Exhibit 10.1(e)
 
COVALENCE SPECIALTY MATERIALS CORP.,
 
 
as Issuer,
 
and the Guarantors named herein
 
10¼% Senior Subordinated Notes due 2016
 
________________________
 
INDENTURE
 
Dated as of February 16, 2006
 
________________________
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
as Trustee
 

 

 

 

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TABLE OF CONTENTS
 
Page
 
 
ARTICLE 1
 
DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.
Definitions
 3
SECTION 1.02.
Other Definitions
 33
SECTION 1.03.
Incorporation by Reference of Trust Indenture Act
 34
SECTION 1.04.
Rules of Construction
 34

 
ARTICLE 2
 
THE SECURITIES

SECTION 2.01.
Amount of Securities
 35
SECTION 2.02.
Form and Dating
 36
SECTION 2.03.
Execution and Authentication
 37
SECTION 2.04.
Registrar and Paying Agent
 37
SECTION 2.05.
Paying Agent to Hold Money in Trust
 38
SECTION 2.06.
Holder Lists
 38
SECTION 2.07.
Transfer and Exchange
 38
SECTION 2.08.
Replacement Securities
 39
SECTION 2.09.
Outstanding Securities
 40
SECTION 2.10.
Temporary Securities
 40
SECTION 2.11.
Cancellation
 40
SECTION 2.12.
Defaulted Interest
 40
SECTION 2.13.
CUSIP Numbers, ISINs, etc.
 41
SECTION 2.14.
Calculation of Principal Amount of Securities
 41

 
ARTICLE 3
 
REDEMPTION

SECTION 3.01.
Redemption
 41
SECTION 3.02.
Applicability of Article
 41
SECTION 3.03.
Notices to Trustee
 41
SECTION 3.04.
Selection of Securities to Be Redeemed
 42
SECTION 3.05.
Notice of Optional Redemption
 42
SECTION 3.06.
Effect of Notice of Redemption
 43
SECTION 3.07.
Deposit of Redemption Price
 43
SECTION 3.08.
Securities Redeemed in Part
 43

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Article 4
 
COVENANTS

SECTION 4.01.
Payment of Securities
 43
SECTION 4.02.
Reports and Other Information
 44
SECTION 4.03.
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock
 45
SECTION 4.04.
Limitation on Restricted Payments
 51
SECTION 4.05.
Dividend and Other Payment Restrictions Affecting Subsidiaries
 56
SECTION 4.06.
Asset Sales
 57
SECTION 4.07.
Transactions with Affiliates
 60
SECTION 4.08.
Change of Control
 63
SECTION 4.09.
Compliance Certificate
 65
SECTION 4.10.
Further Instruments and Acts
 65
SECTION 4.11.
Future Guarantors
 65
SECTION 4.12.
Liens
 65
SECTION 4.13.
Limitation on Other Senior Subordinated Indebtedness
 66
SECTION 4.14.
Maintenance of Office or Agency
 66

 
ARTICLE 5
 
SUCCESSOR COMPANY

SECTION 5.01.
When Company May Merge or Transfer Assets
 66

 
 
ARTICLE 6
 
DEFAULTS AND REMEDIES

SECTION 6.01.
Events of Default
 69
SECTION 6.02.
Acceleration
 70
SECTION 6.03.
Other Remedies
 71
SECTION 6.04.
Waiver of Past Defaults
 71
SECTION 6.05.
Control by Majority
 71
SECTION 6.06.
Limitation on Suits
 72
SECTION 6.07.
Rights of the Holders to Receive Payment
 72
SECTION 6.08.
Collection Suit by Trustee
 72
SECTION 6.09.
Trustee May File Proofs of Claim
 72
SECTION 6.10.
Priorities
 73
SECTION 6.11.
Undertaking for Costs
 73
SECTION 6.12.
Waiver of Stay or Extension Laws
 73

 
ARTICLE 7
 
TRUSTEE

SECTION 7.01.
Duties of Trustee
 74

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SECTION 7.02.
Rights of Trustee
 75
SECTION 7.03.
Individual Rights of Trustee
 76
SECTION 7.04.
Trustee’s Disclaimer
 76
SECTION 7.05.
Notice of Defaults
 76
SECTION 7.06.
Reports by Trustee to the Holders
 77
SECTION 7.07.
Compensation and Indemnity
 77
SECTION 7.08.
Replacement of Trustee
 78
SECTION 7.09.
Successor Trustee by Merger
 79
SECTION 7.10.
Eligibility; Disqualification
 79
SECTION 7.11.
Preferential Collection of Claims Against Company
 79

 
ARTICLE 8
 
DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.
Discharge of Liability on Securities; Defeasance
 79
SECTION 8.02.
Conditions to Defeasance
 81
SECTION 8.03.
Application of Trust Money
 82
SECTION 8.04.
Repayment to Company
 82
SECTION 8.05.
Indemnity for Government Obligations
 82
SECTION 8.06.
Reinstatement
 82

 
ARTICLE 9
 
AMENDMENTS AND WAIVERS

SECTION 9.01.
Without Consent of the Holders
 83
SECTION 9.02.
With Consent of the Holders
 84
SECTION 9.03.
Compliance with Trust Indenture Act
 85
SECTION 9.04.
Revocation and Effect of Consents and Waivers
 85
SECTION 9.05.
Notation on or Exchange of Securities
 85
SECTION 9.06.
Trustee to Sign Amendments
 85
SECTION 9.07.
Payment for Consent
 86
SECTION 9.08.
Additional Voting Terms; Calculation of Principal Amount
 86

 
ARTICLE 10
 
SUBORDINATION OF THE SECURITIES

SECTION 10.01.
Agreement to Subordinate
 86
SECTION 10.02.
Liquidation, Dissolution, Bankruptcy
 86
SECTION 10.03.
Default on Designated Senior Indebtedness
 87
SECTION 10.04.
Acceleration of Payment of Securities
 88
SECTION 10.05.
When Distribution Must Be Paid Over
 88
SECTION 10.06.
Subrogation
 88
SECTION 10.07.
Relative Rights
 88
SECTION 10.08.
Subordination May Not Be Impaired by Company
 89
SECTION 10.09.
Rights of Trustee and Paying Agent
 89
SECTION 10.10.
Distribution or Notice to Representative
 89
SECTION 10.11.
Article 10 Not to Prevent Events of Default or Limit Right to Accelerate
 89
SECTION 10.12.
Trust Monies Not Subordinated
 89
SECTION 10.13.
Trustee Entitled to Rely
 89
SECTION 10.14.
Trustee to Effectuate Subordination
 90
SECTION 10.15.
Trustee Not Fiduciary for Holders of Senior Indebtedness
 90
SECTION 10.16.
Reliance by Holders of Senior Indebtedness on Subordination Provisions
 90

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ARTICLE 11
 
GUARANTEES

SECTION 11.01.
Guarantees
 91
SECTION 11.02.
Limitation on Liability
 93
SECTION 11.03.
Successors and Assigns
 94
SECTION 11.04.
No Waiver
 94
SECTION 11.05.
Modification
 94
SECTION 11.06.
Execution of Supplemental Indenture for Future Guarantors
 94
SECTION 11.07.
Non-Impairment
 95

 
ARTICLE 12
 
SUBORDINATION OF THE GUARANTEES

SECTION 12.01.
Agreement to Subordinate
 95
SECTION 12.02.
Liquidation, Dissolution, Bankruptcy
 95
SECTION 12.03.
Default on Designated Senior Indebtedness of a Guarantor
 95
SECTION 12.04.
Demand for Payment
 97
SECTION 12.05.
When Distribution Must Be Paid Over
 97
SECTION 12.06.
Subrogation
 97
SECTION 12.07.
Relative Rights
 97
SECTION 12.08.
Subordination May Not Be Impaired by a Guarantor
 97
SECTION 12.09.
Rights of Trustee and Paying Agent
 97
SECTION 12.10.
Distribution or Notice to Representative
 98
SECTION 12.11.
Article 12 Not to Prevent Events of Default or Limit Right to Accelerate
 98
SECTION 12.12.
Trustee Entitled to Rely
 98
SECTION 12.13.
Trustee to Effectuate Subordination
 98
SECTION 12.14.
Trustee Not Fiduciary for Holders of Senior Indebtedness of a Guarantor
 99
SECTION 12.15.
Reliance by Holders of Senior Indebtedness of a Guarantor on Subordination
Provisions
 99
SECTION 12.16.
Trust Monies Not Subordinated
 99

 
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Article 13
MISCELLANEOUS

SECTION 13.01.
Trust Indenture Act Controls
 100
SECTION 13.02.
Notices
 100
SECTION 13.03.
Communication by the Holders with Other Holders
 100
SECTION 13.04.
Certificate and Opinion as to Conditions Precedent
 101
SECTION 13.05.
Statements Required in Certificate or Opinion
 101
SECTION 13.06.
When Securities Disregarded
 101
SECTION 13.07.
Rules by Trustee, Paying Agent and Registrar
 101
SECTION 13.08.
Legal Holidays
 101
SECTION 13.09. 
GOVERNING LAW
 102
SECTION 13.10.
No Recourse Against Others
 102
SECTION 13.11.
Successors
 102
SECTION 13.12.
Multiple Originals
 102
SECTION 13.13.
Table of Contents; Headings
 102
SECTION 13.14.
Indenture Controls
 102
SECTION 13.15.
Severability
 102

 
Appendix A - Provisions Relating to Initial Securities, Additional Securities
and
 
Exchange Securities
 
EXHIBIT INDEX
 
Exhibit A - Initial Security
Exhibit B - Exchange Security
Exhibit C - Form of Transferee Letter of Representation
Exhibit D - Form of Supplemental Indenture
 

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CROSS-REFERENCE TABLE
TIA                                                   Indenture
Section                                                   Section
 
310
(a)(1)
7.10
 
(a)(2)
7.10
 
(a)(3)
N.A.
 
(a)(4)
N.A.
 
(b)
7.08; 7.10
 
(c)
N.A.
311
(a)
7.11
 
(b)
7.11
 
(c)
N.A.
312
(a)
2.06
 
(b)
13.03
 
(c)
13.03
313
(a)
7.06
 
(b)(1)
N.A.
 
(b)(2)
7.06
 
(c)
7.06
 
(d)
4.02; 4.09
314
(a)
4.02; 4.09
 
(b)
N.A.
 
(c)(1)
13.04
 
(c)(2)
13.04
 
(c)(3)
N.A.
 
(d)
N.A.
 
(e)
13.05
 
(f)
4.10
315
(a)
7.01
 
(b)
7.05
 
(c)
7.01
 
(d)
7.01
 
(e)
6.11
316
(a)(last sentence)
13.06
 
(a)(1)(A)
6.05
 
(a)(1)(B)
6.04
 
(a)(2)
N.A.
 
(b)
6.07
317
(a)(1)
6.08
 
(a)(2)
6.09
 
(b)
2.05
318
(a)
13.01
     

N.A. Means Not Applicable.
 
Note:
This Cross-Reference Table shall not, for any purposes, be deemed to be part of
this Indenture.

 
 
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INDENTURE dated as of February 16, 2006 among COVALENCE SPECIALTY MATERIALS
CORP., a Delaware corporation (the “Company”), the Guarantors (as defined
herein) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as trustee (the “Trustee”).
 
Each party agrees as follows for the benefit of the other parties and for the
equal and ratable benefit of the Holders of (a) $265,000,000 aggregate principal
amount of the Company’s 10¼% Senior Subordinated Notes due March 1, 2016 (the
“Original Securities”) issued on the date hereof, (b) any Additional Securities
(as defined herein) that may be issued after the date hereof in the form of
Exhibit A (all such securities in clauses (a) and (b) being referred to
collectively as the “Initial Securities”) and (c) if and when issued as provided
in the Registration Agreement (as defined in Appendix A hereto (the “Appendix”))
or otherwise registered under the Securities Act and issued, the Company’s 10¼%
Senior Subordinated Notes due March 1, 2016 (the “Exchange Securities” and,
together with the Initial Securities, the “Securities”) issued in the Registered
Exchange Offer (as defined in the Appendix) in exchange for any Initial
Securities or otherwise registered under the Securities Act and issued in the
form of Exhibit B. Subject to the conditions and compliance with the covenants
set forth herein, the Company may issue an unlimited aggregate principal amount
of Additional Securities.
 
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions
 
.
 
“Acquired Indebtedness” 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 Restricted Subsidiary of such specified Person,
and
 
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
 
“Acquisition” means the acquisition by the Company of all of the outstanding
right, title and interests in and to the assets (other than certain excluded
assets) of, and all of the issued and outstanding shares of capital stock or
partnership interests, as applicable, of, the Seller’s subsidiaries relating to
the adhesives, coated products and plastics businesses and L tape product line
pursuant to the terms of the Stock and Asset Purchase Agreement.
 
“Acquisition Documents” means the Stock and Asset Purchase Agreement and any
other document entered into in connection therewith, in each case as amended,
supplemented or modified from time to time.
 
“Additional Securities” means 10¼% Senior Subordinated Notes due 2016 issued
under the terms of this Indenture subsequent to the Issue Date.
 
“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
 

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Person. For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”), 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.
 
“Applicable Premium” means, with respect to any Security on any applicable
redemption date, the greater of:
 
(1) 1% of the then outstanding principal amount of the Security; and
 
(2) the excess of:
 
(a) the present value at such redemption date of (i) the redemption price of the
Securities, at March 1, 2011 as set forth in Paragraph 5 of the applicable
Security plus (ii) all required interest payments due on such Security through
March 1, 2011 (excluding accrued but unpaid interest), computed using a discount
rate equal to the Treasury Rate as of such redemption date plus 50 basis points;
over
 
(b) the then outstanding principal amount of the Security.
 
“Asset Sale” means:
 
(1) the sale, conveyance, transfer or other disposition (whether in a single
transaction or a series of related transactions) of property or assets
(including by way of a Sale/Leaseback Transaction) outside the ordinary course
of business of the Company or any Restricted Subsidiary of the Company (each
referred to in this definition as a “disposition”) or
 
(2) the issuance or sale of Equity Interests (other than directors’ qualifying
shares and shares issued to foreign nationals or other third parties to the
extent required by applicable law) of any Restricted Subsidiary (other than to
the Company or another Restricted Subsidiary of the Company) (whether in a
single transaction or a series of related transactions),
 
in each case other than:
 
(a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete
or worn out equipment in the ordinary course of business;
 
(b) the disposition of all or substantially all of the assets of the Company in
a manner permitted pursuant to Section 5.01 or any disposition that constitutes
a Change of Control;
 
(c) any Restricted Payment or Permitted Investment that is permitted to be made,
and is made, under Section 4.04;
 

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(d) any disposition of assets or issuance or sale of Equity Interests of any
Restricted Subsidiary, which assets or Equity Interests so disposed or issued
have an aggregate Fair Market Value of less than $7.5 million;
 
(e) any disposition of property or assets, or the issuance of securities, by a
Restricted Subsidiary of the Company to the Company or by the Company or a
Restricted Subsidiary of the Company to a Restricted Subsidiary of the Company;
 
(f) any exchange of assets for assets related to a Similar Business of
comparable or greater market value, as determined in good faith by the Company,
which in the event of an exchange of assets with a Fair Market Value in excess
of (1) $7.5 million shall be evidenced by an Officers’ Certificate, and (2) $15
million shall be set forth in a resolution approved in good faith by at least a
majority of the Board of Directors of the Company;
 
(g) foreclosure on assets of the Company or any of its Restricted Subsidiaries;
 
(h) any sale of Equity Interests in, or Indebtedness or other securities of, an
Unrestricted Subsidiary;
 
(i) the lease, assignment or sublease of any real or personal property in the
ordinary course of business;
 
(j) a sale of accounts receivable and related assets of the type specified in
the definition of “Receivables Financing” to a Receivables Subsidiary in a
Qualified Receivables Financing or in factoring or similar transactions;
 
(k) a transfer of accounts receivable and related assets of the type specified
in the definition of “Receivables Financing” (or a fractional undivided interest
therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
 
(l) the grant in the ordinary course of business of any licenses of patents,
trademarks, know-how and any other intellectual property; and
 
(m) the sale of any property in a Sale/Leaseback Transaction within six months
of the acquisition of such property.
 
“Bank Indebtedness” means any and all amounts payable under or in respect of the
Credit Agreement and the other Senior Credit Documents as amended, restated,
supplemented, waived, replaced, restructured, repaid, refunded, refinanced or
otherwise modified from time to time (including after termination of the Credit
Agreement), including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
 

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“Board of Directors” means, as to any Person, the board of directors or
managers, as applicable, of such Person (or, if such Person is a partnership,
the board of directors or other governing body of the general partner of such
Person) or any duly authorized committee thereof.
 
“Business Day” means a day other than a Saturday, Sunday or other day on which
banking institutions are authorized or required by law to close in New York
State.
 
“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.
 
“Capitalized Lease Obligation” means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized and reflected as a liability on a
balance sheet (excluding the footnotes thereto) in accordance with GAAP.
 
“Cash Contribution Amount” means the aggregate amount of cash contributions made
to the capital of the Company described in the definition of “Contribution
Indebtedness.”
 
“Cash Equivalents” means:
 
(1) U.S. Dollars or, in the case of any Foreign Subsidiary that is a Restricted
Subsidiary, such local currencies held by it from time to time in the ordinary
course of business;
 
(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof in each case
maturing, unless such securities are deposited to defease any Indebtedness, not
more than two years from the date of acquisition;
 
(3) certificates of deposit, time deposits and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances, in each case with maturities not exceeding one year and overnight
bank deposits, in each case with any commercial bank having capital and surplus
in excess of $250 million and whose long-term debt is rated “A” or the
equivalent thereof by Moody’s or S&P;
 

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(4) repurchase obligations for underlying securities of the types described in
clauses (2) and (3) above entered into with any financial institution meeting
the qualifications specified in clause (3) above;
 
(5) commercial paper issued by a corporation (other than an Affiliate of the
Company) rated at least “A-1” or the equivalent thereof by Moody’s or S&P and in
each case maturing within one year after the date of acquisition;
 
(6) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either Moody’s or S&P in each case
with maturities not exceeding two years from the date of acquisition;
 
(7) Indebtedness issued by Persons (other than the Sponsors or any of their
Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from
Moody’s in each case with maturities not exceeding two years from the date of
acquisition; and
 
(8) investment funds investing at least 95% of their assets in securities of the
types described in clauses (1) through (7) above.
 
“Change of Control” means the occurrence of any of the following events:
 
(i) the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all the assets of the Company and its Subsidiaries, taken
as a whole, to a Person other than any of the Permitted Holders; or
 
(ii) the Company becomes aware (by way of a report or any other filing pursuant
to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise)
of the acquisition by any Person or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision),
including any group acting for the purpose of acquiring, holding or disposing of
securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than any of the Permitted Holders, in a single transaction or in a related
series of transactions, by way of merger, consolidation or other business
combination or purchase of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act, or any successor provision), of more than 50% of
the total voting power of the Voting Stock of the Company or any direct or
indirect parent of the Company; or
 
(iii) individuals who on the Issue Date constituted the Board of Directors of
the Company (together with any new directors whose election by such Board of
Directors of the Company or whose nomination for election by the shareholders of
the Company was approved by (a) a vote of a majority of the directors of the
Company then still in office who were either directors on the Issue Date or
whose election or nomination for election was previously so approved or (b) the
Permitted Holders) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 

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“Company” means the party named as such in the Preamble to this Indenture until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor on
the Securities.
 
“consolidated” means, with respect to any Person, such Person consolidated with
its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary,
but the interest of such Person in an Unrestricted Subsidiary shall be accounted
for as an Investment.
 
“Consolidated Interest Expense” means, with respect to any Person for any
period, the sum, without duplication, of:
 
(1) consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, to the extent such expense was deducted in computing
Consolidated Net Income (including amortization of original issue discount, the
interest component of Capitalized Lease Obligations, and net payments and
receipts (if any) pursuant to interest rate Hedging Obligations and excluding
amortization of deferred financing fees and expensing of any bridge or other
financing fees);
 
(2) consolidated capitalized interest of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued;
 
(3) commissions, discounts, yield and other fees and charges Incurred in
connection with any Receivables Financing which are payable to Persons other
than the Company and its Restricted Subsidiaries; and
 
(4) less interest income for such period.
 
“Consolidated Net Income” means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis; provided, however, that:
 
(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or
income or expenses (less all fees and expenses relating thereto), including,
without limitation, any severance expenses, and fees, expenses or charges
related to any Equity Offering, Permitted Investment, acquisition or
Indebtedness permitted to be Incurred by this Indenture (in each case, whether
or not successful), including any such fees, expenses, charges or change in
control payments made under the Acquisition Documents or otherwise related to
the Transactions, in each case, shall be excluded;
 
(2) any increase in amortization or depreciation or any one-time non-cash
charges resulting from purchase accounting (such as, without limitation,
capitalized profit inventory) in connection with the Transactions or any
acquisition that is consummated after the Issue Date shall be excluded;
 
(3) the Net Income for such period shall not include the cumulative effect of a
change in accounting principles during such period;
 

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(4) any net after-tax income or loss from discontinued operations and any net
after-tax gains or losses on disposal of discontinued operations shall be
excluded;
 
(5) any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
the Board of Directors of the Company) shall be excluded;
 
(6) any net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness shall
be excluded;
 
(7) the Net Income for such period of any Person that is not a Subsidiary of
such Person, or is an Unrestricted Subsidiary, or that is accounted for by the
equity method of accounting, shall be included only to the extent of the amount
of dividends or distributions or other payments paid in cash (or to the extent
converted into cash) to the referent Person or a Restricted Subsidiary thereof
in respect of such period;
 
(8) solely for the purpose of determining the amount available for Restricted
Payments under clause (1) of the definition of Cumulative Credit, the Net Income
for such period of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of its Net Income is not at the date of determination
permitted without any prior governmental approval (which has not been obtained)
or, directly or indirectly, by the 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, unless
such restrictions with respect to the payment of dividends or similar
distributions have been legally waived; provided that the Consolidated Net
Income of such Person shall be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or converted into cash)
by any such Restricted Subsidiary to such Person, to the extent not already
included therein;
 
(9) an amount equal to the amount of Tax Distributions actually made to any
parent of such Person in respect of such period in accordance with Section
4.04(b)(xii) shall be included as though such amounts had been paid as income
taxes directly by such Person for such period;
 
(10) any non-cash impairment charges resulting from the application of Statement
of Financial Accounting Standards Nos. 142 and 144 and the amortization of
intangibles arising pursuant to No. 141 shall be excluded;
 
(11) any non-cash compensation expense realized from grants of stock
appreciation or similar rights, stock options or other rights to officers,
directors and employees of such Person or any of its Restricted Subsidiaries
shall be excluded;
 
(12) any (a) severance or relocation costs or expenses, (b) one-time non-cash
compensation charges, (c) the costs and expenses after the Issue Date related to
employment of terminated employees, (d) costs or expenses realized in connection
with,
 

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resulting from or in anticipation of the Transactions or (e) costs or expenses
realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on the Issue Date of officers,
directors and employees, in each case of such Person or any of its Restricted
Subsidiaries, shall be excluded;
 
(13) accruals and reserves that are established within 12 months after the Issue
Date and that are so required to be established in accordance with GAAP shall be
excluded;
 
(14) solely for purposes of calculating EBITDA, (a) the Net Income of any Person
and its Restricted Subsidiaries shall be calculated without deducting the income
attributable to, or adding the losses attributable to, the minority equity
interests of third parties in any non-wholly-owned Restricted Subsidiary except
to the extent of dividends declared or paid in respect of such period or any
prior period on the shares of Capital Stock of such Restricted Subsidiary held
by such third parties and (b) any ordinary course dividend, distribution or
other payment paid in cash and received from any Person in excess of amounts
included in clause (7) above shall be included;
 
(15) (a)(i) the non-cash portion of “straight-line” rent expense shall be
excluded and (ii) the cash portion of “straight-line” rent expense which exceeds
the amount expensed in respect of such rent expense shall be included and (b)
non-cash gains, losses, income and expenses resulting from fair value accounting
required by Statement of Financial Accounting Standards No. 133 shall be
excluded;
 
(16) unrealized gains and losses relating to hedging transactions and
mark-to-market of Indebtedness denominated in foreign currencies resulting from
the applications of FAS 52 shall be excluded; and
 
(17) solely for the purpose of calculating Restricted Payments, the difference,
if positive, of the Consolidated Taxes of the Company calculated in accordance
with GAAP and the actual Consolidated Taxes paid in cash by the Company during
any Reference Period shall be included.
 
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries of the
Company or a Restricted Subsidiary of the Company to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under clauses (D) and (E) of the definition of “Cumulative Credit.”
 
“Consolidated Non-cash Charges” means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person for such period on a consolidated basis and otherwise determined in
accordance with GAAP, but excluding any such charge which consists of or
requires an accrual of, or cash reserve for, anticipated cash charges for any
future period.
 

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“Consolidated Taxes” means provision for taxes based on income, profits or
capital, including, without limitation, state, franchise and similar taxes and
any Tax Distributions taken into account in calculating Consolidated Net Income.
 
“Contingent Obligations” means, with respect to any Person, any obligation of
such Person guaranteeing any leases, dividends or other obligations that do not
constitute Indebtedness (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent:
 
(1) to purchase any such primary obligation or any property constituting direct
or indirect security therefor,
 
(2) to advance or supply funds:
 
(a) for the purchase or payment of any such primary obligation; or
 
(b) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor; or
 
(3) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation against loss in respect
thereof.
 
“Contribution Indebtedness” means Indebtedness of the Company or any Guarantor
in an aggregate principal amount not greater than twice the aggregate amount of
cash contributions (other than Excluded Contributions) made to the capital of
the Company after the Issue Date; provided that:
 
(1) such cash contributions have not been used to make a Restricted Payment,
 
(2) if the aggregate principal amount of such Contribution Indebtedness is
greater than one times such cash contributions to the capital of the Company,
the amount in excess shall be Indebtedness (other than Secured Indebtedness)
with a Stated Maturity later than the Stated Maturity of the Securities, and
 
(3) such Contribution Indebtedness (a) is Incurred within 180 days after the
making of such cash contributions and (b) is so designated as Contribution
Indebtedness pursuant to an Officers’ Certificate on the Incurrence date
thereof.
 
“Credit Agreement” means (i) the credit agreement entered into in connection
with, and on or prior to, the consummation of the Acquisition, as amended,
restated, supplemented, waived, replaced (whether or not upon termination, and
whether with the original lenders or otherwise), restructured, repaid, refunded,
refinanced or otherwise modified from time to time, including any agreement or
indenture extending the maturity thereof, refinancing, replacing or otherwise
restructuring all or any portion of the Indebtedness under such agreement or
agreements or indenture or indentures or any successor or replacement agreement
or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or
 

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altering the maturity thereof, among the Company, Covalence Specialty Materials
Holding Corp., the financial institutions named therein, and Bank of America,
N.A., as Administrative Agent, and (ii) whether or not the credit agreement
referred to in clause (i) remains outstanding, if designated by the Company to
be included in the definition of “Credit Agreement,” one or more (A) debt
facilities or commercial paper facilities, providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
lenders or to special purpose entities formed to borrow from lenders against
such receivables) or letters of credit, (B) debt securities, indentures or other
forms of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances), or (C) instruments or agreements
evidencing any other Indebtedness, in each case, with the same or different
borrowers or issuers and, in each case, as amended, supplemented, modified,
extended, restructured, renewed, refinanced, restated, replaced or refunded in
whole or in part from time to time.
 
“Cumulative Credit” means the sum of (without duplication):
 
(A) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period, the “Reference Period”) from April 1, 2006 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, in the case
such Consolidated Net Income for such period is a deficit, minus 100% of such
deficit), plus
 
(B) 100% of the aggregate net proceeds, including cash and the Fair Market Value
(as determined in accordance with the next succeeding sentence) of property
other than cash, received by the Company after the Issue Date from the issue or
sale of Equity Interests of the Company (excluding Refunding Capital Stock,
Designated Preferred Stock, Excluded Contributions, Disqualified Stock and the
Cash Contribution Amount), including Equity Interests issued upon conversion of
Indebtedness or upon exercise of warrants or options (other than an issuance or
sale to a Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries), plus
 
(C) 100% of the aggregate amount of contributions to the capital of the Company
received in cash and the Fair Market Value (as determined in accordance with the
next succeeding sentence) of property other than cash after the Issue Date
(other than Excluded Contributions, Refunding Capital Stock, Designated
Preferred Stock, Disqualified Stock and the Cash Contribution Amount), plus
 
(D) the principal amount of any Indebtedness, or the liquidation preference or
maximum fixed repurchase price, as the case may be, of any Disqualified Stock of
the Company or any Restricted Subsidiary thereof issued after the Issue Date
(other than Indebtedness or Disqualified Stock issued to a Restricted
Subsidiary) which has been converted into or exchanged for Equity Interests in
the Company (other than Disqualified Stock) or any direct or indirect parent of
the Company (provided in the case of any parent, such Indebtedness or
Disqualified Stock is retired or extinguished), plus
 

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(E) 100% of the aggregate amount received by the Company or any Restricted
Subsidiary in cash and the Fair Market Value (as determined in accordance with
the next succeeding sentence) of property other than cash received by the
Company or any Restricted Subsidiary from:
 
(I) the sale or other disposition (other than to the Company or a Restricted
Subsidiary of the Company) of Restricted Investments made by the Company and its
Restricted Subsidiaries and from repurchases and redemptions of such Restricted
Investments from the Company and its Restricted Subsidiaries by any Person
(other than the Company or any of its Subsidiaries) and from repayments of loans
or advances which constituted Restricted Investments (other than in each case to
the extent that the Restricted Investment was made pursuant to clause (vii) or
(x) of Section 4.04(b)),
 
(II) the sale (other than to the Company or a Restricted Subsidiary of the
Company) of the Capital Stock of an Unrestricted Subsidiary, or
 
(III) a distribution or dividend from an Unrestricted Subsidiary, plus
 
(F) in the event any Unrestricted Subsidiary of the Company has been
redesignated as a Restricted Subsidiary or has been merged, consolidated or
amalgamated with or into, or transfers or conveys its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company, the Fair
Market Value (as determined in accordance with the next succeeding sentence) of
the Investment of the Company in such Unrestricted Subsidiary at the time of
such redesignation, combination or transfer (or of the assets transferred or
conveyed, as applicable), after taking into account any Indebtedness associated
with the Unrestricted Subsidiary so designated or combined or any Indebtedness
associated with the assets so transferred or conveyed (other than in each case
to the extent that the designation of such Subsidiary as an Unrestricted
Subsidiary was made pursuant to clause (vii) or (x) of Section 4.04(b) or
constituted a Permitted Investment).
 
