Exhibit 10.4

EXECUTION

INDENTURE

Dated as of September 5, 2014

Among

EDUCATION MANAGEMENT LLC,

EDUCATION MANAGEMENT FINANCE CORP.,

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

SENIOR PIK TOGGLE NOTES DUE 2018

 

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CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

   Indenture Section

310(a)(1)

   7.10

(a)(2)

   7.10

(a)(3)

   N.A.

(a)(4)

   N.A.

(a)(5)

   7.10

(b)

   7.10

(c)

   N.A.

311(a)

   7.11

(b)

   7.11

(c)

   N.A.

312(a)

   2.05

(b)

   12.03

(c)

   12.03

313(a)

   7.06

(b)(1)

   N.A.

(b)(2)

   7.06;7.07

(c)

   7.06; 12.02

(d)

   7.06

314(a)

   4.03; 12.02; 12.05

(b)

   N.A.

(c)(1)

   12.04

(c)(2)

   12.04

(c)(3)

   N.A.

(d)

   N.A.

(e)

   12.05

(f)

   N.A.

315(a)

   7.01

(b)

   7.05; 12.02

(c)

   7.01

(d)

   7.01

(e)

   6.14

316(a)(last sentence)

   2.09

(a)(1)(A)

   6.05

(a)(1)(B)

   6.04

(a)(2)

   N.A.

(b)

   6.07

(c)

   2.12; 9.04

317(a)(1)

   6.08

(a)(2)

   6.12

(b)

   2.04

318(a)

   12.01

(b)

   N.A.

(c)

   12.01

N.A. means not applicable.

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

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TABLE OF CONTENTS

 

         PAGE   ARTICLE 1   

DEFINITIONS AND INCORPORATION BY REFERENCE

  

Section 1.01.

  Definitions      1   

Section 1.02.

  Other Definitions      33   

Section 1.03.

  Incorporation by Reference of Trust Indenture Act      34   

Section 1.04.

  Rules of Construction      35   

Section 1.05.

  Acts of Holders      35    ARTICLE 2    THE NOTES   

Section 2.01.

  Form and Dating; Terms      37   

Section 2.02.

  Execution and Authentication      40   

Section 2.03.

  Registrar and Paying Agent      40   

Section 2.04.

  Paying Agent to Hold Money in Trust      41   

Section 2.05.

  Holder Lists      41   

Section 2.06.

  Transfer and Exchange      41   

Section 2.07.

  Replacement Notes      55   

Section 2.08.

  Outstanding Notes      55   

Section 2.09.

  Treasury Notes      56   

Section 2.10.

  Temporary Notes      56   

Section 2.11.

  Cancellation      56   

Section 2.12.

  Defaulted Interest      57   

Section 2.13.

  CUSIP Numbers      57    ARTICLE 3    REDEMPTION   

Section 3.01.

  Notices to Trustee      57   

Section 3.02.

  Selection of Notes to Be Redeemed or Purchased      58   

Section 3.03.

  Notice of Redemption      58   

Section 3.04.

  Effect of Notice of Redemption      59   

Section 3.05.

  Deposit of Redemption or Purchase Price      59   

Section 3.06.

  Notes Redeemed or Purchased in Part      60   

Section 3.07.

  Optional Redemption      60   

Section 3.08.

  Mandatory Redemption.      61   

Section 3.09.

  Offers to Repurchase by Application of Excess Proceeds      61    ARTICLE 4   
COVENANTS   

Section 4.01.

  Payment of Notes      64   

Section 4.02.

  Maintenance of Office or Agency      64   

 

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Section 4.03.

  Reports and Other Information      65   

Section 4.04.

  Compliance Certificate      68   

Section 4.05.

  Taxes      68   

Section 4.06.

  Stay, Extension and Usury Laws      68   

Section 4.07.

  Limitation on Restricted Payments      69   

Section 4.08.

  Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries     
74   

Section 4.09.

  Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock
and Preferred Stock      76   

Section 4.10.

  Asset Sales      83   

Section 4.11.

  Transactions with Affiliates      86   

Section 4.12.

  Liens      88   

Section 4.13.

  Corporate Existence      89   

Section 4.14.

  Offer to Repurchase Upon Change of Control      89   

Section 4.15.

  Limitation on Guarantees of Indebtedness by Restricted Subsidiaries      91   

Section 4.16.

  Discharge and Suspension of Covenants      92   

Section 4.17.

  Limitation on Activities of the Co-Issuer      92    ARTICLE 5    SUCCESSORS
  

Section 5.01.

  Merger, Consolidation or Sale of All or Substantially All Assets      93   

Section 5.02.

  Successor Substituted      96    ARTICLE 6    DEFAULTS AND REMEDIES   

Section 6.01.

  Events of Default      96   

Section 6.02.

  Acceleration      99   

Section 6.03.

  Other Remedies      99   

Section 6.04.

  Waiver of Past Defaults      100   

Section 6.05.

  Control by Majority      100   

Section 6.06.

  Limitation on Suits      100   

Section 6.07.

  Rights of Holders of Notes to Receive Payment      101   

Section 6.08.

  Collection Suit by Trustee      101   

Section 6.09.

  Restoration of Rights and Remedies      101   

Section 6.10.

  Rights and Remedies Cumulative      101   

Section 6.11.

  Delay or Omission Not Waiver      102   

Section 6.12.

  Trustee May File Proofs of Claim      102   

Section 6.13.

  Priorities      102   

Section 6.14.

  Undertaking for Costs      103    ARTICLE 7    TRUSTEE   

Section 7.01.

  Duties of Trustee      103   

 

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Section 7.02.

  Rights of Trustee      104   

Section 7.03.

  Individual Rights of Trustee      106   

Section 7.04.

  Trustee’s Disclaimer      106   

Section 7.05.

  Notice of Defaults      106   

Section 7.06.

  Reports by Trustee to Holders of the Notes      106   

Section 7.07.

  Compensation and Indemnity      107   

Section 7.08.

  Replacement of Trustee      108   

Section 7.09.

  Successor Trustee by Merger, Etc.      109   

Section 7.10.

  Eligibility; Disqualification      109   

Section 7.11.

  Preferential Collection of Claims Against Issuers      109   

Section 7.12.

  Tax Reporting      109    ARTICLE 8    LEGAL DEFEASANCE AND COVENANT
DEFEASANCE   

Section 8.01.

  Option to Effect Legal Defeasance or Covenant Defeasance      110   

Section 8.02.

  Legal Defeasance and Discharge      110   

Section 8.03.

  Covenant Defeasance      111   

Section 8.04.

  Conditions to Legal or Covenant Defeasance      111   

Section 8.05.

  Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions      113   

Section 8.06.

  Repayment to Issuers      113   

Section 8.07.

  Reinstatement      114    ARTICLE 9    AMENDMENT, SUPPLEMENT AND WAIVER   

Section 9.01.

  Without Consent of Holders of Notes      114   

Section 9.02.

  With Consent of Holders of Notes      115   

Section 9.03.

  Compliance with Trust Indenture Act      117   

Section 9.04.

  Revocation and Effect of Consents      117   

Section 9.05.

  Notation on or Exchange of Notes      118   

Section 9.06.

  Trustee to Sign Amendments, Etc.      118   

Section 9.07.

  Payment for Consent      118    ARTICLE 10    GUARANTEES   

Section 10.01.

  Guarantee      119   

Section 10.02.

  Limitation on Guarantor Liability      121   

Section 10.03.

  Execution and Delivery      121   

Section 10.04.

  Subrogation      121   

Section 10.05.

  Benefits Acknowledged      122   

Section 10.06.

  Release of Guarantees      122   

 

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ARTICLE 11    SATISFACTION AND DISCHARGE   

Section 11.01.

  Satisfaction and Discharge      122   

Section 11.02.

  Application of Trust Money      123    ARTICLE 12    MISCELLANEOUS   

Section 12.01.

  Trust Indenture Act Controls      124   

Section 12.02.

  Notices      124   

Section 12.03.

  Communication by Holders of Notes with Other Holders of Notes      125   

Section 12.04.

  Certificate and Opinion as to Conditions Precedent      125   

Section 12.05.

  Statements Required in Certificate or Opinion      126   

Section 12.06.

  Rules by Trustee and Agents      126   

Section 12.07.

  No Personal Liability of Directors, Officers, Employees and Stockholders     
126   

Section 12.08.

  Governing Law; Submission to Jurisdiction      126   

Section 12.09.

  Waiver of Jury Trial      127   

Section 12.10.

  Force Majeure      127   

Section 12.11.

  No Adverse Interpretation of Other Agreements      127   

Section 12.12.

  Successors      128   

Section 12.13.

  Severability      128   

Section 12.14.

  Counterpart Originals      128   

Section 12.15.

  Table of Contents, Headings, Etc.      128   

Section 12.16.

  Qualification of Indenture      128   

Section 12.17.

  Calculations      128   

 

EXHIBITS

  

Exhibit A

  Form of Note   

Exhibit B

  Form of Certificate of Transfer   

Exhibit C

  Form of Certificate of Exchange   

Exhibit D

  Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors   

 

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INDENTURE, dated as of September 5, 2014, among Education Management LLC, a
Delaware limited liability company (the “Company”), Education Management Finance
Corp., a Delaware corporation (the “Co-Issuer” and, together with the Company,
the “Issuers”) the Guarantors (as defined herein) listed on the signature pages
hereto and The Bank of New York Mellon Trust Company, N.A., a national banking
association, as Trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Issuers have duly authorized the creation of an issue of
$175,376,620 aggregate principal amount of Senior PIK Toggle Notes due 2018 (the
“Initial Notes”);

WHEREAS, each of the Issuers and each of the Guarantors has duly authorized the
execution and delivery of this Indenture.

NOW, THEREFORE, the Issuers, the Guarantors and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the Holders
of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

“144A Global Note” means a Global Note substantially in the form of Exhibit A
hereto, bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued (or the principal amount of which will be
increased) in respect of the outstanding principal amount of the Notes and PIK
Notes issued or sold in reliance on Rule 144A.

“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,
including Indebtedness incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person, and

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

“Additional Notes” means additional Notes (other than the Initial Notes, any PIK
Notes) issued from time to time under this Indenture in accordance with Sections
2.01 and 4.09 hereof.

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“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, shall mean
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.

“Agent” means any Registrar or Paying Agent.

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

“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 and Lease-Back Transaction) of the Company or any of
its Restricted Subsidiaries (each referred to in this definition as a
“disposition”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other
than Preferred Stock of Restricted Subsidiaries issued in compliance with
Section 4.09), whether in a single transaction or a series of related
transactions;

in each case, other than:

(a) any disposition of Cash Equivalents or obsolete or worn out equipment in the
ordinary course of business or any disposition of inventory or goods (or other
assets) held for sale 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 the provisions described under Section 5.01(a)
hereof or any disposition that constitutes a Change of Control pursuant to this
Indenture;

(c) the making of any Restricted Payment or Permitted Investment that is
permitted to be made, and is made, under Section 4.07 hereof;

(d) any disposition of assets or issuance or sale of Equity Interests of any
Restricted Subsidiary in any transaction or series of transactions with an
aggregate fair market value of less than $10.0 million;

 

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(e) any disposition of property or assets or 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 another Restricted Subsidiary of the
Company;

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of
1986, any exchange of like property (excluding any boot thereon) for use in a
Similar Business;

(g) the lease, assignment or sub lease of any real or personal property in the
ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;

(i) foreclosures on assets; and

(j) any financing transaction with respect to property built or acquired by the
Issuers or any Restricted Subsidiary after the Issue Date, including Sale and
Lease-Back Transactions and asset securitizations permitted by this Indenture.

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

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

“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.

 

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“Cash Equivalents” means:

(1) United States dollars;

(2) such local currencies held by the Company or any Restricted Subsidiary from
time to time in the ordinary course of business;

(3) securities issued or directly and fully and unconditionally guaranteed or
insured by the U.S. government (or any agency or instrumentality thereof the
securities of which are unconditionally guaranteed as a full faith and credit
obligation of such government), with maturities of 24 months or less from the
date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any commercial bank having capital and surplus of not less
than $500.0 million in the case of U.S. banks and $100.0 million (or the U.S.
dollar equivalent as of the date of determination) in the case of non U.S.
banks;

(5) repurchase obligations for underlying securities of the types described in
clauses (3) and (4) entered into with any financial institution meeting the
qualifications specified in clause (4) above;

(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P and in
each case maturing within 24 months after the date of creation thereof;

(7) marketable short term money market and similar securities having a rating of
at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time
neither Moody’s nor S&P shall be rating such obligations, an equivalent rating
from another Rating Agency) and in each case maturing within 24 months after the
date of creation thereof;

(8) investment funds investing 95% of their assets in securities of the types
described in clauses (1) through (7) above;

(9) readily marketable direct obligations issued by any state, commonwealth or
territory of the United States or any political subdivision or taxing authority
thereof having an Investment Grade Rating from either Moody’s or S&P with
maturities of 24 months or less from the date of acquisition;

(10) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or
higher from S&P or “A2” or higher from Moody’s with maturities of 24 months or
less from the date of acquisition; and

(11) Investments with average maturities of 24 months or less from the date of
acquisition in money market funds rated AAA- (or the equivalent thereof) or
better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s.

 

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Notwithstanding the foregoing, Cash Equivalents shall include amounts
denominated in currencies other than those set forth in clauses (1) and
(2) above, provided that such amounts are converted into any currency listed in
clauses (1) and (2) as promptly as practicable and in any event within ten
Business Days following the receipt of such amounts.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Subsidiaries,
taken as a whole, to any Person other than a Permitted Holder; or

(2) the Company becomes aware of (by way of a report or any other filing
pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or
otherwise) 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 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 50% or more of
the total voting power of the Voting Stock of the Company or any of its direct
or indirect parent companies holding directly or indirectly 100% of the total
voting power of the Voting Stock of the Company.

“Clearstream” means Clearstream Banking, Société Anonyme.

“Co-Issuer” has the meaning set forth in the recitals hereto.

“Company” has the meaning set forth in the recitals hereto; provided that when
used in the context of determining the fair market value of an asset or
liability under this Indenture, “Company” shall be deemed to mean the board of
directors of the Company when the fair market value is equal to or in excess of
$50.0 million (unless otherwise expressly stated).

“Consolidated Depreciation and Amortization Expense” means with respect to any
Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.

 

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

(1) consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, to the extent such expense was deducted (and not added back) in
computing Consolidated Net Income (including (a) amortization of original issue
discount resulting from the issuance of Indebtedness at less than par, (b) all
commissions, discounts and other fees and charges owed with respect to letters
of credit or bankers acceptances, (c) non cash interest payments (but excluding
any non cash interest expense attributable to the movement in the mark to market
valuation of Hedging Obligations or other derivative instruments pursuant to
GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net
payments, if any, pursuant to interest rate Hedging Obligations with respect to
Indebtedness, and excluding (v) accretion or accrual of discounted liabilities
not constituting Indebtedness, (w) any expense resulting from the discounting of
any Indebtedness in connection with the application of purchase accounting in
connection with any acquisition, (x) amortization of deferred financing fees,
debt issuance costs, commissions, fees and expenses and (y) any expensing of
bridge, commitment and other financing fees; plus

(2) consolidated capitalized interest of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued; less

(3) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by such
Person to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP.

“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, and otherwise determined in accordance
with GAAP; provided, however, that, without duplication,

(1) any after tax effect of extraordinary, non-recurring or unusual gains or
losses (less all fees and expenses relating thereto) or expenses (including
relating to the Transaction to the extent incurred on or prior to June 30,
2007), severance, relocation costs and curtailments or modifications to pension
and post-retirement employee benefit plans and other restructuring costs shall
be excluded,

(2) 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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(3) any after tax effect of income (loss) from disposed or discontinued
operations and any net after tax gains or losses on disposal of disposed,
abandoned or discontinued operations shall be excluded,

(4) any after tax effect of gains or losses (less all fees and expenses relating
thereto) attributable to asset dispositions other than in the ordinary course of
business, as determined in good faith by the Company, shall be excluded,

(5) the Net Income for such period of any Person that is not a Subsidiary, or is
an Unrestricted Subsidiary, or that is accounted for by the equity method of
accounting, shall be excluded; provided that Consolidated Net Income of the
Company shall be increased by the amount of dividends or distributions or other
payments that are actually paid in cash (or to the extent converted into cash)
to the referent Person or a Restricted Subsidiary thereof in respect of such
period,

(6) solely for the purpose of determining the amount available for Restricted
Payments under clause (iii)(a) of Section 4.07(a) hereof, the Net Income for
such period of any Restricted Subsidiary (other than any Guarantor) shall be
excluded if the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of its Net Income is not at the date of determination
wholly 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 restriction with respect to the payment of dividends
or similar distributions has been legally waived, provided that Consolidated Net
Income of the Company will be increased by the amount of dividends or other
distributions or other payments actually paid in cash (or to the extent
converted into cash) to the Company or a Restricted Subsidiary thereof in
respect of such period, to the extent not already included therein,

(7) effects of adjustments (including the effects of such adjustments pushed
down to the Company and its Restricted Subsidiaries) in the property and
equipment, software and other intangible assets, deferred revenue and debt line
items in such Person’s consolidated financial statements pursuant to GAAP
resulting from the application of purchase accounting in relation to the
Transaction or any consummated acquisition or the amortization or write-off of
any amounts thereof, net of taxes, shall be excluded,

(8) any after tax effect of income (loss) from the early extinguishment of
Indebtedness or Hedging Obligations or other derivative instruments shall be
excluded,

 

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(9) any impairment charge or asset write off, in each case, pursuant to GAAP and
the amortization of intangibles arising pursuant to GAAP shall be excluded,

(10) any non cash compensation expense recorded from grants of stock
appreciation or similar rights, stock options, restricted stock or other rights
shall be excluded, and

(11) accruals and reserves that are established within twelve months after
June 1, 2006 that are so required to be established as a result of the
Transaction in accordance with GAAP shall be excluded.

“Consolidated Net Tangible Assets” means the total amount of assets (less
applicable reserves and other properly deductible items and excluding the amount
of any Excluded Contributions) after deducting (i) all current liabilities
(excluding the amount of those which are by their terms extendable or renewable
at the option of the obligor to a date more than 12 months after the date as of
which the amount is being determined) and (2) all goodwill, tradenames, patents,
unamortized debt discount and expense and other intangible assets, all as set
forth on the most recent balance sheet of the Company and its consolidated
Restricted Subsidiaries and determined in accordance with GAAP.

“Consolidated Leverage Ratio” as of any date of determination means, the ratio
of (1) Consolidated Total Indebtedness of the Company and its Restricted
Subsidiaries as of such date (without giving effect to any repayments or
prepayments of Indebtedness from the proceeds of Excluded Contributions) to
(2) the Company’s EBITDA for the most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such event for which such calculation is being made shall occur,
in each case with such pro forma adjustments to Consolidated Total Indebtedness
and EBITDA as are appropriate and consistent with the pro forma adjustment
provisions set forth in the definition of Fixed Charge Coverage Ratio.

“Consolidated Total Indebtedness” means, as at any date of determination, an
amount equal to the sum of (1) the aggregate amount of all outstanding
Indebtedness of the Company and its Restricted Subsidiaries on a consolidated
basis consisting of Indebtedness for borrowed money, Obligations in respect of
Capitalized Lease Obligations and debt obligations evidenced by promissory notes
and similar instruments (and any such Indebtedness of another Person guaranteed,
or secured by a lien on any assets of, the Company or any of its Restricted
Subsidiaries) and (2) the aggregate amount of all outstanding Disqualified Stock
of the Company and all Preferred Stock of its Restricted Subsidiaries on a
consolidated basis, with the amount of such Disqualified Stock and Preferred
Stock equal to the greater of their respective voluntary or involuntary
liquidation preferences and maximum fixed repurchase prices, in each case
determined on a consolidated basis in accordance with GAAP. For purposes hereof,
the “maximum fixed repurchase price” of any Disqualified Stock or Preferred
Stock that does not have a fixed repurchase price shall be calculated in

 

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accordance with the terms of such Disqualified Stock or Preferred Stock as if
such Disqualified Stock or Preferred Stock were purchased on any date on which
Consolidated Total Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock or Preferred Stock, such fair market value
shall be determined reasonably and in good faith by the Company.

