such Equity Offering.

                  (6) Mandatory Redemption.

         The Company will not be required to make mandatory redemption or
simplified 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 Liquidated Damages thereon, if any, to the date of purchase (the
         "Change of Control Payment"). Within ten 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.

                                      A-3
<PAGE>

                           (b) If the Company or a Subsidiary consummates any
         Asset Sales, within five days of each date on which the aggregate
         amount of Excess Proceeds exceeds $5 million, the Company will commence
         an offer to all Holders of Notes and all holders of other Indebtedness
         that is pari passu with the Notes containing provisions similar to
         those set forth in the Indenture with respect to offers to purchase or
         redeem with the proceeds of sales of assets (an "Asset Sale Offer")
         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 Liquidated Damages 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 (including any Additional 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 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.

                  (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

                                      A-4
<PAGE>

         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 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 or to allow any Guarantor to execute a supplemental indenture
         to the Indenture and/or a Note Guarantee with respect to the Notes.

                  (12) DEFAULTS AND REMEDIES. Events of Default include events
         when: (1) the Company defaults for 30 days in the payment when due of
         interest on, or Liquidated Damages with respect to, the Notes whether
         or not prohibited by the subordination provisions of the 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, whether or not prohibited by the subordination provisions of
         the Indenture; (3) the Company or any of its Restricted Subsidiaries
         fails to comply with the provisions of Sections 4.07, 4.09, 4.10, 4.15
         or 5.01 hereof; (4) the Company or any of its Restricted Subsidiaries
         fails to observe or perform any other covenant, representation,
         warranty or other agreement in the Indenture or the Notes for 60 days
         after notice to the Company by the Trustee or the Holders of at least
         25% in aggregate principal amount of the Notes then outstanding voting
         as a single class; (5) 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 Restricted Subsidiaries (or the payment of which is
         guaranteed by the Company or any of its Restricted Subsidiaries),
         whether such Indebtedness or guarantee now exists, or is created after
         the date of the Indenture, if that default: (A) is caused by a failure
         to pay principal of, or interest or premium, if any, on such
         Indebtedness prior to the expiration of the grace period provided in
         such Indebtedness on the date of such default (a "Payment Default"); or
         (B) results in the acceleration of such Indebtedness prior to its
         express maturity, and, in each case, the principal amount of any such
         Indebtedness, together with the principal amount of any other such
         Indebtedness or the maturity of which has been so accelerated,
         aggregates $10.0 million or more; (6) failure by the Company or any of
         its Restricted Subsidiaries to pay for 60 days from the date on which
         such obligation first arose reimbursement, indemnification or similar
         obligations aggregating more than $15.0 million relating to Surety
         Obligations as to which to the issuing or providing party or parties
         have made payments under the documentation relating thereto; (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 that, taken as a whole, would constitute a Significant
         Subsidiary, which judgment or judgments are not paid, discharged or
         stayed for a period of 60 days after such judgment becomes final and
         non-appealable; provided that the aggregate of all such undischarged
         judgments exceeds $10.0 million; (8) except as permitted by the
         Indenture, any Note Guarantee (other than a Guarantee issued by a
         Subsidiary that is not a Significant Subsidiary or any group of
         Subsidiaries 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 behalf of
         any Guarantor, shall deny or disaffirm its obligations under its
         Guarantee (other than a Guarantee issued by a Subsidiary that is not a
         Significant Subsidiary or any group of Subsidiaries that, taken
         together, would constitute a Significant Subsidiary); and (9) the
         Company or any of its Significant Subsidiaries or any group of
         Restricted Subsidiaries that, taken as a whole, would constitute a
         Significant Subsidiary pursuant to or within the meaning of Bankruptcy
         Law: (A) commences a voluntary case, (B) consents to the entry of an
         order for relief against it in an involuntary case, (C) consents to the
         appointment of a 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

                                      A-5
<PAGE>

         due; or (10) a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that: (A) is for relief against the
         Company or any of its Significant Subsidiaries or any group of
         Restricted Subsidiaries that, taken as a whole, 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 as a whole, 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 as a whole, 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 as a whole, would constitute a Significant
         Subsidiary; and the order or decree remains unstayed and in effect for
         60 consecutive days.

                  (13) SUBORDINATION. Payment of principal, interest and premium
         and Liquidated Damages, 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 Registration Rights Agreement dated as of April 17, 2002,
         between the Company, the Guarantors 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,
         between the Company, the Guarantors and the other parties thereto,
         relating to rights given by the Company and the 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

                                      A-6
<PAGE>

         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:

Synagro Technologies, Inc.
1800 Bering Drive, Suite 1000
Houston, Texas 77507
Attention:  Alvin L. Thomas II, Esq., General Counsel

                                      A-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:  _______________

<TABLE>
<S>                                                     <C>
                                                        Your Signature:____________________________
                                       (Sign exactly as your name appears on the face of this Note)
</TABLE>

Signature Guarantee*:  ___________________________

*     Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                      A-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:  __________________

<TABLE>
<S>                                                     <C>
                                                        Your Signature:____________________________
                                       (Sign exactly as your name appears on the face of this Note)

                                                        Tax Identification No.:____________________
</TABLE>

Signature Guarantee*:  _________________________

*        Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                      A-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.

                                      A-10
<PAGE>
                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

Synagro Technologies, Inc.
1800 Bering Drive, Suite 1000
Houston, Texas 77507
Attention:  Alvin L. Thomas II, Esq., General Counsel

Wells Fargo Bank Minnesota, National Association
505 Main Street, Suite 301
Fort Worth, Texas 76102
Attention:  Ms. Melissa Scott

         Re: 9 1/2% Senior Subordinated Notes due 2009

         Reference is hereby made to the Indenture, dated as of April 17, 2002
(the "Indenture"), between Synagro Technologies, Inc., as issuer (the
"Company"), the Guarantors named on the signature pages thereto 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 GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of

                                      B-1

<PAGE>

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 Initial
Purchasers). 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, 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;

                                       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 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

                                      B-2

<PAGE>

Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.