The Fair Market Value of property other than cash covered by clauses (B), (C),
(D), (E) and (F) of this definition of “Cumulative Credit” shall be determined
in good faith by the Company and
 
(x) in the event of property with a Fair Market Value in excess of $7.5 million,
shall be set forth in an Officers’ Certificate or
 
(y) in the event of property with a Fair Market Value in excess of $15 million,
shall be set forth in a resolution approved by at least a majority of the Board
of Directors of the Company.
 
“Default” means any event which is, or after notice or passage of time or both
would be, an Event of Default.
 
“Designated Non-cash Consideration” means the Fair Market Value of non-cash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Non-cash
Consideration pursuant to an
 

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Officers’ Certificate, setting forth the basis of such valuation, less the
amount of Cash Equivalents received in connection with a subsequent sale of such
Designated Non-cash Consideration.
 
“Designated Preferred Stock” means Preferred Stock of the Company or any direct
or indirect parent of the Company, as applicable (other than Disqualified
Stock), that is issued for cash (other than to the Company or any of its
Subsidiaries or an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries) and is so designated as Designated Preferred
Stock, pursuant to an Officers’ Certificate, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in clause (C)
of the definition of “Cumulative Credit.”
 
“Designated Senior Indebtedness” means, with respect to the Company or a
Guarantor:
 
(1) the Bank Indebtedness;
 
(2) the Floating Rate Loan; and
 
(3) any other Senior Indebtedness of the Company or such Guarantor which, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25 million and is specifically designated by the Company
or such Guarantor in the instrument evidencing or governing such Senior
Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.
 
“Disqualified Stock” means, with respect to any Person, any Capital Stock of
such Person which, by its terms (or by the terms of any security into which it
is convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:
 
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than as a result of a change of control or asset sale;
provided that the relevant asset sale or change of control provisions, taken as
a whole, are no more favorable in any material respect to holders of such
Capital Stock than the asset sale and change of control provisions applicable to
the Securities and any purchase requirement triggered thereby may not become
operative until compliance with the asset sale and change of control provisions
applicable to the Securities (including the purchase of any Securities tendered
pursuant thereto)),
 
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock, or
 
(3) is redeemable at the option of the holder thereof, in whole or in part,
 
in each case prior to 91 days after the maturity date of the Securities;
provided, however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at
the option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock; provided, further, however, that if such Capital Stock is
issued to any employee or to any plan for the benefit of employees of the
Company or
 

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its Subsidiaries or by any such plan to such employees, such Capital Stock shall
not constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations or as a result of such employee’s termination, death or
disability; provided, further, that any class of Capital Stock of such Person
that by its terms authorizes such Person to satisfy its obligations thereunder
by delivery of Capital Stock that is not Disqualified Stock shall not be deemed
to be Disqualified Stock.
 
“Domestic Subsidiary” means a Restricted Subsidiary that is not a Foreign
Subsidiary.
 
“EBITDA” means, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period plus, without duplication, to the extent
the same was deducted in calculating Consolidated Net Income:
 
(1) Consolidated Taxes; plus
 
(2) Consolidated Interest Expense; plus
 
(3) Consolidated Non-cash Charges; plus
 
(4) business optimization expenses and other restructuring charges; provided
that with respect to each business optimization expense or other restructuring
charge, the Company shall have delivered to the Trustee an Officers’ Certificate
specifying and quantifying such expense or charge and stating that such expense
or charge is a business optimization expense or other restructuring charge, as
the case may be; plus
 
(5) the amount of management, monitoring, consulting and advisory fees and
related expenses paid to the Sponsors (or any accruals relating to such fees and
related expenses) during such period pursuant to the terms of the agreements
between the Sponsors and the Company and its Subsidiaries as described with
particularity in the Offering Memorandum and as in effect on the Issue Date;
 
less, without duplication,
 
(6) non-cash items increasing Consolidated Net Income for such period (excluding
any items which represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period and any items for which cash was
received in a prior period).
 
“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
 
“Equity Offering” means any public or private sale after the Issue Date of
common stock or Preferred Stock of the Company or any direct or indirect parent
of the Company, as applicable (other than Disqualified Stock), other than:
 

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(1) public offerings with respect to the Company’s or such direct or indirect
parent’s common stock registered on Form S-8; and
 
(2) any such public or private sale that constitutes an Excluded Contribution.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
 
“Exchange Offer Registration Statement” means the registration statement filed
with the SEC in connection with the Registered Exchange Offer.
 
“Excluded Contributions” means the net cash proceeds received by the Company
after the Issue Date from:
 
(1) contributions to its common equity capital, and
 
(2) the sale (other than to a Subsidiary of the Company or to any Subsidiary
management equity plan or stock option plan or any other management or employee
benefit plan or agreement) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of the Company,
 
in each case designated as Excluded Contributions pursuant to an Officers’
Certificate on or promptly after the date such capital contributions are made or
the date such Capital Stock is sold, as the case may be, the cash proceeds of
which are excluded from the calculation set forth in clause (C) of the
definition of “Cumulative Credit.”
 
“Fair Market Value” means, with respect to any asset or property, the price
which could be negotiated in an arm’s-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
 
“Fixed Charge Coverage Ratio” means, with respect to any Person for any period,
the ratio of EBITDA of such Person for such period to the Fixed Charges of such
Person for such period. In the event that the Company or any of its Restricted
Subsidiaries Incurs or redeems any Indebtedness (other than in the case of
revolving credit borrowings or revolving advances under any Qualified
Receivables Financing, in which case interest expense shall be computed based
upon the average daily balance of such Indebtedness during the applicable
period) or issues or redeems Preferred Stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such Incurrence or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter period.
 
For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and discontinued operations
(as determined in accordance with GAAP), in each case with respect to an
operating unit of a business, and any operational changes that the Company or
any of its Restricted Subsidiaries has both determined
 

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to make and made after the Issue Date and during the four-quarter reference
period or subsequent to such reference period and on or prior to or
simultaneously with the Calculation Date (each, for purposes of this definition,
a “pro forma event”) shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, consolidations and
discontinued operations (and the change of any associated fixed charge
obligations and the change in EBITDA resulting therefrom) had occurred on the
first day of the four-quarter reference period. If since the beginning of such
period any Person that subsequently became a Restricted Subsidiary or was merged
with or into the Company or any Restricted Subsidiary since the beginning of
such period shall have made any Investment, acquisition, disposition, merger,
consolidation, discontinued operation or operational change, in each case with
respect to an operating unit of a business, that would have required adjustment
pursuant to this definition, then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such
Investment, acquisition, disposition, discontinued operation, merger,
consolidation or operational change had occurred at the beginning of the
applicable four-quarter period.
 
For purposes of this definition, whenever pro forma effect is to be given to any
pro forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Company. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the Calculation Date had been the applicable rate for the entire period (taking
into account any Hedging Obligations applicable to such Indebtedness if such
Hedging Obligation has a remaining term in excess of 12 months). Interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Company to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP. For purposes of making the computation referred to
above, interest on any Indebtedness under a revolving credit facility computed
on a pro forma basis shall be computed based upon the average daily balance of
such Indebtedness during the applicable period. Interest on Indebtedness that
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rate, shall be
deemed to have been based upon the rate actually chosen, or, if none, then based
upon such optional rate chosen as the Company may designate. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Company as set forth in an Officers’ Certificate, to
reflect (1) operating expense reductions and other operating improvements or
synergies reasonably expected to result from the applicable pro forma event
(including, to the extent applicable, from the Transactions) and (2) all
adjustments of the nature used in connection with the calculation of “Adjusted
EBITDA” as set forth in footnote 4 to the “Summary Historical and Pro Forma
Combined Financial Data” under “Summary” in the Offering Memorandum to the
extent such adjustments, without duplication, continue to be applicable to such
four-quarter period.
 
“Fixed Charges” means, with respect to any Person for any period, the sum of:
 
(1) Consolidated Interest Expense of such Person for such period, and
 

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(2) all cash dividend payments (excluding items eliminated in consolidation) on
any series of Preferred Stock or Disqualified Stock of such Person and its
Restricted Subsidiaries.
 
“Floating Rate Guarantee” means the guarantee of the Floating Rate Loan by
certain Subsidiaries of the Company as described in the Offering Memorandum.
 
“Floating Rate Guarantor” means any Person that Incurs a Floating Rate
Guarantee; provided that upon the release or discharge of such Person from its
Floating Rate Guarantee in accordance with the Floating Rate Loan, such Person
ceases to be a Floating Rate Guarantor.
 
“Floating Rate Loan” means the second-priority senior secured floating rate loan
among the Company, certain Subsidiaries of the Company, the financial
institutions named therein, and Bank of America, N.A., as Administrative Agent
providing for $175.0 million of loans, as amended, restated, supplemented,
waived, replaced (whether or not upon termination, and whether with the original
lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise
modified from time to time, including any agreement or indenture extending the
maturity thereof, refinancing, replacing or otherwise restructuring all or any
portion of the Indebtedness under such agreement or agreements or indenture or
indentures or any successor or replacement agreement or agreements or indenture.
 
“Foreign Subsidiary” means a Restricted Subsidiary not organized or existing
under the laws of the United States of America or any state or territory thereof
and any direct or indirect subsidiary of such Restricted Subsidiary.
 
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
 
“Guarantee” means any guarantee of the obligations of the Company under this
Indenture and the Securities by any Person in accordance with the provisions of
this Indenture.
 
“guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
 
“Guarantor” means any Person that Incurs a Guarantee; provided that upon the
release or discharge of such Person from its Guarantee in accordance with this
Indenture, such Person ceases to be a Guarantor.
 
“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under:
 

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(1) currency exchange, interest rate or commodity swap agreements, currency
exchange, interest rate or commodity cap agreements and currency exchange,
interest rate or commodity collar agreements; and
 
(2) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange, interest rates or commodity prices.
 
“Holder” means the Person in whose name a Security is registered on the
Registrar’s books.
 
“Incur” means issue, assume, guarantee, incur or otherwise become liable for;
provided, however, that any Indebtedness or Capital Stock of a Person existing
at the time such Person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Person at the
time it becomes a Subsidiary.
 
“Indebtedness” means, with respect to any Person:
 
(1) the principal and premium (if any) of any indebtedness of such Person,
whether or not contingent, (a) in respect of borrowed money, (b) evidenced by
bonds, notes, debentures or similar instruments or letters of credit or bankers’
acceptances (or, without duplication, reimbursement agreements in respect
thereof), (c) representing the deferred and unpaid purchase price of any
property, except any such balance that constitutes a trade payable or similar
obligation to a trade creditor due within six months from the date on which it
is Incurred, in each case Incurred in the ordinary course of business, which
purchase price is due more than six months after the date of placing the
property in service or taking delivery and title thereto, (d) in respect of
Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if
and to the extent that any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability on a balance sheet
(excluding the footnotes thereto) of such Person prepared in accordance with
GAAP;
 
(2) to the extent not otherwise included, any obligation of such Person to be
liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness
of another Person (other than by endorsement of negotiable instruments for
collection in the ordinary course of business);
 
(3) to the extent not otherwise included, Indebtedness of another Person secured
by a Lien on any asset owned by such Person (whether or not such Indebtedness is
assumed by such Person); provided, however, that the amount of such Indebtedness
will be the lesser of: (a) the Fair Market Value of such asset at such date of
determination, and (b) the amount of such Indebtedness of such other Person; and
 
(4) to the extent not otherwise included, with respect to the Company and its
Restricted Subsidiaries, the amount then outstanding (i.e., advanced, and
received by, and available for use by, the Company or any of its Restricted
Subsidiaries) under any Receivables Financing (as set forth in the books and
records of the Company or any Restricted Subsidiary and confirmed by the agent,
trustee or other representative of the institution or group providing such
Receivables Financing);
 

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provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include (1) Contingent Obligations incurred in the ordinary course
of business and not in respect of borrowed money; (2) deferred or prepaid
revenues; (3) purchase price holdbacks in respect of a portion of the purchase
price of an asset to satisfy warranty or other unperformed obligations of the
respective seller; (4) Obligations under or in respect of Qualified Receivables
Financing or (5) obligations under the Acquisition Documents.
 
“Indenture” means this Indenture as amended or supplemented from time to time.
 
“Independent Financial Advisor” means an accounting, appraisal or investment
banking firm or consultant, in each case of nationally recognized standing, that
is, in the good faith determination of the Company, qualified to perform the
task for which it has been engaged.
 
“Investment Grade Securities” means:
 
(1) securities issued or directly and fully guaranteed or insured by the U.S.
government or any agency or instrumentality thereof (other than Cash
Equivalents),
 
(2) investments in any fund that invests exclusively in investments of the type
described in clause (1) which fund may also hold immaterial amounts of cash
pending investment and/or distribution, and
 
(3) corresponding instruments in countries other than the United States
customarily utilized for high quality investments and in each case with
maturities not exceeding two years from the date of acquisition.
 
“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding accounts receivable,
trade credit and advances to customers and commission, travel and similar
advances to officers, employees and consultants made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities issued by any other Person and investments
that are required by GAAP to be classified on the balance sheet of the Company
in the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property. For
purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:
 
(1) “Investments” shall include the portion (proportionate to the Company’s
equity interest in such Subsidiary) of the Fair Market Value of the net assets
of a Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent “Investment” in an Unrestricted Subsidiary equal to an
amount (if positive) equal to:
 
(a) the Company’s “Investment” in such Subsidiary at the time of such
redesignation less
 

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(b) the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the
time of such redesignation; and
 
(2) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its Fair Market Value at the time of such transfer, in each case as
determined in good faith by the Board of Directors of the Company.
 
“Issue Date” means February 16, 2006, the date on which the Original Securities
are issued.
 
“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 any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction); provided that in
no event shall an operating lease be deemed to constitute a Lien.
 
“Management Group” means the group consisting of the directors, executive
officers and other management personnel of the Company or any direct or indirect
parent of the Company, as the case may be, on the Issue Date together with (1)
any new directors whose election by such boards of directors or whose nomination
for election by the shareholders of the Company or any direct or indirect parent
of the Company, as applicable, was approved by a vote of a majority of the
directors of the Company or any direct or indirect parent of the Company, as
applicable, then still in office who were either directors on the Issue Date or
whose election or nomination was previously so approved and (2) executive
officers and other management personnel of the Company or any direct or indirect
parent of the Company, as applicable, hired at a time when the directors on the
Issue Date together with the directors so approved constituted a majority of the
directors of the Company or any direct or indirect parent of the Company, as
applicable.
 
“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating
agency business thereof.
 
“Net Income” means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of Preferred Stock dividends.
 
“Net Proceeds” means the aggregate cash proceeds received by the Company or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset Sale
and any cash payments received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as and when received,
but excluding the assumption by the acquiring Person of Indebtedness relating to
the disposed assets or other consideration received in any other non-cash form),
net of the direct costs relating to such Asset Sale and the sale or disposition
of such Designated Non-cash
 

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Consideration (including, without limitation, legal, accounting and investment
banking fees, and brokerage and sales commissions), and any relocation expenses
Incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements related thereto), amounts required to be applied to the repayment
of principal, premium (if any) and interest on Indebtedness required (other than
pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction, and
any deduction of appropriate amounts to be provided by the Company as a reserve
in accordance with GAAP against any liabilities associated with the asset
disposed of in such transaction and retained by the Company after such sale or
other disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
transaction.
 
“Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with
respect to letters of credit and bankers’ acceptances), damages and other
liabilities payable under the documentation governing any Indebtedness; provided
that Obligations with respect to the Securities shall not include fees or
indemnifications in favor of the Trustee and other third parties other than the
Holders of the Securities.
 
“Offering Memorandum” means the offering memorandum relating to the offering of
the Original Securities dated February 2, 2006.
 
“Officer” means the Chairman of the Board, Chief Executive Officer, President,
any Executive Vice President, Senior Vice President or Vice President, the
Treasurer or the Secretary of the Company.
 
“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 set forth in this
Indenture; provided, however, that in the case of any Officers' Certificate that
is dated the date hereof, only one Officer shall be required to sign such
Officers' Certificate.
 
“Opinion of Counsel” means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
 
“Pari Passu Indebtedness” means:
 
(1) with respect to the Company, the Securities and any Indebtedness which ranks
pari passu in right of payment to the Securities; and
 
(2) with respect to any Guarantor, its Guarantee and any Indebtedness which
ranks pari passu in right of payment to such Guarantor’s Guarantee.
 
“Permitted Holders” means, at any time, each of (i) the Sponsors and (ii) the
Management Group. Any person or group whose acquisition of beneficial ownership
constitutes
 

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a Change of Control in respect of which a Change of Control Offer is made in
accordance with the requirements of this Indenture will thereafter, together
with its Affiliates, constitute an additional Permitted Holder.
 
“Permitted Investments” means:
 
(1) any Investment in the Company or any Restricted Subsidiary;
 
(2) any Investment in Cash Equivalents or Investment Grade Securities;
 
(3) any Investment by the Company or any Restricted Subsidiary of the Company in
a Person that is primarily engaged in a Similar Business if as a result of such
Investment (a) such Person becomes a Restricted Subsidiary of the Company, or
(b) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
 
(4) any Investment in securities or other assets not constituting Cash
Equivalents and received in connection with an Asset Sale made pursuant to the
provisions of Section 4.06 or any other disposition of assets not constituting
an Asset Sale;
 
(5) any Investment existing on the Issue Date;
 
(6) advances to employees not in excess of $15 million outstanding at any one
time in the aggregate;
 
(7) any Investment acquired by the Company or any of its Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held by the
Company or any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable, or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default;
 
(8) Hedging Obligations permitted under Section 4.03(b)(x);
 
(9) any Investment by the Company or any of its Restricted Subsidiaries in a
Similar Business (other than an Investment in an Unrestricted Subsidiary or any
direct or indirect parent of the Company) having an aggregate Fair Market Value,
taken together with all other Investments made pursuant to this clause (9), not
to exceed the greater of (x) $50.0 million and (y) 6.5% of Total Assets at the
time of such Investment (with the Fair Market Value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value); provided, however, that if any Investment pursuant to this clause (9) is
made in any Person that is not a Restricted Subsidiary of the Company at the
date of the making of such Investment and such Person becomes a Restricted
Subsidiary of the Company after such date, such Investment shall thereafter be
deemed to have been made pursuant to clause (1) above and shall cease to have
been
 

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made pursuant to this clause (9) for so long as such Person continues to be a
Restricted Subsidiary;
 
(10) additional Investments by the Company or any of its Restricted Subsidiaries
having an aggregate Fair Market Value, taken together with all other Investments
made pursuant to this clause (10), not to exceed the greater of (x) $50.0
million and (y) 6.5% of Total Assets at the time of such Investment (with the
Fair Market Value of each Investment being measured at the time made and without
giving effect to subsequent changes in value);
 
(11) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case Incurred in the ordinary course of business;
 
(12) Investments the payment for which consists of Equity Interests of the
Company (other than Disqualified Stock) or any direct or indirect parent of the
Company, as applicable; provided, however, that such Equity Interests will not
increase the amount available for Restricted Payments under clause (C) of the
definition of “Cumulative Credit”;
 
(13) any transaction to the extent it constitutes an Investment that is
permitted by and made in accordance with the provisions of Section 4.07(b)
(except transactions described in clauses (ii), (vi), (vii) and (xi)(b) of such
Section);
 
(14) Investments consisting of the licensing or contribution of intellectual
property pursuant to joint marketing arrangements with other Persons;
 
(15) guarantees issued in accordance with Sections 4.03 and 4.11;
 
(16) Investments consisting of purchases and acquisitions of inventory,
supplies, materials and equipment or purchases of contract rights or licenses or
leases of intellectual property, in each case in the ordinary course of
business;
 
(17) any Investment in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person in connection with a Qualified
Receivables Financing, including Investments of funds held in accounts permitted
or required by the arrangements governing such Qualified Receivables Financing
or any related Indebtedness; provided, however, that any Investment in a
Receivables Subsidiary is in the form of a Purchase Money Note, contribution of
additional receivables or an equity interest;
 
(18) additional Investments in joint ventures of the Company or any of its
Restricted Subsidiaries existing on the Issue Date not to exceed $15 million at
any one time; and
 
(19) Investments of a Restricted Subsidiary of the Company acquired after the
Issue Date or of an entity merged into, amalgamated with, or consolidated with a
Restricted Subsidiary of the Company in a transaction that is not prohibited by
Section
 

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5.01 after the Issue Date to the extent that such Investments were not made in
contemplation of such acquisition, merger, amalgamation or consolidation and
were in existence on the date of such acquisition, merger, amalgamation or
consolidation.
 
“Permitted Junior Securities” shall mean unsecured debt or equity securities of
the Company or any Guarantor or any successor corporation issued pursuant to a
plan of reorganization or readjustment of the Company or any Guarantor, as
applicable, that are subordinated to the payment of all then outstanding Senior
Indebtedness of the Company or any Guarantor, as applicable, at least to the
same extent that the Securities are subordinated to the payment of all Senior
Indebtedness of the Company or any Guarantor, as applicable, on the Issue Date,
so long as to the extent that any Senior Indebtedness of the Company or any
Guarantor, as applicable, outstanding on the date of consummation of any such
plan of reorganization or readjustment is not paid in full in cash on such date,
the holders of any such Senior Indebtedness not so paid in full in cash have
consented to the terms of such plan of reorganization or readjustment.
 
“Permitted Liens” means, with respect to any Person:
 
(1) pledges or deposits by such Person under workmen’s compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of cash or U.S.
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;
 
(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’
Liens, in each case for sums not yet due or being contested in good faith by
appropriate proceedings or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then be proceeding
with an appeal or other proceedings for review;
 
(3) Liens for taxes, assessments or other governmental charges not yet due or
payable or subject to penalties for nonpayment or which are being contested in
good faith by appropriate proceedings;
 
(4) Liens in favor of issuers of performance and surety bonds or bid bonds or
with respect to other regulatory requirements or letters of credit issued
pursuant to the request of and for the account of such Person in the ordinary
course of its business;
 
(5) minor survey exceptions, minor encumbrances, easements or reservations of,
or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or Liens incidental to the conduct
of the business of such Person or to the ownership of its properties which were
not Incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;
 

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(6) (A) Liens securing Senior Indebtedness, and Liens on assets of a Restricted
Subsidiary that is not a Guarantor securing Indebtedness of such Restricted
Subsidiary, in each case permitted to be Incurred pursuant to Section 4.03 and
(B) Liens securing Indebtedness permitted to be Incurred pursuant to clause
(iv), (xii) or (xx) of Section 4.03(b) (provided that in the case of clause
(xx), such Lien does not extend to the property or assets of any Subsidiary of
the Company other than a Foreign Subsidiary) of Section 4.03(b);
 
(7) Liens existing on the Issue Date;
 
(8) Liens on property or shares of stock of a Person at the time such Person
becomes a Subsidiary; provided, however, that such Liens are not created or
Incurred in connection with, or in contemplation of, such other Person becoming
such a Subsidiary; provided, further, however, that such Liens may not extend to
any other property owned by the Company or any Restricted Subsidiary of the
Company;
 
(9) Liens on property at the time the Company or a Restricted Subsidiary of the
Company acquired the property, including any acquisition by means of a merger or
consolidation with or into the Company or any Restricted Subsidiary of the
Company; provided, however, that such Liens are not created or Incurred in
connection with, or in contemplation of, such acquisition; provided, further,
however, that the Liens may not extend to any other property owned by the
Company or any Restricted Subsidiary of the Company;
 
(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or another Restricted Subsidiary of the Company permitted
to be Incurred in accordance with Section 4.03;
 
(11) Liens securing Hedging Obligations not incurred in violation of this
Indenture; provided that with respect to Hedging Obligations relating to
Indebtedness, such Lien extends only to the property securing such Indebtedness;
 
(12) Liens on specific items of inventory or other goods and proceeds of any
Person securing such Person’s obligations in respect of bankers’ acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;
 
(13) leases and subleases of real property which do not materially interfere
with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
 
(14) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Company and its Restricted
Subsidiaries in the ordinary course of business;
 
(15) Liens in favor of the Company or any Guarantor;
 

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(16) Liens on accounts receivable and related assets of the type specified in
the definition of “Receivables Financing” Incurred in connection with a
Qualified Receivables Financing;
 
(17) deposits made in the ordinary course of business to secure liability to
insurance carriers;
 
(18) Liens on the Equity Interests of Unrestricted Subsidiaries;
 
(19) grants of software and other technology licenses in the ordinary course of
business;
 
(20) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (6)(B), (7), (8), (9), (10), (11) and (15);
provided, however, that (x) such new Lien shall be limited to all or part of the
same property that secured the original Lien (plus improvements on such
property), and (y) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding principal
amount or, if greater, committed amount of the Indebtedness described under
clauses (6)(B), (7), (8), (9), (10), (11) and (15) at the time the original Lien
became a Permitted Lien under this Indenture, and (B) an amount necessary to pay
any fees and expenses, including premiums, related to such refinancing,
refunding, extension, renewal or replacement;
 
(21) Liens on equipment of the Company or any Restricted Subsidiary granted in
the ordinary course of business to the Company’s or such Restricted Subsidiary’s
client at which such equipment is located; and
 
(22) other Liens securing obligations incurred in the ordinary course of
business which obligations do not exceed $20 million at any one time
outstanding.
 
“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
 
“Preferred Stock” means any Equity Interest with preferential right of payment
of dividends or upon liquidation, dissolution, or winding up.
 
“Purchase Money Note” means a promissory note of a Receivables Subsidiary
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company to a Receivables Subsidiary in connection with a
Qualified Receivables Financing, which note is intended to finance that portion
of the purchase price that is not paid by cash or a contribution of equity.
 
“Qualified Receivables Financing” means any Receivables Financing of a
Receivables Subsidiary that meets the following conditions:
 

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(1) the Board of Directors of the Company shall have determined in good faith
that such Qualified Receivables Financing (including financing terms, covenants,
termination events and other provisions) is in the aggregate economically fair
and reasonable to the Company and the Receivables Subsidiary;
 
(2) all sales of accounts receivable and related assets to the Receivables
Subsidiary are made at Fair Market Value (as determined in good faith by the
Company); and
 
(3) the financing terms, covenants, termination events and other provisions
thereof shall be market terms (as determined in good faith by the Company) and
may include Standard Securitization Undertakings.
 
The grant of a security interest in any accounts receivable of the Company or
any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to
secure Bank Indebtedness shall not be deemed a Qualified Receivables Financing.
 
“Receivables Fees” means distributions or payments made directly or by means of
discounts with respect to any participation interests issued or sold in
connection with, and all other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Financing.
 
“Receivables Financing” means any transaction or series of transactions that may
be entered into by the Company or any of its Subsidiaries pursuant to which the
Company or any of its Subsidiaries may sell, convey or otherwise transfer to (a)
a Receivables Subsidiary (in the case of a transfer by the Company or any of its
Subsidiaries); and (b) any other Person (in the case of a transfer by a
Receivables Subsidiary), or may grant a security interest in, any accounts
receivable (whether now existing or arising in the future) of the Company or any
of its 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
and any Hedging Obligations entered into by the Company or any such Subsidiary
in connection with such accounts receivable.
 
“Receivables Repurchase Obligation” means any obligation of a seller of
receivables in a Qualified Receivables Financing to repurchase receivables
arising as a result of a breach of a representation, warranty or covenant or
otherwise, including as a result of a receivable or portion thereof becoming
subject to any asserted defense, dispute, off-set or counterclaim of any kind as
a result of any action taken by, any failure to take action by or any other
event relating to the seller.
 