“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.

“Corporate Trust Office of the Trustee” means the office of the Trustee at which
at any particular time its corporate trust business in Pittsburgh, Pennsylvania
shall be principally administered, which office as of the date of this
instrument is located at the address specified in Section 12.02 hereof, except
that with respect to presentation of Notes for payment or for registration of
transferor exchange, such term shall mean the office or agency of the Trustee at
which at any particular time its corporate agency business shall be conducted,
which office at the date of this instrument is located at 101 Barclay Street,
New York, New York 10286; Attention: Corporate Trust Administration, or, in the
case of any of such offices or agency, such other address as the Trustee may
designate from time to time by notice to the Holders and the Issuers.

“Credit Facilities” means, with respect to the Company or any of its Restricted
Subsidiaries, one or more debt facilities, including the Senior Credit
Facilities, or other financing arrangements (including, without limitation,
commercial paper facilities or indentures) providing for revolving credit loans,
term loans, letters of credit or other long term indebtedness, including any
notes, mortgages, guarantees, collateral documents, instruments and agreements

 

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executed in connection therewith, and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities that replace,
refund or refinance any part of the loans, notes, other credit facilities or
commitments thereunder, including any such replacement, refunding or refinancing
facility or indenture that increases the amount permitted to be borrowed
thereunder or alters the maturity thereof (provided that such increase in
borrowings is permitted under Section 4.09 hereof) or adds Restricted
Subsidiaries as additional borrowers or guarantors thereunder and whether by the
same or any other agent, lender or group of lenders.

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

“Dealer Managers” means Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Barclays Capital Inc.

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

“Definitive Note” means a certificated Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06(c) hereof, substantially in
the form of Exhibit A hereto, except that such Note shall not bear the Global
Note Legend and shall not have the “Schedule of Increases and Decreases of
Interests in the Global Note” attached thereto.

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

“Designated Non-cash Consideration” means the fair market value of non-cash
consideration received by the Company or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officer’s Certificate, setting forth the basis of such valuation,
executed by the principal financial officer of the Company, less the amount of
cash or Cash Equivalents received in connection with a subsequent sale of or
collection on such Designated Non-cash Consideration.

“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 putable or exchangeable, or upon the happening
of any event, matures or is mandatorily redeemable (other than solely as a
result of a change of control or asset sale) pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof
(other than solely as a result of a change of control or asset sale), in whole
or in part, in each case prior to the date 91 days after the earlier of the
maturity date of the

 

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Notes or the date the Notes are no longer outstanding; provided, however, that
if such Capital Stock is issued to any plan for the benefit of employees of the
Company or 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 or its Subsidiaries in order to satisfy
applicable statutory or regulatory obligations.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period

(1) increased (without duplication) by:

(a) provision for taxes based on income or profits or capital, including,
without limitation, state, franchise and similar taxes (such as the Pennsylvania
capital tax) and foreign withholding taxes of such Person paid or accrued during
such period deducted (and not added back) in computing Consolidated Net Income;
plus

(b) Fixed Charges of such Person for such period (including (x) net losses or
Hedging Obligations or other derivative instruments entered into for the purpose
of hedging interest rate risk and (y) costs of surety bonds in connection with
financing activities, in each case, to the extent included in Fixed Charges) to
the extent the same was deducted (and not added back) in calculating such
Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such
period to the extent the same were deducted (and not added back) in computing
Consolidated Net Income; plus

(d) any expenses or charges (other than depreciation or amortization expense)
related to any Equity Offering, Permitted Investment, acquisition, disposition,
recapitalization or the incurrence of Indebtedness permitted to be incurred by
this Indenture (including a refinancing thereof) (whether or not successful),
including (i) such fees, expenses or charges related to the offering of the
Notes and the Credit Facilities and (ii) any amendment or other modification of
the Notes, and, in each case, deducted (and not added back) in computing
Consolidated Net Income; plus

(e) the amount of any restructuring charge or reserve deducted (and not added
back) in such period in computing Consolidated Net Income, including any one
time costs incurred in connection with acquisitions after the Issue Date and
costs related to the closure and/or consolidation of facilities; plus

 

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(f) any other non cash charges, including any write offs or write downs,
reducing Consolidated Net Income for such period (other than any such non-cash
charges that represent an accrual or reserve for potential cash items in any
future period, and excluding amortization of a prepaid cash item that was paid
in a prior period); plus

(g) the amount of any minority interest expense consisting of Subsidiary income
attributable to minority equity interests of third parties in any
non-Wholly-Owned Subsidiary deducted (and not added back) in such period in
calculating Consolidated Net Income; plus

(h) the amount of management, monitoring, consulting and advisory fees and
related expenses paid in such period to the Investors to the extent otherwise
permitted under clause (c) of Section 4.11 hereof; plus

(i) any costs or expense incurred by the Company or a Restricted Subsidiary
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement or any stock subscription or
shareholder agreement reducing Consolidated Net Income, to the extent that such
cost or expenses are funded with cash proceeds contributed to the capital of the
Company as equity (other than Disqualified Stock) or net cash proceeds of an
issuance of Equity Interest of the Company (other than Disqualified Stock)
solely to the extent that such net cash proceeds are excluded from the
calculation set forth in clause (iii) of Section 4.07(a) hereof and the
calculation set forth in clause (xii) of Section 4.09(b) hereof; plus

(j) any fees and expenses incurred during such period, or any amortization
thereof for such period, in connection with any acquisition, disposition,
Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of
Equity Interests, refinancing transaction or amendment or modification of any
debt instrument (in each case, including any such transaction consummated prior
to the Issue Date and any such transaction undertaken but not completed) and any
charges or non-recurring merger costs incurred during such period as a result of
any such transaction shall be excluded;

(2) decreased by (without duplication) non-cash gains increasing Consolidated
Net Income of such Person for such period, excluding any non-cash gains to the
extent they represent the reversal of an accrual or reserve for a potential cash
item that reduced EBITDA in any prior period, and

 

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(3) increased or decreased by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and
the application of Statement of Financial Accounting Standards No. 133; plus or
minus, as applicable,

(b) any net gain or loss resulting in such period from currency translation
gains or losses related to currency remeasurements of Indebtedness (including
any net loss or gain resulting from hedge agreements for currency exchange
risk).

“EMU” means economic and monetary union as contemplated in the Treaty on
European Union.

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

“Equity Offering” means any public or private sale of common stock or Preferred
Stock (excluding Disqualified Stock) of the Company or any of its direct or
indirect parent companies to the extent contributed to the Company as common
equity, other than:

(1) public offerings with respect to the Company’s or any direct or indirect
parent company’s common stock registered on Form S-8;

(2) issuances to any Subsidiary of the Company; and

(3) any such public or private sale that constitutes an Excluded Contribution.

“euro” means the single currency of participating member states of the EMU.

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

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

“Excluded Contribution” means net cash proceeds, marketable securities or
Qualified Proceeds received by the Company from

(1) contributions to its common equity capital, and

(2) the sale (other than to a Subsidiary of the Company or to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement of the Company) of Capital Stock (other than Disqualified
Stock) of the Company,

 

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provided, that in the case of any Excluded Contribution relating to Qualified
Proceeds, such contribution is designated as an Excluded Contribution pursuant
to an officer’s certificate executed by the principal financial officer of the
Company on the date such capital contributions are made.

“Existing Notes” means the Senior Cash Pay/PIK Notes due 2018.

“Existing Notes Indenture” means the Indenture, dated as of March 5, 2013, among
the Issuers, the guarantors party thereto and The Bank of New York Mellon Trust
Company, N.A., as trustee, governing the Existing Notes.

“Fairness Requirement” means, with respect to any transaction or series of
related transactions, (i) the Company obtaining from an Independent Financial
Advisor a written opinion to the effect that such transaction or transactions
are fair, from a financial point of view (or words of similar import) to the
Company and the Restricted Subsidiaries, taken as a whole and (ii) the Company
otherwise is complying with Section 4.11 hereof.

“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 Restricted
Subsidiary incurs, assumes, guarantees, redeems, retires, defeases or
extinguishes any Indebtedness (other than Indebtedness repaid under any
revolving credit facility unless such Indebtedness has been permanently repaid
and has not been replaced) or issues or redeems Disqualified Stock or Preferred
Stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to or simultaneously with the event
for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed
Charge Coverage Ratio Calculation Date”), then the Fixed Charge Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
guarantee, redemption, retirement, defeasance or extinguishment of Indebtedness,
or such issuance or redemption of Disqualified Stock or 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 disposed operations (as
determined in accordance with GAAP) that have been made by the Company or any of
its Restricted Subsidiaries during the four quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro
forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations and disposed operations (and the change in 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 of its
Restricted Subsidiaries since the beginning of such period shall have made any
Investment, acquisition, disposition, merger, consolidation or disposed
operation that would have required

 

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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, merger, consolidation or disposed
operation 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 a
transaction, 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 Fixed Charge Coverage Ratio Calculation Date had been the applicable rate
for the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness). 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 except
as set forth in the first paragraph of this definition. 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.

“Fixed Charges” means, with respect to any Person for any period, the sum of:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated
in consolidation) on any series of Preferred Stock during such period; and

(3) all dividends or other distributions accrued (excluding items eliminated in
consolidation) on any series of Disqualified Stock during such period.

“Foreign Subsidiary” means, with respect to any Person, any Restricted
Subsidiary of such Person that is not organized or existing under the laws of
the United States, any State thereof, or the District of Columbia.

“GAAP” means generally accepted accounting principles in the United States which
are in effect on the Issue Date.

 

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

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

“Government Securities” 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 either case, are not callable or redeemable at the option of the
issuers 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 Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.

“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 letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness or other
obligations.

“Guarantee” means the guarantee by any Guarantor of the Issuers’ Obligations
under this Indenture.

“Guarantor” means Parent and each Restricted Subsidiary that Guarantees the
Notes in accordance with the terms of this Indenture.

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, commodity swap agreement, commodity cap
agreement, commodity collar agreement, foreign exchange contract, currency swap
agreement or similar agreement providing for the transfer or mitigation of
interest rate or currency risks either generally or under specific
contingencies.

 

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“Holder” means the Person in whose name a Note is registered on the Registrar’s
books.

“Indebtedness” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) 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 balance deferred and unpaid of the purchase price of any
property (including Capitalized Lease Obligations), except (i) any such balance
that constitutes a trade payable or similar obligation to a trade creditor, in
each case accrued in the ordinary course of business and (ii) any earn-out
obligations until such obligation becomes a liability on the balance sheet of
such Person in accordance with GAAP; or

(d) 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 upon a balance
sheet (excluding the footnotes thereto) of such Person prepared in accordance
with GAAP;

(2) to the extent not otherwise included, any obligation by such Person to be
liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of
the type referred to in clause (1) of a third Person (whether or not such items
would appear upon the balance sheet of the such obligor or guarantor), other
than by endorsement of negotiable instruments for collection in the ordinary
course of business; and

(3) to the extent not otherwise included, the obligations of the type referred
to in clause (1) of a third Person secured by a Lien on any asset owned by such
first Person, whether or not such Indebtedness is assumed by such first Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include Contingent Obligations incurred in the ordinary course of
business.

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

 

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“Independent Financial Advisor” means an accounting, appraisal, investment
banking firm or consultant to Persons engaged in Similar Businesses of
nationally recognized standing that is, in the good faith judgment of the
Company, qualified to perform the task for which it has been engaged.

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

“Initial Notes” has the meaning set forth in the recitals hereto.

“Interest Payment Date” means March 30 and September 30 of each year to stated
maturity.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s and BBB (or the equivalent) by S&P, or an equivalent
rating by any other Rating Agency.

“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, advances to customers, commission, travel and similar advances to
officers and employees, in each case 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 (excluding the
footnotes) 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 4.07 hereof:

(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 in an amount (if
positive) equal to:

(a) the Company’s “Investment” in such Subsidiary at the time of such
redesignation; less

(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 Company.

 

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“Investors” means Goldman Sachs Capital Partners, Providence Equity Partners,
Inc. and Leeds Equity Partners and each of their respective Affiliates but not
including, however, any portfolio companies of any of the foregoing.

“Issue Date” means September 5, 2014.

“Issuers” has the meaning set forth in the recitals hereto.

“Issuers’ Order” means a written request or order signed on behalf of each
Issuer by an Officer of such Issuer, who must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of such Issuer, and delivered to the Trustee.

“Legal Holiday” means a Saturday, a Sunday or a day on which commercial banking
institutions are not required to be open in the State of New York.

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

“Lien” means, with respect to any asset, any mortgage, lien (statutory or
otherwise), pledge, hypothecation, charge, security interest, preference,
priority 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.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating
agency business.

“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 any cash
received upon the sale or other disposition of any Designated Non-cash
Consideration received in any Asset Sale, net of the direct costs relating to
such Asset Sale and the sale or disposition of such Designated Non-cash
Consideration, including legal, accounting and investment banking fees, and
brokerage and sales commissions, 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),
amounts required to be applied to the repayment of principal, premium, if any,
and interest

 

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on Secured Indebtedness required (other than required by clause (i) of
Section 4.10(b) hereof) to be paid as a result of such transaction and any
deduction of appropriate amounts to be provided by the Company or any of its
Restricted Subsidiaries as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Company or any of its Restricted Subsidiaries after such sale or
other disposition thereof, including pension and other post employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Notes” means the Initial Notes and more particularly means any Note
authenticated and delivered under this Indenture. For all purposes of this
Indenture, the term “Notes” shall also include any Additional Notes that may be
issued under a supplemental indenture and any PIK Notes. For purposes of this
Indenture, all references to Notes to be issued or authenticated upon transfer,
replacement or exchange shall be deemed to refer to Notes of the applicable
series.

“Obligations” means any principal, interest (including any interest accruing
subsequent to the filing of a petition in bankruptcy, reorganization or similar
proceeding at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable state, federal
or foreign law), penalties, fees, indemnifications, reimbursements (including
reimbursement obligations with respect to letters of credit and banker’s
acceptances), damages and other liabilities, and guarantees of payment of such
principal, interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities, payable under the documentation governing any
Indebtedness.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer or the Secretary of the applicable Issuer, or any other
applicable Person.

“Officer’s Certificate” means a certificate signed on behalf of each Issuer, or
on behalf of any other applicable Person, by an Officer of such Issuer, or such
applicable Person, who must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of such
Issuer, or such applicable Person, that meets the requirements set forth in this
Indenture.

“Old Notes” means the 8 3⁄4% Senior Notes due 2014 of the Issuers.

“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
Issuers or the Trustee.

 

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“Parent” means Education Management Corporation, a Pennsylvania corporation, and
its permitted successors and assigns.

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

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of
Related Business Assets or a combination of Related Business Assets and cash or
Cash Equivalents between the Company or any of its Restricted Subsidiaries and
another Person; provided, that any cash or Cash Equivalents received must be
applied in accordance with Section 4.10 hereof.

“Permitted Holders” means each of the Investors and members of management of the
Company (or its direct parent) who are holders of Equity Interests of the
Company (or any of its direct or indirect parent companies) on the Issue Date
and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision) of which any of the foregoing are
members; provided, that, in the case of such group and without giving effect to
the existence of such group or any other group, such Investors and members of
management, collectively, have beneficial ownership of more than 50% of the
total voting power of the Voting Stock of the Company or any of its direct or
indirect parent companies.

“Permitted Investments” means:

(1) any Investment in the Company or any of its Restricted Subsidiaries;

(2) any Investment in cash and Cash Equivalents;

(3) any Investment by the Company or any of its Restricted Subsidiaries in a
Person that is engaged in a Similar Business if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person, in one transaction or a series of related transactions, is
merged or consolidated with or into, or transfers or conveys substantially all
of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided, that such
Investment was not acquired by such Person in contemplation of such acquisition,
merger, consolidation or transfer;

(4) any Investment in securities or other assets not constituting cash or Cash
Equivalents received in connection with an Asset Sale made pursuant to the
provisions of Section 4.10 hereof or any other disposition of assets not
constituting an Asset Sale;

 

21

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(5) any Investment existing on the Issue Date;

(6) 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;

(7) Hedging Obligations permitted under clause (x) of Section 4.09(b) hereof;

(8) [Reserved];

(9) Investments the payment for which consists of Equity Interests (exclusive of
Disqualified Stock) of the Company, or any of its direct or indirect parent
companies; provided, however, that such Equity Interests will not increase the
amount available for Restricted Payments under clause (iii) of Section 4.07(a)
hereof;

(10) guarantees of Indebtedness permitted under Section 4.09 hereof;

(11) Investments consisting of purchases and acquisitions of inventory,
supplies, material or equipment;

(12) [Reserved];

(13) advances to, or guarantees of Indebtedness of, employees not in excess of
$5.0 million outstanding at any one time, in the aggregate;

(14) 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 or consistent with past
practices or to fund such Person’s purchase of Equity Interests of the Company
or any direct or indirect parent company thereof; and

 

22

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(15) any transaction to the extent it constitutes an Investment that is
permitted and made in accordance with the provisions of Section 4.11(b) (except
transactions described in clauses (ii), (vi), (vii) and (ix) thereof).

“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 overdue for a period of more than 30 days
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 if adequate reserves with respect thereto are maintained on the books of
such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue
for a period of more than 30 days or payable or subject to penalties for
nonpayment or which are being contested in good faith by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of such Person in accordance with GAAP;

(4) Liens in favor of the 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;

 

23

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(6) Liens securing Indebtedness permitted to be incurred pursuant to clauses
(i) (“Credit Facility Indebtedness”), (iv), (xii) or (xviii) of Section 4.09(b)
hereof; provided that (i) Liens securing Indebtedness permitted to be incurred
pursuant to clause (xviii) extend only to the assets of Foreign Subsidiaries and
(ii) Liens securing Indebtedness permitted pursuant to clause (iv) extend only
to the assets acquired;

(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, 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 Issuers or any of its Restricted Subsidiaries;

(9) Liens on property at the time the Company or a Restricted Subsidiary
acquired the property, including any acquisition by means of a merger or
consolidation with or into the Company or any of its Restricted Subsidiaries;
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 of
its Restricted Subsidiaries;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or another Restricted Subsidiary permitted to be incurred
in accordance with Section 4.09 hereof;

(11) Liens securing Hedging Obligations so long as related Indebtedness is, and
is permitted to be under this Indenture, secured by a Lien on the same property
securing such Hedging Obligations;

(12) Liens on specific items of inventory of 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, subleases, licenses or sublicenses granted to others in the
ordinary course of business which do not materially interfere with the ordinary
conduct of the business of the Company or any of its Restricted Subsidiaries and
do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Issuers and its Restricted
Subsidiaries in the ordinary course of business;

 

24

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(15) Liens in favor of an Issuer or any Guarantor;

(16) Liens on equipment of the Company or any of its Restricted Subsidiaries
granted in the ordinary course of business to the Issuers’ clients;

(17) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancing, refunding, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (6) (other than Liens securing Credit
Facility Indebtedness), (7), (8) and (9) (it being understood that any such
refinancing or replacement Liens shall be deemed reallocated to such clauses or
subparts thereof); provided, however, that (a) 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 (b) the Indebtedness secured by such Lien at
such time is not increased to any amount greater than the sum of (i) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (6), (7), (8) and (9) at the time the
original Lien became a Permitted Lien under this Indenture, and (ii) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement;

(18) deposits made in the ordinary course of business to secure liability to
insurance carriers;

(19) other Liens securing obligations incurred in the ordinary course of
business which obligations do not exceed $35.0 million at any one time
outstanding;

(20) Liens securing judgments for the payment of money not constituting an Event
of Default under clause (v) of Section 6.01 hereof so long as such Liens are
adequately bonded and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment have not been finally terminated or
the period within which such proceedings may be initiated has not expired;

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

(22) Liens (i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code or any comparable or successor provision on items in the course
of collection, (ii) attaching to commodity trading accounts or other commodity
brokerage accounts incurred in the ordinary course of business, and (iii) in
favor of banking institutions arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters
customary in the banking industry;

 

25

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(23) Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 4.09 hereof; provided that such Liens do not
extend to any assets other than those that are the subject of such repurchase
agreement;

(24) Liens encumbering reasonable customary initial deposits and margin deposits
and similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business and not for speculative
purposes;

(25) Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of the Issuers or any of its Restricted Subsidiaries to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business of
the Company and its Restricted Subsidiaries or (iii) relating to purchase orders
and other agreements entered into with customers of the Company or any of its
Restricted Subsidiaries in the ordinary course of business; and

(26) during a Suspension Period only, Liens securing Indebtedness, and
Indebtedness represented by Sale and Leaseback Transactions, in an amount that
does not exceed 15% of Consolidated Net Tangible Assets of the Company and its
Restricted Subsidiaries at any one time outstanding.