         (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

         (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

         This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

                                    ____________________________________________
                                              [Insert Name of Transferor]

                                    By:_________________________________________
                                      Name:
                                      Title:

Dated:  _______________________

                                      B-3
<PAGE>

                       ANNEX A TO CERTIFICATE OF TRANSFER

         1.       The Transferor owns and proposes to transfer the following:

                            [CHECK ONE 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-4
<PAGE>

                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

Synagro Technologies, Inc.
1800 Bering Drive, Suite 1000
Houston, Texas 77507
Attention:  Alvin L. Thomas II, Esq., General Counsel

Wells Fargo Bank Minnesota, National Association
505 Main Street, Suite 301
Fort Worth, Texas 76102
Attention:  Ms. Melissa Scott

         Re:  9 1/2% Senior Subordinated Notes due 2009

                              (CUSIP ____________)

         Reference is hereby made to the Indenture, dated as of April 17, 2002
(the "Indenture"), between Synagro Technologies, Inc., as issuer (the
"Company"), the Guarantors named on the signature pages thereto 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.

         (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

                                      C-1

<PAGE>

         (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

         (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

         2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES

         (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

         (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

                                      C-2
<PAGE>

         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

Synagro Technologies, Inc.
1800 Bering Drive, Suite 1000
Houston, Texas 77507
Attention:  Alvin L. Thomas II, Esq., General Counsel

Wells Fargo Bank Minnesota, National Association
505 Main Street, Suite 301
Fort Worth, Texas 76102
Attention:  Ms. Melissa Scott

         Re:  9 1/2% Senior Subordinated Notes due 2009

         Reference is hereby made to the Indenture, dated as of April 17, 2002
(the "Indenture"), between Synagro Technologies, Inc., as issuer (the
"Company"), the guarantors named on the signature pages thereto 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) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, 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 (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.

                                       D-1

<PAGE>

         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.

         5. We are acquiring the Notes or beneficial interest therein purchased
by us 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.

         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 April 17, 2002 (the "Indenture") among
Synagro Technologies, Inc., (the "Company"), the Guarantors listed on Schedule I
thereto and Wells Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium and
Liquidated Damages, 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. 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 SUBSEQUENT GUARANTORS

         Supplemental Indenture (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of ____________________ (or its permitted successor),
a [Delaware] corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) 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 April 17, 2002 providing for
the issuance of an aggregate principal amount of up to $150,000,000 of 9 1/2%
Senior Subordinated Notes due 2009 (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 all Guarantors named in the Indenture,
                  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 Liquidated
                 Damages, if any, and interest on the Notes will be promptly
                 paid in full when due, whether at maturity, by acceleration,
                 redemption or otherwise, and interest on the overdue principal
                 of and interest on the Notes, if any, if lawful, and all other
                 obligations of the Company to the Holders or the Trustee
                 hereunder or thereunder will be promptly paid in full or
                 performed, all in accordance with the terms hereof and thereof;
                 and

                           (ii) in case of any extension of time of payment or
                 renewal of any Notes or any of such other obligations, that
                 same will be promptly paid in full when due or performed in
                 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

                                      F-1

<PAGE>

                  guaranteed or any performance so guaranteed for whatever
                  reason, the Guarantors shall be jointly and severally
                  obligated to pay the same immediately.

                           (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 11.02 of the Indenture, after
                  giving effect to any maximum amount and all other contingent
                  and fixed liabilities that are relevant under any applicable
                  Bankruptcy 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.

                                      F-2
<PAGE>

         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.

         4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

                           (a) 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 11.04 and 11.05
                  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) the Net
                  Proceeds of such sale or other disposition are applied in
                  accordance with the applicable provisions of the Indenture,
                  including without limitation, Section 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 11.05 of Article 11 of the Indenture, and
                  notwithstanding clauses (a) and (b) 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 Restricted Subsidiary of
                  the Company, then such Guarantor (in the event of a sale or
                  other disposition, by way of

                                      F-3

<PAGE>

                  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 the Indenture, including without
                  limitation Section 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
                  Section 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) In the event the Company designates any
                  Restricted Subsidiary that is a Guarantor as an Unrestricted
                  Subsidiary in accordance with Section 4.18 of the Indenture,
                  then such Guarantor will be released and relieved of any
                  obligations under its Note Guarantee.

                           (c) In the event the Company designates any
                  Unrestricted Subsidiary Guarantor to no longer be a Guarantor
                  in accordance with the provisions of this Indenture that would
                  be applicable if such Unrestricted Subsidiary Guarantor were
                  treated as if it were a Restricted Subsidiary that the Company
                  had designated as an Unrestricted Subsidiary in accordance
                  with clause (b) above, then such Guarantor will be released
                  and relieved of any obligations under its Note Guarantee.

                           (d) In the event there is a sale, disposition or
                  transfer of all the assets of a Guarantor to another Guarantor
                  or the Company, then such Guarantor will be released and
                  relieved of any obligations under its Note Guarantee in
                  connection therewith.

                           (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.

                                      F-4

<PAGE>

         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-5

<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:

                                      SYNAGRO TECHNOLOGIES, INC.

                                      By:  _______________________________
                                      Name:
                                      Title:

                                      [EXISTING GUARANTORS]

                                      By:  _______________________________
                                      Name:
                                      Title:

                                      WELLS FARGO BANK MINNESOTA, NATIONAL
                                      ASSOCIATION, as Trustee

                                      By:  _______________________________
                                                Authorized Signatory

                                      F-6

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