“Receivables Subsidiary” means a Wholly Owned Restricted Subsidiary of the
Company (or another Person formed for the purposes of engaging in Qualified
Receivables Financing with the Company in which the Company or any Subsidiary of
the Company makes an Investment and to which the Company or any Subsidiary of
the Company transfers accounts
 

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receivable and related assets) which engages in no activities other than in
connection with the financing of accounts receivable of the Company and its
Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary and:
 
(a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which (i) is guaranteed by the Company or any other Subsidiary of
the Company (excluding guarantees of obligations (other than the principal of
and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Company or any other
Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings, or (iii) subjects any property or asset of the
Company or any other Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
 
(b) with which neither the Company nor any other Subsidiary of the Company has
any material contract, agreement, arrangement or understanding other than on
terms which the Company reasonably believes to be no less favorable to the
Company or such Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of the Company; and
 
(c) to which neither the Company nor any other Subsidiary of the Company has any
obligation to maintain or preserve such entity’s financial condition or cause
such entity to achieve certain levels of operating results.
 
Any such designation by the Board of Directors of the Company shall 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.
 
“Representative” means the trustee, agent or representative (if any) for an
issue of Senior Indebtedness or Designated Senior Indebtedness, as applicable;
provided that if, and for so long as, such Senior Indebtedness lacks such a
Representative, then the Representative for such Senior Indebtedness shall at
all times constitute the holder or holders of a majority in outstanding
principal amount of obligations under such Senior Indebtedness.
 
“Restricted Investment” means an Investment other than a Permitted Investment.
 
“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of
such Person other than an Unrestricted Subsidiary of such Person. Unless
otherwise indicated in this Indenture, all references to Restricted Subsidiaries
shall mean Restricted Subsidiaries of the Company.
 
“Sale/Leaseback Transaction” means an arrangement relating to property now owned
or hereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or such
 

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Restricted Subsidiary leases it from such Person, other than leases between the
Company and a Restricted Subsidiary of the Company or between Restricted
Subsidiaries of the Company.
 
“S&P” means Standard & Poor’s Ratings Group or any successor to the rating
agency business thereof.
 
“SEC” means the Securities and Exchange Commission.
 
“Secured Indebtedness” means any Indebtedness secured by a Lien.
 
“Securities” means the securities issued under this Indenture.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
 
“Seller” means Tyco Group S.a.r.l., a Luxembourg company.
 
“Senior Credit Documents” means the collective reference to the Credit
Agreement, the notes issued pursuant thereto and the guarantees thereof, and the
collateral documents relating thereto, as amended, supplemented, restated,
renewed, refunded, replaced, restructured, repaid, refinanced or otherwise
modified from time to time.
 
“Senior Indebtedness” with respect to the Company or any of its Restricted
Subsidiaries means all Indebtedness and any Receivables Repurchase Obligation of
the Company or any such Restricted Subsidiary, including interest thereon
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary of the Company at the rate specified in the documentation with
respect thereto whether or not a claim for post-filing interest is allowed in
such proceeding) and other amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof,
whether outstanding on the Issue Date or thereafter Incurred, unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such obligations are subordinated in right
of payment to any other Indebtedness of the Company or such Restricted
Subsidiary, as applicable; provided, however, that Senior Indebtedness shall not
include, as applicable:
 
(1) any obligation of the Company to any Subsidiary of the Company (other than
any Receivables Repurchase Obligation) or of any Subsidiary of the Company to
the Company, or of any Subsidiary to the Company or any other Subsidiary of the
Company,
 
(2) any liability for Federal, state, local or other taxes owed or owing by the
Company or such Restricted Subsidiary,
 
(3) any accounts payable or other liability to trade creditors (including
guarantees thereof or instruments evidencing such liabilities),
 
(4) any Indebtedness or obligation of the Company or any Restricted Subsidiary
which is subordinate or junior in any respect to any other Indebtedness or
 

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obligation of the Company or such Restricted Subsidiary, as applicable,
including any Pari Passu Indebtedness and any Subordinated Indebtedness,
 
(5) any obligations with respect to any Capital Stock, or
 
(6) any Indebtedness Incurred in violation of this Indenture but, as to any such
Indebtedness Incurred under the Credit Agreement, no such violation shall be
deemed to exist for purposes of this clause (6) if the holders of such
Indebtedness or their Representative shall have received an Officers’
Certificate to the effect that the Incurrence of such Indebtedness does not (or,
in the case of a revolving credit facility thereunder, the Incurrence of the
entire committed amount thereof at the date on which the initial borrowing
thereunder is made would not) violate this Indenture.
 
If any Senior Indebtedness is disallowed, avoided or subordinated pursuant to
the provisions of Section 548 of Title 11 of the United States Code or any
applicable state fraudulent conveyance law, such Senior Indebtedness
nevertheless will constitute Senior Indebtedness.
 
For the avoidance of doubt, the term “Senior Indebtedness” shall include,
without limitation, the Floating Rate Loan.
 
“Significant Subsidiary” means any Restricted Subsidiary that would be a
“Significant Subsidiary” of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
 
“Similar Business” means a business, the majority of whose revenues are derived
from the activities of the Company and its Subsidiaries as of the Issue Date or
any business or activity that is reasonably similar thereto or a reasonable
extension, development or expansion thereof or ancillary thereto.
 
“Sponsors” means (1) one or more investment funds controlled by Apollo
Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and
(2) any Person that forms a group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision) with any
Apollo Sponsors, provided that any Apollo Sponsor (x) owns a majority of the
voting power and (y) controls a majority of the Board of Directors of the
Company.
 
“Standard Securitization Undertakings” means representations, warranties,
covenants, indemnities and guarantees of performance entered into by the Company
or any Subsidiary of the Company which the Company has determined in good faith
to be customary in a Receivables Financing including without limitation, those
relating to the servicing of the assets of a Receivables Subsidiary, it being
understood that any Receivables Repurchase Obligation shall be deemed to be a
Standard Securitization Undertaking.
 
“Stated Maturity” means, with respect to any security, the date specified in
such security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the
 

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happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
 
“Stock and Asset Purchase Agreement” means the Stock and Asset Purchase
Agreement, dated as of December 20, 2005, among the Seller, Covalence Specialty
Materials Holding Corp. and Tyco International Group S.A., a Luxembourg
corporation, as amended, supplemented or modified from time to time.
 
“Subordinated Indebtedness” means (a) with respect to the Company, any
Indebtedness of the Company which is by its terms subordinated in right of
payment to the Securities, and (b) with respect to any Guarantor, any
Indebtedness of such Guarantor which is by its terms subordinated in right of
payment to its Guarantee.
 
“Subsidiary” means, with respect to any Person, (1) any corporation, association
or other business entity (other than a partnership, joint venture or limited
liability company) of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
of determination owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
and (2) any partnership, joint venture or limited liability company of which (x)
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general and limited partnership interests, as applicable,
are owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person or a combination thereof, whether in
the form of membership, general, special or limited partnership interests or
otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a
controlling general partner or otherwise controls such entity.
 
“Tax Distributions” means any distributions described in Section 4.04(b)(xii).
 
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as
in effect on the date of this Indenture.
 
“Total Assets” means the total consolidated assets of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Company.
 
“Transactions” means the Acquisition and the transactions related thereto, the
issuance of the Securities, and borrowings made pursuant to the Credit Agreement
and the Floating Rate Loan and, to the extent applicable, funding in a
Receivables Financing on the Issue Date.
 
“Treasury Rate” means, as of the applicable redemption date, the yield to
maturity as of such redemption date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to such redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such redemption date to March 1, 2011; provided,
however, that if the period from such redemption date to March 1, 2011 is less
than one year, the
 

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weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year will be used.
 
“Trust Officer” means:
 
(1) any officer within the corporate trust department of the Trustee, including
any vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such Person’s knowledge of and familiarity with the
particular subject, and
 
(2) who shall have direct responsibility for the administration of this
Indenture.
 
“Trustee” means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
 
“Uniform Commercial Code” means the New York Uniform Commercial Code as in
effect from time to time.
 
“Unrestricted Subsidiary” means:
 
(1) any Subsidiary of the Company that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below; and
 
(2) any Subsidiary of an Unrestricted Subsidiary.
 
The Board of Directors of the Company may designate any Subsidiary of the
Company (including any newly acquired or newly formed Subsidiary of the Company)
to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that
is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that the Subsidiary to be so designated and its Subsidiaries do not at the time
of designation have and do not thereafter Incur any Indebtedness pursuant to
which the lender has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries; provided, further, however, that either:
 
(a) the Subsidiary to be so designated has total consolidated assets of $1,000
or less; or
 
(b) if such Subsidiary has consolidated assets greater than $1,000, then such
designation would be permitted under Section 4.04.
 
The Board of Directors of the Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation:
 

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(x) (1) the Company could Incur $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed
Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be
greater than such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro forma basis taking
into account such designation, and
 
(y) no Event of Default shall have occurred and be continuing.
 
Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by promptly filing with the Trustee a 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 provisions.
 
“U.S. Government Obligations” means securities that are:
 
(1) direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged, or
 
(2) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America, the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America,
 
which, in each case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any such U.S. Government Obligations or a specific payment of principal of or
interest on any such U.S. Government Obligations held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations evidenced
by such depository receipt.
 
“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 or
Disqualified Stock, as the case may be, at any date, the quotient obtained by
dividing (1) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (2) the sum of all such
payments.
 
“Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a
Restricted Subsidiary.
 
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100%
of the outstanding Capital Stock or other ownership interests of which (other
than
 

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directors’ qualifying shares or shares required to be held by Foreign
Subsidiaries) shall at the time be owned by such Person or by one or more Wholly
Owned Subsidiaries of such Person.
 
SECTION 1.02. Other Definitions
 
.
 
Term
Defined
in Section
   
“Additional Interest”
Appendix A
“Affiliate Transaction”
4.07
“Appendix”
Preamble
“Asset Sale Offer”
4.06(b)
“Bankruptcy Law”
6.01
“Blockage Notice”
10.03
“covenant defeasance option”
8.01(c)
“Custodian”
6.01
“Definitive Security”
Appendix A
“Depository”
Appendix A
“Euroclear”
Appendix A
“Event of Default”
6.01
“Excess Proceeds”
4.06(b)
“Exchange Securities”
Preamble
“Global Securities Legend”
Appendix A
“Guarantee Blockage Notice”
12.03
“Guarantee Payment Blockage Period”
12.03
“Guaranteed Obligations”
11.01(a)
“IAI”
Appendix A
“incorporated provision”
13.01
“Initial Purchasers”
Appendix A
“Initial Securities”
Preamble
“legal defeasance option”
8.01
“Notice of Default”
6.01(j)
“Offer Period”
4.06(d)
“Original Securities”
Preamble
“pay its Guarantee”
12.03
“pay the Securities”
10.03
“Paying Agent”
2.04
“Payment Blockage Period”
10.03
“protected purchaser”
2.08
“Purchase Agreement”
Appendix A
“QIB”
Appendix A
“Refinancing Indebtedness”
4.03(b)
“Refunding Capital Stock”
4.04(b)
“Registered Exchange Offer”
Appendix A
“Registration Agreement”
Appendix A
“Registrar”
2.04
“Regulation S”
Appendix A
“Regulation S Permanent Global Security”
Appendix A
“Regulation S Securities”
Appendix A
“Regulation S Temporary Global Security”
Appendix A
“Restricted Payment”
4.04(a)
“Restricted Period”
Appendix A
“Restricted Securities Legend”
Appendix A
“Retired Capital Stock”
4.04(b)
“Rule 501”
Appendix A
“Rule 144A”
Appendix A
“Rule 144A Securities”
Appendix A
“Securities Custodian”
Appendix A
“Shelf Registration Statement”
Appendix A
“Successor Company”
5.01(a)
“Successor Guarantor”
5.01(b)
“Transfer”
5.01(b)
“Transfer Restricted Securities”
Appendix A
“Unrestricted Definitive Security
Appendix A
   

SECTION 1.03. Incorporation by Reference of Trust Indenture Act
 
. This Indenture incorporates by reference certain provisions of the TIA. The
following TIA terms have the following meanings:
 
“Commission” means the SEC.
 
“indenture securities” means the Securities and the Guarantees.
 
“indenture security holder” means a Holder.
 
“indenture to be qualified” means this Indenture.
 
“indenture trustee” or “institutional trustee” means the Trustee.
 
“obligor” on the indenture securities means the Company, the Guarantors and any
other obligor on the Securities.
 
All other TIA terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule have the meanings
assigned to them by such definitions.
 
SECTION 1.04. Rules of Construction
 
. Unless the context otherwise requires:
 
(a) a term has the meaning assigned to it;
 

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(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
 
(c) “or” is not exclusive;
 
(d) “including” means including without limitation;
 
(e) words in the singular include the plural and words in the plural include the
singular;
 
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to
Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;
 
(g) the principal amount of any non-interest bearing or other discount security
at any date shall be the principal amount thereof that would be shown on a
balance sheet of the issuer dated such date prepared in accordance with GAAP;
 
(h) the principal amount of any Preferred Stock shall be (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock,
whichever is greater;
 
(i) unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP;
 
(j) “$” and “U.S. Dollars” each refer to United States dollars, or such other
money of the United States of America that at the time of payment is legal
tender for payment of public and private debts; and
 
(k) whenever in this Indenture or the Securities there is mentioned, in any
context, principal, interest or any other amount payable under or with respect
to any Securities, such mention shall be deemed to include mention of the
payment of Additional Interest, to the extent that, in such context, Additional
Interest are, were or would be payable in respect thereof.
 
ARTICLE 2
THE SECURITIES
SECTION 2.01. Amount of Securities
 
. The aggregate principal amount of Original Securities which may be
authenticated and delivered under this Indenture on the Issue Date is
$265,000,000. All Securities shall be substantially identical except as to
denomination.
 
The Company may from time to time after the Issue Date issue Additional
Securities under this Indenture in an unlimited principal amount, so long as (i)
the Incurrence of the Indebtedness represented by such Additional Securities is
at such time permitted by Section 4.03 and (ii) such Additional Securities are
issued in compliance with the other applicable
 

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provisions of this Indenture. With respect to any Additional Securities issued
after the Issue Date (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 2.07, 2.08, 2.09, 2.10, 3.06, 4.06(g), 4.08(c) or the
Appendix), there shall be (a) established in or pursuant to a resolution of the
Board of Directors and (b) (i) set forth or determined in the manner provided in
an Officers’ Certificate or (ii) established in one or more indentures
supplemental hereto, prior to the issuance of such Additional Securities:
 
(1) the aggregate principal amount of such Additional Securities which may be
authenticated and delivered under this Indenture,
 
(2) the issue price and issuance date of such Additional Securities, including
the date from which interest on such Additional Securities shall accrue;
 
(3) if applicable, that such Additional Securities shall be issuable in whole or
in part in the form of one or more Global Securities and, in such case, the
respective depositaries for such Global Securities, the form of any legend or
legends which shall be borne by such Global Securities in addition to or in lieu
of those set forth in Exhibit A hereto and any circumstances in addition to or
in lieu of those set forth in Section 2.2 of the Appendix in which any such
Global Security may be exchanged in whole or in part for Additional Securities
registered, or any transfer of such Global Security in whole or in part may be
registered, in the name or names of Persons other than the depositary for such
Global Security or a nominee thereof; and
 
(4) if applicable, that such Additional Securities that are not Transfer
Restricted Securities shall not be issued in the form of Initial Securities as
set forth in Exhibit A, but shall be issued in the form of Exchange Securities
as set forth in Exhibit B.
 
If any of the terms of any Additional Securities are established by action taken
pursuant to a resolution of the Board of Directors, a copy of an appropriate
record of such action shall be certified by the Secretary or any Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Securities.
 
The Securities, including any Additional Securities, shall be treated as a
single class for all purposes under this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
 
SECTION 2.02. Form and Dating
 
. Provisions relating to the Initial Securities and the Exchange Securities are
set forth in the Appendix, which is hereby incorporated in and expressly made a
part of this Indenture. The (i) Initial Securities and the Trustee’s certificate
of authentication and (ii) any Additional Securities (if issued as Transfer
Restricted Securities) and the Trustee’s certificate of authentication shall
each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The (i) Exchange
Securities and the Trustee’s certificate of authentication and (ii) any
Additional Securities issued other than as Transfer Restricted Securities and
the Trustee’s certificate of authentication shall each be substantially in the
form of Exhibit B hereto, which is hereby
 

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incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or any Guarantor is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The Securities shall be issuable only in registered form without interest
coupons and only in denominations of $1,000 and any integral multiples thereof.
 
SECTION 2.03. Execution and Authentication
 
. The Trustee shall authenticate and make available for delivery upon a written
order of the Company signed by one Officer (a) Original Securities for original
issue on the date hereof in an aggregate principal amount of $265,000,000, (b)
subject to the terms of this Indenture, Additional Securities in an aggregate
principal amount to be determined at the time of issuance and specified therein
and (c) the Exchange Securities for issue in a Registered Exchange Offer
pursuant to the Registration Agreement for a like principal amount of Initial
Securities exchanged pursuant thereto or otherwise pursuant to an effective
registration statement under the Securities Act. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
Initial Securities or Exchange Securities. Notwithstanding anything to the
contrary in the Indenture or the Appendix, any issuance of Additional Securities
after the Issue Date shall be in a principal amount of at least $1,000.
 
One Officer shall sign the Securities for the Company by manual or facsimile
signature.
 
If an Officer whose signature is on a Security no longer holds that office at
the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
 
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
 
The Trustee may appoint one or more authenticating agents reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to the Company. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
 
SECTION 2.04. Registrar and Paying Agent
 
. (1) The Company shall maintain (i) an office or agency where Securities may be
presented for registration of transfer or for exchange (the “Registrar”) and
(ii) an office or agency where Securities may be presented for payment (the
“Paying Agent”). The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may have one or more co-registrars and
one or more additional paying agents. The term “Registrar” includes any
co-registrars. The term “Paying Agent” includes the Paying Agent and any
additional paying agents. The Company initially
 

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appoints the Trustee as Registrar, Paying Agent and the Securities Custodian
with respect to the Global Securities.
 
(b) The Company may enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate
the terms of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of the
name and address of any such agent. If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any
of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent
or Registrar.
 
(c) The Company may remove any Registrar or Paying Agent upon written notice to
such Registrar or Paying Agent and to the Trustee; provided, however, that no
such removal shall become effective until (i) if applicable, acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Company and the Trustee; provided,
however, that the Trustee may resign as Paying Agent or Registrar only if the
Trustee also resigns as Trustee in accordance with Section 7.08.
 
SECTION 2.05. Paying Agent to Hold Money in Trust
 
. Prior to each due date of the principal of and interest on any Security, the
Company shall deposit with each Paying Agent (or if the Company or a Wholly
Owned Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that a Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money held by a Paying Agent
for the payment of principal of and interest on the Securities, and shall notify
the Trustee of any default by the Company in making any such payment. If the
Company or a Wholly Owned Subsidiary of the Company acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it in trust for
the benefit of the Persons entitled thereto. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by such Paying Agent. Upon complying with this Section, a Paying
Agent shall have no further liability for the money delivered to the Trustee.
 
SECTION 2.06. Holder Lists
 
. The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders. If
the Trustee is not the Registrar, the Company shall furnish, or cause the
Registrar to furnish, to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
 
SECTION 2.07. Transfer and Exchange
 
. The Securities shall be issued in registered form and shall be transferable
only upon the surrender of a Security for registration of transfer and in
compliance with the Appendix. When a Security is presented to the Registrar
 

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with a request to register a transfer, the Registrar shall register the transfer
as requested if its requirements therefor are met. When Securities are presented
to the Registrar with a request to exchange them for an equal principal amount
of Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar’s request. The Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section. The Company
shall not be required to make, and the Registrar need not register, transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or of
any Securities for a period of 15 days before a selection of Securities to be
redeemed.
 
Prior to the due presentation for registration of transfer of any Security, the
Company, the Guarantors, the Trustee, the Paying Agent and the Registrar may
deem and treat the Person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of and
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, any Guarantor,
the Trustee, the Paying Agent or the Registrar shall be affected by notice to
the contrary.
 
Any Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
(a) the Holder of such Global Security (or its agent) or (b) any Holder of a
beneficial interest in such Global Security, and that ownership of a beneficial
interest in such Global Security shall be required to be reflected in a book
entry.
 
All Securities issued upon any transfer or exchange pursuant to the terms of
this Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
 
SECTION 2.08. Replacement Securities
 
. If a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met, such that the Holder (a) satisfies the Company or the Trustee within a
reasonable time after such Holder has notice of such loss, destruction or
wrongful taking and the Registrar does not register a transfer prior to
receiving such notification, (b) makes such request to the Company or the
Trustee prior to the Security being acquired by a protected purchaser as defined
in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and
(c) satisfies any other reasonable requirements of the Trustee. If required by
the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Trustee to protect the Company, the Trustee, a
Paying Agent and the Registrar from any loss that any of them may suffer if a
Security is replaced. The Company and the Trustee may charge the Holder for
their expenses in replacing a Security (including without limitation, attorneys’
fees and disbursements in replacing such Security). In the event any such
mutilated, lost, destroyed or wrongfully taken Security has
 

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become or is about to become due and payable, the Company in its discretion may
pay such Security instead of issuing a new Security in replacement thereof.
 
Every replacement Security is an additional obligation of the Company.
 
The provisions of this Section 2.08 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, lost, destroyed or wrongfully taken Securities.
 
SECTION 2.09. Outstanding Securities
 
. Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. Subject to Section
13.06, a Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
 
If a Security is replaced pursuant to Section 2.08 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced
Security is held by a protected purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.08.
 
If a Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities (or
portions thereof) to be redeemed or maturing, as the case may be, and no Paying
Agent is prohibited from paying such money to the Holders on that date pursuant
to the terms of this Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.
 
SECTION 2.10. Temporary Securities
 
. In the event that Definitive Securities are to be issued under the terms of
this Indenture, until such Definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of Definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Definitive Securities and make them available for
delivery in exchange for temporary Securities upon surrender of such temporary
Securities at the office or agency of the Company, without charge to the Holder.
Until such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as Definitive Securities.
 
SECTION 2.11. Cancellation
 
. The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and each Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment or cancellation and shall dispose of
canceled Securities in accordance with its customary procedures. The Company may
not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation. The Trustee shall not authenticate
Securities in place of canceled Securities other than pursuant to the terms of
this Indenture.
 

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SECTION 2.12. Defaulted Interest
 
. If the Company defaults in a payment of interest on the Securities, the
Company shall pay the defaulted interest then borne by the Securities (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the Persons who are Holders on a
subsequent special record date. The Company shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail or cause to be mailed to each affected Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
 
SECTION 2.13. CUSIP Numbers, ISINs, etc.
 
The Company in issuing the Securities may use CUSIP numbers, ISINs and “Common
Code” numbers (if then generally in use) and, if so, the Trustee shall use CUSIP
numbers, ISINs and “Common Code” numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers, either as
printed on the Securities or as contained in any notice of a redemption that
reliance may be placed only on the other identification numbers printed on the
Securities and that any such redemption shall not be affected by any defect in
or omission of such numbers. The Company shall advise the Trustee of any change
in the CUSIP numbers, ISINs and “Common Code” numbers.
 
SECTION 2.14. Calculation of Principal Amount of Securities
 
. The aggregate principal amount of the Securities, at any date of
determination, shall be the principal amount of the Securities at such date of
determination. With respect to any matter requiring consent, waiver, approval or
other action of the Holders of a specified percentage of the principal amount of
all the Securities, such percentage shall be calculated, on the relevant date of
determination, by dividing (a) the principal amount, as of such date of
determination, of Securities, the Holders of which have so consented, by (b) the
aggregate principal amount, as of such date of determination, of the Securities
then outstanding, in each case, as determined in accordance with the preceding
sentence, Section 2.09 and Section 13.06 of this Indenture. Any such calculation
made pursuant to this Section 2.14 shall be made by the Company and delivered to
the Trustee pursuant to an Officers’ Certificate.
 
ARTICLE 3
REDEMPTION
SECTION 3.01. Redemption
 
. The Securities may be redeemed, in whole, or from time to time in part,
subject to the conditions and at the redemption prices set forth in Paragraph 5
of the form of Securities set forth in Exhibit A and Exhibit B hereto, which are
hereby incorporated by reference and made a part of this Indenture, together
with accrued and unpaid interest to the redemption date.
 
SECTION 3.02. Applicability of Article
 
. Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
 
SECTION 3.03. Notices to Trustee
 
. If the Company elects to redeem Securities pursuant to the optional redemption
provisions of Paragraph 5 of the Security, it shall notify the
 

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Trustee in writing of (i) the Section of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Securities to be redeemed and (iv) the redemption price. The Company shall give
notice to the Trustee provided for in this paragraph at least 45 days but not
more than 60 days before a redemption date if the redemption is pursuant to
Paragraph 5 of the Security, unless a shorter period is acceptable to the
Trustee. Such notice shall be accompanied by an Officers’ Certificate and
Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall be not fewer than 15
days after the date of notice to the Trustee. Any such notice may be canceled at
any time prior to notice of such redemption being mailed to any Holder and shall
thereby be void and of no effect.
 
SECTION 3.04. Selection of Securities to Be Redeemed
 
. In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which such Securities are
listed, or if such Securities are not so listed, on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and appropriate (and in such
manner as complies with applicable legal requirements); provided that no
Securities of $1,000 or less shall be redeemed in part. The Trustee shall make
the selection from outstanding Securities not previously called for redemption.
The Trustee may select for redemption portions of the principal of Securities
that have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
 
SECTION 3.05. Notice of Optional Redemption
 
. (a) At least 30 days but not more than 60 days before a redemption date
pursuant to Paragraph 5 of the Security, the Company shall mail or cause to be
mailed by first-class mail a notice of redemption to each Holder whose
Securities are to be redeemed.
 
Any such notice shall identify the Securities to be redeemed and shall state:
 
(i) the redemption date;
 
(ii) the redemption price and the amount of accrued interest to the redemption
date;
 
(iii) the name and address of the Paying Agent;
 
(iv) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price, plus accrued interest;
 
(v) if fewer than all the outstanding Securities are to be redeemed, the
certificate numbers and principal amounts of the particular Securities to be
redeemed, the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding after such partial
redemption;
 

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(vi) that, unless the Company defaults in making such redemption payment or the
Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date;
 
(vii) the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the
Securities being redeemed; and
 
(viii) that no representation is made as to the correctness or accuracy of the
CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice
or printed on the Securities.
 
(b) At the Company’s request, the Trustee shall give the notice of redemption in
the Company’s name and at the Company’s expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
 
SECTION 3.06. Effect of Notice of Redemption
 
. Once notice of redemption is mailed in accordance with Section 3.05,
Securities called for redemption become due and payable on the redemption date
and at the redemption price stated in the notice, except as provided in the
final sentence of paragraph 5 of the Securities. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price stated in the
notice, plus accrued interest, to, but not including, the redemption date;
provided, however, that if the redemption date is after a regular record date
and on or prior to the interest payment date, the accrued interest shall be
payable to the Holder of the redeemed Securities registered on the relevant
record date. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
 
SECTION 3.07. Deposit of Redemption Price
 
. With respect to any Securities, prior to 10:00 a.m., New York City time, on
the redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities or portions thereof to be redeemed on that date other
than Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancellation. On and after the
redemption date, interest shall cease to accrue on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid
interest on, the Securities to be redeemed, unless the Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture.
 
SECTION 3.08. Securities Redeemed in Part
 
. Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company’s
expense) a new Security equal in principal amount to the unredeemed portion of
the Security surrendered.
 

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Article 4
 
COVENANTS
 
SECTION 4.01. Payment of Securities
 
. The Company shall promptly pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and in this Indenture.
An installment of principal of or interest shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds as of 12:00 p.m.
Eastern time money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Holders on that date pursuant to the terms of this Indenture.
 
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate borne by the Securities to the extent lawful.
 
SECTION 4.02. Reports and Other Information
 
. (a) Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on
an annual and quarterly basis on forms provided for such annual and quarterly
reporting pursuant to rules and regulations promulgated by the SEC, the Company
shall file with the SEC (and provide the Trustee and Holders with copies
thereof, without cost to each Holder, within 15 days after it files them with
the SEC),
 
(i) within 90 days after the end of each fiscal year (or such shorter period as
may be required by the SEC), annual reports on Form 10-K (or any successor or
comparable form) containing the information required to be contained therein (or
required in such successor or comparable form), 
 
(ii) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year (or such shorter period as may be required by the SEC), reports
on Form 10-Q (or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or comparable
form),
 
(iii) promptly from time to time after the occurrence of an event required to be
therein reported (and in any event within the time period specified for filing
current reports on Form 8-K by the SEC), such other reports on Form 8-K (or any
successor or comparable form), and
 
(iv) any other information, documents and other reports which the Company would
be required to file with the SEC if it were subject to Section 13 or 15(d) of
the Exchange Act;
 
provided, however, that the Company shall not be so obligated to file such
reports with the SEC if the SEC does not permit such filing, in which event the
Company shall make available such information to prospective purchasers of
Securities, in addition to providing such information to the Trustee and the
Holders, in each case within 15 days after the time the Company would be
required to file such information with the SEC if it were subject to Section 13
or 15(d) of the Exchange Act.
 