For purposes of this definition, the term “Indebtedness” shall be deemed to
include interest on such Indebtedness. Additionally, solely for purposes of this
definition and Section 4.12, any Indebtedness incurred during a Suspension
Period that could have been incurred in compliance with an applicable provision
under Section 4.09 were such covenant in effect at such time, may be deemed by
the Company to have been so incurred.

Any Liens incurred for purposes of the Existing Notes Indenture between March 5,
2013 and the Issue Date that have been allocated to clause (6) or (19) of the
definition of “Permitted Liens” thereunder shall be allocated to the
corresponding clauses of this definition.

“Person” means any individual, corporation, limited liability company,
partnership, 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 rights of payment
of dividends or upon liquidation, dissolution, or winding up.

 

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

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

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock
of any Person engaged in, a Similar Business; provided that the fair market
value of any such assets or Capital Stock shall be determined by the Company in
good faith.

“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not
make ratings on the Notes publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the
Issuers which shall be substituted for Moody’s or S&P or both, as the case may
be.

“Record Date” for the interest payable on any applicable Interest Payment Date
means March 15 or September 15 (whether or not a Business Day) next preceding
such Interest Payment Date (provided, however, that the Record Date for the
Interest Payment Date occurring on September 30, 2014 shall be the Issue Date).

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as applicable.

“Regulation S Permanent Global Note” means a permanent Global Note in the form
of Exhibit A hereto, bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Global Note upon expiration of
the Restricted Period.

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

“Regulation S Temporary Global Note Legend” means the legend set forth in
Section 2.06(g)(iii) hereof.

“Related Business Assets” means assets (other than cash or Cash Equivalents)
used or useful in a Similar Business, provided that any assets received by the
Company or a Restricted Subsidiary in exchange for assets

 

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transferred by the Company or a Restricted Subsidiary shall not be deemed to be
Related Business Assets if they consist of securities of a Person, unless upon
receipt of the securities of such Person, such Person would become a Restricted
Subsidiary.

“Responsible Officer” means, when used with respect to the Trustee, any officer
assigned to the Corporate Trust Administration unit (or any successor division
or unit) of the Trustee located at the Corporate Trust Office of the Trustee,
who shall have direct responsibility for the administration of this Indenture,
and for the purposes of Section 6.02, Section 7.01(c)(ii) and the second
sentence of Section 7.05 shall also include any other officer of the Trustee to
whom any corporate trust matter is referred because of such officer’s knowledge
of and familiarity with the particular subject.

“Restricted Definitive Note” means a Definitive Note bearing the Private
Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement
Legend.

“Restricted Investment” means an Investment other than a Permitted Investment.

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

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of
the Company (including any Foreign Subsidiary) that is not then an Unrestricted
Subsidiary; provided, however, that upon the occurrence of an Unrestricted
Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be
included in the definition of “Restricted Subsidiary.”

“Restructuring Support Agreement” means that certain Restructuring Support
Agreement, dated on or about September 4, 2014, by and among Parent, Education
Management Holdings LLC, a Delaware limited liability company, the Issuers,
certain Subsidiaries of the Company party thereto, the Consenting Creditors (as
defined therein) and the Consenting Shareholders (as defined therein), as such
agreement may be amended, modified or supplemented from time to time.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 903” means Rule 903 promulgated under the Securities Act.

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

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“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw
Hill Companies, Inc., and any successor to its rating agency business.

“Sale and Lease-Back Transaction” means any arrangement providing for the
leasing by the Company or any of its Restricted Subsidiaries of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to a third Person in
contemplation of such leasing.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Senior Credit Facilities” means the Credit Facility under the Second Amended
and Restated Credit and Guarantee Agreement, dated December 7, 2010, among the
Company, the guarantors party thereto, the lenders party thereto in their
capacities as lenders thereunder and the agents party thereto, including any
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and any amendments, supplements, modifications,
extensions, renewals, restatements, refundings or refinancings thereof and any
indentures or credit facilities or commercial paper facilities with banks or
other institutional lenders or investors that replace, refund or refinance any
part of the loans, notes, other credit facilities or commitments thereunder,
including any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder or alters the maturity thereof
(provided that such increase in borrowings is permitted under Section 4.09
hereof).

“Significant Subsidiary” means (i) the Co-Issuer or (ii) any Restricted
Subsidiary that would be a “significant subsidiary” as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such
regulation is in effect on the Issue Date.

“Similar Business” means any business conducted or proposed to be conducted by
the Company and its Restricted Subsidiaries on the Issue Date or any business
that is similar, reasonably related, incidental or ancillary thereto.

“Subordinated Indebtedness” means, with respect to the Notes,

(1) any Indebtedness of the Issuers which is by its terms subordinated in right
of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in
right of payment to the Guarantee of such entity of the Notes.

 

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“Subsidiary” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a
partnership, joint venture, limited liability company or similar entity) of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees 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 or is
consolidated under GAAP with such Person at such time; and

(2) any partnership, joint venture, limited liability company or similar entity
of which

(x) more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or 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 or otherwise, and

(y) such Person or any Restricted Subsidiary of such Person is a controlling
general partner or otherwise controls such entity.

“Tax Legend” means the legend set forth in Section 2.06(g)(iv) hereof to be
placed on all Notes issued under this Indenture, except where otherwise
permitted by the provisions of this Indenture.

“Total Assets” means the total assets of the Company and its Restricted
Subsidiaries on a consolidated basis, as shown on the most recent balance sheet
of the Company or such other Person as may be expressly stated (excluding the
amount of any Excluded Contributions).

“Transaction” means the merger contemplated by the Transaction Agreement, the
issuance by the Issuers of the Old Notes and the 10 1⁄4% Senior Subordinated
Notes due 2016 and the related borrowings under the credit facilities to finance
the merger and repay certain outstanding debt as contemplated in the Transaction
Agreement.

“Transaction Agreement” means the Agreement and Plan of Merger dated as of
March 3, 2006 between Education Management Corporation and EM Acquisition
Corporation, as amended.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended (15
U.S.C. §§ 77aaa-777bbbb).

 

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“Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee,
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.

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

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

“Upstream Restricted Payment” means any dividend, distribution, repayment,
prepayment, repurchase, redemption, purchase or other retirement for value of
Equity Interests or Subordinated Indebtedness of the Issuers or any of the
Restricted Subsidiaries, except for any of the foregoing made to the Issuers or
a Guarantor.

“Unrestricted Subsidiary” means:

(1) any Subsidiary of the Company which at the time of determination is an
Unrestricted Subsidiary (as designated by the Company, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Company may designate any Subsidiary of the Company (including any existing
Subsidiary and any newly acquired or newly formed Subsidiary) 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 Subsidiary of the Company (other than solely any
Subsidiary of the Subsidiary to be so designated); provided that

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests
entitled to cast at least a majority of the votes that may be cast by all Equity
Interests having ordinary voting power for the election of directors or Persons
performing a similar function are owned, directly or indirectly, by the Company;

(2) such designation complies with Section 4.07 hereof; and

(3) each of:

(a) the Subsidiary to be so designated; and

(b) its Subsidiaries

 

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has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any Restricted Subsidiary.

The Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to such designation,
no Default shall have occurred and be continuing and either:

(1) the Company’s Fixed Charge Coverage Ratio on a consolidated basis for the
Company and its Restricted Subsidiaries’ most recently ended four fiscal
quarters for which internal financial statements are available immediately
preceding the date on which the designation occurs would have been at least 2.00
to 1.00, had such designation occurred at the beginning of such four-quarter
period and (ii) in the event that after such designation, the Company and its
Restricted Subsidiaries would have obligations of Indebtedness in excess of the
obligations in respect of Indebtedness of the Company and its Restricted
Subsidiaries immediately before such designation, the Consolidated Leverage
Ratio for the Company and its Restricted Subsidiaries’ most recently ended four
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such designation occurs would have been
not more than 3.25 to 1.00, had such designation occurred at the beginning of
such four-quarter period; or

(2)(a) 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, and (b) in the event that
after such designation, the Successor Company would have obligations in respect
of Indebtedness in excess of the obligations in respect of Indebtedness of the
Company and its Restricted Subsidiaries immediately before such designation, the
Consolidated Leverage Ratio of the Company and its Restricted Subsidiaries would
be less 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.

Any such designation by the Company shall be notified by the Company to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
board of directors of the Company or any committee thereof giving effect to such
designation and an Officer’s Certificate certifying that such designation
complied with the foregoing provisions.

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

 

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“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,
Disqualified Stock or Preferred 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 or Preferred Stock multiplied by the amount of such payment; by

(2) the sum of all such payments.

“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person, 100%
of the outstanding Equity Interests of which (other than directors’ qualifying
shares) 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  

Acceptable Commitment

     4.10   

AHYDO Redemption Date

     3.08   

Affiliate Transaction

     4.11   

Applicable Law

     7.12   

Asset Sale Offer

     4.10   

Authentication Order

     2.02   

Change of Control Offer

     4.14   

Change of Control Payment

     4.14   

Change of Control Payment Date

     4.14   

Code

     3.08   

Covenant Defeasance

     8.03   

Covenant Suspension Event

     4.16   

DTC

     2.01   

Event of Default

     6.01   

Excess Proceeds

     4.10   

incur

     4.09   

Legal Defeasance

     8.02   

Mandatory Principal Redemption

     3.08   

Mandatory Principal Redemption Amount

     3.08   

Market Maker

     4.03   

Note Register

     2.03   

Offer Amount

     3.09   

Offer Period

     3.09   

 

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Term

   Defined
in Section  

Pari Passu Indebtedness

     4.10   

Paying Agent

     2.03   

Permitted Student Loan Investments

     4.07   

PIK Interest

     2.01   

PIK Notes

     2.01   

PIK Payment

     2.01   

Prospective Investor

     4.03   

Purchase Date

     3.09   

Refinancing Indebtedness

     4.09   

Refunding Capital Stock

     4.07   

Registrar

     2.03   

Restricted Payments

     4.07   

Reversion Date

     4.16   

Secured System

     4.03   

Security Analyst

     4.03   

Successor Company

     5.01   

Successor Person

     5.01   

Suspended Covenants

     4.16   

Suspension Period

     4.16   

Treasury Capital Stock

     4.07   

Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the Trust Indenture Act, the provision is
incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms used in this Indenture have the
following meanings:

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Guarantees means the Issuers and the Guarantors,
respectively, and any successor obligor upon the Notes and the Guarantees,
respectively.

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

 

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Section 1.04. Rules of Construction. Unless the context otherwise requires:

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

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

(c) “or” is not exclusive;

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

(e) “will” shall be interpreted to express a command;

(f) provisions apply to successive events and transactions;

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

(h) unless the context otherwise requires, any reference to an “Article,”
“Section” or “clause” refers to an Article, Section or clause, as the case may
be, of this Indenture; and

(i) the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Indenture as a whole and not any particular Article,
Section, clause or other subdivision.

Section 1.05. Acts of Holders. Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly required, to
the Issuers. Proof of execution of any such instrument or of a writing
appointing any such agent, or the holding by any Person of a Note, shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Issuers, if made in the manner
provided in this Section 1.05.

(a) The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
or on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute proof of the authority of the Person

 

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executing the same. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.

(b) The ownership of Notes shall be proved by the Note Register.

(c) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of any action
taken, suffered or omitted by the Trustee or the Issuers in reliance thereon,
whether or not notation of such action is made upon such Note.

(d) The Issuers may, in the circumstances permitted by the Trust Indenture Act,
set a record date for purposes of determining the identity of Holders entitled
to give any request, demand, authorization, direction, notice, consent, waiver
or take any other act, or to vote or consent to any action by vote or consent
authorized or permitted to be given or taken by Holders. Unless otherwise
specified, if not set by the Issuers prior to the first solicitation of a Holder
made by any Person in respect of any such action, or in the case of any such
vote, prior to such vote, any such record date shall be the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders furnished to the Trustee prior to such solicitation.

(e) Without limiting the foregoing, a Holder entitled to take any action
hereunder with regard to any particular Note may do so with regard to all or any
part of the principal amount of such Note or by one or more duly appointed
agents, each of which may do so pursuant to such appointment with regard to all
or any part of such principal amount. Any notice given or action taken by a
Holder or its agents with regard to different parts of such principal amount
pursuant to this paragraph shall have the same effect as if given or taken by
separate Holders of each such different part.

(f) Without limiting the generality of the foregoing, a Holder, including DTC,
as the Holder of a Global Note, may make, give or take, by a proxy or proxies
duly appointed in writing, any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this Indenture to be made,
given or taken by Holders, and DTC as the Holder of a Global Note may provide
its proxy or proxies to the beneficial owners of interests in any such Global
Note through such depositary’s standing instructions and customary practices.

(g) The Issuers may fix a record date for the purpose of determining the Persons
who are beneficial owners of interests in any Global Note held by DTC entitled
under the procedures of such depositary to make, give or take, by a proxy or
proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to
be made, given or taken by Holders. If such a record date is fixed, the Holders
on such record date or their duly appointed proxy or proxies, and only such
Persons,

 

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shall be entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other action, whether or not such Holders
remain Holders after such record date. No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating; Terms. (a) General. The Notes and the Trustee’s
certificate of authentication shall be substantially in the form of Exhibit A
hereto. The Notes may have notations, legends or endorsements required by law,
stock exchange rules or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in minimum denominations of $2,000 and
integral multiples of $1.00 in excess thereof, subject to the payment of PIK
Interest and the issuance of PIK Notes. PIK Notes may be issued and PIK Interest
will be paid in denominations of $1.00 and integral multiples of $1.00 in excess
thereof.

(b) Global Notes. Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend thereon and the
“Schedule of Increases and Decreases of Interests in the Global Note” attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the “Schedule of Increases and Decreases of Interests in the Global
Note” attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified in the “Schedule of Increases and
Decreases of Interests in the Global Note” attached thereto and each shall
provide that it shall represent up to the aggregate principal amount of Notes
from time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as applicable, to reflect exchanges, redemptions and the payment of
PIK Interest. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.

 

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(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary Global Note,
which shall be deposited on behalf of the purchasers of the Notes represented
thereby with the Trustee, as custodian for the Depositary, and registered in the
name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed
by each Issuer and authenticated by the Trustee as hereinafter provided. The
Restricted Period shall be terminated upon the receipt by the Trustee of:

(i) a written certificate from the Depositary, together with copies of
certificates from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an interest therein during the
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 Note bearing a Private Placement Legend, all as contemplated by
Section 2.06(b) hereof); and

(ii) an Officer’s Certificate from each Issuer.

Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in the Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of the Regulation S Permanent Global
Note, the Trustee shall cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.

(d) Terms. The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited.

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

The Notes shall be subject to repurchase by the Issuers pursuant to an Asset
Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as
provided in Section 4.14 hereof. The Notes shall not be redeemable, other than
as provided in Article 3.

Additional Notes ranking pari passu with the Initial Notes may be created and
issued from time to time by the Issuers without notice to or consent of the
Holders and shall be consolidated with and form a single class with the Initial
Notes and the PIK Notes and shall have the same terms as to status, redemption
or otherwise as the Initial Notes and the PIK Notes (except that interest may
accrue on the Additional Notes from the date of issuance thereof); provided that
the Issuers’ ability to issue Additional Notes shall be subject to the Issuers’
compliance with Section 4.09 hereof. The Initial Notes and any Additional Notes
and PIK Notes subsequently issued under this Indenture will be treated as a
single

 

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class for all purposes under this Indenture, including, waivers, amendments,
redemptions and offers to purchase, provided, however, that if the Additional
Notes or PIK Notes are not fungible for U.S. federal income tax purposes with
the Notes previously issued under the Indenture, such Additional Notes or PIK
Notes will have a separate CUSIP number (or other applicable identifying
number). Any Additional Notes shall be issued with the benefit of an indenture
supplemental to this Indenture.

In addition to cash interest payable pursuant to Section 4.01 hereof, the
Issuers promise to pay interest in kind (“PIK Interest”) on the Notes, which
will accrue at a rate of (i) 1.0% per annum for the period from March 30, 2014
through and including March 30, 2015, (ii) 2.0% per annum for the period from
March 30, 2015 through and including March 30, 2016, (iii) 3.0% per annum for
the period from March 30, 2016 through and including March 30, 2017 and
(iv) 4.0% per annum for the period from March 30, 2017 through and including
July 1, 2018 and, in each case, be payable at the relevant Interest Payment Date
by the making by the Issuers of a PIK Payment.

Notwithstanding the foregoing, for each of the Interest Payment Dates occurring
on September 30, 2014 and March 30, 2015, interest on the Notes shall be paid
entirely in PIK Interest by increasing the principal amount of the outstanding
Notes or by issuing Notes (“PIK Notes”) (rounded up to the nearest $1.00) under
this Indenture, with any additional Notes issued having the same terms and
conditions as the Initial Notes (in each case, a “PIK Payment”).

PIK Interest shall be payable (x) with respect to Notes represented by one or
more Global Notes registered in the name of, or held by, The Depository Trust
Company (“DTC”) or its nominee on the relevant record date, by increasing the
principal amount of the outstanding Global Note by an amount equal to the amount
of PIK Interest for the applicable interest period (rounded up to the nearest
$1.00) and (y) with respect to Notes represented by certificated notes, by
issuing PIK Notes in certificated form in an aggregate principal amount equal to
the amount of PIK Interest for the applicable period (rounded up to the nearest
$1.00), and the Trustee will, at the request of the Issuers, authenticate and
deliver such PIK Notes in certificated form for original issuance to the Holders
on the relevant Record Date, as shown by the records of the register of Holders.
Following an increase in the principal amount of the outstanding Global Notes as
a result of a PIK Payment, the Global Notes will bear interest on such increased
principal amount from and after the date of such PIK Payment. Any PIK Notes
issued in certificated form will be dated as of the applicable Interest Payment
Date and will bear interest from and after such date. All PIK Notes will be
governed by, and subject to the terms, provisions and conditions of, this
Indenture and shall have the same rights and benefits as the Notes issued on the
Issue Date. Any certificated Notes will be issued with the description PIK on
the face of such Note, and references to the “principal amount” of the Notes
shall include any increase in the principal amount of the outstanding Notes as a
result of any PIK Payment. Interest that is paid in the form of PIK Interest
shall be considered paid or duly provided for, for all purposes of this
Indenture, and shall not be considered overdue.