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(b) In the event that:
 
(i) the rules and regulations of the SEC permit the Company and any direct or
indirect parent of the Company to report at such parent entity’s level on a
consolidated basis and
 
(ii) such parent entity of the Company is not engaged in any business in any
material respect other than incidental to its ownership, directly or indirectly,
of the capital stock of the Company,
 
such consolidated reporting at such parent entity’s level in a manner consistent
with that described in this Section 4.02 for the Company shall satisfy this
Section 4.02.
 
(c) The Company shall make such information available to prospective investors
upon request. In addition, the Company shall, for so long as any Securities
remain outstanding during any period when it is not subject to Section 13 or
15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with
certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to
the Holders of the Securities and to prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
 
Notwithstanding the foregoing, the Company will be deemed to have furnished such
reports referred to above to the Trustee and the Holders if the Company has
filed such reports with the SEC via the EDGAR filing system and such reports are
publicly available. In addition, such requirements shall be deemed satisfied
prior to the commencement of the exchange offer contemplated by the Registration
Agreement relating to the Securities or the effectiveness of the shelf
registration statement by the filing with the SEC of the Exchange Offer
Registration Statement and/or shelf registration statement in accordance with
the provisions of such registration rights agreement, and any amendments
thereto, with such financial information that satisfies Regulation S-X of the
Securities Act and such registration statement and/or amendments thereto are
filed at times that otherwise satisfy the time requirements set forth in Section
4.02(a).
 
In the event that any direct or indirect parent of the Company is or becomes a
Guarantor of the Securities, the Company may satisfy its obligations under this
Section 4.02 with respect to financial information relating to the Company by
furnishing financial information relating to such direct or indirect parent;
provided that the same is accompanied by consolidating information that explains
in reasonable detail the differences between the information relating to such
direct or indirect parent and any of its Subsidiaries other than the Company and
its Subsidiaries, on the one hand, and the information relating to the Company,
the Guarantors and the other Subsidiaries of the Company on a standalone basis,
on the other hand.
 
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock
 
. (2) (i) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the
Company shall not permit any of its Restricted Subsidiaries (other than a
Guarantor) to issue any shares of Preferred
 

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Stock; provided, however, that the Company and any Restricted Subsidiary that is
a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock and any Restricted
Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge
Coverage Ratio of the Company for the 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 2.00 to
1.00 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 Disqualified Stock or Preferred Stock had been issued, as the case may be,
and the application of proceeds therefrom had occurred at the beginning of such
four-quarter period.
 
(b) The limitations set forth in Section 4.03(a) shall not apply to:
 
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness
under the Credit Agreement and the issuance and creation of letters of credit
and bankers’ acceptances thereunder (with letters of credit and bankers’
acceptances being deemed to have a principal amount equal to the face amount
thereof) up to an aggregate principal amount of $750 million outstanding at any
one time;
 
(ii) the Incurrence by the Company, the Floating Rate Guarantors and the
Guarantors of Indebtedness represented by the Floating Rate Loan, the Floating
Rate Guarantees, the Original Securities (not including any Additional
Securities) and the Guarantees, as applicable (including the Exchange Securities
and guarantees thereof);
 
(iii) Indebtedness existing on the Issue Date (other than Indebtedness described
in clauses (i) and (ii) of this Section 4.03(b));
 
(iv) Indebtedness (including Capitalized Lease Obligations) Incurred by the
Company or any of its Restricted Subsidiaries to finance (whether prior to or
within 270 days after) the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets (but no other material assets))
in an aggregate principal amount which, when aggregated with the principal
amount of all other Indebtedness then outstanding that was Incurred pursuant to
this clause (iv), does not exceed the greater of $75.0 million and 4.0% of Total
Assets at the time of Incurrence;
 
(v) Indebtedness Incurred by the Company or any of its Restricted Subsidiaries
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, health, disability or other
employee benefits or property, casualty or liability insurance or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers’ compensation claims; provided, however, that upon
the drawing of such letters of credit, such obligations are reimbursed within 30
days following such drawing;
 

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(vi) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, Incurred in connection with the Acquisition
or any other acquisition or disposition of any business, assets or a Subsidiary
of the Company in accordance with the terms of this Indenture, other than
guarantees of Indebtedness Incurred by any Person acquiring all or any portion
of such business, assets or Subsidiary for the purpose of financing such
acquisition;
 
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any
such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is
subordinated in right of payment to the obligations of the Company under the
Securities; provided, further, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any other subsequent transfer of any
such Indebtedness (except to the Company or another Restricted Subsidiary) shall
be deemed, in each case, to be an Incurrence of such Indebtedness;
 
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the
Company or another Restricted Subsidiary; provided that any subsequent issuance
or transfer of any Capital Stock or any other event which results in any
Restricted Subsidiary that holds such shares of Preferred Stock of another
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such shares of Preferred Stock (except to the Company
or another Restricted Subsidiary) shall be deemed, in each case, to be an
issuance of shares of Preferred Stock;
 
(ix) Indebtedness of a Restricted Subsidiary to the Company or another
Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to
a Restricted Subsidiary that is not a Guarantor such Indebtedness is
subordinated in right of payment to the Guarantee of such Guarantor; provided,
further, that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any Restricted Subsidiary lending such Indebtedness
ceasing to be a Restricted Subsidiary or any other subsequent transfer of any
such Indebtedness (except to the Company or another Restricted Subsidiary) shall
be deemed, in each case, to be an Incurrence of such Indebtedness;
 
(x) Hedging Obligations that are not incurred for speculative purposes: (1) for
the purpose of fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(2) for the purpose of fixing or hedging currency exchange rate risk with
respect to any currency exchanges; or (3) for the purpose of fixing or hedging
commodity price risk with respect to any commodity purchases or sales;
 
(xi) obligations in respect of performance, bid and surety bonds and completion
guarantees provided by the Company or any Restricted Subsidiary in the ordinary
course of business;
 

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(xii) Indebtedness or Disqualified Stock of the Company or any Restricted
Subsidiary of the Company not otherwise permitted hereunder in an aggregate
principal amount, which when aggregated with the principal amount or liquidation
preference of all other Indebtedness and Disqualified Stock then outstanding and
Incurred pursuant to this clause (xii), does not exceed $100 million at any one
time outstanding (it being understood that any Indebtedness Incurred under this
clause (xii) shall cease to be deemed Incurred or outstanding for purposes of
this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a)
from and after the first date on which the Company, or the Restricted
Subsidiary, as the case may be, could have Incurred such Indebtedness under
Section 4.03(a) without reliance upon this clause (xii));
 
(xiii) any guarantee by the Company or a Guarantor of Indebtedness or other
obligations of the Company or any of its Restricted Subsidiaries so long as the
Incurrence of such Indebtedness Incurred by the Company or such Restricted
Subsidiary is permitted under the terms of this Indenture; provided that if such
Indebtedness is by its express terms subordinated in right of payment to the
Securities or the Guarantee of such Restricted Subsidiary, as applicable, any
such guarantee of such Guarantor with respect to such Indebtedness shall be
subordinated in right of payment to such Guarantor’s Guarantee with respect to
the Securities substantially to the same extent as such Indebtedness is
subordinated to the Securities or the Guarantee of such Restricted Subsidiary,
as applicable;
 
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary
of the Company which serves to refund, refinance or defease any Indebtedness
Incurred or Disqualified Stock or Preferred Stock issued as permitted under
Section 4.03(a) and clauses (ii), (iii), (iv), (xv), (xix) and (xx) of this
Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock
Incurred to so refund or refinance such Indebtedness, Disqualified Stock or
Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred
Stock Incurred to pay premiums and fees in connection therewith (subject to the
following proviso, “Refinancing Indebtedness”) prior to its respective maturity;
provided, however, that such Refinancing Indebtedness:
 
(1) has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is Incurred which is not less than the shorter of (x) the remaining
Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or
Preferred Stock being refunded or refinanced and (y) the Weighted Average Life
to Maturity that would result if all payments of principal on the Indebtedness,
Disqualified Stock and Preferred Stock being refunded or refinanced that were
due on or after the date one year following the last maturity date of any
Securities then outstanding were instead due on such date one year following the
last date of maturity of the Securities;
 
(2) has a Stated Maturity which is not earlier than the earlier of (x) the
Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year
following the last maturity date of the Securities;
 

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(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness
junior to the Securities or the Guarantee of such Restricted Subsidiary, as
applicable, such Refinancing Indebtedness is junior to the Securities or the
Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified
Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or
Preferred Stock;
 
(4) is Incurred in an aggregate amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the aggregate
amount (or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being refinanced plus premium, fees and
expenses Incurred in connection with such refinancing;
 
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company
that is not a Guarantor that refinances Indebtedness of the Company or a
Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or
a Restricted Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary; and
 
(6) in the case of any Refinancing Indebtedness Incurred to refinance
Indebtedness outstanding under clause (iv), (xix) or (xx) of this Section
4.03(b), shall be deemed to have been Incurred and to be outstanding under such
clause (iv), (xix) or (xx) of this Section 4.03(b), as applicable, and not this
clause (xiv) for purposes of determining amounts outstanding under such clauses
(iv), (xix) and (xx) of this Section 4.03(b);
 
provided, further, that subclauses (1) and (2) of this clause (xiv) shall not
apply to any refunding or refinancing of the Securities or any Senior
Indebtedness.
 
(xv) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are
acquired by the Company or any of its Restricted Subsidiaries or merged into a
Restricted Subsidiary in accordance with the terms of this Indenture; provided,
however, that such Indebtedness, Disqualified Stock or Preferred Stock is not
Incurred in contemplation of such acquisition or merger or to provide all or a
portion of the funds or credit support required to consummate such acquisition
or merger; provided, further, however, that after giving effect to such
acquisition and the Incurrence of such Indebtedness either:
 
(1) the Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first sentence of Section 4.03(a); or
 
(2) the Fixed Charge Coverage Ratio would be greater than immediately prior to
such acquisition;
 
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified
Receivables Financing that is not recourse to the Company or any Restricted
Subsidiary other than a Receivables Subsidiary (except for Standard
Securitization Undertakings);
 

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(xvii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business; provided that such Indebtedness is
extinguished within two Business Days of its Incurrence;
 
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a
letter of credit issued pursuant to the Credit Agreement, in a principal amount
not in excess of the stated amount of such letter of credit;
 
(xix) Contribution Indebtedness;
 
(xx) Indebtedness of Restricted Subsidiaries that are not Guarantors Incurred
for working capital purposes, provided, however, that the aggregate principal
amount of Indebtedness Incurred under this clause (xx), when aggregated with the
principal amount of all other Indebtedness then outstanding and Incurred
pursuant to this clause (xx), does not exceed the greater of $15 million and 10%
of the consolidated assets of the Restricted Subsidiaries that are not
Guarantors; and
 
(xxi) Indebtedness of the Company or any Restricted Subsidiary consisting of (x)
the financing of insurance premiums or (y) take-or-pay obligations contained in
supply arrangements, in each case, in the ordinary course of business.
 
(c) For purposes of determining compliance with this Section 4.03, in the event
that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the
criteria of more than one of the categories of permitted Indebtedness described
in clauses (i) through (xxi) above or is entitled to be Incurred pursuant to
Section 4.03(a), the Company shall, in its sole discretion, classify or
reclassify, or later divide, classify or reclassify, such item of Indebtedness
in any manner that complies with this Section 4.03; provided that all
Indebtedness under the Credit Agreement outstanding on the Issue Date shall be
deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the
Company shall not be permitted to reclassify all or any portion of such
Indebtedness under the Credit Agreement outstanding on the Issue Date. Accrual
of interest, the accretion of accreted value, the payment of interest in the
form of additional Indebtedness with the same terms, the payment of dividends on
Preferred Stock in the form of additional shares of Preferred Stock of the same
class, accretion of original issue discount or liquidation preference and
increases in the amount of Indebtedness outstanding solely as a result of
fluctuations in the exchange rate of currencies shall not be deemed to be an
Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness which is
otherwise included in the determination of a particular amount of Indebtedness
shall not be included in the determination of such amount of Indebtedness;
provided that the Incurrence of the Indebtedness represented by such guarantee
or letter of credit, as the case may be, was in compliance with this Section
4.03.
 
(d) For purposes of determining compliance with any U.S. dollar-denominated
restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was Incurred, in the case of term debt, or first committed or
first Incurred (whichever yields the lower U.S. dollar
 

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equivalent), in the case of revolving credit debt; provided that if such
Indebtedness is Incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced.
 
SECTION 4.04. Limitation on Restricted Payments
 
. (3) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
 
(i) declare or pay any dividend or make any distribution on account of the
Company’s or any of its Restricted Subsidiaries’ Equity Interests, including any
payment made in connection with any merger or consolidation involving the
Company (other than (A) dividends or distributions by the Company payable solely
in Equity Interests (other than Disqualified Stock) of the Company; or (B)
dividends or distributions by a Restricted Subsidiary so long as, in the case of
any dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary other than a Wholly Owned
Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least
its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities);
 
(ii) purchase or otherwise acquire or retire for value any Equity Interests of
the Company or any direct or indirect parent of the Company;
 
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value, in each case prior to any scheduled repayment or
scheduled maturity, any Subordinated Indebtedness (other than the payment,
redemption, repurchase, defeasance, acquisition or retirement of (A)
Subordinated Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of such payment, redemption, repurchase, defeasance,
acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and
(ix) of Section 4.03(b)); or
 
(iv) make any Restricted Investment
 
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as “Restricted Payments”), unless, at the time of
such Restricted Payment:
 
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
 
(2) immediately after giving effect to such transaction on a pro forma basis,
the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a);
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 Issue Date (including Restricted Payments permitted by clauses (i), (iv)
(only to the extent of
 

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one-half of the amounts paid pursuant to such clause), (vi), (viii) and (xiii)
(only to the extent of one-half of the amounts paid pursuant to such clause) of
Section 4.04(b), but excluding all other Restricted Payments permitted by
Section 4.04(b)), is less than the amount equal to the Cumulative Credit.
 
(b) The provisions of Section 4.04(a) shall not prohibit:
 
(i) the payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;
 
(ii) (A) the repurchase, retirement or other acquisition of any Equity Interests
(“Retired Capital Stock”) of the Company or any direct or indirect parent of the
Company or Subordinated Indebtedness of the Company or any Guarantor in exchange
for, or out of the proceeds of the substantially concurrent sale of, Equity
Interests of the Company or contributions to the equity capital of the Company
(other than any Disqualified Stock or any Equity Interests sold to a Subsidiary
of the Company or to an employee stock ownership plan or any trust established
by the Company or any of its Subsidiaries) (collectively, including any such
contributions, “Refunding Capital Stock”); and (B) the declaration and payment
of accrued dividends on the Retired Capital Stock out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company or to
an employee stock ownership plan or any trust established by the Company or any
of its Subsidiaries) of Refunding Capital Stock;
 
(iii) the redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Company or any Guarantor made by exchange for,
or out of the proceeds of the substantially concurrent sale of, new Indebtedness
of the Company or a Guarantor which is Incurred in accordance with Section 4.03
so long as
 
(A) the principal amount of such new Indebtedness does not exceed the principal
amount of the Subordinated Indebtedness being so redeemed, repurchased, acquired
or retired for value (plus the amount of any premium required to be paid under
the terms of the instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired plus any fees incurred in connection
therewith),
 
(B) such Indebtedness is subordinated to the Securities at least to the same
extent as such Subordinated Indebtedness so purchased, exchanged, redeemed,
repurchased, acquired or retired for value,
 
(C) such Indebtedness has a final scheduled maturity date equal to or later than
the earlier of (x) the final scheduled maturity date of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired or (y) one year
following the Stated Maturity of the Securities, and
 
(D) such Indebtedness has a Weighted Average Life to Maturity at the time
Incurred which is not less than the shorter of (x) the remaining Weighted
Average Life to Maturity of the Subordinated Indebtedness being so redeemed,
 

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repurchased, acquired or retired and (y) the Weighted Average Life to Maturity
that would result if all payments of principal on the Subordinated Indebtedness
being redeemed, repurchased, acquired or retired that were due on or after the
date one year following the last maturity date of any Securities then
outstanding were instead due on such date one year following the last date of
maturity of the Securities;
 
(iv) the repurchase, retirement or other acquisition (or dividends to any direct
or indirect parent of the Company to finance any such repurchase, retirement or
other acquisition) for value of Equity Interests of the Company or any direct or
indirect parent of the Company held by any future, present or former employee,
director or consultant of the Company or any direct or indirect parent of the
Company or any Subsidiary of the Company pursuant to any management equity plan
or stock option plan or any other management or employee benefit plan or other
agreement or arrangement; provided, however, that the aggregate amounts paid
under this clause (iv) do not exceed $12.5 million in any calendar year (with
unused amounts in any calendar year being permitted to be carried over for the
two succeeding calendar years subject to a maximum payment (without giving
effect to the following proviso) of $20 million in any calendar year); provided,
further, however, that such amount in any calendar year may be increased by an
amount not to exceed:
 
(A) the cash proceeds received by the Company or any of its Restricted
Subsidiaries from the sale of Equity Interests (other than Disqualified Stock)
of the Company or any direct or indirect parent of the Company (to the extent
contributed to the Company) to members of management, directors or consultants
of the Company and its Restricted Subsidiaries or any direct or indirect parent
of the Company that occurs after the Issue Date (provided that the amount of
such cash proceeds utilized for any such repurchase, retirement, other
acquisition or dividend shall not increase the amount available for Restricted
Payments under Section 4.04(a)(3)); plus
 
(B) the cash proceeds of key man life insurance policies received by the Company
or any direct or indirect parent of the Company (to the extent contributed to
the Company) or the Company’s Restricted Subsidiaries after the Issue Date;
 
provided that the Company may elect to apply all or any portion of the aggregate
increase contemplated by clauses (A) and (B) above in any calendar year;
 
(v) the declaration and payment of dividends or distributions to holders of any
class or series of Disqualified Stock of the Company or any of its Restricted
Subsidiaries issued or incurred in accordance with Section 4.03;
 
(vi) the declaration and payment of dividends or distributions (a) to holders of
any class or series of Designated Preferred Stock (other than Disqualified
Stock) issued after the Issue Date and (b) to any direct or indirect parent of
the Company, the proceeds of which will be used to fund the payment of dividends
to holders of any class or series of
 

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Designated Preferred Stock (other than Disqualified Stock) of any direct or
indirect parent of the Company issued after the Issue Date; provided, however,
that, (A) for the most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date of
issuance of such Designated Preferred Stock, after giving effect to such
issuance (and the payment of dividends or distributions) on a pro forma basis,
the Company would have had a Fixed Charge Coverage Ratio of at least 2.00 to
1.00 and (B) the aggregate amount of dividends declared and paid pursuant to
this clause (vi) does not exceed the net cash proceeds actually received by the
Company from any such sale of Designated Preferred Stock (other than
Disqualified Stock) issued after the Issue Date;
 
(vii) Investments in Unrestricted Subsidiaries having an aggregate Fair Market
Value, taken together with all other Investments made pursuant to this clause
(vii) that are at that time outstanding, not to exceed $25 million at the time
of such Investment (with the Fair Market Value of each Investment being measured
at the time made and without giving effect to subsequent changes in value);
 
(viii) the payment of dividends on the Company’s common stock (or the payment of
dividends to any direct or indirect parent of the Company, as the case may be,
to fund the payment by any direct or indirect parent of the Company, as the case
may be, of dividends on such entity’s common stock) of up to 6% per annum of the
net proceeds received by the Company from any public offering of common stock of
the Company or any direct or indirect parent of the Company;
 
(ix) Investments that are made with Excluded Contributions;
 
(x) other Restricted Payments in an aggregate amount not to exceed $50 million;
 
(xi) the distribution, as a dividend or otherwise, of shares of Capital Stock
of, or Indebtedness owed to the Company or a Restricted Subsidiary of the
Company by, Unrestricted Subsidiaries;
 
(xii) the payment of dividends or other distributions to any direct or indirect
parent of the Company in amounts required for such parent to pay federal, state
or local income taxes (as the case may be) imposed directly on such parent to
the extent such income taxes are attributable to the income of the Company and
its Restricted Subsidiaries (including, without limitation, by virtue of such
parent being the common parent of a consolidated or combined tax group of which
the Company and/or its Restricted Subsidiaries are members);
 
(xiii) the payment of dividends, other distributions or other amounts or the
making of loans or advances by the Company, if applicable:
 
(A) in amounts equal to the amounts required for any direct or indirect parent
of the Company, if applicable, to pay fees and expenses (including franchise or
similar taxes) required to maintain its corporate existence, customary salary,
bonus and other benefits payable to, and indemnities provided on behalf
 

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of, officers and employees of any direct or indirect parent of the Company, if
applicable, and general corporate overhead expenses of any direct or indirect
parent of the Company, if applicable, in each case to the extent such fees and
expenses are attributable to the ownership or operation of the Company, if
applicable, and its Subsidiaries; and
 
(B) in amounts equal to amounts required for any direct or indirect parent of
the Company, if applicable, to pay interest and/or principal on Indebtedness the
proceeds of which have been contributed to the Company or any of its Restricted
Subsidiaries and that has been guaranteed by, or is otherwise considered
Indebtedness of, the Company Incurred in accordance with Section 4.03;
 
(xiv) cash dividends or other distributions on the Company’s Capital Stock used
to, or the making of loans to any direct or indirect parent of the Company to,
fund the Transactions and the payment of fees and expenses incurred in
connection with the Transactions or owed by the Company or any direct or
indirect parent of the Company, as the case may be, or Restricted Subsidiaries
of the Company to Affiliates, in each case to the extent permitted by Section
4.07;
 
(xv) repurchases of Equity Interests deemed to occur upon exercise of stock
options if such Equity Interests represent a portion of the exercise price of
such options;
 
(xvi) purchases of receivables pursuant to a Receivables Repurchase Obligation
in connection with a Qualified Receivables Financing and the payment or
distribution of Receivables Fees;
 
(xvii) the repurchase, redemption or other acquisition or retirement for value
of any Subordinated Indebtedness pursuant to the provisions similar to those
described under Sections 4.06 and 4.08; provided that all Securities tendered by
Holders in connection with a Change of Control Offer or Asset Sale Offer, as
applicable, have been repurchased, redeemed or acquired for value; and
 
(xviii) any payments made, including any such payments made to any direct or
indirect parent of the Company to enable it to make payments, in connection with
the consummation of the Transactions or as contemplated by the Acquisition
Documents (other than payments to any Permitted Holder or any Affiliate
thereof);
 
provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (vi), (vii), (x) and (xi) of this
Section 4.04(b), no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof.
 
(c) As of the Issue Date, all of the Company’s Subsidiaries shall be Restricted
Subsidiaries. The Company shall not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except pursuant to the definition of “Unrestricted
Subsidiary.” For purposes of designating any Restricted Subsidiary as an
Unrestricted Subsidiary, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated shall be deemed to be Restricted Payments in an amount determined as
set forth in the
 

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last sentence of the definition of “Investments.” Such designation shall only be
permitted if a Restricted Payment in such amount would be permitted at such time
and if such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
 
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries
 
. The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:
 
(a) (i) pay dividends or make any other distributions to the Company or any of
its Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any
other interest or participation in, or measured by, its profits; or (ii) pay any
Indebtedness owed to the Company or any of its Restricted Subsidiaries;
 
(b) make loans or advances to the Company or any of its Restricted Subsidiaries;
or
 
(c) sell, lease or transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries;
 
except in each case for such encumbrances or restrictions existing under or by
reason of:
 
(1) contractual encumbrances or restrictions in effect on the Issue Date,
including pursuant to the Credit Agreement and the other Senior Credit
Documents;
 
(2) the Floating Rate Loan, this Indenture and the Securities (and any Exchange
Securities and guarantees thereof);
 
(3) applicable law or any applicable rule, regulation or order;
 
(4) any agreement or other instrument relating to Indebtedness of a Person
acquired by the Company or any Restricted Subsidiary which was in existence at
the time of such acquisition (but not created in contemplation thereof or to
provide all or any portion of the funds or credit support utilized to consummate
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;
 
(5) any restriction with respect to a Restricted Subsidiary imposed pursuant to
an agreement entered into for the sale or disposition of assets of such
Restricted Subsidiary pending the closing of such sale or disposition;
 
(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections
4.03 and 4.12 that limit the right of the debtor to dispose of the assets
securing such Indebtedness;
 
(7) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;
 

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(8) customary provisions in joint venture agreements and other similar
agreements entered into in the ordinary course of business;
 
(9) purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature discussed in clause (c) above on
the property so acquired;
 
(10) customary provisions contained in leases, licenses and other similar
agreements entered into in the ordinary course of business that impose
restrictions of the type described in clause (c) above on the property subject
to such lease;
 
(11) any encumbrance or restriction of a Receivables Subsidiary effected in
connection with a Qualified Receivables Financing; provided, however, that such
restrictions apply only to such Receivables Subsidiary;
 
(12) other Indebtedness of any Restricted Subsidiary of the Company (i) that is
a Guarantor that is Incurred subsequent to the Issue Date pursuant to Section
4.03 or (ii) that is Incurred by a Foreign Subsidiary of the Company subsequent
to the Issue Date pursuant to clause (iv), (xii) or (xx) of Section 4.03(b);
 
(13) any Restricted Investment not prohibited by Section 4.04 and any Permitted
Investment; or
 
(14) any encumbrances or restrictions of the type referred to in clauses (a),
(b) and (c) above 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
(13) above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are,
in the good faith judgment of the Company, no more restrictive with respect to
such dividend and other payment restrictions than those contained in the
dividend or other payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
 
For purposes of determining compliance with this Section 4.05, (i) the priority
of any Preferred Stock in receiving dividends or liquidating distributions prior
to dividends or liquidating distributions being paid on common stock shall not
be deemed a restriction on the ability to make distributions on Capital Stock
and (ii) the subordination of loans or advances made to the Company or a
Restricted Subsidiary of the Company to other Indebtedness Incurred by the
Company or any such Restricted Subsidiary shall not be deemed a restriction on
the ability to make loans or advances.
 
SECTION 4.06. Asset Sales
 
. (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, cause or make an Asset Sale, unless (x) the Company or any of
its Restricted Subsidiaries, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value (as determined
in good faith by the Company) of the assets sold or otherwise disposed of, and
(y) at least 75% of the consideration therefor received
 

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by the Company or such Restricted Subsidiary, as the case may be, is in the form
of Cash Equivalents; provided that the amount of:
 
(i) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s
most recent balance sheet or in the notes thereto) of the Company or any
Restricted Subsidiary of the Company (other than liabilities that are by their
terms subordinated to the Securities or any Guarantee) that are assumed by the
transferee of any such assets,
 
(ii) any notes or other obligations or other securities or assets received by
the Company or such Restricted Subsidiary of the Company from such transferee
that are converted by the Company or such Restricted Subsidiary of the Company
into cash within 180 days of the receipt thereof (to the extent of the cash
received), and
 
(iii) any Designated Non-cash Consideration received by the Company or any of
its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (iii) that is at that time outstanding, not to exceed
the greater of 3.0% of Total Assets and $35 million at the time of the receipt
of such Designated Non-cash Consideration (with the Fair Market Value of each
item of Designated Non-cash Consideration being measured at the time received
and without giving effect to subsequent changes in value)
 
shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).
 
(b) Within 365 days after the Company’s or any Restricted Subsidiary of the
Company’s receipt of the Net Proceeds of any Asset Sale, the Company or such
Restricted Subsidiary of the Company may apply the Net Proceeds from such Asset
Sale, at its option:
 
(i) to permanently reduce Obligations under the Credit Agreement (and, in the
case of revolving Obligations, to correspondingly reduce commitments with
respect thereto) or other Senior Indebtedness or Pari Passu Indebtedness
(provided that if the Company or any Guarantor shall so reduce Obligations under
Pari Passu Indebtedness, the Company shall equally and ratably reduce
Obligations under the Securities by making an offer (in accordance with the
procedures set forth below for an Asset Sale Offer) to all Holders to purchase
at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and Additional Interest, if any, the pro rata principal
amount of Securities) or Indebtedness of a Restricted Subsidiary that is not a
Guarantor, in each case other than Indebtedness owed to the Company or an
Affiliate of the Company,
 
(ii) to make an investment in any one or more businesses (provided that if such
investment is in the form of the acquisition of Capital Stock of a Person, such
acquisition results in such Person becoming a Restricted Subsidiary of the
Company), assets, or property or capital expenditures, in each case used or
useful in a Similar Business, and/or
 
(iii) to make an investment in any one or more businesses (provided that if such
investment is in the form of the acquisition of Capital Stock of a Person, such
 

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acquisition results in such Person becoming a Restricted Subsidiary of the
Company), properties or assets that replace the properties and assets that are
the subject of such Asset Sale;
 
provided that (x) in the case of Sections 4.06(b)(ii) and (iii), a binding
commitment shall be treated as a permitted application of the Net Proceeds from
the date of such commitment and, (y) in the event such binding commitment is
later canceled or terminated for any reason before such Net Proceeds are so
applied, the Company or such Restricted Subsidiary enters into another binding
commitment within nine months of such cancellation or termination of the prior
binding commitment; provided, further that the Company or such Restricted
Subsidiary may only enter into such a commitment under clause (y) one time with
respect to each Asset Sale.
 
Pending the final application of any such Net Proceeds, the Company or such
Restricted Subsidiary of the Company may temporarily reduce Indebtedness under a
revolving credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents or Investment Grade Securities. Any Net Proceeds from any Asset Sale
that are not applied as provided and within the time period set forth in the
first sentence of this Section 4.06(b) (it being understood that any portion of
such Net Proceeds used to make an offer to purchase Securities, as described in
clause (i) of this Section 4.06(b), shall be deemed to have been invested
whether or not such offer is accepted) shall be deemed to constitute “Excess
Proceeds.” When the aggregate amount of Excess Proceeds exceeds $15 million, the
Company shall make an offer to all Holders of Securities (and, at the option of
the Company, to holders of any Pari Passu Indebtedness) (an “Asset Sale Offer”)
to purchase the maximum principal amount of Securities (and such Pari Passu
Indebtedness), that is an integral multiple of $1,000 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 (or, in the event such Pari Passu Indebtedness was
issued with significant original issue discount, 100% of the accreted value
thereof), plus accrued and unpaid interest and Additional Interest, if any (or,
in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be
provided for by the terms of such Pari Passu Indebtedness), to the date fixed
for the closing of such offer, in accordance with the procedures set forth in
this Section 4.06. The Company shall commence an Asset Sale Offer with respect
to Excess Proceeds within ten Business Days after the date that Excess Proceeds
exceeds $15 million by mailing the notice required pursuant to the terms of
Section 4.06(f), with a copy to the Trustee. To the extent that the aggregate
amount of Securities (and such Pari Passu Indebtedness) tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Securities (and such Pari Passu Indebtedness) surrendered by
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Securities to be purchased in the manner described in Section 4.06(e). Upon
completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
 
(c) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws or regulations are applicable in connection with the repurchase of the
Securities pursuant to an Asset Sale Offer. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this
Indenture, the Company shall comply with the applicable securities laws and
 

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regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
 
(d) Not later than the date upon which written notice of an Asset Sale Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers’ Certificate as to (i) the amount of the Excess Proceeds,
(ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which
such Asset Sale Offer is being made and (iii) the compliance of such allocation
with the provisions of Section 4.06(b). On such date, the Company shall also
irrevocably deposit with the Trustee or with a paying agent (or, if the Company
or a Wholly Owned Restricted Subsidiary is acting as the Paying Agent, segregate
and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash
Equivalents, as directed in writing by the Company, and to be held for payment
in accordance with the provisions of this Section 4.06. Upon the expiration of
the period for which the Asset Sale Offer remains open (the “Offer Period”), the
Company shall deliver to the Trustee for cancellation the Securities or portions
thereof that have been properly tendered to and are to be accepted by the
Company. The Trustee (or the Paying Agent, if not the Trustee) shall, on the
date of purchase, mail or deliver payment to each tendering Holder in the amount
of the purchase price. In the event that the Excess Proceeds delivered by the
Company to the Trustee are greater than the purchase price of the Securities
tendered, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with Section
4.06.
 
(e) Holders electing to have a Security purchased shall be required to surrender
the Security, with an appropriate form duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
purchase date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
by the Holder for purchase and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the end of the Offer Period more
Securities (and such Pari Passu Indebtedness) are tendered pursuant to an Asset
Sale Offer than the Company is required to purchase, selection of such
Securities for purchase shall be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Securities are listed, or if such Securities are not so listed, on a pro
rata basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements);
provided that no Securities of $1,000 or less shall be purchased in part.
Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of
such Pari Passu Indebtedness.
 
(f) Notices of an Asset Sale Offer shall be mailed by first class mail, postage
prepaid, at least 30 but not more than 60 days before the purchase date to each
Holder of Securities at such Holder’s registered address. If any Security is to
be purchased in part only, any notice of purchase that relates to such Security
shall state the portion of the principal amount thereof that has been or is to
be purchased.
 
SECTION 4.07. Transactions with Affiliates
 
. (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to,
 

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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 or series of transactions, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each of the foregoing, an “Affiliate Transaction”) involving aggregate
consideration in excess of $5 million, unless:
 
(i) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
could have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
 
(ii) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20 million, the
Company delivers to the Trustee a resolution adopted in good faith by the
majority of the Board of Directors of the Company, approving such Affiliate
Transaction and set forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clause (i) above.
 
(b) The provisions of Section 4.07(a) shall not apply to the following:
 
(i) (A) transactions between or among the Company and/or any of its Restricted
Subsidiaries and (B) any merger of the Company and any direct parent of the
Company; provided that such parent shall have no material liabilities and no
material assets other than cash, Cash Equivalents and the Capital Stock of the
Company and such merger is otherwise in compliance with the terms of this
Indenture and effected for a bona fide business purpose;
 
(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;
 
(iii) (x) the entering into of any agreement to pay, and the payment of, annual
management, consulting, monitoring and advisory fees and expenses to the
Sponsors in an aggregate amount in any fiscal year not to exceed the greater of
(A) $2.5 million and (B) 1.5% of EBITDA of the Company and its Restricted
Subsidiaries for the immediately preceding fiscal year; provided, however, that
any payment not made in any fiscal year may be carried forward and paid in the
following two fiscal years and (y) the payment of the present value of all
amounts payable pursuant to any agreement described in clause (iii)(x) of
Section 4.07(b) in connection with the termination of such agreement;
 
(iv) the payment of reasonable and customary fees and reimbursement of expenses
paid to, and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any Restricted Subsidiary or any direct or
indirect parent of the Company;
 
(v) payments by the Company or any of its Restricted Subsidiaries to the
Sponsors made for any financial advisory, financing, underwriting or placement
services or in respect of other investment banking activities, including,
without limitation, in connection with acquisitions or divestitures, which
payments are (x) made pursuant to the
 

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agreements with the Sponsors described in the Offering Memorandum or (y)
approved by a majority of the Board of Directors of the Company in good faith;
 
(vi) transactions in which the Company or any of its Restricted Subsidiaries, as
the case may be, delivers to the Trustee a letter from an Independent Financial
Advisor stating that such transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view or meets the requirements of clause
(i) of Section 4.07(a);
 
(vii) payments or loans to employees or consultants which are approved by a
majority of the Board of Directors of the Company in good faith;
 
(viii) any agreement as in effect as of the Issue Date or any amendment thereto
(so long as any such agreement together with all amendments thereto, taken as a
whole, is not more disadvantageous to the Holders of the Securities in any
material respect than the original agreement as in effect on the Issue Date) or
any transaction contemplated thereby as described in the Offering Memorandum;
 
(ix) the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of, Acquisition
Documents, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the Issue Date and any amendment thereto or similar agreements which it may
enter into thereafter; provided, however, that the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of its
obligations under, any future amendment to any such existing agreement or under
any similar agreement entered into after the Issue Date shall only be permitted
by this clause (ix) to the extent that the terms of any such existing agreement
together with all amendments thereto, taken as a whole, or new agreement are not
otherwise more disadvantageous to the Holders of the Securities in any material
respect than the original agreement as in effect on the Issue Date;
 
(x) the execution of the Transactions and the payment of all fees and expenses
related to the Transactions, including fees to the Sponsors, which are described
in the Offering Memorandum;
 
(xi) (A) transactions with customers, clients, suppliers or purchasers or
sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Indenture, which are fair to
the Company and its Restricted Subsidiaries in the reasonable determination of
the Board of Directors or the senior management of the Company, or are on terms
at least as favorable as might reasonably have been obtained at such time from
an unaffiliated party or (B) transactions with joint ventures or Unrestricted
Subsidiaries entered into in the ordinary course of business;
 
(xii) any transaction effected as part of a Qualified Receivables Financing;
 
(xiii) the issuance of Equity Interests (other than Disqualified Stock) of the
Company to any Person;
 

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(xiv) the issuances of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock option and stock ownership plans or similar employee benefit plans
approved by the Board of Directors of the Company or any direct or indirect
parent of the Company or of a Restricted Subsidiary of the Company, as
appropriate, in good faith;
 
(xv) the entering into of any tax sharing agreement or arrangement and any
payments permitted by Section 4.04(b)(xii);
 
(xvi) any contribution to the capital of the Company;
 
(xvii) transactions permitted by, and complying with, Section 5.01;
 
(xviii) transactions between the Company or any of its Restricted Subsidiaries
and any Person, a director of which is also a director of the Company or any
direct or indirect parent of the Company; provided, however, that such director
abstains from voting as a director of the Company or such direct or indirect
parent, as the case may be, on any matter involving such other Person;
 
(xix) pledges of Equity Interests of Unrestricted Subsidiaries; and
 
(xx) any employment agreements entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business.
 
SECTION 4.08. Change of Control
 
. (4) Upon a Change of Control, each Holder shall have the right to require the
Company to repurchase all or any part of such Holder’s Securities at a purchase
price in cash equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in accordance with the terms contemplated in
this Section 4.08; provided, however, that notwithstanding the occurrence of a
Change of Control, the Company shall not be obligated to purchase any Securities
pursuant to this Section 4.08 in the event that it has exercised its right to
redeem such Securities in accordance with Article 3 of this Indenture. In the
event that at the time of such Change of Control the terms of the Bank
Indebtedness or other Senior Indebtedness restrict or prohibit the repurchase of
Securities pursuant to this Section 4.08, then prior to the mailing of the
notice to the Holders provided for in Section 4.08(b) but in any event within 30
days following any Change of Control, the Company shall (i) repay in full all
Bank Indebtedness and such Senior Indebtedness, or (ii) obtain the requisite
consent, if required, under the agreements governing the Bank Indebtedness and
such Senior Indebtedness to permit the repurchase of the Securities as provided
for in Section 4.08(b).
 
(b) Within 30 days following any Change of Control, except to the extent that
the Company has exercised its right to redeem the Securities in accordance with
Article 3 of this Indenture, the Company shall mail a notice (a “Change of
Control Offer”) to each Holder with a copy to the Trustee stating:
 
(i) that a Change of Control has occurred and that such Holder has the right to
require the Company to purchase all or a portion of such Holder’s Securities at
a
 

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purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Additional Interest, if any, to the date of
purchase (subject to the right of the Holders of record on the relevant record
date to receive interest on the relevant interest payment date);
 
(ii) the circumstances and relevant facts and financial information regarding
such Change of Control;
 
(iii) the repurchase date (which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed); and
 
(iv) the instructions determined by the Company, consistent with this Section
4.08, that a Holder must follow in order to have its Securities purchased.
 
(c) Holders electing to have a Security purchased shall be required to surrender
the Security, with an appropriate form duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
purchase date. The Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
 
(d) On the purchase date, all Securities purchased by the Company under this
Section shall be delivered to the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest to the Holders
entitled thereto.
 
(e) Notwithstanding the foregoing provisions of this Section, the Company shall
not be required to make a Change of Control Offer upon a Change of Control if a
third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in Section 4.08
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.
 
(f) A Change of Control Offer may be made in advance of a Change of Control, and
conditioned upon such Change of Control, if a definitive agreement is in place
for the Change of Control at the time of making of the Change of Control Offer.
Securities repurchased by the Company pursuant to a Change of Control Offer will
have the status of Securities issued but not outstanding or will be retired and
canceled at the option of the Company. Securities purchased by a third party
pursuant to the preceding clause (e) will have the status of Securities issued
and outstanding.
 
(g) At the time the Company delivers Securities to the Trustee which are to be
accepted for purchase, the Company shall also deliver an Officers’ Certificate
stating that such Securities are to be accepted by the Company pursuant to and
in accordance with the terms of this Section 4.08. A Security shall be deemed to
have been accepted for purchase at the time the
 

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Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
 
(h) Prior to any Change of Control Offer, the Company shall deliver to the
Trustee an Officers’ Certificate stating that all conditions precedent contained
herein to the right of the Company to make such offer have been complied with.
 
(i) The Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Securities pursuant to this Section. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.08, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
 
SECTION 4.09. Compliance Certificate
 
. The Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company, beginning with the fiscal year end on December 31,
2006, an Officers’ Certificate stating that in the course of the performance by
the signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
 
SECTION 4.10. Further Instruments and Acts
 
. Upon request of the Trustee, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
 
SECTION 4.11. Future Guarantors
 
. The Company shall cause each Restricted Subsidiary that is a Domestic
Subsidiary (unless such Subsidiary is a Receivables Subsidiary) that
 
(i) guarantees any Indebtedness of the Company or any of its Restricted
Subsidiaries, or
 
(ii) incurs any Indebtedness or issues any shares of Disqualified Stock
permitted to be Incurred or issued pursuant to clauses (i) or (xii) of Section
4.03(b) or not permitted to be Incurred by Section 4.03,
 
to execute and deliver to the Trustee a supplemental indenture substantially in
the form of Exhibit D pursuant to which such Subsidiary shall guarantee payment
of the Securities.
 
SECTION 4.12. Liens
 
. The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, Incur or suffer to exist any Lien on any
asset or property of the Company or such Restricted Subsidiary of the Company,
or any income or profits therefrom, or assign or convey any right to receive
income therefrom, that secures any Indebtedness of the Company or any Guarantor
unless the Securities are equally and ratably secured with (or on a senior basis
to, in the case of obligations subordinated in right of payment to the
Securities) the obligations so secured until such time as such obligations are
no longer
 

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secured by a Lien. The preceding sentence shall not require the Company or any
Restricted Subsidiary of the Company to secure the Securities if the Lien
consists of a Permitted Lien; provided that any Lien which is granted to secure
the Securities or such Guarantee under this Section 4.12 shall be automatically
released and discharged at the same time as the release of the Lien that gave
rise to the obligation to secure the Securities or such Guarantee under this
Section 4.12.
 
SECTION 4.13. Limitation on Other Senior Subordinated Indebtedness
 
. The Company shall not, and shall not permit any Guarantor to, directly or
indirectly, Incur any Indebtedness (including Acquired Indebtedness) that is
subordinate in right of payment to any Indebtedness of the Company or any
Indebtedness of any such Guarantor, as the case may be, unless such Indebtedness
is either:
 
(i) pari passu in right of payment with the Securities or such Guarantor’s
Guarantee, as the case may be, or
 
(ii) subordinate in right of payment to the Securities or such Guarantor’s
Guarantee, as the case may be.
 
SECTION 4.14. Maintenance of Office or Agency
 
. (5) The Company shall maintain an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee or Registrar) where Securities may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
corporate trust office of the Trustee as set forth in Section 13.02.
 
(b) The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
 
(c) The Company hereby designates the corporate trust office of the Trustee or
its Agent as such office or agency of the Company in accordance with Section
2.04.
 
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets
 
. (6) The Company shall not, directly or indirectly, consolidate or merge with
or into or wind up or convert into (whether or not the Company is the surviving
Person), or sell, assign, transfer, lease, convey
 

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or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to any Person unless:
 
(i) the Company is the surviving Person or the Person formed by or surviving any
such consolidation, merger, winding up or conversion (if other than the Company)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the United States, any
state thereof, the District of Columbia, or any territory thereof (the Company
or such Person, as the case may be, being herein called the “Successor
Company”); provided that in the case where the surviving Person is not a
corporation, a co-obligor of the Securities is a corporation;
 
(ii) the Successor Company (if other than the Company) expressly assumes all the
obligations of the Company under this Indenture and the Securities pursuant to
supplemental indentures or other documents or instruments in form reasonably
satisfactory to the Trustee;
 
(iii) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any of its
Restricted Subsidiaries as a result of such transaction as having been Incurred
by the Successor Company or such Restricted Subsidiary at the time of such
transaction) no Default or Event of Default shall have occurred and be
continuing;
 
(iv) immediately after giving pro forma effect to such transaction, as if such
transaction had occurred at the beginning of the applicable four-quarter period,
either
 
(A) the Successor Company would be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.03(a); or
 
(B) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted
Subsidiaries would be greater than such ratio for the Company and its Restricted
Subsidiaries immediately prior to such transaction;
 
(v) each Guarantor, unless it is the other party to the transactions described
above, shall have by supplemental indenture confirmed that its Guarantee shall
apply to such Person’s obligations under this Indenture and the Securities; and
 
(vi) the Company shall have delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indentures (if any) comply with this Indenture.
 
The Successor Company shall succeed to, and be substituted for, the Company
under this Indenture and the Securities. Notwithstanding the foregoing clauses
(iii) and (iv) of this Section 5.01, (a) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or to another Restricted Subsidiary, and (b) the Company
may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another state of the United States, or may
convert into a limited liability
 

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company, so long as the amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby.
 
(b) Subject to the provisions of Section 11.02(b) (which govern the release of a
Guarantee upon the sale or disposition of a Restricted Subsidiary of the Company
that is a Guarantor), each Guarantor shall not, and the Company shall not permit
any Guarantor to, consolidate or merge with or into or wind up into (whether or
not such Guarantor is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person (other than any such
sale, assignment, transfer, lease, conveyance or disposition in connection with
the Transactions described in the Offering Memorandum) unless:
 
(i) such Guarantor is the surviving Person or the Person formed by or surviving
any such consolidation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made is a corporation, partnership or limited liability company organized
or existing under the laws of the United States, any state thereof, the District
of Columbia, or any territory thereof (such Guarantor or such Person, as the
case may be, being herein called the “Successor Guarantor”);
 
(ii) the Successor Guarantor (if other than such Guarantor) expressly assumes
all the obligations of such Guarantor under this Indenture and such Guarantor’s
Guarantee pursuant to a supplemental indenture or other documents or instruments
in form reasonably satisfactory to the Trustee; and
 
(iii) the Successor Guarantor (if other than such Guarantor) shall have
delivered or caused to be delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture (if any) comply with this Indenture.
 
Except as otherwise provided in this Indenture, the Successor Guarantor shall
succeed to, and be substituted for, such Guarantor under this Indenture and such
Guarantor’s Guarantee. Notwithstanding the foregoing, (1) a Guarantor may merge
with an Affiliate incorporated solely for the purpose of reincorporating such
Guarantor in another state of the United States, so long as the amount of
Indebtedness of the Guarantor is not increased thereby and (2) a Guarantor may
merge with another Guarantor or the Company.
 
Notwithstanding the foregoing, any Guarantor may consolidate or merge with or
into or wind up into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets (collectively, a
“Transfer”) to, (x) the Company or any Guarantor or (y) any Restricted
Subsidiary of the Company that is not a Guarantor; provided that at the time of
each such Transfer pursuant to clause (y) the aggregate amount of all such
Transfers since the Issue Date shall not exceed 5% of the consolidated assets of
the Company and the Guarantors as shown on the most recent available balance
sheet of the Company and the Restricted Subsidiaries after giving effect to each
such Transfer and including all Transfers occurring from and after the Issue
Date (excluding Transfers in connection with the Transactions described in the
Offering Memorandum).
 

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Article 6
 
DEFAULTS AND REMEDIES
 
SECTION 6.01. Events of Default
 
. An “Event of Default” occurs if:
 
(a) the Company defaults in any payment of interest on any Security when the
same becomes due and payable, whether or not such payment shall be prohibited by
Article 10, and such default continues for a period of 30 days,
 
(b) the Company defaults in the payment of principal or premium, if any, of any
Security when due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, whether or not such payment
shall be prohibited by Article 10,
 
(c) the Company fails to comply with its obligations under Section 5.01,
 
(d) the Company or any of its Restricted Subsidiaries fails to comply with any
of its agreements in the Securities or this Indenture (other than those referred
to in clause (a), (b) or (c) above) and such failure continues for 60 days after
the notice specified below,
 
(e) the Company or any Significant Subsidiary fails to pay any Indebtedness
(other than Indebtedness owing to the Company or a Restricted Subsidiary of the
Company) within any applicable grace period after final maturity or the
acceleration of any such Indebtedness by the holders thereof because of a
default, in each case, if the total amount of such Indebtedness unpaid or
accelerated exceeds $20 million or its foreign currency equivalent,
 
(f) the Company or any Significant Subsidiary of the Company pursuant to or
within the meaning of any Bankruptcy Law:
 
(i) commences a voluntary case;
 
(ii) consents to the entry of an order for relief against it in an involuntary
case;
 
(iii) consents to the appointment of a Custodian of it or for any substantial
part of its property; or
 
(iv) makes a general assignment for the benefit of its creditors or takes any
comparable action under any foreign laws relating to insolvency,
 
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
 
(i) is for relief against the Company or any Significant Subsidiary of the
Company in an involuntary case;
 

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(ii) appoints a Custodian of the Company or any Significant Subsidiary of the
Company or for any substantial part of its property; or
 
(iii) orders the winding up or liquidation of the Company or any Significant
Subsidiary of the Company;
 
or any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days,
 
(h) the Company or any Significant Subsidiary fails to pay final judgments
aggregating in excess of $20 million or its foreign currency equivalent (net of
any amounts which are covered by enforceable insurance policies issued by
solvent carriers), which judgments are not discharged, waived or stayed for a
period of 60 days following the entry thereof, or
 
(i) any Guarantee of a Significant Subsidiary ceases to be in full force and
effect (except as contemplated by the terms thereof) or any Guarantor denies or
disaffirms its obligations under this Indenture or any Guarantee and such
Default continues for 10 days after the notice specified below.
 
The foregoing shall constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
 
The term “Bankruptcy Law” means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors. The term “Custodian” means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
 
A Default under clause (d) above shall not constitute an Event of Default until
the Trustee notifies the Company or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company and the Trustee of the
Default and the Company does not cure such Default within the time specified in
clause (d) above after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a “Notice of
Default.” The Company shall deliver to the Trustee, within five (5) Business
Days after the occurrence thereof, written notice in the form of an Officers’
Certificate of any event which is, or with the giving of notice or the lapse of
time or both would become, an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
 
SECTION 6.02. Acceleration
 
. If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) with respect to the Company) occurs and is continuing, the
Trustee upon written request of Holders of at least 25% in principal amount of
outstanding Securities, shall declare to the Company and the Trustee that the
principal of, premium, if any, and accrued but unpaid interest on all the
Securities is due and payable; provided, however, that so long as any Bank
Indebtedness remains outstanding, no such acceleration shall be effective until
the earlier of (1) five (5) Business Days after the giving of written notice to
the Company and the Representative under the Credit Agreement and (2) the day on
which any Bank
 

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Indebtedness is accelerated. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(f) or (g) with respect to the Company occurs, the principal of,
premium, if any, and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holders. The Holders of a majority in principal amount of
the Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
 
In the event of any Event of Default specified in Section 6.01(e), such Event of
Default and all consequences thereof (excluding, however, any resulting payment
default) shall be annulled, waived and rescinded, automatically and without any
action by the Trustee or the Holders of the Securities, if within 20 days after
such Event of Default arose the Company delivers an Officers’ Certificate to the
Trustee stating that (x) the Indebtedness or guarantee that is the basis for
such Event of Default has been discharged or (y) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default or (z) the default that is the basis for
such Event of Default has been cured, it being understood that in no event shall
an acceleration of the principal amount of the Securities as described above be
annulled, waived or rescinded upon the happening of any such events.
 
SECTION 6.03. Other Remedies
 
. If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy at law or in equity to collect the payment of principal of or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
 
The Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. To the extent required by law, all available remedies are
cumulative.
 
SECTION 6.04. Waiver of Past Defaults
 
. Provided the Securities are not then due and payable by reason of a
declaration of acceleration, the Holders of a majority in principal amount of
the Securities by written notice to the Trustee may waive an existing Default
and its consequences except (a) a Default in the payment of the principal of or
interest on a Security, (b) a Default arising from the failure to redeem or
purchase any Security when required pursuant to the terms of this Indenture or
(c) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder affected. When a Default is waived,
it is deemed cured and the Company, the Trustee and the Holders will be restored
to their former positions and rights under this Indenture, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
 
SECTION 6.05. Control by Majority
 
. The Holders of a majority in principal amount of the Securities may direct the
time, method and place of conducting any proceeding for
 

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any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action under
this Indenture, the Trustee shall be entitled to indemnification satisfactory to
it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
 
SECTION 6.06. Limitation on Suits
 
. (7) Except to enforce the right to receive payment of principal, premium (if
any) or interest when due, no Holder may pursue any remedy with respect to this
Indenture or the Securities unless:
 
(i) the Holder gives to the Trustee written notice stating that an Event of
Default is continuing;
 
(ii) the Holders of at least 25% in principal amount of the Securities make a
written request to the Trustee to pursue the remedy;
 
(iii) such Holder or Holders offer to the Trustee reasonable security or
indemnity satisfactory to it against any loss, liability or expense;
 
(iv) the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and
 
(v) the Holders of a majority in principal amount of the Securities do not give
the Trustee a direction inconsistent with the request during such 60-day period.
 
(b) A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
 
SECTION 6.07. Rights of the Holders to Receive Payment
 
. Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed or provided for in the
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
 
SECTION 6.08. Collection Suit by Trustee
 
. If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any other obligor on the Securities for
the whole amount then due and owing (together with interest on overdue principal
and (to the extent lawful) on any unpaid interest at the rate provided for in
the Securities) and the amounts provided for in Section 7.07.
 
SECTION 6.09. Trustee May File Proofs of Claim
 
. The Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation, expenses disbursements and advances of
the Trustee (including counsel, accountants, experts or such other
 

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professionals as the Trustee deems necessary, advisable or appropriate)) and the
Holders allowed in any judicial proceedings relative to the Company or any
Guarantor, their creditors or their property, shall be entitled to participate
as a member, voting or otherwise, of any official committee of creditors
appointed in such matters and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
 
SECTION 6.10. Priorities
 
. If the Trustee collects any money or property pursuant to this Article 6, it
shall pay out the money or property in the following order:
 
FIRST: to the Trustee for amounts due under Section 7.07;
 
SECOND: to holders of Senior Indebtedness of the Company to the extent required
by Article 10 and to holders of Senior Indebtedness of the Guarantors to the
extent required by Article 12;
 
THIRD: to the Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal and interest, respectively; and
 
FOURTH: to the Company or, to the extent the Trustee collects any amount for any
Guarantor, to such Guarantor.
 
The Trustee may fix a record date and payment date for any payment to the
Holders pursuant to this Section. At least 15 days before such record date, the
Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.
 
SECTION 6.11. Undertaking for Costs
 
. In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
Securities.
 
SECTION 6.12. Waiver of Stay or Extension Laws
 
. Neither the Company nor any Guarantor (to the extent it may lawfully do so)
shall at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company and each Guarantor (to the extent
that it may
 

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lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
 
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee
 
. (8) If an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a reasonable person would exercise
or use under the circumstances in the conduct of such person’s own affairs.
 
(b) Except during the continuance of an Event of Default:
 
(i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee (it being agreed that the
permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty); and
 
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. The Trustee shall be under no duty to
make any investigation as to any statement contained in any such instance, but
may accept the same as conclusive evidence of the truth and accuracy of such
statement or the correctness of such opinions. However, in the case of
certificates or opinions required by any provision hereof to be provided to it,
the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
 
(c) The Trustee may not be relieved from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct, except that:
 
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
 
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts;
 
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05; and
 
(iv) no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers.
 

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(d) Every provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b) and (c) of this Section.
 
(e) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company.
 
(f) Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
 
(g) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
 
SECTION 7.02. Rights of Trustee
 
. (9) The Trustee may conclusively rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
 
(b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officers’
Certificate or Opinion of Counsel.
 
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
 
(d) The Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee’s conduct does not constitute willful
misconduct or negligence.
 
(e) The Trustee may consult with counsel of its own selection and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
 
(f) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, debenture, note or
other paper or document unless requested in writing to do so by the Holders of
not less than a majority in principal amount of the Securities at the time
outstanding, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, at the expense of the Company and shall
incur no liability of any kind by reason of such inquiry or investigation.
 
(g) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity
 

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satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
 
(h) The rights, privileges, protections, immunities and benefits given to the
Trustee, including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent,
custodian and other Person employed to act hereunder.
 
(i) The Trustee shall not be liable for any action taken or omitted by it in
good faith at the direction of the Holders of not less than a majority in
principal amount of the Securities as to the time, method and place of
conducting any proceedings for any remedy available to the Trustee or the
exercising of any power conferred by the Indenture.
 
(j) Any action taken, or omitted to be taken, by the Trustee in good faith
pursuant to this Indenture upon the request or authority or consent of any
person who, at the time of making such request or giving such authority or
consent, is the Holder of any Security shall be conclusive and binding upon
future Holders of Securities and upon Securities executed and delivered in
exchange therefor or in place thereof.
 
SECTION 7.03. Individual Rights of Trustee
 
. The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent or
Registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
 
SECTION 7.04. Trustee’s Disclaimer
 
. The Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, any Guarantee or the Securities, it
shall not be accountable for the Company’s use of the proceeds from the
Securities, and it shall not be responsible for any statement of the Company or
any Guarantor in this Indenture or in any document issued in connection with the
sale of the Securities or in the Securities other than the Trustee’s certificate
of authentication. The Trustee shall not be charged with knowledge of any
Default or Event of Default under Sections 6.01(c), (d), (e), (h), or (i) or of
the identity of any Significant Subsidiary unless either (a) a Trust Officer
shall have actual knowledge thereof or (b) the Trustee shall have received
written notice thereof in accordance with Section 13.02 hereof from the Company,
any Guarantor or any Holder. In accepting the trust hereby created, the Trustee
acts solely as Trustee for the Holders of the Securities and not in its
individual capacity and all persons, including without limitation the Holders of
Securities and the Company having any claim against the Trustee arising from
this Indenture shall look only to the funds and accounts held by the Trustee
hereunder for payment except as otherwise provided herein.
 