 

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Notwithstanding anything to the contrary, the payment of accrued interest in
connection with any redemption or repurchase of the Notes as described in
Sections 3.07, 3.09, 4.10 and 4.14 hereof and upon acceleration or at maturity
shall, in each case, be made solely in cash.

The calculation of PIK Interest shall be made by the Issuers or on behalf of the
Issuers by such Person as the Issuers shall designate, and such calculation and
the correctness thereof shall not be a duty or obligation of the Trustee.

At the maturity date of the Notes, an additional principal amount of 13% of the
then aggregate principal amount of the Notes outstanding as of such maturity
date (including PIK Interest as of such maturity date) shall be due and payable
in cash to Holders of record of the Notes on such maturity date.

Section 2.02. Execution and Authentication. At least one Officer of each Issuer
shall execute the Notes on behalf of such Issuer by manual or facsimile
signature.

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

A Note shall not be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose until authenticated substantially in the form of
Exhibit A attached hereto, as the case may be, by the manual or facsimile
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuers’ Order (an
“Authentication Order”), authenticate and deliver the Initial Notes. In
addition, at any time, from time to time, the Trustee shall upon receipt of an
Authentication Order authenticate and deliver any Additional Notes and any PIK
Notes for an aggregate principal amount specified in such Authentication Order
for such Additional Notes or PIK Notes issued hereunder.

The Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Issuers. No
Opinion of Counsel or Officer’s Certificate must be delivered in connection with
authentication and delivery of any PIK Notes.

Section 2.03. Registrar and Paying Agent. The Issuers shall maintain an office
or agency where Notes may be presented for registration of transfer or for
exchange (“Registrar”) and an office or agency where Notes may be

 

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presented for payment (“Paying Agent”). The Registrar shall keep a register of
the Notes (“Note Register”) and of their transfer and exchange. The Issuers may
appoint one or more co-registrars and one or more additional paying agents. The
term “Registrar” includes any co-registrar and the term “Paying Agent” includes
any additional paying agent. The Issuers may change any Paying Agent or
Registrar without prior notice to any Holder. The Issuers shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their respective Subsidiaries may act as Paying Agent or Registrar.

The Issuers initially appoint DTC to act as Depositary with respect to the
Global Notes.

The Issuers initially appoint the Trustee to act as the Paying Agent and
Registrar for the Notes and to act as Custodian with respect to the Global
Notes.

Section 2.04. Paying Agent to Hold Money in Trust. The Issuers shall require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium, if any, or
interest on the Notes, and will notify the Trustee of any default by the Issuers
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Issuers
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than an
Issuer or a Subsidiary) shall have no further liability for the money. If an
Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Issuers, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05. Holder Lists. The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with Trust Indenture Act
Section 312(a). If the Trustee is not the Registrar, the Issuers shall furnish
to the Trustee at least two Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Issuers shall otherwise comply with
Trust Indenture Act Section 312(a).

Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of Global Notes.
Except as otherwise set forth in this Section 2.06, a Global Note may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor Depositary or a nominee of such successor Depositary. A
beneficial interest in a Global Note may not be exchanged for a Definitive Note
unless (i) the Depositary (x) notifies the Issuers that it is

 

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unwilling or unable to continue as Depositary for such Global Note or (y) has
ceased to be a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Issuers within 120 days or
(ii) there shall have occurred and be continuing a Default with respect to the
Notes. Upon the occurrence of any of the preceding events in (i) or (ii) above,
Definitive Notes delivered in exchange for any Global Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
its customary procedures). Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 and 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note, except for Definitive Notes issued subsequent to any of the preceding
events in (i) or (ii) above and pursuant to Section 2.06(c) hereof. A Global
Note may not be exchanged for another Note other than as provided in this
Section 2.06(a); provided, however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

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

(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation S
Temporary Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person. Beneficial interests in any Unrestricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.
In connection with all transfers and exchanges of beneficial interests that are
not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given

 

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to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive Note in
an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above; provided that in no
event shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903. Upon consummation of an Exchange
Offer by the Issuers in accordance with Section 2.06(f) hereof, the requirements
of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt
by the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted Global
Notes. Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the Notes
or otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section 2.06(h)
hereof.

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

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

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

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note
for Beneficial Interests in an Unrestricted Global Note. A beneficial interest
in any Restricted Global Note may be exchanged by any holder thereof for a
beneficial interest in an

 

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Unrestricted Global Note or transferred to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section 2.06(b)(ii)
hereof and:

(A) such transfer is effected pursuant to an effective registration statement
under the Securities Act; or

(B) the Registrar receives the following:

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

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

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

If any such transfer is effected pursuant to subparagraph (A) or (B) above at a
time when an Unrestricted Global Note has not yet been issued, the Issuers shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or
(D) above.

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

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

 

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(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Restricted Definitive Note, then, upon the occurrence of any of
the events in paragraph (i) or (ii) of Section 2.06(a) hereof and receipt by the
Registrar of the following documentation:

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

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

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

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

(E) if such beneficial interest is being transferred to the Company or any of
its Restricted Subsidiaries, a certificate substantially in the form of Exhibit
B hereto, including the certifications in item (3)(b) thereof; or

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

the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and mail to the Person
designated in the instructions a Definitive Note in the applicable principal
amount. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such

 

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beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall mail
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive
Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial
interest in the Regulation S Temporary Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof in the
form of a Definitive Note prior to (A) the expiration of the Restricted Period
and (B) the receipt by the Registrar of any certificates required pursuant to
Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note may
exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only upon the occurrence of any of the
events in subsection (i) or (ii) of Section 2.06(a) hereof and if the Registrar
receives the following:

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

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

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

 

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(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon the occurrence of any of the events
in subsection (i) or (ii) of Section 2.06(a) hereof and satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall execute
and the Trustee shall authenticate and mail to the Person designated in the
instructions a Definitive Note in the applicable principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iv) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from or through the
Depositary and the Participant or Indirect Participant. The Trustee shall mail
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend.

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

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

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

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

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person
in an offshore transaction

in

 

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accordance with Rule 903 or Rule 904, a certificate substantially in the form of
Exhibit B hereto, including the certifications in item (2) thereof;

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

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

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

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the applicable Restricted Global Note, in the case of clause (B) above, the
applicable 144A Global Note, and in the case of clause (C) above, the applicable
Regulation S Global Note.

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

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

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

and, if the Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to

 

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the Registrar to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.

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

If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Issuers shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request
by a Holder of Definitive Notes and such Holder’s compliance with the provisions
of this Section 2.06(e), the Registrar shall register the transfer or exchange
of Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder shall present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by 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 2.06(e):

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

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

 

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

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

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

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

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

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

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

(f) [Reserved].

 

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

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

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN ONE YEAR AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON”
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraph (b)(iv), (c)(iii),

 

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(c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall not bear
the Private Placement Legend.

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

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS. UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

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

“BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S.
PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.”

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

“THIS SECURITY HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE
MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON
WRITTEN REQUEST, THE ISSUERS WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS
SECURITY THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE
SECURITY, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE SECURITY AND (3) THE
YIELD TO MATURITY OF THE SECURITY. HOLDERS SHOULD CONTACT “ATTN: TREASURER” AT
210 SIXTH AVENUE, PITTSBURGH, PA 15222, 33RD FLOOR.”

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

(i) General Provisions Relating to Transfers and Exchanges.

 

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(i) To permit registrations of transfers and exchanges, the Issuers shall
execute and the Trustee shall authenticate Global Notes and Definitive Notes
upon receipt of an Authentication Order in accordance with Section 2.02 hereof
or at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a
Global Note or to a Holder of a Definitive Note for any registration of transfer
or exchange, but the Issuers may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and
9.05 hereof).

(iii) Neither the Registrar nor the Issuers shall be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.

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

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

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

(vii) Upon surrender for registration of transfer of any Note at the office or
agency of the Issuers designated pursuant to Section 4.02 hereof, the Issuers
shall execute, and the Trustee shall authenticate and mail, in the name of the
designated transferee or transferees, one or more replacement Notes of any
authorized denomination or denominations of a like aggregate principal amount.

 

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(viii) At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations of a like aggregate principal
amount upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Global Notes or Definitive Notes are so surrendered for exchange,
the Issuers shall execute, and the Trustee shall authenticate and mail, the
replacement Global Notes and Definitive Notes which the Holder making the
exchange is entitled to in accordance with the provisions of Section 2.02
hereof.

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

(x) To the extent any Notes are not fungible with the Initial Notes (or other
Additional Notes issued under this Indenture) for U.S. federal income tax
purposes, such Notes shall be treated as a separate series only for the purposes
of this Section 2.06 and shall trade under a separate CUSIP number.

Section 2.07. Replacement Notes. If any mutilated Note is surrendered to the
Trustee, the Registrar or the Issuers and the Trustee receives evidence to its
satisfaction of the ownership and destruction, loss or theft of any Note, the
Issuers shall issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee’s requirements are met. If
required by the Trustee or the Issuers, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Issuers to
protect the Issuers, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Issuers may
charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes. The Notes outstanding at any time are all the
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because an Issuer
or an Affiliate of an Issuer holds the Note. The aggregate principal amount
outstanding under any Note shall include any increase in the outstanding
principal amount of such Note as the result of payment of PIK Interest, if any.

 

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

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

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

Section 2.09. Treasury Notes. In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by an Issuer, or by any Affiliate of an Issuer, shall be considered
as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes that a Responsible Officer of the Trustee knows are so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
shall not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right to deliver any such direction, waiver or consent
with respect to the Notes and that the pledgee is not an Issuer or any obligor
upon the Notes or any Affiliate of an Issuer or of such other obligor.

Section 2.10. Temporary Notes. Until certificates representing Notes are ready
for delivery, the Issuers may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of certificated Notes but may have variations that
the Issuers consider appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuers shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be
entitled to all of the benefits accorded to Holders, or beneficial holders,
respectively, of Notes under this Indenture.

Section 2.11. Cancellation. The Issuers at any time may deliver Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee or, at the direction of the Trustee, the Registrar or the
Paying Agent and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Issuers. The Issuers may not issue new Notes to replace Notes that they
have paid or that have been delivered to the Trustee for cancellation.

 

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Section 2.12. Defaulted Interest. If the Issuers default in a payment of
interest on the Notes, they shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest to
the Persons who are Holders on a subsequent special record date, in each case at
the rate provided in the Notes and in Section 4.01 hereof. The Issuers shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment, and at the same time the
Issuers shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such defaulted interest as provided in this
Section 2.12. The Trustee shall fix or cause to be fixed each such special
record date and payment date; provided that no such special record date shall be
less than 10 days prior to the related payment date for such defaulted interest.
The Trustee shall promptly notify the Issuers of such special record date. At
least 15 days before the special record date, the Issuers (or, upon the written
request of the Issuers, the Trustee in the name and at the expense of the
Issuers) shall mail or cause to be mailed, first-class postage prepaid, to each
Holder a notice at his or her address as it appears in the Note Register that
states the special record date, the related payment date and the amount of such
interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater
certainty, each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Note.

Section 2.13. CUSIP Numbers. The Issuers in issuing the Notes may use CUSIP
numbers (if then generally in use) and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Holders; provided, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Issuers will as promptly as
practicable notify the Trustee of any change in the CUSIP numbers.

ARTICLE 3

REDEMPTION

Section 3.01. Notices to Trustee. If the Issuers elect to redeem Notes pursuant
to Section 3.07 hereof, they shall furnish to the Trustee, at least five
Business Days before notice of redemption is required to be mailed or caused to
be mailed to Holders pursuant to Section 3.03 hereof but not more than 60 days
before a redemption date, an Officer’s Certificate setting forth (a) the
paragraph or subparagraph of such Note and/or Section of this Indenture pursuant
to which the redemption shall occur, (b) the redemption date, (c) the principal
amount of the Notes to be redeemed and (d) the redemption price.

 

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Section 3.02. Selection of Notes to Be Redeemed or Purchased. If less than all
of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee shall select the Notes to be redeemed or purchased (a) if the
Notes are listed on any national securities exchange, in compliance with the
requirements of the principal national securities exchange on which the Notes
are listed or (b) on a pro rata basis, by lot, in compliance with the
requirements of DTC, or by such other method the Trustee considers fair and
appropriate. In the event of partial redemption or purchase by lot, the
particular Notes to be redeemed or purchased shall be selected, unless otherwise
provided herein, not less than 30 days nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.

The Trustee shall promptly notify the Issuers in writing of the Notes selected
for redemption or purchase and, in the case of any Note selected for partial
redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or
multiples of $1.00 in excess thereof (and, if PIK Interest has been paid, in
minimum denominations of $1.00 or an integral multiple of $1.00 in excess
thereof); no Notes of $2,000 or less can be redeemed in part, except that if all
of the Notes of a Holder are to be redeemed or purchased, the entire outstanding
amount of Notes held by such Holder, even if not $2,000 or a multiple of $1.00
in excess thereof, shall be redeemed or purchased. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption or purchase also apply to portions of Notes called for redemption or
purchase.

Section 3.03. Notice of Redemption. Subject to Section 3.09 hereof, the Issuers
shall mail or cause to be mailed by first-class mail notices of redemption at
least 30 days but not more than 60 days prior to the redemption date to each
Holder of Notes to be redeemed at such Holder’s registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with Article 8 or Article 11 hereof. Except
as set forth in Section 3.07(b) hereof, notices of redemption may not be
conditional.

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

(a) the redemption date;

(b) the redemption price;

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

 

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representing the same indebtedness to the extent not redeemed will be issued in
the name of the Holder of the Notes upon cancellation of the original Note;

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

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

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

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

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

(i) if in connection with a redemption pursuant to Section 3.07(b) hereof, any
condition to such redemption.

At the Issuers’ request, the Trustee shall give the notice of redemption in the
names of the Issuers and at their expense; provided that the Issuers shall have
delivered to the Trustee, at least five Business Days before notice of
redemption is required to be mailed or caused to be mailed to Holders pursuant
to this Section 3.03 (unless a shorter notice shall be agreed to by the
Trustee), an Officer’s Certificate requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in the
preceding paragraph.

Section 3.04. Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.03 hereof, Notes called for redemption
become irrevocably due and payable on the redemption date at the redemption
price (except as provided for in Section 3.07(b) hereof). The notice, if mailed
in a manner herein provided, shall be conclusively presumed to have been given,
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the Holder of any Note
designated for redemption in whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note. Subject to Section 3.05
hereof, on and after the redemption date, interest ceases to accrue on Notes or
portions of Notes called for redemption.

Section 3.05. Deposit of Redemption or Purchase Price. Prior to 10:00 a.m. (New
York City time) on the redemption or purchase date, the Issuers shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
or purchase price of and accrued and unpaid interest on all Notes to be

 

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redeemed or purchased on that date. The Trustee or the Paying Agent shall
promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued and unpaid interest on, all Notes to be
redeemed or purchased.

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

Section 3.06. Notes Redeemed or Purchased in Part. Upon surrender of a Note that
is redeemed or purchased in part, the Issuers shall issue and the Trustee shall
authenticate for the Holder at the expense of the Issuers a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered representing the same indebtedness to the extent not redeemed or
purchased; provided that each new Note will be in a principal amount of $2,000
or an integral multiple of $1.00 in excess thereof (and, if PIK Interest has
been paid, in minimum denominations of $1.00 or an integral multiple of $1.00 in
excess thereof). It is understood that, notwithstanding anything in this
Indenture to the contrary, only an Authentication Order and not an Opinion of
Counsel or Officer’s Certificate is required for the Trustee to authenticate
such new Note.

Section 3.07. Optional Redemption. (a) [Reserved]

(b) [Reserved].

(c) [Reserved].

 

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(d) The Issuers may redeem the Notes, in whole or in part, at any time and from
time to time, upon not less than 30 nor more than 60 days’ prior notice by
first-class mail, postage prepaid, with a copy to the Trustee, to each Holder of
Notes at the address of such Holder appearing in the security register, at the
redemption prices (expressed as percentages of principal amount of the Notes to
be redeemed) set forth below, plus accrued and unpaid interest thereon to the
applicable date of redemption, subject to the right of Holders of Notes of
record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date, if redeemed during the twelve month period beginning on
March 30 of each of the years indicated below:

 

Year

   Percentage  

2014

     107.50 % 

2015

     107.50 % 

2016

     110.00 % 

2017 and thereafter

     113.00 % 

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

Section 3.08. Mandatory Redemption.

(a) Except as set forth in Section 3.08(b), the Issuers shall not be required to
make any mandatory redemption or sinking fund payments with respect to the
Notes.

(b) If the Notes would otherwise constitute “applicable high yield discount
obligations” within the meaning of Section 163(i)(1) of the Internal Revenue
Code of 1986, as amended (the “Code”), at the end of the first “accrual period”
(as defined in Section 1272(a)(5) of the Code) ending after the fifth
anniversary of the Notes’ issuance (the “AHYDO Redemption Date”), the Issuers
will be required to redeem for cash a portion of each Note then outstanding
equal to the “Mandatory Principal Redemption Amount” (each such redemption, a
“Mandatory Principal Redemption”). The redemption price for the portion of each
Note redeemed pursuant to any Mandatory Principal Redemption will be 100% of the
principal amount of such portion plus any accrued interest thereon on the date
of redemption. “Mandatory Principal Redemption Amount” means, as of the AHYDO
Redemption Date, the portion of a Note required to be redeemed to prevent such
Note from being treated as an “applicable high yield discount obligation” within
the meaning of Section 163(i)(1) of the Code. No partial redemption or
repurchase of the Notes prior to the AHYDO Redemption Date pursuant to any other
provision of the Indenture will alter the Issuers’ obligation to make any
Mandatory Principal Redemption with respect to any Notes that remain outstanding
on the AHYDO Redemption Date.

(c) Any redemption of Notes pursuant to this Section 3.08 shall be made pursuant
to the applicable provisions of Section 3.01 through Section 3.06 hereof.

Section 3.09. Offers to Repurchase by Application of Excess Proceeds. (a) In the
event that, pursuant to Section 4.10 hereof, the Issuers shall be required to
commence an Asset Sale Offer, they shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the “Offer Period”). No later than five
Business Days after the termination of the Offer Period (the “Purchase

 

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Date”), the Issuers shall apply all Excess Proceeds (the “Offer Amount”) to the
purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata
basis, if applicable), or, if less than the Offer Amount has been tendered, all
Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the
related Interest Payment Date, any accrued and unpaid interest up to but
excluding the Purchase Date, shall be paid to the Person in whose name a Note is
registered at the close of business on such Record Date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.

(d) Upon the commencement of an Asset Sale Offer, the Issuers shall send, by
first-class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders and holders of Pari Passu Indebtedness, if
required. The notice, which shall govern the terms of the Asset Sale Offer,
shall state:

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

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

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

(iv) that, unless the Issuers default in making such payment, any Note accepted
for payment pursuant to the Asset Sale Offer shall cease to accrue interest
after the Purchase Date;

(v) that Holders electing to have a Note purchased pursuant to an Asset Sale
Offer may elect to have Notes purchased in denominations of $2,000 (or $1.00 if
PIK Interest has been paid) and multiples of $1.00 in excess thereof;

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

 

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

(viii) that, if the aggregate principal amount of Notes and Pari Passu
Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the
Trustee shall select the Notes and the agent for such Pari Passu Indebtedness
shall select such Pari Passu Indebtedness to be purchased on a pro rata basis
based on the accreted value or principal amount of the Notes or such Pari Passu
Indebtedness tendered (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $2,000 (or $1.00 if PIK Interest
has been paid), or multiples of $1.00 in excess thereof, shall be purchased);
and

(ix) that Holders whose Notes were purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer) representing the same
indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuers shall, to the extent lawful,
(i) accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered
and (ii) deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officer’s Certificate stating the aggregate principal
amount of Notes or portions thereof so tendered.

(f) The Issuers, the Depositary or the Paying Agent, as the case may be, shall
promptly mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes properly tendered by such Holder and accepted by the
Issuers for purchase, and the Issuers shall promptly issue a new Note, and the
Trustee, upon receipt of an Authentication Order, shall authenticate and mail or
deliver (or cause to be transferred by book-entry) such new Note to such Holder
(it being understood that, notwithstanding anything in this Indenture to the
contrary, no Opinion of Counsel or Officer’s Certificate is required for the
Trustee to authenticate and mail or deliver such new Note) in a principal amount
equal to any unpurchased portion of the Note surrendered representing the same
indebtedness to the extent not repurchased; provided, that each such new Note
shall be in a principal amount of $2,000 (or $1.00 if PIK Interest has been
paid) or an integral multiple of $1.00 in excess thereof. Any Note not so
accepted shall be promptly mailed or delivered by the Issuers to the Holder
thereof. The Issuers shall publicly announce the results of the Asset Sale Offer
on or as soon as practicable after the Purchase Date.

 

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Other than as specifically provided in this Section 3.09 or Section 4.10 hereof,
any purchase pursuant to this Section 3.09 shall be made pursuant to the
applicable provisions of Section 3.01 through Section 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01. Payment of Notes. The Issuers shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and cash interest
shall be considered paid on the date due if the Paying Agent, if other than an
Issuer or a Subsidiary, holds as of noon Eastern Time on the due date money
deposited by the Issuers in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. Any PIK
Payment shall be considered paid on the date due, (a) with respect to PIK
Interest on any Definitive Note, if the Issuer has delivered PIK Notes in
definitive form in the aggregate principal amount of PIK Interest for the
applicable Interest Period (rounded up to the nearest dollar) and an
Authentication Order relating thereto to the Trustee on or prior to such date,
including instructions regarding delivery of such PIK Note to the Holder, and
(b) with respect to PIK Interest on any Global Note, by increasing the aggregate
principal amount of such Global Note in an amount equal to such PIK Interest for
the applicable Interest Period (rounded up to the nearest dollar) and delivery
of an instruction to instruct DTC to so increase the aggregate principal amount
of such Global Note, the Trustee evidencing such payment by making appropriate
amendments to the schedule of principal amounts of such Global Note pursuant to
Section 2.03 hereof.

The Issuers shall pay in cash interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful (provided,
however, that if the Trustee or the Holders of at least 25% in principal amount
of the then total outstanding Notes declare the principal on all the then
outstanding Notes to be due and payable immediately upon the occurrence and
continuation of an Event of Default under Section 6.01(ix), interest thereon
shall accrue at the rate equal to the then applicable interest rate on the Notes
plus 5.0% to the extent lawful); they shall pay in cash interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency. The Issuers shall maintain in
Pittsburgh, Pennsylvania an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuers shall give prompt written notice to the
Trustee of the

 

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location, and any change in the location, of such office or agency. If at any
time the Issuers 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.

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

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

Section 4.03. Reports and Other Information. (a) The Company shall file with the
Trustee, within 15 days after it files any annual and quarterly reports,
information, documents and other reports with the SEC, copies of such reports,
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.

(b) In the event the Company is at any time not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall provide the
Trustee:

(i) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year, (A) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, stockholders’ equity and cash flows for such
fiscal year setting forth in each case in comparative form the figures for the
previous fiscal year that would be contained in an Annual Report on Form 10-K if
the Company were required to file such a report (subject to the proviso below),
and (B) management’s discussion and analysis of significant operational and
financial developments during such fiscal year, all of which shall be in
reasonable detail and, with respect to such consolidated financial statements,
prepared in accordance with GAAP and, audited and accompanied by a report and
opinion of Ernst & Young LLP or any other independent registered public
accounting firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards;

(ii) as soon as available, but in any event within forty-five (45) days after
the end of each of the first three (3) fiscal quarters of

 

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each fiscal year, (A) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
statements of income or operations for such fiscal quarter and for the portion
of the fiscal year then ended and consolidated statements of cash flows for the
portion of the fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year that would be contained in a Quarterly Report on Form 10-Q if the Company
were required to file such a report (subject to the proviso below), and
(B) management’s discussion and analysis of significant operational and
financial developments during such quarterly period, all of which shall be in
reasonable detail; and

(iii) within five (5) Business Days after the occurrence of any event that would
require the filing of a Current Report on Form 8-K pursuant to the items
specified below, current reports containing substantially all of the information
that would be required to be filed in a Current Report on Form 8-K under the
Exchange Act on the Issue Date pursuant to Items 1.01 (Entry into a Material
Definitive Agreement) (limited to agreements for business acquisitions), 1.02
(Termination of a Material Definitive Agreement) (limited to agreements for
business acquisitions), 1.03 (Bankruptcy or Receivership), 2.01 (Completion of
Acquisition or Disposition of Assets), 2.02 (Results of Operations and Financial
Condition) (limited to earnings announcements regarding a completed fiscal year
or quarter), 2.03 (Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant) (other than as
contemplated in the Restructuring Support Agreement), 2.04 (Triggering Events
that Accelerate or Increase a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement), 2.05 (Costs Associated with Exit or Disposal
Activities), 2.06 (Material Impairment), 4.01 (Changes in Registrant’s
Certifying Accountants), 4.02 (Non-Reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim Review), 5.01 (Changes
in Control of Registrant) and 5.02(a) and (b) (Departure of Directors or
Principal Officers); provided, however, that (a) no such current report will be
required to be furnished if the Company determines in its good faith judgment
that such event is not material to Holders or the business, assets, operations,
financial position or prospects of the Issuers and the Restricted Subsidiaries,
taken as a whole and (b) trade secrets and other confidential information that
is competitively sensitive, or information that the Company is otherwise
prohibited by law or contract from disclosing, in each case in the good faith
and reasonable determination of the Company may be excluded from disclosures;

provided, further, however, that such reports required pursuant to clauses (i),
(ii) and (iii) above (a) shall not be required to comply with Section 302,
Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, as amended, or
related Items 307 and 308 of Regulation S-K promulgated by the SEC, or
Item 10(e) of

 

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Regulation S-K (with respect to any non-GAAP financial measure contained
therein, so long a reconciliation to the most comparable GAAP financial measure
is provided), (b) shall not be required to comply with Items 402 of Regulation
S-K promulgated by the SEC, (c) shall not be required to comply with Rule 3-10
or Rule 3-16 of Regulation S-X, (d) shall not be required to include any segment
or business unit level financial information and (e) shall not be required to
include any exhibits that would have been required to be filed pursuant to
Item 601 of Regulation S-K.

(c) The requirement to deliver any of the reports required pursuant to
Section 4.03(a) and Section 4.03(b) may be satisfied within the time periods
specified above via press release by the Company and/or by the posting of such
reports on the Company’s website, Intralinks or any comparable password
protected online data system requiring user identification and a confidentiality
acknowledgement (the “Secured System”). If the Company uses the Secured System
to satisfy such requirements, it shall make readily and promptly available any
password or other login information relating to the Secured System to Holders,
prospective investors (each, a “Prospective Investor”), security analysts who
have certified to the Company that they are reputable security analysts employed
by a reputable financial institution who regularly cover or intend to cover the
Company and the Notes (each, a “Security Analyst”) and market makers who have
certified to the Company that they are reputable market makers who regularly
make or intend to make a market in the Notes (each, a “Market Maker”), and shall
make readily and promptly available on its external website contact information
for being provided access to the Secured System to any Holders, Prospective
Investors, Security Analysts or Market Makers and promptly comply with any such
requests for access to the Secured System. The delivery of reports to the
Trustee shall be made by electronic transmission to the Trustee. In addition, to
the extent not satisfied by the foregoing, the Company shall furnish to Holders
and to Securities Analysts and Prospective Investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

(d) So long as any Notes are outstanding, the Company shall also:

(i) within twenty (20) Business Days after furnishing to the Trustee the annual
and quarterly reports required by clauses (b)(i) and (b)(ii) above, and unless
prohibited by applicable law, hold a conference call (which may be limited to
those parties that have access to the Secured System and which may, at the
Company’s option, be held as a single call together with investors holding other
securities or debt of the Company) to discuss such reports and the results of
operations for the relevant reporting period; and

(ii) issue a press release to the Secured System no fewer than three
(3) Business Days prior to the date of the conference call required to be held
in accordance with this paragraph, announcing the time and date of such
conference call and either including all information

 

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necessary to access the call or directing Holders of the Notes, Prospective
Investors, Security Analysts and Market Makers to access the Secured System or
to contact the appropriate person at the Company to obtain such information.

(e) The Company may satisfy its obligations under this Section 4.03 with respect
to SEC reports and/or financial information relating to the Company by
furnishing SEC reports and/or financial information relating to any direct or
indirect parent company of the Company; provided that the same is accompanied by
consolidating information that explains in reasonable detail the differences
between the information relating to such parent, on the one hand, and the
information relating to the Company and its Restricted Subsidiaries on a
standalone basis, on the other hand.

Section 4.04. Compliance Certificate. (a) Each Issuer and each Guarantor (to the
extent that such Guarantor is so required under the Trust Indenture Act and with
such determination to be made by each Guarantor) shall deliver to the Trustee,
within 90 days after the end of each fiscal year ending after the Issue Date, a
certificate from the principal executive officer, principal financial officer or
principal accounting officer stating that a review of the activities of such
Issuer and, in the case of the Company, its Restricted Subsidiaries, during the
preceding fiscal year has been made under the supervision of the signing Officer
with a view to determining whether such Issuer has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to such
Officer signing such certificate, that to the best of his or her knowledge such
Issuer has kept, observed, performed and fulfilled each and every condition and
covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions, covenants and conditions of this
Indenture (or, if a Default shall have occurred, describing all such Defaults of
which he or she may have knowledge and what action such Issuer is taking or
proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if
the Trustee or the holder of any other evidence of Indebtedness of the Issuers
or any of their respective Subsidiaries gives any notice or takes any other
action with respect to a claimed Default, the Issuers shall promptly (which
shall be no more than five (5) Business Days) deliver to the Trustee by
registered or certified mail or by facsimile transmission an Officer’s
Certificate specifying such event and what action the Issuers propose to take
with respect thereto.

Section 4.05. Taxes. The Company shall pay, and the Company shall cause each of
its Restricted Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate negotiations or proceedings or where the failure to effect
such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws. Each of the Issuers and each of
the Guarantors covenant (to the extent that they may lawfully do so) that

 

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

Section 4.07. Limitation on Restricted Payments. (a) 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 payment or distribution on account
of the Company’s or any of its Restricted Subsidiaries’ Equity Interests,
including any dividend or distribution payable in connection with any merger or
consolidation 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
Subsidiary, a majority of such class is owned by the Company or another
Restricted Subsidiary and 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, redeem, defease or otherwise acquire or retire for value any
Equity Interests of the Company or any direct or indirect parent of the Company,
including in connection with any merger or consolidation;

(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,
sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (vii) and (viii) of Section 4.09(b)
hereof; or

(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness
purchased in anticipation of satisfying

 

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a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition; 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”).

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

(i) the payment of any dividend 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) the redemption, repurchase, retirement or other acquisition of any Equity
Interests (“Treasury Capital Stock”) or Subordinated Indebtedness of the Issuers
or any Equity Interests of any direct or indirect parent company of the Company,
in exchange for, or out of the proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary) of, Equity Interests of the Company or
any direct or indirect parent company of the Company to the extent contributed
to the Company as common equity (in each case, other than any Disqualified
Stock) (“Refunding Capital Stock”);

(iii) the redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Issuers or a Guarantor made in exchange for, or
out of the proceeds of the substantially concurrent sale of, new Indebtedness of
the Issuers or a Guarantor, as the case may be, which is incurred in compliance
with Section 4.09 hereof so long as:

(A) the principal amount or accreted value of such new Indebtedness does not
exceed the principal amount of (or accreted value, if applicable), plus any
accrued and unpaid interest on, the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired for value, plus the amount of any reasonable
premium to be paid (including reasonable tender premiums) and any reasonable
fees and expenses incurred in connection with the issuance of such new
Indebtedness;

(B) such new Indebtedness is subordinated to the Notes or the applicable
Guarantee at least to the same extent as such Subordinated Indebtedness so
purchased, exchanged, redeemed, repurchased, acquired or retired for value;

(C) such new Indebtedness has a final scheduled maturity date equal to or later
than the final scheduled maturity date of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired; and

 

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(D) such new Indebtedness has a Weighted Average Life to Maturity equal to or
greater than the remaining Weighted Average Life to Maturity of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired;

(iv) a Restricted Payment to pay for the repurchase, retirement or other
acquisition or retirement for value of Equity Interests (other than Disqualified
Stock) of the Company or any of its direct or indirect parent companies held by
any future, present or former employee, director or consultant of the Company,
any of its Subsidiaries or any of its direct or indirect parent companies
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement; provided, however, that the
aggregate Restricted Payments made under this clause (iv) do not exceed in any
calendar year $10.0 million (with unused amounts in any calendar year being
carried over to succeeding calendar years subject to a maximum (without giving
effect to the following proviso) of $20.0 million in any calendar year; provided
further that such amount in any calendar year may be increased by an amount not
to exceed:

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified
Stock) of the Company and, to the extent contributed to the Company as equity
(other than Disqualified Stock), Equity Interests of any of the Company’s direct
or indirect parent companies, in each case to members of management, directors
or consultants of the Company, any of its Subsidiaries or any of its direct or
indirect parent companies that occurs after the Issue Date, to the extent the
cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments; plus

(B) the cash proceeds of key man life insurance policies received by the Company
or its Restricted Subsidiaries after the Issue Date; less

(C) the amount of any Restricted Payments previously made with the cash proceeds
described in clauses (A) and (B) of this clause (iv);

and provided further that cancellation of Indebtedness owing to the Company or
any of its Restricted Subsidiaries from members of management of the Company,
any of the Company’s direct or indirect parent companies or any of the Company’s
Restricted Subsidiaries in connection with a repurchase of Equity Interests of
the Company or any of its direct or indirect parent companies will not be deemed
to constitute a Restricted Payment for purposes of this Section 4.07 or any
other provision of this Indenture;

 

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(v) the declaration and payment of dividends to holders of any class or series
of Disqualified Stock of the Company or any of its Restricted Subsidiaries
issued in accordance with Section 4.09 hereof to the extent such dividends are
included in the definition of “Fixed Charges”;

(vi) Investments (“Permitted Student Loan Investments”) made by the Company or
any Guarantor consisting of the purchase (other than from an Affiliate) of
student loans; provided, however, that (A) the aggregate Investments made under
this clause (vi) do not exceed in any calendar year $200.0 million and do not in
the aggregate exceed $425.0 million at any one time outstanding, (B) such
Investments shall continue to be held by the Company or a Guarantor until
transferred to a party that is not an Affiliate of the Company or its
Subsidiaries (provided that such transfer may be to an Affiliate of the Company
or its Subsidiaries if such transfer is for cash and the Company complies with
the Fairness Requirement with respect to such transaction), and (C) any net cash
proceeds from a disposition, sale, factoring, securitization or similar
monetization transaction relating to such Permitted Student Loan Investments
shall be applied as if they were Net Proceeds from an Asset Sale, in accordance
with Section 4.10 hereof;

(vii) Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (vii) that are at the time
outstanding, without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash or marketable
securities, not to exceed 2.5% 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);

(viii) repurchases of Equity Interests deemed to occur upon exercise of stock
options or warrants if such Equity Interests represent a portion of the exercise
price of such options or warrants;

(ix) any Investment in a Similar Business having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (ix) that
are at that time outstanding, not to exceed 1.5% 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);

(x) Restricted Payments that are made with Excluded Contributions; provided, to
the extent that any such Restricted Payment is permitted to be made on the basis
of any Excluded Contribution made in the form of Qualified Proceeds, such
Restricted Payment shall be comprised of such Qualified Proceeds;

 

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(xi) [Reserved];

(xii) [Reserved];

(xiii) the repurchase, redemption or other acquisition or retirement for value
of any Subordinated Indebtedness in accordance with the provisions similar to
those described under Section 4.10 and Section 4.14 hereof; provided that all
Notes 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

(xiv) the declaration and payment of dividends by the Company to, or the making
of loans to, any direct or indirect parent in amounts required for any direct or
indirect parent companies to pay, in each case without duplication,

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

(B) federal, state and local income taxes, to the extent such income taxes are
attributable to the income of the Company and its Restricted Subsidiaries and,
to the extent of the amount actually received from its Unrestricted
Subsidiaries, in amounts required to pay such taxes to the extent attributable
to the income of such Unrestricted Subsidiaries; provided that in each case the
amount of such payments in any fiscal year does not exceed the amount that the
Company and its Restricted Subsidiaries and its Unrestricted Subsidiaries (to
the extent described above) would be required to pay in respect of federal,
state and local taxes for such fiscal year were the Company, its Restricted
Subsidiaries and its Unrestricted Subsidiaries (to the extent described above)
to pay such taxes separately from any such parent entity;

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

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

 

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(E) fees and expenses, other than to Affiliates of the Company (it being
understood that Goldman, Sachs & Co. shall not be deemed an Affiliate of the
Company for this purpose solely as a result of the equity ownership of the
Company’s direct or indirect parent company by its Affiliates) related to any
unsuccessful equity or debt offering of such parent entity;

provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (vi), (vii), (ix), (xi) or (xiv) of
this Section 4.07(b), no Default shall have occurred and be continuing or would
occur as a consequence thereof.

(c) The Company shall not permit any Unrestricted Subsidiary to become a
Restricted Subsidiary except pursuant to the last sentence of 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 last sentence of the definition of “Investment.” Such
designation shall be permitted only if a Restricted Payment in such amount would
be permitted at such time, whether pursuant to Section 4.07(a) hereof or under
clause (vi), (vii), (ix) or (x) of Section 4.07(b) hereof, or pursuant to the
definition of “Permitted Investments,” and if such Subsidiary otherwise meets
the definition of an Unrestricted Subsidiary.

(d) For the avoidance of doubt, the Issuer and its Restricted Subsidiaries shall
not directly or indirectly make any Upstream Restricted Payment by means of
Investments.

(e) Any Restricted Payments made for purposes of the Existing Notes Indenture
between March 5, 2013 and the Issue Date that have been allocated to subclause
(iv), (vi), (viii) or (ix) of Section 4.07(b) of the Existing Notes Indenture
shall be allocated to the corresponding subclauses of Section 4.07(b) hereof.
Any Permitted Investments made for purposes of the Existing Notes Indenture
between March 5, 2013 and the Issue Date that have been allocated to clause
(13) of the definition thereof in the Existing Notes Indenture shall be
allocated to clause (13) of the definition of “Permitted Investments” in this
Indenture.

Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. (a) 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 such Restricted Subsidiary to:

(i)(A) pay dividends or make any other distributions to the Company or any of
its Restricted Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, or

 

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(B) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries;

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

(iii) sell, lease or transfer any of its properties or assets to the Issuers or
any of its Restricted Subsidiaries.