SECTION 7.05. Notice of Defaults
 
. If a Default occurs and is continuing and if it is actually known to the
Trustee, the Trustee shall mail to each Holder notice of the Default within the
earlier of 90 days after it occurs or 30 days after it is actually known to a
Trust Officer or written notice of it is received by the Trustee. Except in the
case of a Default in the payment of principal of, premium (if any) or interest
on any Security, the Trustee may withhold the notice
 

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if and so long as a committee of its Trust Officers in good faith determines
that withholding the notice is in the interests of the Holders.
 
SECTION 7.06. Reports by Trustee to the Holders
 
. As promptly as practicable after each September 30 beginning with the
September 30 following the date of this Indenture, and in any event prior to
September 30 in each year, the Trustee shall mail to each Holder a brief report
dated as of such September 30 that complies with Section 313(a) of the TIA if
and to the extent required thereby. The Trustee shall also comply with Section
313(b) of the TIA.
 
A copy of each report at the time of its mailing to the Holders shall be filed
with the SEC and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
 
SECTION 7.07. Compensation and Indemnity
 
. The Company shall pay to the Trustee from time to time reasonable compensation
for its services. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee’s agents, counsel, accountants and
experts. The Company and each Guarantor, jointly and severally shall indemnify
the Trustee against any and all loss, liability, claim, damage or expense
(including reasonable attorneys’ fees and expenses) incurred by or in connection
with the acceptance or administration of this trust and the performance of its
duties hereunder, including the costs and expenses of enforcing this Indenture
or Guarantee against the Company or a Guarantor (including this Section 7.07)
and defending itself against or investigating any claim (whether asserted by the
Company, any Guarantor, any Holder or any other Person). The obligation to pay
such amounts shall survive the payment in full or defeasance of the Securities
or the removal or resignation of the Trustee. The Trustee shall notify the
Company of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder. The Company shall defend the claim and the indemnified
party shall provide reasonable cooperation at the Company’s expense in the
defense. Such indemnified parties may have separate counsel and the Company and
the Guarantors, as applicable shall pay the fees and expenses of such counsel;
provided, however, that the Company shall not be required to pay such fees and
expenses if it assumes such indemnified parties’ defense and, in such
indemnified parties’ reasonable judgment, there is no conflict of interest
between the Company and the Guarantors, as applicable, and such parties in
connection with such defense. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party through such party’s own willful misconduct, negligence or bad faith.
 
To secure the Company’s and the Guarantors’ payment obligations in this Section,
the Trustee shall have a Lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
 

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The Company’s and the Guarantors’ payment obligations pursuant to this Section
shall survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(f) or (g) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
 
No provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
repayment of such funds or adequate indemnity against such risk or liability is
not assured to its satisfaction.
 
SECTION 7.08. Replacement of Trustee
 
. (10) The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
 
(i) the Trustee fails to comply with Section 7.10;
 
(ii) the Trustee is adjudged bankrupt or insolvent;
 
(iii) a receiver or other public officer takes charge of the Trustee or its
property; or
 
(iv) the Trustee otherwise becomes incapable of acting.
 
(b) If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
 
(c) A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to the Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided for in Section 7.07.
 
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition at the expense of the
Company any court of competent jurisdiction for the appointment of a successor
Trustee.
 
(e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty
to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has
been a bona
 

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fide holder of a Security for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
 
(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the
Company’s obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.
 
SECTION 7.09. Successor Trustee by Merger
 
. If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
 
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
 
SECTION 7.10. Eligibility; Disqualification
 
. The Trustee shall at all times satisfy the requirements of Section 310(a) of
the TIA. The Trustee shall have a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
The Trustee shall comply with Section 310(b) of the TIA, subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the TIA; provided, however, that there shall be excluded from
the operation of Section 310(b)(1) of the TIA any series of securities issued
under this Indenture and any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
Section 310(b)(1) of the TIA are met.
 
SECTION 7.11. Preferential Collection of Claims Against Company
 
. The Trustee shall comply with Section 311(a) of the TIA, excluding any
creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated.
 
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance
 
. This Indenture shall be discharged and shall cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities, as expressly provided for in this Indenture) as to all outstanding
Securities:
 

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(a) when (i) all the Securities theretofore authenticated and delivered (other
than Securities pursuant to Section 2.08 which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for
cancellation or (ii) all of the Securities (a) have become due and payable, (b)
will become due and payable at their stated maturity within one year or (c) if
redeemable at the option of the Company, are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company has irrevocably deposited or caused to be deposited with the
Trustee cash in U.S. Dollars, U.S. Government Obligations or a combination
thereof in an amount sufficient in the written opinion of a firm of independent
public accountants delivered to the Trustee (which delivery shall only be
required if Government Obligations have been so deposited) to pay and discharge
the entire Indebtedness on the Securities not theretofore delivered to the
Trustee for cancellation, for principal of, premium, if any, and interest on the
Securities to the date of deposit together with irrevocable instructions from
the Company directing the Trustee to apply such funds to the payment thereof at
maturity or redemption, as the case may be;
 
(b) the Company and/or the Guarantors have paid all other sums payable under
this Indenture; and
 
(c) the Company has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel stating that all conditions precedent under this Indenture
relating to the satisfaction and discharge of this Indenture have been complied
with.
 
Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i)
all of its obligations under the Securities and this Indenture (with respect to
such Securities) (“legal defeasance option”) or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12 and 4.13 and
the operation of Section 5.01 and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f)
(with respect to Significant Subsidiaries of the Company only), 6.01(g) (with
respect to Significant Subsidiaries of the Company only), 6.01(h) and 6.01(i)
(“covenant defeasance option”). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option. In
the event that the Company terminates all of its obligations under the
Securities and this Indenture (with respect to such Securities) by exercising
its legal defeasance option or its covenant defeasance option, the obligations
of each Guarantor under its Guarantee of such Securities shall be terminated
simultaneously with the termination of such obligations.
 
If the Company exercises its legal defeasance option, payment of the Securities
so defeased may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities so
defeased may not be accelerated because of an Event of Default specified in
Section 6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant
Subsidiaries of the Company only), 6.01(g) (with respect to Significant
Subsidiaries of the Company only), 6.01(h) or 6.01(i) or because of the failure
of the Company to comply with Section 5.01.
 

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Upon satisfaction of the conditions set forth herein and upon request of the
Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
 
(d) Notwithstanding clauses (a) and (b) above, the Company’s obligations in
Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article 8
shall survive until the Securities have been paid in full. Thereafter, the
Company’s obligations in Sections 7.07, 8.05 and 8.06 shall survive such
satisfaction and discharge.
 
SECTION 8.02. Conditions to Defeasance
 
. (11) The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
 
(i) the Company irrevocably deposits in trust with the Trustee cash in U.S.
Dollars, U.S. Government Obligations or a combination thereof in an amount
sufficient or Government Obligations, the principal of and the interest on which
will be sufficient, or a combination thereof sufficient, to pay the principal of
and premium (if any) and interest on the Securities when due at maturity or
redemption, as the case may be, including interest thereon to maturity or such
redemption date;
 
(ii) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal, premium, if any, and interest when due on all the
Securities to maturity or redemption, as the case may be;
 
(iii) 123 days pass after the deposit is made and during the 123-day period no
Default specified in Section 6.01(f) or (g) with respect to the Company occurs
which is continuing at the end of the period;
 
(iv) the deposit does not constitute a default under any other agreement binding
on the Company and is not prohibited by Article 10;
 
(v) in the case of the legal defeasance option, the Company shall have delivered
to the Trustee an Opinion of Counsel stating that (1) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
(2) 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 will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and 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
deposit and defeasance had not occurred;
 
(vi) impair the right of any holder to receive payment of principal of, premium,
if any, and interest on such holder’s Securities on or after the due dates
therefore or to institute suit for the enforcement of any payment on or with
respect to such holder’s Securities;
 

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(vii) in the case of the covenant defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders
will not recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and 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 deposit and defeasance had not occurred; and
 
(viii) the Company delivers to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Securities to be so defeased and discharged as contemplated
by this Article 8 have been complied with.
 
(b) Before or after a deposit, the Company may make arrangements satisfactory to
the Trustee for the redemption of such Securities at a future date in accordance
with Article 3.
 
SECTION 8.03. Application of Trust Money
 
. The Trustee shall hold in trust money or Government Obligations (including
proceeds thereof) deposited with it pursuant to this Article 8. It shall apply
the deposited money and the money from Government Obligations through each
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Securities so discharged or defeased. Money and
securities so held in trust are not subject to Article 10 or 12.
 
SECTION 8.04. Repayment to Company
 
. Each of the Trustee and each Paying Agent shall promptly turn over to the
Company upon request any money or Government Obligations held by it as provided
in this Article which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if Government Obligations have been so deposited), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent discharge or defeasance in accordance with this Article.
 
Subject to any applicable abandoned property law, the Trustee and each Paying
Agent shall pay to the Company upon written request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors, and the Trustee and each Paying Agent shall have no
further liability with respect to such monies.
 
SECTION 8.05. Indemnity for Government Obligations
 
. The Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against deposited Government Obligations or
the principal and interest received on such Government Obligations.
 
SECTION 8.06. Reinstatement
 
. If the Trustee or any Paying Agent is unable to apply any money or Government
Obligations in accordance with this Article 8 by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
obligations under this Indenture and the Securities so discharged or defeased
shall be revived and reinstated
 

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as though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or any Paying Agent is permitted to apply all such money or
Government Obligations in accordance with this Article 8; provided, however,
that, if the Company has made any payment of principal of or interest on, any
such Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or Government Obligations held by the Trustee or any
Paying Agent.
 
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of the Holders
 
. (12) The Company and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Holder:
 
(i) to cure any ambiguity, omission, defect or inconsistency;
 
(ii) to comply with Article 5;
 
(iii) to provide for uncertificated Securities in addition to or in place of
certificated Securities; provided, however, that the uncertificated Securities
are issued in registered form for purposes of Section 163(f) of the Code or in a
manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Code;
 
(iv) to make any change in Article 10 or Article 12 that would limit or
terminate the benefits available to any holder of Senior Indebtedness of the
Company or a Guarantor (or Representatives thereof) under Article 10 or Article
12, respectively;
 
(v) to add additional Guarantees with respect to the Securities or to secure the
Securities;
 
(vi) to add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company;
 
(vii) to comply with any requirement of the SEC in connection with qualifying or
maintaining the qualification of, this Indenture under the TIA;
 
(viii) to make any change that does not adversely affect the rights of any
Holder; or
 
(ix) to provide for the issuance of the Exchange Securities or Additional
Securities, which shall have terms substantially identical in all material
respects to the Initial Securities, and which shall be treated, together with
any outstanding Initial Securities, as a single issue of securities.
 
(b) An amendment under this Section 9.01 may not make any change that adversely
affects the rights under Article 10 or Article 12 of any holder of Senior
Indebtedness of the Company or a Guarantor then outstanding unless the holders
of such Senior Indebtedness (or any group or Representative thereof authorized
to give a consent) consent to such change.
 

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After an amendment under this Section 9.01 becomes effective, the Company shall
mail to the Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
 
SECTION 9.02. With Consent of the Holders
 
. (13) The Company and the Trustee may amend this Indenture or the Securities
with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Holder of an outstanding
Security affected, an amendment may not:
 
(i) reduce the amount of Securities whose Holders must consent to an amendment,
 
(ii) reduce the rate of or extend the time for payment of interest on any
Security,
 
(iii) reduce the principal of or change the Stated Maturity of any Security,
 
(iv) reduce the premium payable upon the redemption of any Security or change
the time at which any Security may be redeemed in accordance with Article 3,
 
(v) make any Security payable in money other than that stated in such Security,
 
(vi) make any change in Article 10 or Article 12 that adversely affects the
rights of any Holder under Article 10 or Article 12,
 
(vii) impair the right of any Holder to receive payment of principal of or
premium, if any, and interest on such Holder’s Securities on or after the due
dates therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder’s Securities,
 
(viii) make any change in Section 6.04 or 6.07 or the second sentence of this
Section 9.02, or
 
(ix) modify any Guarantees in any manner adverse to the Holders.
 
It shall not be necessary for the consent of the Holders under this Section 9.02
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
 
An amendment under this Section 9.02 may not make any change that adversely
affects the rights under Article 10 or Article 12 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or Representative thereof authorized to give a consent) consent to
such change.
 

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After an amendment under this Section 9.02 becomes effective, the Company shall
mail to the Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.02.
 
SECTION 9.03. Compliance with Trust Indenture Act
 
. From the date on which this Indenture is qualified under the TIA, every
amendment, waiver or supplement to this Indenture or the Securities shall comply
with the TIA as then in effect.
 
SECTION 9.04. Revocation and Effect of Consents and Waivers
 
. (14) A consent to an amendment or a waiver by a Holder of a Security shall
bind the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder’s Security or portion of the Security if the Trustee receives the notice
of revocation before the date on which the Trustee receives an Officers’
Certificate from the Company certifying that the requisite principal amount of
Securities have consented. After an amendment or waiver becomes effective, it
shall bind every Holder. An amendment or waiver becomes effective upon the (i)
receipt by the Company or the Trustee of consents by the Holders of the
requisite principal amount of securities, (ii) satisfaction of conditions to
effectiveness as set forth in this Indenture and any indenture supplemental
hereto containing such amendment or waiver and (iii) execution of such amendment
or waiver (or supplemental indenture) by the Company and the Trustee.
 
(b) The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
 
SECTION 9.05. Notation on or Exchange of Securities
 
. If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security regarding the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
 
SECTION 9.06. Trustee to Sign Amendments
 
. The Trustee shall sign any amendment, supplement or waiver authorized pursuant
to this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and shall be provided with, and (subject
to Section
 

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7.01) shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating that such amendment, supplement or waiver is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver is the legal, valid and binding obligation of the Company and the
Guarantors, enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03).
 
SECTION 9.07. Payment for Consent
 
. Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Securities unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
 
SECTION 9.08. Additional Voting Terms; Calculation of Principal Amount
 
. All Securities issued under this Indenture shall vote and consent together on
all matters (as to which any of such Securities may vote) as one class and no
series of Securities will have the right to vote or consent as a separate class
on any matter. Determinations as to whether Holders of the requisite aggregate
principal amount of Securities have concurred in any direction, waiver or
consent shall be made in accordance with this Article 9 and Section 2.14.
 
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.01. Agreement to Subordinate
 
. The Company agrees, and each Holder by accepting a Security agrees, that the
Indebtedness evidenced by the Securities is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all existing and future Senior Indebtedness of the Company and that
the subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Securities shall in all respects rank pari passu in
right of payment with all existing and future Pari Passu Indebtedness of the
Company and shall rank senior in right of payment to all existing and future
Subordinated Indebtedness of the Company; and only Indebtedness of the Company
that is Senior Indebtedness of the Company shall rank senior to the Securities
in accordance with the provisions set forth herein. For purposes of this Article
10, the Indebtedness evidenced by the Securities shall be deemed to include any
Additional Interest payable pursuant to the provisions set forth in the
Securities and the Registration Agreement. All provisions of this Article 10
shall be subject to Section 10.12.
 
SECTION 10.02. Liquidation, Dissolution, Bankruptcy
 
. Upon any payment or distribution of the assets of the Company to creditors
upon a total or partial liquidation or a total or partial dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
 
(a) holders of Senior Indebtedness of the Company shall be entitled to receive
payment in full in cash of such Senior Indebtedness (including interest accruing
after, or which would accrue but for, the commencement of any such proceeding at
the rate
 

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specified in the applicable Senior Indebtedness, whether or not a claim for such
interest would be allowed) before Holders shall be entitled to receive any
payment of principal of or interest on the Securities; and
 
(b) until the Senior Indebtedness of the Company is paid in full in cash, any
payment or distribution to which Holders would be entitled but for this Article
10 shall be made to holders of such Senior Indebtedness as their interests may
appear, except that the Holders may receive and retain (a) Permitted Junior
Securities and (b) payments made from the trust described under Article 8, so
long as, on the date or dates the respective amounts were paid into the trust
such payments were made with respect to the Securities without violating this
Article 10.
 
SECTION 10.03. Default on Designated Senior Indebtedness
 
. The Company may not pay principal of, premium (if any) or interest on, the
Securities or make any deposit pursuant to the provisions described under
Section 8.01 and may not otherwise purchase, redeem or otherwise retire any
Securities (except that the Holders may receive and retain (a) Permitted Junior
Securities and (b) payments made from the trust described under Article 8)
(collectively, “pay the Securities”) if:
 
(1) a default in the payment of the principal of, premium, if any, or interest
on any Designated Senior Indebtedness of the Company occurs and is continuing or
any other amount owing in respect of any Designated Senior Indebtedness of the
Company is not paid when due, or
 
(2) any other default on Designated Senior Indebtedness of the Company occurs
and the maturity of such Designated Senior Indebtedness of the Company is
accelerated in accordance with its terms,
 
unless, in either case, the default has been cured or waived and any such
acceleration has been rescinded or such Designated Senior Indebtedness has been
paid in full in cash; provided, however, the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of the holders of such
Designated Senior Indebtedness with respect to which either of the events set
forth in clause (1) or (2) of this sentence has occurred and is continuing.
During the continuance of any default (other than a default described in clause
(1) or (2) of the preceding sentence) with respect to any Designated Senior
Indebtedness of the Company pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a “Blockage Notice”) of such default from the
Representative of the holders of such Designated Senior Indebtedness specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated (i) by written notice
to the Trustee and the Company from the Person or Persons who gave such Blockage
Notice; (ii) by repayment in full in cash of such Designated Senior
Indebtedness; or (iii) because the default giving rise to such Blockage Notice
is no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
 

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first sentence of this Section 10.03 and in Section 10.02), unless the holders
of such Designated Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Indebtedness or a
payment default exists, the Company may resume payments on the Securities after
the end of such Payment Blockage Period. Not more than one Blockage Notice may
be given in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness during such period. In
no event, however, may the total number of days during which any Payment
Blockage Period is in effect exceed 179 days in the aggregate during any 360
consecutive day period. For purposes of this Section 10.03, no default or event
of default that existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days (it being understood
that any subsequent action or any breach of any financial covenants for a period
commencing after the date of commencement of such Payment Blockage Period that,
in either case, would give rise to an event of default pursuant to any provision
of the Designated Senior Indebtedness under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
 
SECTION 10.04. Acceleration of Payment of Securities
 
. If payment of the Securities is accelerated because of an Event of Default,
the Company or the Trustee (provided that the Trustee shall have received
written notice from the Company, on which notice the Trustee shall be entitled
to conclusively rely) shall promptly notify the holders of the Designated Senior
Indebtedness of the Company (or their Representative) of the acceleration.
 
SECTION 10.05. When Distribution Must Be Paid Over
 
. If a distribution is made to the Holders that because of this Article 10
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear.
 
SECTION 10.06. Subrogation
 
. After all Senior Indebtedness of the Company is paid in full and until the
Securities are paid in full, the Holders shall be subrogated to the rights of
holders of such Senior Indebtedness to receive distributions applicable to
Senior Indebtedness of the Company. A distribution made under this Article 10 to
holders of such Senior Indebtedness which otherwise would have been made to the
Holders is not, as between the Company and the Holders, a payment by the Company
on such Senior Indebtedness.
 
SECTION 10.07. Relative Rights
 
. This Article 10 defines the relative rights of the Holders and holders of
Senior Indebtedness of the Company. Nothing in this Indenture shall:
 
(a) impair, as between the Company and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
on the Securities in accordance with their terms; or
 

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(b) prevent the Trustee or any Holder from exercising its available remedies
upon a Default, subject to the rights of holders of Senior Indebtedness of the
Company to receive distributions otherwise payable to the Holders.
 
SECTION 10.08. Subordination May Not Be Impaired by Company
 
. No right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
 
SECTION 10.09. Rights of Trustee and Paying Agent
 
. Notwithstanding Section 10.03, the Trustee or any Paying Agent may continue to
make payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article 10. The Company, the Registrar, any Paying Agent, a
Representative or a holder of Senior Indebtedness of the Company may give the
notice; provided, however, that, if an issue of Senior Indebtedness of the
Company has a Representative, only the Representative may give the notice.
 
The Trustee in its individual or any other capacity may hold Senior Indebtedness
of the Company with the same rights it would have if it were not Trustee. The
Registrar and any Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article 10 with respect to
any Senior Indebtedness of the Company which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07 or any other Section of 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
Indebtedness of the Company, the distribution may be made and the notice given
to their Representative (if any).
 
SECTION 10.11. Article 10 Not to Prevent Events of Default or Limit Right to
Accelerate
 
. The failure to make a payment pursuant to the Securities by reason of any
provision in this Article 10 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 10 shall have any effect on the right of
the Holders or the Trustee to accelerate the maturity of the Securities.
 
SECTION 10.12. Trust Monies Not Subordinated
 
. Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of Government Obligations held in trust under Article 8 by the
Trustee and deposited at a time when permitted by the subordination provisions
of this Article 10 for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness of the Company or subject to the restrictions set forth in this
Article 10, and none of the Holders shall be obligated to pay over any such
amount to the Company or any holder of Senior Indebtedness of the Company or any
other creditor of the Company.
 

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SECTION 10.13. Trustee Entitled to Rely
 
. Upon any payment or distribution pursuant to this Article 10, the Trustee and
the Holders shall be entitled to rely (a) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (b) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders or (c) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article 10, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article 10, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
 
SECTION 10.14. Trustee to Effectuate Subordination
 
. Each Holder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Holders and the holders of Senior
Indebtedness of the Company as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
 
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness
 
. The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness of the Company and shall not be liable to any such holders
if it shall mistakenly pay over or distribute to the Holders or the Company or
any other Person money or assets to which any holders of Senior Indebtedness of
the Company shall be entitled by virtue of this Article 10 or otherwise.
 
SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions
 
. Each Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of the Company, whether
such Senior Indebtedness was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
 
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Trustee or the Holders and without impairing or
releasing the subordination provided in this Article 10 or the obligations
hereunder of the Holders to the holders of the Senior Indebtedness of the
 

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Company, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness of the Company, or otherwise amend or supplement in any manner
Senior Indebtedness of the Company, or any instrument evidencing the same or any
agreement under which Senior Indebtedness of the Company is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness of the Company; (iii) release any
Person liable in any manner for the payment or collection of Senior Indebtedness
of the Company; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
 
ARTICLE 11
GUARANTEES
SECTION 11.01. Guarantees
 
. (15) Each Guarantor hereby jointly and severally, irrevocably and
unconditionally guarantees, as a primary obligor and not merely as a surety, to
each Holder and to the Trustee and its successors and assigns (i) the full and
punctual payment when due, whether at Stated Maturity, by acceleration, by
redemption or otherwise, of all obligations of the Company under this Indenture
(including obligations to the Trustee) and the Securities, whether for payment
of principal of, premium, if any, or interest on in respect of the Securities
and all other monetary obligations of the Company under this Indenture and the
Securities and (ii) the full and punctual performance within applicable grace
periods of all other obligations of the Company whether for fees, expenses,
indemnification or otherwise under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the “Guaranteed Obligations”).
Each Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed, in whole or in part, without notice or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Article 11
notwithstanding any extension or renewal of any Guaranteed Obligation.
 
(b) Each Guarantor waives presentation to, demand of payment from and protest to
the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Guaranteed Obligations. The obligations of each Guarantor
hereunder shall not be affected by (i) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other
agreement or otherwise; (ii) any extension or renewal of this Indenture, the
Securities or any other agreement; (iii) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Securities
or any other agreement; (iv) the release of any security held by any Holder or
the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of
any Holder or Trustee to exercise any right or remedy against any other
guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of
such Guarantor, except as provided in Section 11.02(b).
 
(c) Each Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Guarantors, such that such
Guarantor’s obligations would be less than the full amount claimed. Each
Guarantor hereby waives any right to which it may be entitled to have the assets
of the Company first be used and depleted as
 

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payment of the Company’s or such Guarantor’s obligations hereunder prior to any
amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor
hereby waives any right to which it may be entitled to require that the Company
be sued prior to an action being initiated against such Guarantor.
 
(d) Each Guarantor further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Guaranteed
Obligations.
 
(e) The Guarantee of each Guarantor is, to the extent and in the manner set
forth in Article 12, subordinated and subject in right of payment to the prior
payment in full of the principal of and premium, if any, and interest on all
Senior Indebtedness of the relevant Guarantor and is made subject to such
provisions of this Indenture.
 
(f) Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Guarantor or would otherwise operate as a discharge of any Guarantor as a
matter of law or equity.
 
(g) Each Guarantor agrees that its Guarantee shall remain in full force and
effect until payment in full of all the Guaranteed Obligations. Each Guarantor
further agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.
 
(h) In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, each Guarantor hereby promises
to and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii)
accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by applicable law) and (iii) all other monetary
obligations of the Company to the Holders and the Trustee.
 

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(i) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations and all
obligations to which the Guaranteed Obligations are subordinated as provided in
Article 12. Each Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (i) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of any Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article 6, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
 
(j) Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder
in enforcing any rights under this Section 11.01.
 
(k) Upon request of the Trustee, each Guarantor shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
 
SECTION 11.02. Limitation on Liability
 
. (16) Any term or provision of this Indenture to the contrary notwithstanding,
the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder
by any Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
 
(b) A Guarantee as to any Guarantor shall terminate and be of no further force
or effect and such Guarantor shall be deemed to be released from all obligations
under this Article 11 upon:
 
(i) the sale, disposition or other transfer (including through merger or
consolidation) of the Capital Stock (including any sale, disposition or other
transfer following which the applicable Guarantor is no longer a Restricted
Subsidiary) of the applicable Guarantor if such sale, disposition or other
transfer is made in compliance with this Indenture,
 
(ii) the Company designating such Guarantor to be an Unrestricted Subsidiary in
accordance with the provisions set forth under Section 4.04 and the definition
of “Unrestricted Subsidiary,”
 
(iii) in the case of any Restricted Subsidiary which after the Issue Date is
required to guarantee the Securities pursuant to Section 4.11, the release or
discharge of the guarantee by such Restricted Subsidiary of Indebtedness of the
Company or any Restricted Subsidiary of the Company or such Restricted
Subsidiary or the repayment of
 

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the Indebtedness or Disqualified Stock, in each case, which resulted in the
obligation to guarantee the Securities, and
 
(iv) the Company’s exercise of its defeasance options under Article 8, or if the
Company’s obligations under this Indenture are discharged in accordance with the
terms of this Indenture.
 
In the case of clause (b)(i) above, such Guarantor shall be released from its
guarantees, if any, of, and all pledges and security, if any, granted in
connection with, the Credit Agreement and any other Indebtedness of the Company
or any Restricted Subsidiary of the Company.
 
A Guarantee also shall be automatically released upon the applicable Subsidiary
ceasing to be a Subsidiary as a result of any foreclosure of any pledge or
security interest securing Bank Indebtedness or other exercise of remedies in
respect thereof or if such Subsidiary is released from its guarantees of, and
all pledges and security interests granted in connection with, the Credit
Agreement and any other Indebtedness of the Company or any Restricted Subsidiary
of the Company which results in the obligation to guarantee the Securities.
 
SECTION 11.03. Successors and Assigns
 
. This Article 11 shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
 
SECTION 11.04. No Waiver
 
. Neither a failure nor a delay on the part of either the Trustee or the Holders
in exercising any right, power or privilege under this Article 11 shall operate
as a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article 11 at law, in equity, by statute or
otherwise.
 
SECTION 11.05. Modification
 
. No modification, amendment or waiver of any provision of this Article 11, nor
the consent to any departure by any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any Guarantor in any
case shall entitle such Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
 
SECTION 11.06. Execution of Supplemental Indenture for Future Guarantors
 
. Each Subsidiary and other Person which is required to become a Guarantor
pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit D hereto pursuant to which such
Subsidiary or other Person shall become a Guarantor under this Article 11 and
shall guarantee the Guaranteed Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee
 

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an Opinion of Counsel and an Officers’ Certificate to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary or other Person and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar laws
relating to creditors’ rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Guarantee of such Guarantor
is a valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms and/or to such other matters as the
Trustee may reasonably request.
 
SECTION 11.07. Non-Impairment
 
. The failure to endorse a Guarantee on any Security shall not affect or impair
the validity thereof.
 
ARTICLE 12
SUBORDINATION OF THE GUARANTEES
SECTION 12.01. Agreement to Subordinate
 
. Each Guarantor agrees, and each Holder by accepting a Security agrees, that
the obligations of a Guarantor hereunder are subordinated in right of payment,
to the extent and in the manner provided in this Article 12, to the prior
payment in full of all existing and future Senior Indebtedness of such Guarantor
and that the subordination is for the benefit of and enforceable by the holders
of such Senior Indebtedness of such Guarantor. The obligations hereunder with
respect to a Guarantor shall in all respects rank pari passu in right of payment
with all existing and future Pari Passu Indebtedness of such Guarantor and shall
rank senior in right of payment to all existing and future Subordinated
Indebtedness of such Guarantor; and only Indebtedness of such Guarantor that is
Senior Indebtedness of such Guarantor shall rank senior to the obligations of
such Guarantor in accordance with the provisions set forth herein. For purposes
of this Article 12, the Indebtedness evidenced by the Securities shall be deemed
to include any Additional Interest payable pursuant to the provisions set forth
in the Securities and the Registration Agreement. All provisions of this Article
12 shall be subject to Section 12.16.
 