(b) The restrictions in Section 4.08(a) hereof shall not apply to encumbrances
or restrictions existing under or by reason of:

(i) contractual encumbrances or restrictions in effect on the Issue Date,
including pursuant to the Senior Credit Facilities and the related documentation
governing the Senior Credit Facilities and the Existing Notes and the related
documentation governing the Existing Notes;

(ii) this Indenture and the Notes;

(iii) purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature discussed in clause (iii) of
Section 4.08(a) hereof on the property so acquired;

(iv) applicable law or any applicable rule, regulation or order;

(v) any agreement or other instrument of a Person acquired by the Company or any
of its Restricted Subsidiaries in existence at the time of such acquisition (but
not created in contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person and its Subsidiaries, or the property or assets of the Person and its
Subsidiaries, so acquired;

(vi) contracts for the sale of assets, including customary restrictions with
respect to a Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary;

(vii) Secured Indebtedness otherwise permitted to be incurred pursuant to
Section 4.09 hereof and Section 4.12 hereof that limit the right of the debtor
to dispose of the assets securing such Indebtedness;

(viii) 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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(ix) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign
Subsidiaries or other Restricted Subsidiaries that are not Guarantors permitted
to be incurred subsequent to the Issue Date pursuant to the provisions of
Section 4.09 hereof;

(x) customary provisions in joint venture agreements and other similar
agreements relating solely to such joint venture;

(xi) customary provisions contained in leases or licenses of intellectual
property and other agreements, in each case, entered into in the ordinary course
of business; and

(xii) any encumbrances or restrictions of the type referred to in clauses (i),
(ii) and (iii) of Section 4.08(a) hereof imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xi) of this Section 4.08(b); provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of the
Issuers, no more restrictive with respect to such encumbrance and other
restrictions taken as a whole than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing.

Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise (collectively, “incur” and collectively, an
“incurrence”) with respect to any Indebtedness (including Acquired Indebtedness)
and the Company shall not issue any shares of Disqualified Stock and shall not
permit any Restricted Subsidiary to issue any shares of Disqualified Stock or
Preferred Stock.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(i)(A) the incurrence of Indebtedness under Credit Facilities by the Company or
any Guarantor 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 $1,469.0 million outstanding at any one time, less
principal payments actually made by the borrower thereunder in respect of
Indebtedness thereunder with Net Proceeds from an Asset Sale (provided that no
Indebtedness incurred under this clause (i)(A) may be issued in an exchange
offer for outstanding Notes);

 

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(B) the incurrence of Indebtedness under Credit Facilities by the Company or any
Guarantor in the form of letters of credit of up to $200.0 million outstanding
at any one time; and

(C) the incurrence of Indebtedness under Credit Facilities by the Company or any
Guarantor in the form of letters of credit of up to $225.0 million outstanding
at any one time (to the extent required by applicable regulatory requirements);

(ii) the incurrence by the Company and any Guarantor of Indebtedness represented
by the Notes (including (1) any increase in the principal amount of outstanding
Notes as a result of the payment of PIK Interest or any issuance of PIK Notes as
a result of the payment of PIK Interest thereon and (2) any Guarantee thereof)
(other than any Additional Notes);

(iii) Indebtedness of the Company and its Restricted Subsidiaries in existence
on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of
this Section 4.09(b)), including the Existing Notes and the related guarantees;

(iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock
and Preferred Stock incurred by the Company or any of its Restricted
Subsidiaries, to finance the purchase, lease or improvement of property (real or
personal) or equipment (other than software) that is used or useful in a Similar
Business (in each case, other than from an Affiliate of the Company or any of
its Subsidiaries, unless the Company complies with the Fairness Requirement with
respect to such transaction), whether through the direct purchase of assets or
the Capital Stock of any Person owning such assets, in an aggregate principal
amount at the date of such incurrence (including all Refinancing Indebtedness
(as defined in clause (xiii) hereof) incurred to refinance any other
Indebtedness incurred pursuant to this clause (iv)) not to exceed the greater of
(x) $80.0 million and (y) 2.0% of Total Assets; provided, however, that such
Indebtedness exists at the date of such purchase or transaction, or is created
within 270 days thereafter (it being understood that any Indebtedness,
Disqualified Stock or Preferred Stock incurred pursuant to this clause
(iv) shall cease to be deemed incurred or outstanding for purposes of this
clause (iv) but shall be deemed incurred for the purposes of the first paragraph
of this covenant from and after the first date on which the Company or such
Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock
or Preferred Stock under the first paragraph of this covenant without reliance
on this clause (iv));

(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 letters of credit in respect of
workers’ compensation claims, or

 

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other Indebtedness with respect to reimbursement type obligations regarding
workers’ compensation claims; provided, however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;

(vi) Indebtedness arising from agreements of the Company or its Restricted
Subsidiaries providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, however, that

(A) such Indebtedness is not reflected on the balance sheet of the Company, or
any of its Restricted Subsidiaries (Contingent Obligations referred to in a
footnote to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on such balance sheet for purposes of
this clause (vi)(A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at
no time exceed the gross proceeds including non-cash proceeds (the fair market
value of such non-cash proceeds being measured at the time received and without
giving effect to any subsequent changes in value) actually received by the
Company and its Restricted Subsidiaries in connection with such disposition;

(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any
such Indebtedness owing to a Restricted Subsidiary that is not the Co-Issuer or
a Guarantor is expressly subordinated in right of payment to the Notes; 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 not permitted by this clause
(vii);

(viii) 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 the Co-Issuer or a Guarantor, such
Indebtedness is expressly subordinated in right of payment to the Notes or the
Guarantee of the Notes of such Guarantor; provided further that any 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 not permitted by this clause (viii);

 

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(ix) 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 such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such shares of Preferred Stock (except to the Company
or another of its Restricted Subsidiaries) shall be deemed in each case to be an
issuance of such shares of Preferred Stock not permitted by this clause (ix);

(x) Hedging Obligations (excluding Hedging Obligations entered into for
speculative purposes) for the purpose of limiting interest rate risk with
respect to any Indebtedness permitted to be incurred pursuant to this
Section 4.09, exchange rate risk or commodity pricing risk;

(xi) obligations in respect of performance, bid, appeal and surety bonds and
completion guarantees provided by the Company or any of its Restricted
Subsidiaries in the ordinary course of business;

(xii) Indebtedness or Disqualified Stock of the Company and Indebtedness,
Disqualified Stock or Preferred Stock of the Company or any Restricted
Subsidiary not otherwise permitted hereunder in an aggregate principal amount or
liquidation preference, which when aggregated with the principal amount and
liquidation preference of all other Indebtedness, Disqualified Stock and
Preferred Stock then outstanding and incurred pursuant to this clause (xii),
does not at any one time outstanding exceed $50.0 million (it being understood
that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant
to this clause (xii) shall cease to be deemed incurred or outstanding for
purposes of this clause (xii) but shall be deemed incurred for the purposes of
Section 4.09(a) hereof from and after the first date on which the Company or
such Restricted Subsidiary could have incurred such Indebtedness, Disqualified
Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this
clause (xii));

 

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(xiii) the incurrence or issuance by the Company or any Restricted Subsidiary of
Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or
refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as
permitted under Section 4.09(a) hereof and clauses (ii), (iii) and (iv) of this
Section 4.09(b), this clause (xiii) and clause (xiv) of this Section 4.09(b),
including additional Indebtedness, Disqualified Stock or Preferred Stock
incurred to pay premiums (including reasonable tender premiums), defeasance
costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to
its respective maturity; provided, however, that such Refinancing Indebtedness:

(A) has a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred which is not less than the remaining Weighted Average
Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock
being refunded or refinanced,

(B) to the extent such Refinancing Indebtedness refinances (1) Indebtedness
subordinated or pari passu to the Notes or any Guarantee thereof, such
Refinancing Indebtedness is subordinated or pari passu to the Notes or the
Guarantee at least to the same extent as the Indebtedness being refinanced or
refunded or (2) Disqualified Stock or Preferred Stock, such Refinancing
Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and

(C) shall not include:

(1) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the
Company that is not an Issuer or a Guarantor that refinances Indebtedness,
Disqualified Stock or Preferred Stock of the Company;

(2) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the
Company that is not an Issuer or a Guarantor that refinances Indebtedness,
Disqualified Stock or Preferred Stock of a Guarantor; or

(3) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a
Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or
Preferred Stock of an Unrestricted Subsidiary;

(xiv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or
a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that
are acquired by the Company or any Restricted Subsidiary or merged into the
Company or a Restricted Subsidiary in accordance with the terms of this
Indenture; provided that after giving effect to such acquisition or merger,
either:

(a) both (A) the Fixed Charge Coverage Ratio on a consolidated basis for the
Company and its Restricted Subsidiaries’ most recently ended four 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 there from and

 

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consummation of such acquisition), 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 and such acquisition had
occurred at the beginning of such four-quarter period and (B) the Consolidated
Leverage Ratio for the Company and its Restricted Subsidiaries’ most recently
ended four 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 not more
than 3.25 to 1.00, determined on a pro forma basis (including a pro forma
application of the net proceeds there from and consummation of such
acquisition), 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 and such acquisition had occurred at the
beginning of such four-quarter period; or

(b) both (A) the Fixed Charge Coverage Ratio of the Company and the Restricted
Subsidiaries is greater than immediately prior to such acquisition or merger,
and (B) the Consolidated Leverage Ratio of the Company and its Restricted
Subsidiaries is lower than immediately prior to such acquisition or merger;

(xv) 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;

(xvi) Indebtedness of the Company or any of its Restricted Subsidiaries
supported by a letter of credit issued pursuant to the Credit Facilities, in a
principal amount not in excess of the stated amount of such letter of credit;

(xvii)(A) any guarantee by the Company or a Restricted Subsidiary of
Indebtedness or other obligations of any Restricted Subsidiary so long as the
incurrence of such Indebtedness incurred by such Restricted Subsidiary is
permitted under the terms of this Indenture,

(B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company
provided that such guarantee is incurred in accordance with Section 4.15 hereof,
or

(C) any incurrence by the Co-Issuer of Indebtedness as a co-issuer of
Indebtedness of the Company that was permitted to be incurred by another
provision of this covenant; and

 

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(xviii) Indebtedness of Foreign Subsidiaries of the Company incurred not to
exceed at any one time outstanding and together with any other Indebtedness
incurred under this clause (xviii) 5.0% of the Total Assets of the Foreign
Subsidiaries (it being understood that any Indebtedness incurred pursuant to
this clause (xviii) shall cease to be deemed incurred or outstanding for
purposes of this clause (xviii) but shall be deemed incurred for the purposes of
Section 4.09(a) hereof from and after the first date on which the Company or
such Restricted Subsidiary could have incurred such Indebtedness under
Section 4.09(a) hereof without reliance on this clause(xviii)).

(c) For purposes of determining compliance with this Section 4.09:

(i) in the event that an item of Indebtedness, Disqualified Stock or Preferred
Stock (or any portion thereof) meets the criteria of more than one of the
categories of permitted Indebtedness, Disqualified Stock or Preferred Stock
described in clauses (i) through (xviii) of Section 4.09(b) hereof or is
entitled to be incurred pursuant to Section 4.09(a) hereof, the Company, in its
sole discretion, shall classify or reclassify such item of Indebtedness,
Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be
required to include the amount and type of such Indebtedness, Disqualified Stock
or Preferred Stock in one of the above clauses; and

(ii) at the time of incurrence, the Company shall be entitled to divide and
classify an item of Indebtedness in more than one of the types of Indebtedness
described in Sections 4.09(a) and 4.09(b) hereof;

provided that (i) all Indebtedness outstanding under the Credit Facilities on
the Issue Date shall be treated as incurred on the Issue Date under clauses
(i)(A) or (i)(B) of Section 4.09(b) hereof and (ii) all Indebtedness (other than
the Existing Notes and the related guarantees) incurred between March 5, 2013
and the Issue Date that has been allocated to Section 4.09(a) or any of the
clauses of Section 4.09(b) of the Existing Notes Indenture shall be allocated to
Section 4.09(a) or the corresponding clause of Section 4.09(b) hereof as of the
Issue Date and may not be reallocated to clause (iii) of Section 4.09(b) hereof.

Accrual of interest, the accretion of accreted value and the payment of interest
in the form of additional Indebtedness (including PIK Payments), Disqualified
Stock or Preferred Stock shall not be deemed to be an incurrence of
Indebtedness, Disqualified Stock or Preferred Stock for purposes of this
Section 4.09 but shall be included as Fixed Charges.

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, in
the case

 

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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.

The principal amount of any Indebtedness incurred to refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such respective Indebtedness is denominated that is
in effect on the date of such refinancing.

Section 4.10. Asset Sales. (a) The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(i) the Company or such Restricted Subsidiary, 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

(ii) except in the case of a Permitted Asset Swap, at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary, as
the case may be, is in the form of cash or Cash Equivalents; provided however,
that for purposes of this Section 4.10 and for no other purpose, each of the
following shall be deemed to be cash:

(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s
most recent balance sheet or in the footnotes thereto) of the Company or such
Restricted Subsidiary, other than liabilities that are by their terms
subordinated to the Notes or, in the case of liabilities of a Guarantor, the
Guarantee of such Guarantor, that are assumed by the transferee of any such
assets and for which the Company and all of its Restricted Subsidiaries have
been validly released by all creditors in writing,

(B) any securities received by the Company or such Restricted Subsidiary from
such transferee that are converted by the Company or such Restricted Subsidiary
into cash (to the extent of the cash received) within 180 days following the
closing of such Asset Sale, and

(C) any Designated Non-cash Consideration received by the Company or such
Restricted Subsidiary in such Asset Sale having an aggregate fair market value,
taken together with all other Designated Non-cash Consideration received
pursuant to

 

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this clause (C) that is at that time outstanding, not to exceed 3.0% of Total
Assets 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.

(b) Within 450 days after the receipt of any Net Proceeds of any Asset Sale,1
the Company or such Restricted Subsidiary, at its option, may apply the Net
Proceeds from such Asset Sale,

(i) to permanently reduce:

(A) any Secured Indebtedness (and to correspondingly reduce commitments with
respect thereto);

(B) Obligations under Indebtedness ranking pari passu with the Notes (and to
correspondingly reduce commitments with respect thereto) or reduce Obligations
under the Notes as provided under Section 3.07, through open-market purchases
(to the extent such purchases are at or above 100% of the principal amount
thereof) or by making an Asset Sale Offer (in accordance with the procedures set
forth under Section 4.10(c) hereof); provided that in the case of a reduction of
Obligations other than under the Notes, the Company shall use commercially
reasonable efforts to equally and ratably reduce Obligations under the Notes as
provided under Section 3.07 hereof, through open-market purchases (to the extent
such purchases are at or above 100% of the principal amount thereof), or

(C) with respect to assets of a Restricted Subsidiary that is not the Co-Issuer
or a Guarantor, the Indebtedness of such Restricted Subsidiary, other than
Indebtedness owed to the Company or another Restricted Subsidiary,

(ii) to make (A) an Investment in any one or more businesses, provided that such
Investment in any business is in the form of the acquisition of Capital Stock
and results in the Company or another of its Restricted Subsidiaries, as the
case may be, owning an amount of the Capital Stock of such business such that it
constitutes a Restricted Subsidiary, (B) capital expenditures or
(C) acquisitions of other assets, in each of (A), (B) and (C), used or useful in
a Similar Business, or

 

1  NTD: Issuers to confirm that no Asset Sales have occurred since March 5, 2013
that might require an application of proceeds under the Existing Notes Indenture
(e.g. confirm Sarasota sale is for less than $10mm).

 

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(iii) to make an investment in (A) any one or more businesses, provided that
such Investment in any business is in the form of the acquisition of Capital
Stock and results in the Company or another of its Restricted Subsidiaries, as
the case may be, owning an amount of the Capital Stock of such business such
that it constitutes a Restricted Subsidiary, (B) properties or (C) acquisitions
of other assets that, in each of (A), (B) and (C), replace the businesses,
properties and/or assets that are the subject of such Asset Sale;

provided that, in the case of clauses (ii) and (iii) above, a binding commitment
shall be treated as a permitted application of the Net Proceeds from the date of
such commitment so long as the Company, or such other Restricted Subsidiary
enters into such commitment with the good faith expectation that such Net
Proceeds shall be applied to satisfy such commitment within 180 days of such
commitment (an “Acceptable Commitment”) provided further that if any Acceptable
Commitment is later cancelled or terminated for any reason before such Net
Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds.

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as
provided and within the time period set forth in Section 4.10(b) shall be deemed
to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Issuers shall make an offer to all Holders of the
Notes and, if required by the terms of any Indebtedness that is pari passu with
the Notes (“Pari Passu Indebtedness”), to the holders of such Pari Passu
Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate
principal amount of the Notes and such Pari Passu Indebtedness that is an
integral multiple of $1,000 (but in minimum amounts of $2,000) 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, plus accrued and unpaid interest
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in this Indenture. The Issuers shall commence an Asset Sale
Offer with respect to Excess Proceeds within ten Business Days after the date
that Excess Proceeds exceed $25.0 million by mailing the notice required
pursuant to the terms of this Indenture, with a copy to the Trustee.

To the extent that the aggregate amount of Notes 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, subject to other covenants contained in this Indenture. If
the aggregate principal amount of Notes or the Pari Passu Indebtedness
surrendered by such holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such Pari Passu Indebtedness to be purchased
on a pro rata basis based on the accreted value or principal amount of the Notes
or such Pari Passu Indebtedness tendered. Upon completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero. Additionally, the
Issuers, at their option, may make an Asset Sale Offer using proceeds from any
Asset Sale at any time after consummation of such Asset Sale. Upon consummation
of such Asset Sale Offer, any Net Proceeds not required to be used to purchase
Notes pursuant to the terms of this Indenture shall not be deemed Excess
Proceeds.

 

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(d) Pending the final application of any Net Proceeds pursuant to this
Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds
temporarily to reduce Indebtedness outstanding under a revolving credit facility
or otherwise invest such Net Proceeds in any manner not prohibited by this
Indenture.

(e) The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes 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 Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations described
in this Indenture by virtue thereof.

Section 4.11. Transactions with Affiliates. (a) The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Company (each of the
foregoing, an “Affiliate Transaction”) involving aggregate payments or
consideration in excess of $5.0 million, unless:

(i) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or its relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(ii) the Company delivers to the Trustee with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
payments or consideration in excess of $10.0 million, a resolution adopted by
the majority of the disinterested members of the board of directors of the
Company approving such Affiliate Transaction and set forth in an Officer’s
Certificate certifying that such Affiliate Transaction complies with clause
(i) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

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

 

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(ii) Restricted Payments permitted by Section 4.07 hereof and the definition of
“Permitted Investments”;

(iii) [Reserved];

(iv) the payment of reasonable and customary fees paid to, and indemnities
provided on behalf of, officers, directors, employees or consultants of Issuers,
any of its direct or indirect parent companies or any of its Restricted
Subsidiaries;

(v) 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 stating that the terms are not
materially less favorable to the Company or its relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person on an
arm’s-length basis;

(vi) any agreement as in effect as of the Issue Date, or any amendment thereto
(so long as any such amendment is not disadvantageous to the Holders when taken
as a whole as compared to the applicable agreement as in effect on the Issue
Date);

(vii) the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of, 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 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 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 (vii) to the extent that the terms of any such
amendment or new agreement are not otherwise disadvantageous to the Holders when
taken as a whole;

(viii) [Reserved];

(ix) 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 of the Company or the senior management thereof, or are on
terms at least as favorable as might reasonably have been obtained at such time
from an unaffiliated party;

 

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(x) the issuance of Equity Interests (other than Disqualified Stock) of the
Company to any Permitted Holder or to any director, officer, employee or
consultant;

(xi) payments by the Company or any of its Restricted Subsidiaries to any of the
Investors (or their Affiliates) 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 approved by a majority of the board of directors
of the Company in good faith;

(xii) payments or loans (or cancellation of loans) to employees or consultants
of the Company, any of its direct or indirect parent companies or any of its
Restricted Subsidiaries and employment agreements, stock option plans and other
similar arrangements with such employees or consultants which, in each case, are
approved by the Company in good faith; and

(xiii) investments by the Investors in securities of the Issuers or any of its
Restricted Subsidiaries so long as (A) the investment is being offered generally
to other investors on the same or more favorable terms and (B) the investment
constitutes less than 5% of the proposed or outstanding issue amount of such
class of securities.