SECTION 12.02. Liquidation, Dissolution, Bankruptcy
 
. Upon any payment or distribution of the assets of a Guarantor to creditors
upon a total or partial liquidation or a total or partial dissolution of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Guarantor and its properties:
 
(a) holders of Senior Indebtedness of such Guarantor shall be entitled to
receive payment in full in cash of such Senior Indebtedness (including interest
accruing after, or which would accrue but for, the commencement of any such
proceeding at the rate specified in the applicable Senior Indebtedness, whether
or not a claim for such interest would be allowed) before the Holders shall be
entitled to receive any payment pursuant to any Guaranteed Obligations from such
Guarantor; and
 
(b) until the Senior Indebtedness of such Guarantor is paid in full in cash, any
payment or distribution to which the Holders would be entitled but for this
Article 12 shall be made to holders of such Senior Indebtedness as their
interests may appear, except that the Holders may receive and retain Permitted
Junior Securities.
 

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SECTION 12.03. Default on Designated Senior Indebtedness of a Guarantor
 
. A Guarantor may not make any payment pursuant to any of the Guaranteed
Obligations or otherwise purchase, redeem or otherwise retire any Securities
(except that the Holders may receive and retain (a) Permitted Junior Securities
and (b) payments made from the trust described under Article 8 (collectively,
“pay its Guarantee”) if:
 
(1) a default in the payment of the principal of, premium, if any, or interest
on any Designated Senior Indebtedness of such Guarantor occurs and is continuing
or any other amount owing in respect of any Designated Senior Indebtedness of
such Guarantor is not paid when due, or
 
(2) any other default on Designated Senior Indebtedness of such Guarantor occurs
and the maturity of such Designated Senior Indebtedness of such Guarantor is
accelerated in accordance with its terms,
 
unless, in either case, the default has been cured or waived and any such
acceleration has been rescinded or such Designated Senior Indebtedness has been
paid in full in cash; provided, however, such Guarantor may pay its Guarantee
without regard to the foregoing if such Guarantor and the Trustee receive
written notice approving such payment from the Representative of the holders of
such Designated Senior Indebtedness with respect to which either of the events
set forth in clause (1) or (2) of this sentence has occurred and is continuing.
During the continuance of any default (other than a default described in clause
(1) or (2) of the preceding sentence) with respect to any Designated Senior
Indebtedness of a Guarantor pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, such Guarantor may not pay its Guarantee for a period (a “Guarantee
Payment Blockage Period”) commencing upon the receipt by the Trustee (with a
copy to such Guarantor and the Company) of written notice (a “Guarantee Blockage
Notice”) of such default from the Representative of the holders of such
Designated Senior Indebtedness specifying an election to effect a Guarantee
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Guarantee Payment Blockage Period is terminated (i) by written notice to the
Trustee, such Guarantor and the Company from the Person or Persons who gave such
Guarantee Blockage Notice; (ii) by repayment in full in cash of such Designated
Senior Indebtedness; or (iii) because the default giving rise to such Guarantee
Blockage Notice is no longer continuing). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section 12.03 and in Section 12.02(b)),
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness or a payment default exists, such Guarantor may resume payments on
its Guarantee after the end of such Guarantee Payment Blockage Period (including
any missed payments). Not more than one Guarantee Blockage Notice may be given
with respect to a Guarantor in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period. In no event, however, may the total number of days during which any
Guarantee Payment Blockage Period is in effect exceed 179 days in the aggregate
during any 360 consecutive day period. For purposes of this Section 12.03, no
default or event of default that existed or was continuing on the date of the
commencement of any Guarantee Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Guarantee Payment
 

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Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Guarantee Payment Blockage Period by the Representative of such
Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days (it being understood
that any subsequent action or any breach of any financial covenants for a period
commencing after the date of commencement of such Guarantee Payment Blockage
Period that, in either case, would give rise to an event of default pursuant to
any provision of the Designated Senior Indebtedness under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose).
 
SECTION 12.04. Demand for Payment
 
. If payment of the Securities is accelerated because of an Event of Default and
a demand for payment is made on a Guarantor pursuant to Article 11, the Company,
the Guarantor or the Trustee (provided that the Trustee shall have received
written notice from the Company or such Guarantor, on which notice the Trustee
shall be entitled to conclusively rely) shall promptly notify the holders of the
Designated Senior Indebtedness of such Guarantor (or the Representative of such
holders) of such demand.
 
SECTION 12.05. When Distribution Must Be Paid Over
 
. If a payment or distribution is made to the Holders that because of this
Article 12 should not have been made to them, the Holders who receive the
payment or distribution shall hold such payment or distribution in trust for
holders of the Senior Indebtedness of the relevant Guarantor and pay it over to
them as their respective interests may appear.
 
SECTION 12.06. Subrogation
 
. After all Senior Indebtedness of a Guarantor is paid in full and until the
Securities are paid in full in cash, the Holders shall be subrogated to the
rights of holders of Senior Indebtedness of such Guarantor to receive
distributions applicable to Senior Indebtedness of such Guarantor. A
distribution made under this Article 12 to holders of Senior Indebtedness of
such Guarantor which otherwise would have been made to the Holders is not, as
between such Guarantor and the Holders, a payment by such Guarantor on Senior
Indebtedness of such Guarantor.
 
SECTION 12.07. Relative Rights
 
. This Article 12 defines the relative rights of the Holders and holders of
Senior Indebtedness of a Guarantor. Nothing in this Indenture shall:
 
(a) impair, as between a Guarantor and the Holders, the obligation of a
Guarantor which is absolute and unconditional, to make payments with respect to
the Guaranteed Obligations to the extent set forth in Article 11; or
 
(b) prevent the Trustee or any Holder from exercising its available remedies
upon a default by a Guarantor under its obligations with respect to the
Guaranteed Obligations, subject to the rights of holders of Senior Indebtedness
of such Guarantor to receive distributions otherwise payable to the Holders.
 
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor
 
. No right of any holder of Senior Indebtedness of a Guarantor to enforce the
subordination of the obligations of such Guarantor hereunder shall be impaired
by any act or failure to act by such Guarantor or by its failure to comply with
this Indenture.
 

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SECTION 12.09. Rights of Trustee and Paying Agent
 
. Notwithstanding Section 12.03, the Trustee or any Paying Agent may continue to
make payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article 12. A Guarantor, the Registrar or
co-registrar, a Paying Agent, a Representative or a holder of Senior
Indebtedness of a Guarantor may give the notice; provided, however, that if an
issue of Senior Indebtedness of a Guarantor has a Representative, only the
Representative may give the notice.
 
The Trustee in its individual or any other capacity may hold Senior Indebtedness
of a Guarantor with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and any Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of a Guarantor which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness of such Guarantor; and nothing in Article 7 shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article 12 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07 or any other Section of this Indenture.
 
SECTION 12.10. Distribution or Notice to Representative
 
. Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of a Guarantor, the distribution may be made and the notice given
to their Representative (if any).
 
SECTION 12.11. Article 12 Not to Prevent Events of Default or Limit Right to
Accelerate
 
. The failure of a Guarantor to make a payment on any of its obligations by
reason of any provision in this Article 12 shall not be construed as preventing
the occurrence of a default by such Guarantor under such obligations. Nothing in
this Article 12 shall have any effect on the right of the Holders or the Trustee
to make a demand for payment on a Guarantor pursuant to Article 11.
 
SECTION 12.12. Trustee Entitled to Rely
 
. Upon any payment or distribution pursuant to this Article 12, the Trustee and
the Holders shall be entitled to rely (a) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (b) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders or (c) upon the Representatives for the holders of Senior
Indebtedness of a Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness of a Guarantor and other Indebtedness of a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 12. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of a Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such
 

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Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 12.
 
SECTION 12.13. Trustee to Effectuate Subordination
 
. Each Holder by accepting a Security authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders and the holders
of Senior Indebtedness of each of the Guarantors as provided in this Article 12
and appoints the Trustee as attorney-in-fact for any and all such purposes.
 
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of a
Guarantor
 
. The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness of a Guarantor and shall not be liable to any such holders
if it shall mistakenly pay over or distribute to the Holders or the relevant
Guarantor or any other Person, money or assets to which any holders of Senior
Indebtedness of such Guarantor shall be entitled by virtue of this Article 12 or
otherwise.
 
SECTION 12.15. Reliance by Holders of Senior Indebtedness of a Guarantor on
Subordination Provisions
 
. Each Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of a Guarantor, whether
such Senior Indebtedness was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
 
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of a Guarantor may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Trustee or the Holders and without impairing or
releasing the subordination provided in this Article 12 or the obligations
hereunder of the Holders to the holders of the Senior Indebtedness of a
Guarantor, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness of a Guarantor, or otherwise amend or supplement in any manner
Senior Indebtedness of a Guarantor, or any instrument evidencing the same or any
agreement under which Senior Indebtedness of a Guarantor is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness of a Guarantor; (iii) release any
Person liable in any manner for the payment or collection of Senior Indebtedness
of a Guarantor; and (iv) exercise or refrain from exercising any rights against
such Guarantor and any other Person.
 
SECTION 12.16. Trust Monies Not Subordinated
 
. Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of Government Obligations held in trust under Article 8 by the
Trustee and deposited at a time when permitted by the subordination provisions
of this Article 12 for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness of any Guarantor or subject to the restrictions set forth in this
Article 12, and none of the Holders shall be obligated to pay over any such
amount to a Guarantor or any holder of Senior Indebtedness of a Guarantor or any
other creditor of a Guarantor.
 

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Article 13
 
MISCELLANEOUS
 
SECTION 13.01. Trust Indenture Act Controls
 
. If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision (an
“incorporated provision”) included in this Indenture by operation of, Sections
310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision
shall control.
 
SECTION 13.02. Notices
 
. (17) Any notice or communication required or permitted hereunder shall be in
writing and delivered in person, via facsimile or mailed by first-class mail
addressed as follows:
 
if to the Company or a Guarantor:
 
Covalence Specialty Materials Corp.
 
7 Roszel Road
 
Princeton, New Jersey 08540
 
Attention of: General Counsel
 
Facsimile: (609) 720-5448
 
if to the Trustee:
 
Well Fargo Bank, National Association
 
213 Court Street, Suite 703
 
Middletown, CT 06457
 
Attention of: Corporate Trust Services
 
Facsimile: (860) 704-6219
 
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
 
(b) Any notice or communication mailed to a Holder shall be mailed, first class
mail, to the Holder at the Holder’s address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
 
(c) Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it, except that notices to the Trustee are
effective only if received.
 
SECTION 13.03. Communication by the Holders with Other Holders
 
. The Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and other Persons shall have the protection
of Section 312(c) of the TIA.
 

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SECTION 13.04. Certificate and Opinion as to Conditions Precedent
 
. Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee at the request of the Trustee:
 
(a) an Officers’ Certificate in form reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and
 
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.
 
SECTION 13.05. Statements Required in Certificate or Opinion
 
. Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture (other than pursuant to Section 4.09)
shall include:
 
(a) a statement that the individual making such certificate or opinion has read
such covenant or condition;
 
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
 
(c) a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
 
(d) a statement as to whether or not, in the opinion of such individual, such
covenant or condition has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers’
Certificate or certificates of public officials.
 
SECTION 13.06. When Securities Disregarded
 
. In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Guarantor or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any Guarantor shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
 
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar
 
. The Trustee may make reasonable rules for action by or a meeting of the
Holders. The Registrar and a Paying Agent may make reasonable rules for their
functions.
 
SECTION 13.08. Legal Holidays
 
. If a payment date is not a Business Day, payment shall be made on the next
succeeding day that is a Business Day, and no interest shall
 

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accrue on any amount that would have been otherwise payable on such payment date
if it were a Business Day for the intervening period. If a regular record date
is not a Business Day, the record date shall not be affected.
 
SECTION 13.09. GOVERNING LAW
 
. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 13.10. No Recourse Against Others
 
. No director, officer, employee, incorporator or holder of any equity interests
in the Company or of any Guarantor or any direct or indirect parent corporation,
as such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Securities by accepting a Security waives and releases all such liability.
 
SECTION 13.11. Successors
 
. All agreements of the Company and each Guarantor in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
 
SECTION 13.12. Multiple Originals
 
. The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture.
 
SECTION 13.13. Table of Contents; Headings
 
. The table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
 
SECTION 13.14. Indenture Controls
 
. If and to the extent that any provision of the Securities limits, qualifies or
conflicts with a provision of this Indenture, such provision of this Indenture
shall control.
 
SECTION 13.15. Severability
 
. In case any provision in this Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and such
provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability.
 

 

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as of the date first written above.
 
COVALENCE SPECIALTY MATERIALS CORP.
 
By:       
Name:
Title:
 

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GUARANTORS:
 
COVALENCE SPECIALTY COATINGS LLC

By: COVALENCE SPECIALTY
MATERIALS CORP., its sole member and
Manager

By: ________________________________
Name: Michael Jupiter
Title: President and Secretary

COVALENCE SPECIALTY ADHESIVES  LLC

By: COVALENCE SPECIALTY
MATERIALS CORP., its sole member and
Manager

By: ________________________________
Name: Michael Jupiter
Title: President and Secretary

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WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
 
By:       
Name:
Title:
 

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APPENDIX A
 
PROVISIONS RELATING TO INITIAL SECURITIES, ADDITIONAL SECURITIES AND EXCHANGE
SECURITIES
 
1. Definitions.
 
1.1 Definitions.
 
For the purposes of this Appendix A the following terms shall have the meanings
indicated below:
 
“Additional Interest” has the meaning set forth in the Registration Agreement.
 
“Definitive Security” means a certificated Initial Security or Exchange Security
(bearing the Restricted Securities Legend if the transfer of such Security is
restricted by applicable law) that does not include the Global Securities
Legend.
 
“Depository” means The Depository Trust Company, its nominees and their
respective successors.
 
“Global Securities Legend” means the legend set forth under that caption in the
applicable Exhibit to this Indenture.
 
“IAI” means an institutional “accredited investor” as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
 
“Initial Purchasers” means Banc of America Securities LLC, Credit Suisse
Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear,
Stearns & Co. Inc. and CIBC World Markets Corp., and such other initial
purchasers party to the Purchase Agreement entered into in connection with the
offer and sale of the Securities.
 
“Purchase Agreement” means (a) the Purchase Agreement dated February 2, 2006,
among the Company and the Initial Purchasers and (b) any other similar Purchase
Agreement relating to Additional Securities.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
 
“Registered Exchange Offer” means the offer by the Company, pursuant to the
Registration Agreement, to certain Holders of Initial Securities, to issue and
deliver to such Holders, in exchange for their Initial Securities, a like
aggregate principal amount of Exchange Securities registered under the
Securities Act.
 
“Registration Agreement” means (a) the Registration Rights Agreement dated as of
February 16, 2006 among the Company, the Guarantors and the Initial Purchasers
relating to the Securities and (b) any other similar Registration Rights
Agreement relating to Additional Securities.
 

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“Regulation S” means Regulation S under the Securities Act.
 
“Regulation S Securities” means all Initial Securities offered and sold outside
the United States in reliance on Regulation S.
 
“Restricted Period,” with respect to any Securities, means the period of 40
consecutive days beginning on and including the later of (a) the day on which
such Securities are first offered to persons other than distributors (as defined
in Regulation S under the Securities Act) in reliance on Regulation S, notice of
which day shall be promptly given by the Company to the Trustee, and (b) the
Issue Date, and with respect to any Additional Securities that are Transfer
Restricted Securities, it means the comparable period of 40 consecutive days.
 
“Restricted Securities Legend” means the legend set forth in Section 2.2(f)(i)
herein.
 
“Rule 501” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
 
“Rule 144A” means Rule 144A under the Securities Act.
 
“Rule 144A Securities” means all Initial Securities offered and sold to QIBs in
reliance on Rule 144A.
 
“Securities Custodian” means the custodian with respect to a Global Security (as
appointed by the Depository) or any successor person thereto, who shall
initially be the Trustee.
 
“Shelf Registration Statement” means a registration statement filed by the
Company in connection with the offer and sale of Initial Securities pursuant to
the Registration Agreement.
 
“Transfer Restricted Securities” means Definitive Securities and any other
Securities that bear or are required to bear or are subject to the Restricted
Securities Legend.
 
“Unrestricted Definitive Security” means Definitive Securities and any other
Securities that are not required to bear, or are not subject to, the Restricted
Securities Legend.
 
1.2 Other Definitions.
 
Term:
Defined in Section:
   
“Agent Members”
2.1(b)
“Global Securities”
2.1(b)
“Regulation S Global Securities”
2.1(b)
“Rule 144A Global Securities”
2.1(b)
Regulation S Permanent Global Security
2.1(b)
Regulation S Temporary Global Security
2.1(b)
   

 

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. The Securities.
 
2.1 Form and Dating; Global Securities.
 
(a) The Initial Securities issued on the date hereof will be (i) offered and
sold by the Company pursuant to the Purchase Agreement and (ii) resold,
initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than
U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such
Initial Securities may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501. Additional Securities offered after the date hereof
may be offered and sold by the Company from time to time pursuant to one or more
Purchase Agreements in accordance with applicable law.
 
(b) Global Securities. (i) Rule 144A Securities initially shall be represented
by one or more Securities in definitive, fully registered, global form without
interest coupons (collectively, the “Rule 144A Global Securities”).
 
Regulation S Securities initially shall be represented by one or more Securities
in fully registered, global form without interest coupons (collectively, the
“Regulation S Temporary Global Security” and, together with the Regulation S
Permanent Global Security (defined below), the “Regulation S Global
Securities”), which shall be registered in the name of the Depository or the
nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Clearstream.
 
The Restricted Period shall be terminated upon the receipt by the Trustee of:
(1) a written certificate from the Depository, together with copies of
certificates from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Security (except to the
extent of any beneficial owners thereof who acquired an interest therein during
the Restricted Period pursuant to another exemption from registration under the
Securities Act and who shall take delivery of a beneficial ownership interest in
a 144A Global Security bearing a Private Placement Legend, all as contemplated
by this Appendix A); and (2) an Officers’ Certificate from the Company.
 
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Security shall be exchanged for beneficial
interests in a permanent Global Security (the “Regulation S Permanent Global
Security”) pursuant to the applicable procedures of the Depository.
Simultaneously with the authentication of the Regulation S Permanent Global
Security, the Trustee shall cancel the Regulation S Temporary Global Security.
The aggregate principal amount of the Regulation S Temporary Global Security and
the Regulation S Permanent Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
 
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 shall be
applicable to transfers
 

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of beneficial interests in the Regulation S Temporary Global Security and the
Regulation S Permanent Global Security that are held by Participants through
Euroclear or Clearstream.
 
The term “Global Securities” means the Rule 144A Global Securities and the
Regulation S Global Securities. The Global Securities shall bear the Global
Security Legend. The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, in each case for
credit to an account of an Agent Member, (ii) be delivered to the Trustee as
custodian for such Depository and (iii) bear the Restricted Securities Legend.
 
Members of, or direct or indirect participants in, the Depository shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Securities. The Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global
Securities for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository, or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
 
(ii) Transfers of Global Securities shall be limited to transfer in whole, but
not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Securities may be transferred or
exchanged for Definitive Securities only in accordance with the applicable rules
and procedures of the Depository and the provisions of Section 2.2. In addition,
a Global Security shall be exchangeable for Definitive Securities if (x) the
Depository (1) notifies the Company that it is unwilling or unable to continue
as depository for such Global Security and the Company thereupon fails to
appoint a successor depository or (2) has ceased to be a clearing agency
registered under the Exchange Act or (y) there shall have occurred and be
continuing an Event of Default with respect to such Global Security; provided
that in no event shall the Regulation S Temporary Global Security be exchanged
by the Company for Definitive Securities prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all
cases, Definitive Securities delivered in exchange for any Global Security or
beneficial interests therein shall be registered in the names, and issued in any
approved denominations, requested by or on behalf of the Depository in
accordance with its customary procedures.
 
(iii) In connection with the transfer of a Global Security as an entirety to
beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, to each beneficial owner identified by the Depository in writing
in exchange for its beneficial interest in such Global Security, an equal
aggregate principal amount of Definitive Securities of authorized denominations.
 

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(iv) Any Transfer Restricted Security delivered in exchange for an interest in a
Global Security pursuant to Section 2.2 shall, except as otherwise provided in
Section 2.2, bear the Restricted Securities Legend.
 
(v) Notwithstanding the foregoing, through the Restricted Period, a beneficial
interest in such Regulation S Global Security may be held only through Euroclear
or Clearstream unless delivery is made in accordance with the applicable
provisions of Section 2.2.
 
(vi) The Holder of any Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
 
2.2 Transfer and Exchange.
 
(a) Transfer and Exchange of Global Securities. A Global Security may not be
transferred as a whole except as set forth in Section 2.1(b). Global Securities
will not be exchanged by the Company for Definitive Securities except under the
circumstances described in Section in Section 2.1(b)(ii). Global Securities also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.08
and 2.10 of this Indenture. Beneficial interests in a Global Security may be
transferred and exchanged as provided in Section 2.2(b) or 2.2(g).
 
(b) Transfer and Exchange of Beneficial Interests in Global Securities. The
transfer and exchange of beneficial interests in the Global Securities shall be
effected through the Depository, in accordance with the provisions of this
Indenture and the applicable rules and procedures of the Depository. Beneficial
interests in Restricted Global Securities shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Beneficial interests in Global Securities shall be transferred
or exchanged only for beneficial interests in Global Securities. Transfers and
exchanges of beneficial interests in the Global Securities also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
 
(i) Transfer of Beneficial Interests in the Same Global Security. Beneficial
interests in any Restricted Global Security may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Restricted Global Security in accordance with the transfer restrictions set
forth in the Restricted Securities Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in a
Regulation S Global Security may not be made to a U.S. Person or for the account
or benefit of a U.S. Person (other than an Initial Purchaser). A beneficial
interest in an Unrestricted Global Security may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Security. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this Section
2.2(b)(i).
 
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Securities. In connection with all transfers and exchanges of beneficial
interests in any Global Security that is not subject to Section 2.2(b)(i), the
transferor of such beneficial
 

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interest must deliver to the Registrar (1) a written order from an Agent Member
given to the Depository in accordance with the applicable rules and procedures
of the Depository directing the Depository to credit or cause to be credited a
beneficial interest in another Global Security in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given in
accordance with the applicable rules and procedures of the Depository containing
information regarding the Agent Member account to be credited with such
increase. Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Securities contained in this Indenture and the
Securities or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Security pursuant to Section
2.2(g).
 
(iii) Transfer of Beneficial Interests to Another Restricted Global Security. A
beneficial interest in a Transfer Restricted Global Security may be transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
another Transfer Restricted Global Security if the transfer complies with the
requirements of Section 2.2(b)(ii) above and the Registrar receives the
following:
 
(A) if the transferee will take delivery in the form of a beneficial interest in
a Rule 144A Global Security, then the transferor must deliver a certificate in
the form attached to the applicable Security; and
 
(B) if the transferee will take delivery in the form of a beneficial interest in
a Regulation S Global Security, then the transferor must deliver a certificate
in the form attached to the applicable Security.
 
(iv) Transfer and Exchange of Beneficial Interests in a Transfer Restricted
Global Security for Beneficial Interests in an Unrestricted Global Security. A
beneficial interest in a Transfer Restricted Global Security may be exchanged by
any holder thereof for a beneficial interest in an Unrestricted Global Security
or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security if the exchange or
transfer complies with the requirements of Section 2.2(b)(ii) above and the
Registrar receives the following:
 
(A) if the holder of such beneficial interest in a Restricted Global Security
proposes to exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Security, a certificate from such holder in the form
attached to the applicable Security; or
 
(B) if the holder of such beneficial interest in a Restricted Global Security
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
Security, a certificate from such holder in the form attached to the applicable
Security,
 
and, in each such case, if the Company or the Registrar so requests or if the
applicable rules and procedures of the Depository so require, an Opinion of
Counsel in form
 

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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 Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act. If any such
transfer or exchange is effected pursuant to this subparagraph (iv) at a time
when an Unrestricted Global Security has not yet been issued, the Company shall
issue and, upon receipt of an written order of the Company in the form of an
Officers’ Certificate in accordance with Section 2.01, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred or exchanged pursuant to this subparagraph (iv).
 
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global
Security for Beneficial Interests in a Restricted Global Security. Beneficial
interests in an Unrestricted Global Security cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Security.
 
(c) Transfer and Exchange of Beneficial Interests in Global Securities for
Definitive Securities. A beneficial interest in a Global Security may not be
exchanged for a Definitive Security except under the circumstances described in
Section 2.1(b)(ii). A beneficial interest in a Global Security may not be
transferred to a Person who takes delivery thereof in the form of a Definitive
Security except under the circumstances described in Section 2.1(b)(ii). In any
case, beneficial interests in Global Securities shall be transferred or
exchanged only for Definitive Securities.
 
(d) Transfer and Exchange of Definitive Securities for Beneficial Interests in
Global Securities. Transfers and exchanges of beneficial interests in the Global
Securities also shall require compliance with either subparagraph (i), (ii) or
(ii) below, as applicable:
 
(i) Transfer Restricted Securities to Beneficial Interests in Restricted Global
Securities. If any Holder of a Transfer Restricted Security proposes to exchange
such Transfer Restricted Security for a beneficial interest in a Restricted
Global Security or to transfer such Transfer Restricted Security to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Security, then, upon receipt by the Registrar of the following
documentation:
 
(A) if the Holder of such Transfer Restricted Security proposes to exchange such
Transfer Restricted Security for a beneficial interest in a Restricted Global
Security, a certificate from such Holder in the form attached to the applicable
Security;
 
(B) if such Transfer Restricted Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A under the Securities Act, a
certificate from such Holder in the form attached to the applicable Security;
 
(C) if such Transfer Restricted Security is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
 

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904 under the Securities Act, a certificate from such Holder in the form
attached to the applicable Security;
 
(D) if such Transfer Restricted Security is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144 under the Securities Act, a certificate from such Holder in the
form attached to the applicable Security;
 
(E) if such Transfer Restricted Security 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 from such Holder in the form
attached to the applicable Security, including the certifications, certificates
and Opinion of Counsel, if applicable; or
 
(F) if such Transfer Restricted Security is being transferred to the Company or
a Subsidiary thereof, a certificate from such Holder in the form attached to the
applicable Security;
 
the Trustee shall cancel the Transfer Restricted Security, and increase or cause
to be increased the aggregate principal amount of the appropriate Restricted
Global Security.
 
(ii) Transfer Restricted Securities to Beneficial Interests in Unrestricted
Global Securities. A Holder of a Transfer Restricted Security may exchange such
Transfer Restricted Definitive Security for a beneficial interest in an
Unrestricted Global Security or transfer such Transfer Restricted Security to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Security only if the Registrar receives the following:
 
(A) if the Holder of such Transfer Restricted Security proposes to exchange such
Transfer Restricted Security for a beneficial interest in an Unrestricted Global
Security, a certificate from such Holder in the form attached to the applicable
Security; or
 
(B) if the Holder of such Transfer Restricted Securities proposes to transfer
such Transfer Restricted Security to a Person who shall take delivery thereof in
the form of a beneficial interest in an Unrestricted Global Security, a
certificate from such Holder in the form attached to the applicable Security,
 
and, in each such case, if the Company or the Registrar so requests or if the
applicable rules and procedures of the Depository 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 Restricted Securities
Legend are no longer required in order to maintain compliance with the
Securities Act. Upon satisfaction of the conditions of this subparagraph (ii),
the Trustee shall cancel the Transfer Restricted Securities and increase or
cause to be increased the aggregate principal amount of the Unrestricted Global
Security. If any such transfer or exchange is effected pursuant to this
subparagraph (ii) at
 

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a time when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of an written order of the Company in the form of
an Officers’ Certificate, the Trustee shall authenticate one or more
Unrestricted Global Securities in an aggregate principal amount equal to the
aggregate principal amount of Transfer Restricted Securities transferred or
exchanged pursuant to this subparagraph (ii).
 
(iii) Unrestricted Definitive Securities to Beneficial Interests in Unrestricted
Global Securities. A Holder of an Unrestricted Definitive Security may exchange
such Unrestricted Definitive Security for a beneficial interest in an
Unrestricted Global Security or transfer such Unrestricted Definitive Security
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Security at any time. Upon receipt of a request for such
an exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Security and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Securities. If any such
transfer or exchange is effected pursuant to this subparagraph (iii) at a time
when an Unrestricted Global Security has not yet been issued, the Company shall
issue and, upon receipt of an written order of the Company in the form of an
Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted
Global Securities in an aggregate principal amount equal to the aggregate
principal amount of Unrestricted Definitive Securities transferred or exchanged
pursuant to this subparagraph (iii).
 
(iv) Unrestricted Definitive Securities to Beneficial Interests in Restricted
Global Securities. An Unrestricted Definitive Security cannot be exchanged for,
or transferred to a Person who takes delivery thereof in the form of, a
beneficial interest in a Restricted Global Security.
 