Section 4.12. Liens. (a) The Company shall not, and shall not permit the
Co-Issuer or any Guarantor to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (except Permitted Liens) on any asset or property of
the Company, the Co-Issuer or any Guarantor, or any income or profits therefrom,
or assign or convey any right to receive income therefrom, and (b) no Restricted
Subsidiary (other than the Co-Issuer or any Guarantor) will, directly or
indirectly, create, incur, assume or suffer to exist any Lien (except Permitted
Liens) on any asset or property of such Restricted Subsidiary (excluding
accounts receivable), or any income or profits therefrom, or assign or convey
any right to receive income therefrom, in each case, in support of Indebtedness
of either Issuer or any Guarantor, other than in respect of cash in connection
with letters of credit issued pursuant to Section 4.09(b)(i)(B) or
Section 4.09(b)(i)(C), unless, in the case of either (a) or (b):

(i) in the case of Liens securing Subordinated Indebtedness or other
Indebtedness that is subordinated or junior in right of payment to the Notes and
the related Guarantees, the Notes and related Guarantees are secured by a Lien
on such property, assets or proceeds that is senior in priority to such Liens;
or

(ii) in all other cases, the Notes or the Guarantees are equally and ratably
secured, except that the foregoing shall not apply to Liens securing the Notes
and the related Guarantees.

 

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Section 4.13. Corporate Existence. Subject to Article 5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect (a) its corporate existence, and the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (b) the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries (other than the
Co-Issuer), if the Company in good faith shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries, taken as a whole.

Section 4.14. Offer to Repurchase Upon Change of Control . (a) If a Change of
Control occurs, unless the Issuers have previously or concurrently mailed a
redemption notice with respect to all the outstanding Notes as described under
Section 3.07 hereof, the Issuers shall make an offer to purchase all of the
Notes pursuant to the offer described below (the “Change of Control Offer”) at a
price in cash (the “Change of Control Payment”) equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest to the date of
purchase, subject to the right of Holders of the Notes of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date.
Within 30 days following any Change of Control, the Issuers shall send notice of
such Change of Control Offer by first-class mail, with a copy to the Trustee, to
each Holder of Notes to the address of such Holder appearing in the security
register with a copy to the Trustee, with the following information:

(i) that a Change of Control Offer is being made pursuant to this Section 4.14
and that all Notes properly tendered pursuant to such Change of Control Offer
will be accepted for payment by the Issuers;

(ii) the purchase price and the purchase date, which will be no earlier than 30
days nor later than 60 days from the date such notice is mailed (the “Change of
Control Payment Date”);

(iii) that any Note not properly tendered will remain outstanding and continue
to accrue interest;

(iv) that unless the Issuers default in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest on the Change of Control Payment Date;

(v) that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender such Notes, with the form entitled
“Option of Holder to Elect Purchase” on the reverse of such Notes completed, to
the paying agent specified in the notice at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date;

 

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(vi) that Holders shall be entitled to withdraw their tendered Notes and their
election to require the Issuers to purchase such Notes, provided that the paying
agent receives, not later than the close of business on the 30th day following
the date of the Change of Control notice, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder of the Notes, the
principal amount of Notes tendered for purchase, and a statement that such
Holder is withdrawing its tendered Notes and its election to have such Notes
purchased;

(vii) that if the Issuers are redeeming less than all of the Notes, the Holders
of the remaining Notes will be issued new Notes and such new Notes will be equal
in principal amount to the unpurchased portion of the Notes surrendered. The
unpurchased portion of the Notes must be equal to $2,000 or an integral multiple
of $1.00 in excess thereof (and, if PIK Interest has been paid, in minimum
denominations of $1.00 or an integral multiple of $1.00 in excess thereof); and

(viii) the other instructions, as determined by the Issuers, consistent with
this Section 4.14, that a Holder must follow.

The notice, if mailed in a manner herein provided, shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. If
(a) the notice is mailed in a manner herein provided and (b) any Holder fails to
receive such notice or a Holder receives such notice but it is defective, such
Holder’s failure to receive such notice or such defect shall not affect the
validity of the proceedings for the purchase of the Notes as to all other
Holders that properly received such notice without defect. The Issuers shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws or
regulations are applicable in connection with the repurchase of Notes pursuant
to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this
Section 4.14, the Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations under
this Section 4.14 by virtue thereof.

(b) On the Change of Control Payment Date, the Issuers shall, to the extent
permitted by law,

(i) accept for payment all Notes issued by them or portions thereof properly
tendered pursuant to the Change of Control Offer,

(ii) deposit with the Paying Agent an amount equal to the aggregate Change of
Control Payment in respect of all Notes or portions thereof so tendered, and

 

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(iii) deliver, or cause to be delivered, to the Trustee for cancellation the
Notes so accepted together with an Officer’s Certificate to the Trustee stating
that such Notes or portions thereof have been tendered to and purchased by the
Issuers.

(c) The Issuers shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Section 4.14 applicable to a Change of Control Offer made by
the Issuers and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer. Notwithstanding anything to the contrary herein, a
Change of Control Offer may be made in advance of a Change of Control,
conditional upon such Change of Control, if a definitive agreement is in place
for the Change of Control at the time of the making of the Change of Control
Offer.

(d) Other than as specifically provided in this Section 4.14, any purchase
pursuant to this Section 4.14 shall be made pursuant to the provisions of
Section 3.02, Section 3.05 and Section 3.06 hereof.

Section 4.15. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries. The Company shall not permit any of its Wholly-Owned Subsidiaries
that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such
non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities),
other than the Co-Issuer, a Guarantor or a Foreign Subsidiary guaranteeing
Indebtedness of another Foreign Subsidiary, to guarantee the payment of any
Indebtedness of the Issuers or any Guarantor unless:

(a) such Restricted Subsidiary within 30 days executes and delivers a
supplemental indenture to this Indenture, the form of which is attached as
Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary,
except that with respect to a guarantee of Indebtedness of the Company, the
Co-Issuer or any Guarantor:

(i) if such Indebtedness is by its express terms subordinated in right of
payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such
Restricted Subsidiary with respect to such Indebtedness shall be subordinated in
right of payment to such Guarantee substantially to the same extent as such
Indebtedness is subordinated to the Notes; and

(b) such Restricted Subsidiary waives and shall not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Guarantee;

provided that this Section 4.15 shall not be applicable to any guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary.

 

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Section 4.16. Discharge and Suspension of Covenants. (a) If after the Issue Date
(i) the Notes have Investment Grade Ratings from both Rating Agencies and
(ii) no Default has occurred and is continuing under this Indenture (the
occurrence of the events described in the foregoing clauses (i) and (ii) being
collectively referred to as a “Covenant Suspension Event”), the Company and its
Restricted Subsidiaries will not be subject to the following covenants:
Section 4.07 hereof, Section 4.08 hereof, Section 4.09 hereof, Section 4.10
hereof, Section 4.11 hereof, Section 4.14 hereof, Section 4.15 hereof and clause
(iv) of Section 5.01(a) (collectively, the “Suspended Covenants”).

(b) In the event that the Company and its Restricted Subsidiaries are not
subject to the Suspended Covenants under this Indenture for any period of time
as a result of the foregoing, and on any subsequent date (the “Reversion Date”)
one or both of the Rating Agencies withdraw their Investment Grade Rating or
downgrade the rating assigned to the Notes below an Investment Grade Rating,
then the Company and its Restricted Subsidiaries shall thereafter again be
subject to the Suspended Covenants under this Indenture with respect to future
events. The period of time between the suspension of the Suspended Covenants and
the Reversion Date is referred to herein as the “Suspension Period.” The
Guarantees of the Guarantors will be suspended during the Suspension Period and
reinstated upon termination thereof. Additionally, upon the occurrence of a
Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall
be reset at zero.

(c) Notwithstanding the foregoing, in the event of any reinstatement pursuant to
Section 4.16(b), no action taken or omitted to be taken by the Company or any of
its Restricted Subsidiaries prior to such reinstatement shall give rise to a
Default or Event of Default under this Indenture with respect to the Notes;
provided that (i) with respect to Restricted Payments made after any such
reinstatement, the amount of Restricted Payments made will be calculated as
though the covenant described in Section 4.07 hereof had been in effect prior
to, but not during the Suspension Period; provided that any Subsidiaries
designated as Unrestricted Subsidiaries during the Suspension Period shall
automatically become Restricted Subsidiaries on the Reversion Date (subject to
the Company’s right to subsequently designate them as Unrestricted in accordance
with this Indenture) and (ii) all Indebtedness incurred, or Disqualified Stock
issued, during the Suspension Period will be classified to have been incurred or
issued pursuant to clause (iii) of Section 4.09(b).

(d) The Company shall deliver promptly to the Trustee an Officer’s Certificate
notifying it of any Covenant Suspension Event or reinstatement of covenants
under this Section 4.16.

Section 4.17. Limitation on Activities of the Co-Issuer. The Co-Issuer shall not
hold any assets, become liable for any obligations or engage in any

 

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business activities; provided that it may be a co-obligor with respect to the
Notes or any other Indebtedness issued by the Company, and may engage in any
activities directly related thereto or necessary in connection therewith. The
Co-Issuer shall be a Wholly-Owned Subsidiary of the Company at all times.

ARTICLE 5

SUCCESSORS

Section 5.01. Merger, Consolidation or Sale of All or Substantially All Assets.
(a) The Company shall not consolidate or merge with or into or wind up into
(whether or not the Company 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 unless:

(i) either: (A) the Company is the surviving Person; or (B) the Person formed by
or surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation, partnership, trust 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 Person, as the
case may be, being herein called the “Successor Company”);

(ii) the Successor Company, if other than the Company, expressly assumes all the
obligations of the Company under the Notes pursuant to supplemental indentures
or other documents or instruments in form reasonably satisfactory to the
Trustee;

(iii) immediately after such transaction, no Default exists;

(iv) immediately after giving pro forma effect to such transaction and any
related financing transactions, as if such transactions had occurred at the
beginning of the applicable four quarter period,

(A)(i) the Successor Company’s Fixed Charge Coverage Ratio on a consolidated
basis for the Company and its Restricted Subsidiaries’ most recently ended four
fiscal quarters for which internal financial statements are available
immediately preceding the date on which the transactions occur would have been
at least 2.00 to 1.00, had such transactions occurred at the beginning of such
four-quarter period and (ii) in the event that after consummation of such
transactions, the Successor Company and its Restricted Subsidiaries would have
obligations of Indebtedness in excess of the obligations in respect of
Indebtedness of the Company and its Restricted Subsidiaries immediately before
consummation of the transactions, the Consolidated Leverage Ratio for the
Company and its Restricted

 

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Subsidiaries’ most recently ended four fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
transactions occur would have been not more than 3.25 to 1.00, had such
transactions occurred at the beginning of such four-quarter period, or

(B)(i) the Fixed Charge Coverage Ratio for the Successor Company, the Company
and its Restricted Subsidiaries would be greater than such ratio for the Company
and its Restricted Subsidiaries immediately prior to such transaction, and
(ii) in the event that after consummation of such transactions, the Successor
Company would have obligations in respect of Indebtedness in excess of the
obligations in respect of Indebtedness of the Company and its Restricted
Subsidiaries immediately before consummation of the transactions, the
Consolidated Leverage Ratio of the Company and its Restricted Subsidiaries would
be less 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, in which case Section 5.01(c)(i)(B) hereof shall apply, shall have by
supplemental indenture confirmed that its Guarantee shall apply to such Person’s
obligations under this Indenture and the Notes; and

(vi) the Company shall have delivered to the Trustee an Officer’s Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indentures, if any, comply with this Indenture.

(b) Notwithstanding clauses (iii) and (iv) of Section 5.01(a) hereof,

(i) any Restricted Subsidiary may consolidate with or merge into or transfer all
or part of its properties and assets to the Company, and

(ii) the Company may merge with an Affiliate of the Company, solely for the
purpose of reincorporating the Company in the United States or any State
thereof, the District of Columbia or any territory thereof so long as the amount
of Indebtedness of the Issuers and its Restricted Subsidiaries is not increased
thereby.

 

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(c) Subject to Section 10.06 governing release of a Guarantee upon the sale,
disposition or transfer of a Guarantor, no Guarantor (other than the
Parent)shall, and the Company shall not permit any Guarantor (other than the
Parent) to, consolidate or merge with or into or wind up into (whether or not
the Company or 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 unless:

(i)(A) 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
will have been made is a Person organized or existing under the laws of the
jurisdiction of organization of such Guarantor, as the case may be, or 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 Person”);

(B) the Successor Person, if other than such Guarantor, expressly assumes all
the obligations of such Guarantor under this Indenture and such Guarantor’s
related Guarantee pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

(D) the Company shall have delivered to the Trustee an Officer’s Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indentures, if any, comply with this Indenture; or

(ii) the transaction is made in compliance with Section 4.10 hereof.

(d) Notwithstanding the foregoing, any Guarantor may merge into or transfer all
or part of its properties and assets to another Guarantor or the Company.

(e) The Co-Issuer shall not consolidate with, merge into, sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its property
and assets to, any Person, or permit any Person to merge with or into the
Co-Issuer unless:

(i) concurrently therewith, a corporate Wholly-Owned Restricted Subsidiary of
the Company organized and validly existing under the laws of the United States
or any jurisdiction thereof (which may be the continuing Person as a result of
such transaction) shall expressly assume, by a supplemental Indenture, executed
and delivered to the Trustee and in form and substance satisfactory to the
Trustee, all of the obligations of an issuer under the Notes and this Indenture;
or

(ii) after giving effect thereto, at least one obligor on the Notes shall be a
corporation organized and validly existing under the laws of the United States
or any jurisdiction thereof; and

 

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(iii) immediately after such transaction, no Default or Event of Default will
have occurred and be continuing.

Section 5.02. Successor Substituted. Upon any consolidation or merger, or any
sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company or the Co-Issuer in accordance
with Section 5.01 hereof, the successor formed by such consolidation or into or
with which the Company or the Co-Issuer, as the case may be, is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the Company or the Co-Issuer, as the
case may be, shall refer instead to the successor corporation and not to the
Company or the Co-Issuer, as the case may be), and may exercise every right and
power of the Company or the Co-Issuer, as the case may be, under this Indenture
with the same effect as if such successor Person had been named as the Company
or the Co-Issuer, as the case may be, herein; provided that the predecessor
Company shall not be relieved from the obligation to pay the principal of and
interest on the Notes except in the case of a sale, assignment, transfer,
conveyance or other disposition of all of the assets of the Company that meets
the requirements of Section 5.01 hereof.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default. (a) An “Event of Default” wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be 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):

(i) default in payment when due and payable, upon redemption, acceleration or
otherwise, of principal of, or premium, if any, on the Notes;

(ii) default for 30 days or more in the payment when due of interest on or with
respect to the Notes;

(iii) failure by the Issuers or any Guarantor for 60 days after receipt of
written notice given by the Trustee or the Holders of not less 25% in principal
amount of the Notes to comply with any of their respective obligations,
covenants or agreements (other than a default referred to in clauses (i) and
(ii) above) contained in this Indenture or the Notes;

(iv) default under any mortgage, indenture or instrument under which there is
issued or by which there is secured or evidenced any

 

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Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries, other than Indebtedness owed to the Company or a
Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is
created after the issuance of the Notes, if both:

(A) such default either results from the failure to pay any principal of such
Indebtedness at its stated final maturity (after giving effect to any applicable
grace periods) or relates to an obligation other than the obligation to pay
principal of any such Indebtedness at its stated final maturity and results in
the holder or holders of such Indebtedness causing such Indebtedness to become
due prior to its stated maturity; and

(B) the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
stated final maturity (after giving effect to any applicable grace periods), or
the maturity of which has been so accelerated, aggregate $50.0 million or more
at any one time outstanding;

(v) failure by the Company or any Significant Subsidiary to pay final judgments
aggregating in excess of $50.0 million, which final judgments remain unpaid,
undischarged and unstayed for a period of more than 60 days after such judgment
becomes final, and in the event such judgment is covered by insurance, an
enforcement proceeding has been commenced by any creditor upon such judgment or
decree which is not promptly stayed;

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

(A) commences proceedings to be adjudicated bankrupt or insolvent;

(B) consents to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under applicable Bankruptcy law;

(C) consents to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of it or for all or substantially all of
its property;

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

 

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

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

(A) is for relief against the Company or any of its Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in a proceeding in which
the Company or any such Restricted Subsidiary that is a Significant Subsidiary
or any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(B) appoints a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, or for all or substantially
all of the property of the Company or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary; or

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

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

(viii) the Guarantee of any Significant Subsidiary shall for any reason cease to
be in full force and effect or be declared null and void or any responsible
officer of any Guarantor that is a Significant Subsidiary, as the case may be,
denies that it has any further liability under its Guarantee or gives notice to
such effect, other than by reason of the termination of this Indenture or the
release of any such Guarantee in accordance with this Indenture; or

(ix) material breach by the Company of any of its obligations under the
Restructuring Support Agreement (it being understood, for the avoidance of
doubt, that the Company’s failure to consummate the debt exchanges contemplated
by the Restructuring Support Agreement within the time, and subject to the terms
and conditions, set forth therein shall constitute a material breach).

 

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(b) In the event of any Event of Default specified in clause (iv) of
Section 6.01(a) hereof, such Event of Default and all consequences thereof
(excluding any resulting payment default, other than as a result of acceleration
of the Notes) shall be annulled, waived and rescinded, automatically and without
any action by the Trustee or the Holders, if within 20 days after such Event of
Default arose:

(i) the Indebtedness or guarantee that is the basis for such Event of Default
has been discharged; or

(ii) holders thereof have rescinded or waived the acceleration, notice or action
(as the case may be) giving rise to such Event of Default; or

(iii) the default that is the basis for such Event of Default has been cured.

Section 6.02. Acceleration. (a) If any Event of Default (other than an Event of
Default specified in clause (vi) or (vii) of Section 6.01(a) hereof with respect
to the Company) occurs and is continuing under this Indenture, the Trustee or
the Holders of at least 25% in principal amount of the then total outstanding
Notes may declare the principal, premium, if any, interest and any other
monetary obligations on all the then outstanding Notes to be due and payable
immediately.

Upon such declaration, such principal and interest shall be due and payable
immediately. The Trustee shall have no obligation to accelerate the Notes if and
so long as a committee of its Responsible Officers in good faith determines
acceleration is not in the best interest of the Holders of the Notes.

Notwithstanding the foregoing, in the case of an Event of Default arising under
clause (vi) or (vii) of Section 6.01(a) hereof with respect to the Company, all
outstanding Notes shall be due and payable immediately without further action or
notice.

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

Section 6.03. Other Remedies. If an Event of Default occurs and is continuing,
the Trustee may pursue any available remedy to collect the payment of principal,
premium, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.

 

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

Section 6.04. Waiver of Past Defaults. Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default and its consequences hereunder, except a continuing Default in the
payment of the principal of, premium, if any, or interest on, any Note held by a
non-consenting Holder (including in connection with an Asset Sale Offer or a
Change of Control Offer); provided, subject to Section 6.02 hereof, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

Section 6.05. Control by Majority. Holders of a majority in principal amount of
the then total outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder of a Note or that would involve the Trustee in personal liability.

Section 6.06. Limitation on Suits. Subject to Section 6.07 hereof, no Holder of
a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(a) such Holder has previously given the Trustee notice that an Event of Default
is continuing;

(b) Holders of at least 25% in principal amount of the total outstanding Notes
have requested the Trustee to pursue the remedy;

(c) Holders of the Notes have offered the Trustee security or indemnity
reasonably satisfactory to it against any loss, liability or expense;

(d) the Trustee has not complied with such request within 60 days after the
receipt thereof and the offer of security or indemnity; and

 

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(e) Holders of a majority in principal amount of the total outstanding Notes
have not given the Trustee a direction inconsistent with such request within
such 60 day period.