(e) Transfer and Exchange of Definitive Securities for Definitive Securities.
Upon request by a Holder of Definitive Securities and such Holder’s compliance
with the provisions of this Section 2.2(e), the Registrar shall register the
transfer or exchange of Definitive Securities. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Securities 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 shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.2(e).
 
(i) Transfer Restricted Securities to Transfer Restricted Securities. A Transfer
Restricted Security may be transferred to and registered in the name of a Person
who takes delivery thereof in the form of a Transfer Restricted Security 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 attached to the
applicable Security;
 

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(B) if the transfer will be made pursuant to Rule 903 or Rule 904 under the
Securities Act, then the transferor must deliver a certificate in the form
attached to the applicable Security;
 
(C) if the transfer will be made pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate in the form attached to the applicable Security;
 
(D) if the transfer will be made to an IAI in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (A) through (D) above, a certificate in the form attached to the
applicable Security; and
 
(E) if such transfer will be made to the Company or a Subsidiary thereof, a
certificate in the form attached to the applicable Security.
 
(ii) Transfer Restricted Securities to Unrestricted Definitive Securities. Any
Transfer Restricted Security may be exchanged by the Holder thereof for an
Unrestricted Definitive Security or transferred to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Security if the Registrar
receives the following:
 
(1) if the Holder of such Transfer Restricted Security proposes to exchange such
Transfer Restricted Security for an Unrestricted Definitive Security, a
certificate from such Holder in the form attached to the applicable Security; or
 
(2) if the Holder of such Transfer Restricted Security proposes to transfer such
Securities to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Security, a certificate from such Holder in the form
attached to the applicable Security,
 
and, in each such case, 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 Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act.
 
(iii) Unrestricted Definitive Securities to Unrestricted Definitive Securities.
A Holder of an Unrestricted Definitive Security may transfer such Unrestricted
Definitive Securities to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Security at any time. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Securities pursuant to the instructions from the Holder thereof.
 
(iv) Unrestricted Definitive Securities to Transfer Restricted Securities. An
Unrestricted Definitive Security cannot be exchanged for, or transferred to a
Person who takes delivery thereof in the form of, a Transfer Restricted
Security.
 

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At such time as all beneficial interests in a particular Global Security have
been exchanged for Definitive Securities or a particular Global Security has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, the principal amount of
Securities represented by such Global Security shall be reduced accordingly and
an endorsement shall be made on such Global Security by the Trustee or by the
Depository 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
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such increase.
 
(f) Legend.
 
(i) Except as permitted by the following paragraph (ii), (iii) or (iv), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form (each defined
term in the legend being defined as such for purposes of the legend only):
 
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: TWO
YEARS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A
 

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TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE
(A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.”
 
Each Definitive Security shall bear the following additional legend:
 
“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
 
(ii) Upon any sale or transfer of a Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Definitive Security that does not bear
the legends set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).
 
(iii) After a transfer of any Initial Securities during the period of the
effectiveness of a Shelf Registration Statement with respect to such Initial
Securities, all requirements pertaining to the Restricted Securities Legend on
such Initial Securities shall cease to apply and the requirements that any such
Initial Securities be issued in global form shall continue to apply.
 
(iv) Upon the consummation of a Registered Exchange Offer with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Exchange Securities in exchange for their Initial Securities, all
requirements pertaining to Initial Securities
 

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that Initial Securities be issued in global form shall continue to apply, and
Exchange Securities in global form without the Restricted Securities Legend
shall be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
 
(v) Upon a sale or transfer after the expiration of the Restricted Period of any
Initial Security acquired pursuant to Regulation S, all requirements that such
Initial Security bear the Restricted Securities Legend shall cease to apply and
the requirements requiring any such Initial Security be issued in global form
shall continue to apply.
 
(vi) Any Additional Securities sold in a registered offering shall not be
required to bear the Restricted Securities Legend.
 
(g) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a particular Global Security have been exchanged for
Definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.11 of this Indenture. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, the principal amount of
Securities represented by such Global Security shall be reduced accordingly and
an endorsement shall be made on such Global Security by the Trustee or by the
Depository 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
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such increase.
 
(h) Obligations with Respect to Transfers and Exchanges of Securities.
 
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate, Definitive Securities and Global
Securities at the Registrar’s request.
 
(ii) No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08
and 9.05 of this Indenture).
 
(iii) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, a Paying Agent or the Registrar may deem and
treat the person in whose name a Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and interest
on such Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, the Trustee, the Paying Agent or
the Registrar shall be affected by notice to the contrary.
 

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(iv) All Securities issued upon any transfer or exchange pursuant to the terms
of this Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
 
(i) No Obligation of the Trustee.
 
(i) The Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Security, a member of, or a participant in the Depository or
any other Person with respect to the accuracy of the records of the Depository
or its nominee or of any participant or member thereof, with respect to any
ownership interest in the Securities or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption or repurchase) or
the payment of any amount, under or with respect to such Securities. All notices
and communications to be given to the Holders and all payments to be made to the
Holders under the Securities shall be given or made only to the registered
Holders (which shall be the Depository or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be
exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
 
(ii) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
 
 
 

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EXHIBIT A
 
[FORM OF FACE OF INITIAL SECURITY]
 
[Global Securities Legend]
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
 
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
[Restricted Securities Legend]
 
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: TWO
YEARS] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED
 

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INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER
THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.”
 
Each Definitive Security shall bear the following additional legend:
 
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
 

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[FORM OF INITIAL SECURITY]
 
No.$__________
 
10¼% Senior Subordinated Note due 2016
 
CUSIP No.
ISIN No.
 
COVALENCE SPECIALTY MATERIALS CORP., a Delaware corporation, promises to pay to
[ ], or registered assigns, the principal sum [of Dollars] [listed on the
Schedule of Increases or Decreases in Global Security attached hereto]1  on
March 1, 2016.
 
Interest Payment Dates: March 1 and September 1.
 
Record Dates: February 15 and August 15.
 
Additional provisions of this Security are set forth on the other side of this
Security.
 
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
 
COVALENCE SPECIALTY MATERIALS CORP.
 
By: 
Name: 
Title: 
 
Dated:
 

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TRUSTEE’S CERTIFICATE OF
 
AUTHENTICATION
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
as Trustee, certifies that this is
 
one of the Securities
 
referred to in the Indenture.
 
By:  
Authorized Signatory
 
*/ If the Security is to be issued in global form, add the Global Securities
Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.
 

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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
 
10¼% Senior Subordinated Note due 2016
 
1.
Interest

 
(a) COVALENCE SPECIALTY MATERIALS CORP., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the “Company”), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
shall pay interest semiannually on March 1 and September 1 of each year,
commencing September 1, 2006. Interest on the Securities shall accrue from the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from February 16, 2006 until the
principal hereof is due. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
 
(b) Registration Rights Agreement. The Holder of this Security is entitled to
the benefits of a Registration Rights Agreement, dated as of February 16, 2006,
among the Company, the Guarantors and the Initial Purchasers.
 
2.
Method of Payment

 
The Company shall pay interest on the Securities (except defaulted interest) to
the Persons who are registered Holders at the close of business on the February
15 or August 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date
(whether or not a Business Day). Holders must surrender Securities to the Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest) at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
 
3.
Paying Agent and Registrar

 
Initially, Wells Fargo Bank, National Association, a national banking
association (the “Trustee”), will act as Paying Agent and Registrar. The Company
may appoint and change
 

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any Paying Agent or Registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
 
4.
Indenture

 
The Company issued the Securities under an Indenture dated as of February 16,
2006 (the “Indenture”), among the Company, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred to
the Indenture and the TIA for a statement of such terms and provisions
 
The Securities are senior subordinated unsecured obligations of the Company.
This Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities, any Additional Securities and any
Exchange Securities issued in exchange for the Initial Securities or any
Additional Securities pursuant to the Indenture. The Initial Securities, any
Additional Securities and any Exchange Securities are treated as a single class
of securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends
and other distributions, incur Indebtedness, enter into consensual restrictions
upon the payment of certain dividends and distributions by such Restricted
Subsidiaries, issue or sell shares of capital stock of the Company and such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.
 
To guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant to
the terms of the Indenture.
 
5.
Optional Redemption

 
Except as set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to March 1, 2011. Thereafter, the
Securities shall be redeemable at the option of the Company, in whole at any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of the Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on March 1 of the years
set forth below:
 
 
 
A-6

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Year
Redemption Price
   
2011
105.125%
2012
103.417%
2013
101.708%
2014 and thereafter
100.000%
   

In addition, prior to March 1, 2011, the Company may redeem the Securities at
its option, in whole at any time or in part from time to time, upon not less
than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as of,
and accrued and unpaid interest to, the applicable redemption date (subject to
the right of the Holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
 
Notwithstanding the foregoing, at any time and from time to time on or prior to
March 1, 2009, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price equal to 110.250% of the principal amount thereof plus accrued
and unpaid interest, to the redemption date (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Securities (calculated after giving effect to
any issuance of Additional Securities) must remain outstanding after each such
redemption; and provided, further, that such redemption shall occur within 90
days after the date on which any such Equity Offering is consummated upon not
less than 30 nor more than 60 days’ notice mailed to each Holder of Securities
being redeemed and otherwise in accordance with the procedures set forth in the
Indenture. Notice of any redemption upon any Equity Offering may be given prior
to the completion thereof, and any such redemption or notice may, at the
Company’s discretion, be subject to one or more conditions precedent, including,
but not limited to, completion of the related Equity Offering.
 
6.
Sinking Fund

 
The Securities are not subject to any sinking fund.
 
7.
Notice of Redemption

 
Notice of redemption will be mailed by first-class mail at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his, her or its registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued and
unpaid interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with a Paying Agent on or before the redemption
date and certain
 

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other conditions are satisfied, on and after such date, interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
 
8.
Repurchase of Securities at the Option of the

 
Holders upon Change of Control and Asset Sales
 
Upon the occurrence of a Change of Control, each Holder shall have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
 
In accordance with Section 4.06 of the Indenture, the Company will be required
to offer to purchase Securities upon the occurrence of certain events.
 
9.
Subordination

 
The Securities and Guarantees are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities and Guarantees may be paid. The
Company and each Guarantor agrees, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
 
10.
Denominations; Transfer; Exchange

 
The Securities are in registered form, without coupons, in denominations of
$1,000 and whole multiples of $1,000. A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture. Upon any registration
of transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed.
 
11.
Persons Deemed Owners

 
The registered Holder of this Security shall be treated as the owner of it for
all purposes.
 
12.
Unclaimed Money

 
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and a Paying Agent shall pay the money back to the Company at
its written request unless an abandoned property law designates another Person.
After any such payment, the
 

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Holders entitled to the money must look to the Company for payment as general
creditors and the Trustee and a Paying Agent shall have no further liability
with respect to such monies.
 
13.
Discharge and Defeasance

 
Subject to certain conditions, the Company at any time may terminate some of or
all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
 
14.
Amendment; Waiver

 
Subject to certain exceptions set forth in the Indenture, (i) the Indenture or
the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate principal amount of the outstanding Securities
(voting as a single class) and (ii) any past default or compliance with any
provisions may be waived with the written consent of the Holders of at least a
majority in principal amount of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee may amend the Indenture or the Securities (i) to cure
any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5
of the Indenture; (iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities; (iv) to add Guarantees with respect to
the Securities; (v) to add additional covenants of the Company for the benefit
of the Holders or to surrender rights and powers conferred on the Company; (vi)
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (vii) to make any change that does
not adversely affect the rights of any Holder; (viii) to make any change in the
subordination provisions of the Indenture that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company (or any
Representative thereof) under such subordination provisions; or (ix) to provide
for the issuance of the Exchange Securities or Additional Securities.
 
15.
Defaults and Remedies

 
If an Event of Default occurs (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company) and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities, in each case, by notice to the Company, may declare
the principal of, premium, if any, and accrued but unpaid interest on all the
Securities to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. Under certain circumstances, the Holders of a
majority in principal amount of the outstanding Securities may rescind any such
acceleration with respect to the Securities and its consequences.
 
If an Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable indemnity or
 

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security against any loss, liability or expense and certain other conditions are
complied with. Except to enforce the right to receive payment of principal,
premium (if any) or interest when due, no Holder may pursue any remedy with
respect to the Indenture or the Securities unless (i) such Holder has previously
given the Trustee notice that an Event of Default is continuing, (ii) the
Holders of at least 25% in principal amount of the outstanding Securities have
requested the Trustee in writing to pursue the remedy, (iii) such Holders have
offered the Trustee reasonable security or indemnity against any loss, liability
or expense, (iv) the Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or indemnity and (v)
the Holders of a majority in principal amount of the outstanding Securities have
not given the Trustee a direction inconsistent with such request within such
60-day period. Subject to certain restrictions, the Holders of a majority in
principal amount of the outstanding Securities are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law or
the Indenture or that the Trustee determines is unduly prejudicial to the rights
of any other Holder or that would involve the Trustee in personal liability.
Prior to taking any action under the Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
 
16.
Trustee Dealings with the Company

 
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
 
17.
No Recourse Against Others

 
No director, officer, employee, incorporator or holder of any equity interests
in the Company or of any Guarantor or any direct or indirect parent corporation,
as such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Securities by accepting a Security waives and releases all such liability.
 
18.
Authentication

 
This Security shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Security.
 
19.
Abbreviations

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

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20. Governing Law
 
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
 
21.
CUSIP Numbers; ISINs

 
The Company has caused CUSIP numbers and ISINs to be printed on the Securities
and has directed the Trustee to use CUSIP numbers and ISINs in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Securities 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 of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text of
this Security.
 

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ASSIGNMENT FORM
 
To assign this Security, fill in the form below:
 
I or we assign and transfer this Security to:
 
 
(Print or type assignee’s name, address and zip code)
 
 
(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
 
 
 
Date:   Your Signature:  
 
 
Sign exactly as your name appears on the other side of this Security.
 
Signature Guarantee: 
 
Date:  
 
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably acceptable to
the Trustee
Signature of Signature Guarantee

 

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
 
REGISTRATION OF TRANSFER RESTRICTED SECURITIES
 
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
 
The undersigned (check one box below):
 
has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depository a Security or
Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above);
 
has requested the Trustee by written order to exchange or register the transfer
of a Security or Securities.
 
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
 
CHECK ONE BOX BELOW
 
(1)
 
 
to the Company; or
 
(2)
 
 
 
to the Registrar for registration in the name of the Holder, without transfer;
or
 
(3)
 
 
 
pursuant to an effective registration statement under the Securities Act of
1933; or
 
(4)
 
 
 
inside the United States to a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that purchases for its own account
or for the account of a qualified institutional buyer to whom notice is given
that such transfer is being made in reliance on Rule 144A, in each case pursuant
to and in compliance with Rule 144A under the Securities Act of 1933; or
 
(5)
 
 
outside the United States in an offshore transaction within the meaning of
Regulation S under the Securities Act in compliance with Rule 904 under the
Securities Act of 1933 and such Security shall be held immediately after the
transfer through Euroclear or Clearstream until the expiration of the Restricted
Period (as defined in the Indenture); or
 
(6)
 
 
 
to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a
signed letter containing certain representations and agreements; or
 

 
 
 
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(7)
 
 
 
pursuant to another available exemption from registration provided by Rule 144
under the Securities Act of 1933.
 

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Securities, such legal opinions, certifications and other
information as the Company or the Trustee has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933.
 
Date:   Your Signature:  
 
Signature Guarantee: 
 
Date:  
 
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably acceptable to
the Trustee
Signature of Signature Guarantee

 

 

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TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing this Security for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
 

 
Dated:    
NOTICE: To be executed by an executive officer
 

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[TO BE ATTACHED TO GLOBAL SECURITIES]
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
 
The initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been made:
 
Date of Exchange
Amount of decrease in Principal Amount of this Global Security
Amount of increase in Principal Amount of this Global Security
Principal amount of this Global Security following such decrease or increase
Signature of authorized signatory of Trustee or Securities Custodian
         

 
 
 

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OPTION OF HOLDER TO ELECT PURCHASE
 
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
 
Asset Sale
Change of Control
   

If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($1,000 or an integral multiple thereof):
 
$
 
Date:   Your Signature:  
(Sign exactly as your name appears on the other side of this Security)
 
Signature Guarantee:   
 
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably acceptable to
the Trustee
 

 

 

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

1 
Use the Schedule of Increases and Decreases language if Security is in Global
Form.

 

 
 
A-17

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EXHIBIT B
 
[FORM OF FACE OF EXCHANGE SECURITY]
 
[Global Securities Legend]
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
 
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 

 

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No.                                                            $__________
 
10¼% Senior Subordinated Note due 2016
 
CUSIP No. ______
ISIN No. ______
 
COVALENCE SPECIALTY MATERIALS CORP., a Delaware corporation, promises to pay to
[ ], or registered assigns, the principal sum [of Dollars] [listed on the
Schedule of Increases or Decreases in Global Security attached hereto]2  on
March 1, 2016.
 
Interest Payment Dates: March 1 and September 1.
 
Record Dates: February 15 and August 15.
 
Additional provisions of this Security are set forth on the other side of this
Security.
 
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
 
COVALENCE SPECIALTY MATERIALS CORP.
 
By: 
Name: 
Title: 
 
Dated:
 

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TRUSTEE’S CERTIFICATE OF
 
AUTHENTICATION
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
as Trustee, certifies that this is
 
one of the Securities
 
referred to in the Indenture.
 
By:  
Authorized Signatory
 
______________________
 
*/ If the Security is to be issued in global form, add the Global Securities
Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.
 

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[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
 
10¼% Senior Subordinated Note due 2016
 
1.
Interest

 
COVALENCE SPECIALTY MATERIALS CORP., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the “Company”), promises to pay interest on the principal
amount of this Security at the rate per annum shown above. The Company shall pay
interest semiannually on March 1 and September 1 of each year, commencing
September 1, 2006. Interest on the Securities shall accrue from the most recent
date to which interest has been paid or duly provided for or, if no interest has
been paid or duly provided for, from February 16, 2006 until the principal
hereof is due. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at the
rate borne by the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
 
2.
Method of Payment

 
The Company shall pay interest on the Securities (except defaulted interest) to
the Persons who are registered Holders at the close of business on the February
15 or August 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date
(whether or not a Business Day). Holders must surrender Securities to the Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest), at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
 
3.
Paying Agent and Registrar

 
Initially, Wells Fargo Bank, National Association, a national banking
association (the “Trustee”), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent or Registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent or Registrar.
 

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4. Indenture
 
The Company issued the Securities under an Indenture dated as of February 16,
2006 (the “Indenture”), among the Company, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred to
the Indenture and the TIA for a statement of such terms and provisions.
 
The Securities are senior subordinated unsecured obligations of the Company.
This Security is one of the Exchange Securities referred to in the Indenture.
The Securities include the Initial Securities, any Additional Securities and any
Exchange Securities issued in exchange for the Initial Securities or any
Additional Securities pursuant to the Indenture. The Initial Securities, any
Additional Securities and any Exchange Securities are treated as a single class
of securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends
and other distributions, incur Indebtedness, enter into consensual restrictions
upon the payment of certain dividends and distributions by such Restricted
Subsidiaries, issue or sell shares of capital stock of the Company and such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.
 
To guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant to
the terms of the Indenture.
 
5.
Optional Redemption

 
Except as set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to March 1, 2011. Thereafter, the
Securities shall be redeemable at the option of the Company, in whole at any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of the Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on March 1 of the years
set forth below:
 
Year
Redemption Price
   
2011
105.125%

 
 
 
B-5

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2012
103.417%
2013
101.708%
2014 and thereafter
100.000%
   

 
In addition, prior to March 1, 2011, the Company may redeem the Securities at
its option, in whole at any time or in part from time to time, upon not less
than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as of,
and accrued and unpaid interest to, the applicable redemption date (subject to
the right of the Holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
 
Notwithstanding the foregoing, at any time and from time to time on or prior to
March 1, 2009, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price equal to 110.250% of the principal amount thereof plus accrued
and unpaid interest to the redemption date (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Securities (calculated after giving effect to
any issuance of Additional Securities) must remain outstanding after each such
redemption; and provided, further, that such redemption shall occur within 90
days after the date on which any such Equity Offering is consummated upon not
less than 30 nor more than 60 days’ notice mailed to each Holder of Securities
being redeemed and otherwise in accordance with the procedures set forth in the
Indenture. Notice of any redemption upon any Equity Offering may be given prior
to the completion thereof, and any such redemption or notice may, at the
Company’s discretion, be subject to one or more conditions precedent, including,
but not limited to, completion of the related Equity Offering.
 
6.
Sinking Fund

 
The Securities are not subject to any sinking fund.
 
7.
Notice of Redemption

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

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8. Repurchase of Securities at the Option of the
 
Holders upon Change of Control and Asset Sales
 
Upon the occurrence of a Change of Control, each Holder shall have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
 
In accordance with Section 4.06 of the Indenture, the Company will be required
to offer to purchase Securities upon the occurrence of certain events.
 
9.
Subordination

 
The Securities and Guarantees are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities and Guarantees may be paid. The
Company and each Guarantor agrees, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
 
10.
Denominations; Transfer; Exchange

 
The Securities are in registered form, without coupons, in denominations of
$1,000 and whole multiples of $1,000. A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture. Upon any registration
of transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed.
 
11.
Persons Deemed Owners

 
The registered Holder of this Security shall be treated as the owner of it for
all purposes.
 
12.
Unclaimed Money

 
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and a Paying Agent shall pay the money back to the Company at
its written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
 

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13. Discharge and Defeasance
 
Subject to certain conditions, the Company at any time may terminate some of or
all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
 
14.
Amendment; Waiver

 
Subject to certain exceptions set forth in the Indenture, (i) the Indenture or
the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate principal amount of the outstanding Securities
(voting as a single class) and (ii) any past default or compliance with any
provisions may be waived with the written consent of the Holders of at least a
majority in principal amount of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee may amend the Indenture or the Securities (i) to cure
any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5
of the Indenture; (iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities; (iv) to add Guarantees with respect to
the Securities; (v) to add additional covenants of the Company for the benefit
of the Holders or to surrender rights and powers conferred on the Company; (vi)
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (vii) to make any change that does
not adversely affect the rights of any Holder; (viii) to make any change in the
subordination provisions of the Indenture that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company (or any
Representative thereof) under such subordination provisions; or (ix) to provide
for the issuance of the Exchange Securities or Additional Securities.
 
15.
Defaults and Remedies

 
If an Event of Default occurs (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company) and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities, in each case, by notice to the Company, may declare
the principal of, premium, if any, and accrued but unpaid interest on all the
Securities to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. Under certain circumstances, the Holders of a
majority in principal amount of the outstanding Securities may rescind any such
acceleration with respect to the Securities and its consequences.
 
If an Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due, no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event of
Default is continuing, (ii)
 

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the Holders of at least 25% in principal amount of the outstanding Securities
have requested the Trustee in writing to pursue the remedy, (iii) such Holders
have offered the Trustee reasonable security or indemnity against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
 
16.
Trustee Dealings with the Company

 
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
 
17.
No Recourse Against Others

 
No director, officer, employee, incorporator or holder of any equity interests
in the Company or of any Guarantor or any direct or indirect parent corporation,
as such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Securities by accepting a Security waives and releases all such liability.
 
18.
Authentication

 
This Security shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Security.
 
19.
Abbreviations

 
Customary abbreviations may be used in the name of a Holder or an assignee, such
as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN
(=joint tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
20.
Governing Law

 
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
 

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21. CUSIP Numbers; ISINs
 
The Company has caused CUSIP numbers and ISINs to be printed on the Securities
and has directed the Trustee to use CUSIP numbers and ISINs in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Securities 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 of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text of
this Security.
 

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ASSIGNMENT FORM
 
To assign this Security, fill in the form below:
 
I or we assign and transfer this Security to:
 
 
(Print or type assignee’s name, address and zip code)
 
 
(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
 
 
 
Date:   Your Signature:  
Sign exactly as your name appears on the other side of this Security.
 
Signature Guarantee: 
 
Date:  
 
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably acceptable to
the Trustee
Signature of Signature Guarantee

 

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OPTION OF HOLDER TO ELECT PURCHASE
 
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
 
Asset Sale
Change of Control
   

If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($1,000 or an integral multiple thereof):
 
$
 
Date:   Your Signature:  
(Sign exactly as your name appears on the other side of this Security)
 
Signature Guarantee:   
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably acceptable to
the Trustee
 

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[TO BE ATTACHED TO GLOBAL SECURITIES]
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
 
The initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been made:
 
Date of Exchange
Amount of decrease in Principal Amount of this Global Security
Amount of increase in Principal Amount of this Global Security
Principal amount of this Global Security following such decrease or increase
Signature of authorized signatory of Trustee or Securities Custodian
         

 

 

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2 
Use the Schedule of Increases and Decreases language if Security is in Global
Form.

 
 
 
 
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EXHIBIT C
 
[FORM OF]
 
TRANSFEREE LETTER OF REPRESENTATION
 
Covalence Specialty Materials Corp.
 
c/o Wells Fargo Bank, National Association
 
●
 
●
 
Attention: Vice President
 
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of
the 10¼% Senior Subordinated Notes due 2016 (the “Securities”) of COVALENCE
SPECIALTY MATERIALS CORP. (the “Company”).
 
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
 
Name: ________________________
 
Address: _____________________
 
Taxpayer ID Number: __________
 
The undersigned represents and warrants to you that:
 
1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities
Act”)), purchasing for our own account or for the account of such an
institutional “accredited investor” at least $100,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We 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 Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
 
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the “Resale Restriction Termination Date”) only (1)(a) inside the
United States to a person whom we reasonably believe is a qualified
institutional buyer (as defined in 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 under the
Securities Act, (b) outside the United States to a foreign person in a
transaction meeting the requirements of Rule 903 or Rule
 

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904 of Regulation S under the Securities Act, (c) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
applicable) or (d) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel
acceptable to the Company if the Company so requests), (2) to the Company or (3)
pursuant to an effective registration statement and, in each case, in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction. In addition, we will, and each subsequent holder
is required to, notify any purchaser of the Security evidenced hereby of the
resale restrictions set forth above. No representation can be made as to the
availability of the exemption provided by Rule 144 for resale of the security
evidenced hereby. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made to an institutional “accredited investor”
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional “accredited investor” within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause 1(b), 1(c) or
1(d) above to require the delivery of an opinion of counsel, certifications or
other information satisfactory to the Company and the Trustee.
 
Dated: ____________________
 
TRANSFEREE: ____________________,
 
By:

 

 
 
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EXHIBIT D
 
[FORM OF SUPPLEMENTAL INDENTURE]
 
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of
[               ], among [GUARANTOR] (the “New Guarantor”), a subsidiary of
COVALENCE SPECIALTY MATERIALS CORP. (or its successor), a Delaware corporation
(the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as trustee under the indenture referred to below (the “Trustee”).
 
W I T N E S S E T H :
 
WHEREAS the Company and the existing Guarantors have heretofore executed and
delivered to the Trustee an indenture (as amended, supplemented or otherwise
modified, the “Indenture”) dated as of February 16, 2006, providing for the
issuance of the Company’s 10¼% Senior Subordinated Notes due 2016 (the
“Securities”), initially in the aggregate principal amount of $265,000,000;
 
WHEREAS Section 4.11 of the Indenture provides that under certain circumstances
the Company is required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all the Company’s obligations under the Securities
pursuant to a Guarantee on the terms and conditions set forth herein; and
 
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and
the existing Guarantors are 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 New Guarantor,
the Company, and the Trustee mutually covenant and agree for the equal and
ratable benefit of the holders of the Securities as follows:
 
1. Defined Terms. As used in this Supplemental Indenture, terms defined in the
Indenture or in the preamble or recital hereto are used herein as therein
defined, except that the term “Holders” in this Guarantee shall refer to the
term “Holders” as defined in the Indenture and the Trustee acting on behalf of
and for the benefit of such Holders. The words “herein,” “hereof” and “hereby”
and other words of similar import used in this Supplemental Indenture refer to
this Supplemental Indenture as a whole and not to any particular section hereof.
 
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and
severally with all existing Guarantors (if any), to unconditionally guarantee
the Company’s obligations under the Securities on the terms and subject to the
conditions set forth in Articles 11 and 12 of the Indenture and to be bound by
all other applicable provisions of the Indenture and the Securities and to
perform all of the obligations and agreements of a Guarantor under the
Indenture.
 
3. Notices. All notices or other communications to the New Guarantor shall be
given as provided in Section 13.02 of the Indenture.
 

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4. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except
as expressly amended hereby, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions thereof shall remain in
full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
 
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
6. Trustee Makes No Representation. The Trustee makes no representation as to
the validity or sufficiency of this Supplemental Indenture.
 
7. 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.
 
8. Effect of Headings. The Section headings herein are for convenience only and
shall not effect the construction thereof.
 
 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed as of the date first above written.
 
[NEW GUARANTOR]
 
By: 
Name: 
Title: 
 
COVALENCE SPECIALTY MATERIALS CORP.
 
By: 
Name: 
Title: 
 
WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
 
By: 
Name: 
Title: 
 
 
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