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

Section 6.07. Rights of Holders of Notes to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, premium, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
Asset Sale Offer or a Change of Control Offer), 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)(i) or (ii) hereof occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuers for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

Section 6.09. Restoration of Rights and Remedies. If the Trustee or any Holder
has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceedings, the Issuers,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.

Section 6.10. Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes in Section 2.07 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

 

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Section 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee
or of any Holder of any Note to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

Section 6.12. Trustee May File Proofs of Claim. The Trustee is authorized to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes including the Co-Issuer and the Guarantors), its creditors or its property
and shall be entitled and empowered to participate as a member in any official
committee of creditors appointed in such matter and to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

Section 6.13. Priorities. If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:

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

(b) to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, if any, and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium, if any, and interest, respectively; and

 

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(c) to the Company or to such party as a court of competent jurisdiction shall
direct, including the Co-Issuer or a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.13.

Section 6.14. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.14 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person’s own affairs.

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

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

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture.

 

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

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

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

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

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

(e) The Trustee shall be under no obligation to exercise any of its rights or
powers under this Indenture at the request or direction of any of the Holders of
the Notes unless the Holders have offered to the Trustee indemnity or security
reasonably satisfactory to it against any loss, liability or expense.

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

Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated in
the document, 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 Issuers,
personally or by agent or attorney at the sole cost of the Issuers and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.

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

 

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

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

(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from an Issuer shall be sufficient if signed by an
Officer of such Issuer. The Trustee may request that the Issuers deliver an
incumbency certificate setting forth the names of individuals or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which incumbency certificate may be signed by any person authorized
to sign an Officer’s Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded.

(f) None of the provisions of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise to incur any liability, financial or
otherwise, in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or indemnity reasonably satisfactory to it against
such risk or liability is not assured to it. The Trustee shall not be required
to give any note, bond or surety in respect of the execution of the trusts and
powers under this Indenture.

(g) The Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a Default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.

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

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

(j) Reserved.

(k) Delivery of reports, information and documents to the Trustee pursuant to
Section 4.03 is for informational purposes only and the Trustee’s receipt of
such shall not constitute actual or constructive knowledge or notice of

 

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any information contained therein or determinable from information contained
therein, including the Issuers’ compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer’s
Certificates).

(l) The permissive rights of the Trustee enumerated hereunder, including the
right to obtain an Officer’s Certificate and an Opinion of Counsel to take
certain actions as enumerated in this Indenture, shall not be construed as
duties.

Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuers or any Affiliate of the Issuers with the same rights it would
have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest, as defined in Section 310(b) of the Trust Indenture Act,
it must eliminate such conflict within 90 days, apply to the SEC for permission
to continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Section 7.10 and Section 7.11 hereof.

Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity, sufficiency or adequacy of this
Indenture or the Notes, it shall not be accountable for the Issuers’ use of the
proceeds from the Notes or any money paid to the Issuers or upon the Issuers’
direction under any provision of this Indenture, it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication. The Trustee shall not be responsible to make any calculation
with respect to any matter under this Indenture. The Trustee shall have no duty
to monitor or investigate the Issuers’ compliance with or the breach of, or
cause to be performed or observed, any representation, warranty, or covenant, or
agreement of any Person, other than the Trustee, made in this Indenture

Section 7.05. Notice of Defaults. If a Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default within 90 days after it occurs. Except in the case of a Default
relating to the payment of principal, premium, if any, or interest on any Note,
the Trustee may withhold from the Holders notice of any continuing Default if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes. The
Trustee shall not be deemed to know of any Default unless a Responsible Officer
of the Trustee has actual knowledge thereof or unless written notice of any
event which is such a Default is received by the Trustee at the Corporate Trust
Office of the Trustee.

Section 7.06. Reports by Trustee to Holders of the Notes. Within 60 days after
each February 15, beginning with the February 15 following the date of

 

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this Indenture, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date
that complies with Trust Indenture Act Section 313(a) (but if no event described
in Trust Indenture Act Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by Trust Indenture Act Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall
be mailed to the Issuers and filed with the SEC and each stock exchange on which
the Notes are listed in accordance with Trust Indenture Act Section 313(d). The
Issuers shall promptly notify the Trustee when the Notes are listed on any stock
exchange.

Section 7.07. Compensation and Indemnity. The Issuers shall pay to the Trustee
from time to time such compensation for its acceptance of this Indenture and
services hereunder as the parties shall agree in writing from time to time. The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee’s
agents and counsel.

The Issuers and the Guarantors, jointly and severally, shall indemnify the
Trustee for, and hold the Trustee harmless against, any and all loss, damage,
claims, liability or expense (including attorneys’ fees) incurred by it 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 against the Issuers or any of the Guarantors (including
this Section 7.07) or defending itself against any claim whether asserted by any
Holder, the Issuers, any Guarantor or any other Person, or liability in
connection with the acceptance, exercise or performance of any of its powers or
duties hereunder). The Trustee shall notify the Issuers promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the Issuers
shall not relieve the Issuers of their obligations hereunder. The Issuers shall
defend the claim and the Trustee may have separate counsel and the Issuers shall
pay the fees and expenses of such counsel. The Issuers need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuers under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture, the earlier resignation or removal
of the Trustee or the termination for any reason of this Indenture.

To secure the payment obligations of the Issuers and the Guarantors in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal

 

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and interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture, the earlier resignation or removal of the Trustee
or the termination for any reason of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(a)(vi) or (vii) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

The Trustee shall comply with the provisions of Trust Indenture Act
Section 313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee. A resignation or removal of the Trustee
and appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:

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

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

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

(d) the Trustee becomes incapable of acting.

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

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

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

 

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

Section 7.09. Successor Trustee by Merger, Etc. If the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification. There shall at all times be a
Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any State thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of
Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to
Trust Indenture Act Section 310(b).

Section 7.11. Preferential Collection of Claims Against Issuers. The Trustee is
subject to Trust Indenture Act Section 311(a), excluding any creditor
relationship listed in Trust Indenture Act Section 311(b). A Trustee who has
resigned or been removed shall be subject to Trust Indenture Act Section 311(a)
to the extent indicated therein.

Section 7.12. Tax Reporting. In order to comply with applicable tax laws
(inclusive of rules, regulations and interpretations promulgated by competent
authorities) related to the Indenture in effect from time to time (“Applicable
Law”) that a foreign financial institution, issuer, trustee, paying agent or
other party is or has agreed to be subject to, the Company agrees (i) upon
request by the Trustee to the Company, to provide to the Trustee promptly with
information (to the extent in the Company’s possession) about the parties and/or
transactions (including any modification to the terms of such transactions)
reasonably required by the Trustee so that the Trustee can determine whether it
has tax related obligations under Applicable Law, (ii) that the Trustee shall be
entitled to make any withholding or deduction from payments to the extent
necessary to comply with Applicable Law for which the Trustee shall not have any
liability and (iii) to hold harmless the Trustee for any losses it may suffer
due to the actions it takes to comply with Applicable Law. The terms of this
section shall survive the termination of this Indenture.

 

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ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The
Issuers may, at their option and at any time, elect to have either Section 8.02
or Section 8.03 hereof applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.

Section 8.02. Legal Defeasance and Discharge. Upon the Issuers’ exercise under
Section 8.01 hereof of the option applicable to this Section 8.02, the Issuers
and the Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Notes and Guarantees on the date the
conditions set forth below are satisfied (“Legal Defeasance”). For this purpose,
Legal Defeasance means that the Issuers shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be “outstanding” only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all their other obligations under such
Notes and this Indenture including that of the Guarantors (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder:

(a) the rights of Holders of the Notes to receive payments in respect of the
principal of, premium, if any, and interest on the Notes when such payments are
due solely out of the trust created pursuant to this Indenture referred to in
Section 8.04 hereof;

(b) the Issuers’ obligations with respect to Notes concerning issuing temporary
Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes
and the maintenance of an office or agency for payment and money for security
payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the
Issuers’ obligations in connection therewith; and

(d) this Section 8.02.

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

 

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Section 8.03. Covenant Defeasance. Upon the Issuers’ exercise under Section 8.01
hereof of the option applicable to this Section 8.03, the Issuers and the
Guarantors shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be released from their obligations under the covenants
contained in Section 4.03, Section 4.04, Section 4.05, Section 4.07,
Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.12,
Section 4.13, Section 4.14 and Section 4.15 hereof and clauses (iv) and (v) of
Section 5.01(a), Section 5.01(c) and Section 5.01(d) hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (“Covenant Defeasance”), and the Notes shall thereafter be
deemed not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Issuers may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Issuers’ exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Section 6.01(a)(iii),
Section 6.01(a)(iv), Section 6.01(a)(v), Section 6.01(a)(vi), (solely with
respect to Restricted Subsidiaries that are Significant Subsidiaries),
Section 6.01(a)(vii) (solely with respect to Restricted Subsidiaries that are
Significant Subsidiaries), Section 6.01(a)(viii) (solely with respect to
Restricted Subsidiaries that are Significant Subsidiaries) and
Section 6.01(a)(ix) hereof shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance. The following shall be
the conditions to the application of either Section 8.02 or Section 8.03 hereof
to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect
to the Notes:

(a) the Issuers must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. dollars, Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest due on the Notes on the
stated maturity date or on the redemption date, as the case may be, of such
principal, premium, if any, or interest on such Notes and the Issuers must
specify whether such Notes are being defeased to maturity or to a particular
redemption date;

 

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(b) in the case of Legal Defeasance, the Issuers shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming
that, subject to customary assumptions and exclusions,

(i) the Issuers have received from, or there has been published by, the United
States Internal Revenue Service a ruling, or

(ii) since the issuance of the Notes, there has been a change in the applicable
U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, subject to customary assumptions and exclusions, the Holders
of the Notes will not recognize income, gain or loss for U.S. federal income tax
purposes, as a result of such Legal Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;

(c) in the case of Covenant Defeasance, the Issuers shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming
that, subject to customary assumptions and exclusions, the Holders of the Notes
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such Covenant Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;

(d) no Default (other than that resulting from borrowing funds to be applied to
make such deposit and any similar and simultaneous deposit relating to other
Indebtedness and the granting of Liens in connection therewith) shall have
occurred and be continuing on the date of such deposit;

(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, the Senior Credit Facilities or any
other material agreement or instrument (other than this Indenture) to which any
Issuer or Guarantor is a party or by which any Issuer or Guarantor is bound
(other than that resulting from any borrowing of funds to be applied to make the
deposit required to effect such Legal Defeasance or Covenant Defeasance and any
similar and simultaneous deposit relating to other Indebtedness and the granting
of Liens in connection therewith);

(f) the Issuers shall have delivered to the Trustee an Opinion of Counsel to the
effect that, as of the date of such opinion and subject to customary assumptions
and exclusions following the deposit, the trust funds will not be subject to the
effect of Section 547 of Title 11 of the United States Code;

 

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(g) the Issuers shall have delivered to the Trustee an Officer’s Certificate
stating that the deposit was not made by the Issuers with the intent of
defeating, hindering, delaying or defrauding any creditors of any Issuer or
Guarantor or others; and

(h) the Issuers shall have delivered to the Trustee an Officer’s Certificate and
an Opinion of Counsel (which Opinion of Counsel may be subject to customary
assumptions and exclusions) each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance, as the case
may be, have been complied with.

Section 8.05. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including an Issuer or a Guarantor
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.

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

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

Section 8.06. Repayment to Issuers. Any money deposited with the Trustee or any
Paying Agent, or then held by the Issuers, in trust for the payment of the
principal of, premium, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Issuers on their request or (if then held
by the Issuers) shall be discharged from such trust; and the Holder of such

 

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Note shall thereafter look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers as trustee thereof, shall thereupon cease.

Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply
any United States dollars or Government Securities in accordance with
Section 8.02 or Section 8.03 hereof, as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuers’ obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or Section 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or Section 8.03 hereof, as the case may be; provided that, if the
Issuers make any payment of principal of, premium, if any, or interest on any
Note following the reinstatement of its obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes. Notwithstanding Section 9.02
hereof, the Issuers, any Guarantor (with respect to a Guarantee or this
Indenture) and the Trustee may amend or supplement this Indenture and any
Guarantee or Notes without the consent of any Holder:

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

(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;

(c) to comply with Section 5.01 hereof;

(d) to provide the assumption of the Issuers’ or any Guarantor’s obligations to
the Holders;

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

(f) to add covenants for the benefit of the Holders or to surrender any right or
power conferred upon any Issuer or Guarantor;

(g) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;

 

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(h) to evidence and provide for the acceptance and appointment under this
Indenture of a successor Trustee hereunder pursuant to the requirements hereof;

(i) to provide for the issuance of exchange notes or private exchange notes,
which are identical to exchange notes except that they are not freely
transferable;

(j) to add a Guarantor under this Indenture;

(k) reserved;

(l) to make any amendment to the provisions of this Indenture relating to the
transfer and legending of Notes as permitted by this Indenture, including,
without limitation to facilitate the issuance and administration of the Notes;
provided, however, that (i) compliance with this Indenture as so amended would
not result in Notes being transferred in violation of the Securities Act or any
applicable securities law and (ii) such amendment does not materially and
adversely affect the rights of Holders to transfer Notes;

(m) to make any other modifications to the Notes or this Indenture of a formal,
minor or technical nature or necessary to correct a manifest error , so long as
such modification does not adversely affect the rights of any Holder of the
Notes in any material respect; or

(n) in the event that PIK Notes are issued in certificated form, to establish
minimum redemption amounts for certificated PIK Notes.

Upon the request of the Issuers accompanied by a resolution of their respective
boards of directors (or equivalent governing body) authorizing the execution of
any such amended or supplemental indenture, and upon receipt by the Trustee of
the documents described in Section 7.02 hereof, the Trustee shall join with the
Issuers and the Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise. Notwithstanding the foregoing, except to the extent
required by law, no Opinion of Counsel shall be required in connection with the
addition of a Guarantor under this Indenture upon execution and delivery by such
Guarantor and the Trustee of a supplemental indenture to this Indenture, the
form of which is attached as Exhibit D hereto, and delivery of an Officer’s
Certificate.

Section 9.02. With Consent of Holders of Notes. Except as provided below in this
Section 9.02, the Issuers and the Trustee may amend or supplement this
Indenture, the Notes and the Guarantees with the consent of the Holders of at
least a majority in principal amount of the Notes (including Additional Notes,
if

 

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any) then outstanding voting as a single class (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Section 6.04 and Section 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Guarantees or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including Additional Notes, if
any) voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Section 2.08
hereof and Section 2.09 hereof shall determine which Notes are considered to be
“outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuers accompanied by a resolution of their respective
boards of directors (or equivalent governing body) authorizing the execution of
any such amended or supplemental indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Issuers in the execution of
such amended or supplemental indenture unless such amended or supplemental
indenture directly affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such amended or supplemental
indenture.

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

After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver.

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

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

(b) reduce the principal of or change the fixed final maturity of any such Note
or alter or waive the provisions with respect to the redemption of such Notes
(other than provisions relating to Section 3.09, Section 4.10 and Section 4.14
hereof to the extent that any such

 

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amendment or waiver does not have the effect of reducing the principal of or
changing the fixed final maturity of any such Note or altering or waiving the
provisions with respect to the redemption of such Notes);

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

(d) waive a Default in the payment of principal of or premium, if any, or
interest on the Notes, except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a
waiver of the payment default that resulted from such acceleration, or in
respect of a covenant or provision contained in this Indenture or any Guarantee
which cannot be amended or modified without the consent of all Holders;

(e) make any Note payable in money other than that stated therein;

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

(g) make any change in these amendment and waiver provisions;

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

(i) except as expressly permitted by this Indenture, modify the Guarantees of
any Significant Subsidiary in any manner adverse to the Holders of the Notes; or

(j) subordinate the Notes or the Guarantees in right of payment.

Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement
to this Indenture or the Notes shall be set forth in an amended or supplemental
indenture that complies with the Trust Indenture Act as then in effect.

Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement
or waiver becomes effective, a consent to it by a Holder of a Note is a
continuing consent by the Holder of a Note and every subsequent Holder of a Note
or portion of a Note that evidences the same debt as the consenting Holder’s
Note, even if notation of the consent is not made on any Note. However, any such
Holder of a Note or subsequent Holder of a Note may revoke the consent as to its
Note if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every
Holder.

 

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The Issuers may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver. If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent
previously given, 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 unless the consent of the requisite number of Holders has
been obtained.

Section 9.05. Notation on or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Issuers in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.

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

Section 9.06. Trustee to Sign Amendments, Etc. The Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Issuers may not sign an amendment,
supplement or waiver until the board of directors (or equivalent governing body)
approves it. In executing any amendment, supplement or waiver, the Trustee shall
be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by
Section 12.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture and that such amendment, supplement or waiver is the
legal, valid and binding obligation of the Issuers and any Guarantors party
thereto, enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including
Section 9.03). Notwithstanding the foregoing, no Opinion of Counsel will be
required for the Trustee to execute any amendment or supplement adding a new
Guarantor under this Indenture.

Section 9.07. Payment for Consent. Neither the Issuers nor any Affiliate of the
Issuers 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 Notes unless such consideration is offered
to all Holders and is 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

 

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agreement; provided that if such consents, waivers or amendments are sought in
connection with an exchange offer where participation in such exchange offer is
limited to Holders who are “qualified institutional buyers” as defined in Rule
144A under the Securities Act, or non-U.S. persons, within the meaning given to
such term in Regulation S under the Securities Act, then such consideration need
only be offered to all Holders to whom the exchange offer is made and to be paid
to all such Holders that consent, waive or agree to amend in such time frame.

ARTICLE 10

GUARANTEES

Section 10.01. Guarantee. Subject to this Article 10, each of the Guarantors
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Issuers hereunder or thereunder,
that: (a) the principal of, interest and premium, if any, on the Notes shall be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Issuers to the
Holders or the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuers, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Issuers, any right to require a
proceeding first against the Issuers, protest, notice and all demands whatsoever
and covenants that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section 10.01.

 

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If any Holder or the Trustee is required by any court or otherwise to return to
the Issuers, the Guarantors or any custodian, trustee, liquidator or other
similar official acting in relation to either the Issuers or the Guarantors, any
amount paid either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.

Each Guarantor agrees that it shall not be entitled to any right of subrogation
in relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees that, as between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes of
this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as
provided in Article 6 hereof, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of this
Guarantee. The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantees.

Each Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Issuers for
liquidation, reorganization, should the Issuers become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Issuers’ assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes or Guarantees, whether as a
“voidable preference,” “fraudulent transfer” or otherwise, all as though such
payment or performance had not been made. In the event that any payment or any
part thereof, is rescinded, reduced, restored or returned, the Notes shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Guarantee 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.

The Guarantee issued by any Guarantor shall be a general unsecured senior
obligation of such Guarantor and shall be pari passu in right of payment with or
senior to all Indebtedness of such Guarantor, if any.

Each payment to be made by a Guarantor in respect of its Guarantee shall be made
without set-off, counterclaim, reduction or diminution of any kind or nature.

 

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Section 10.02. Limitation on Guarantor Liability. Each Guarantor, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of
all such parties that the Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Guarantee. To effectuate
the foregoing intention, the Trustee, the Holders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 10, result
in the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under applicable law. Each
Guarantor that makes a payment under its Guarantee shall be entitled upon
payment in full of all guaranteed obligations under this Indenture to a
contribution from each other Guarantor in an amount equal to such other
Guarantor’s pro rata portion of such payment based on the respective net assets
of all the Guarantors at the time of such payment determined in accordance with
GAAP.

Section 10.03. Execution and Delivery. To evidence its Guarantee set forth in
Section 10.01 hereof, each Guarantor hereby agrees that this Indenture shall be
executed on behalf of such Guarantor by an Officer of such Guarantor.

Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01
hereof shall remain in full force and effect notwithstanding the absence of the
endorsement of any notation of such Guarantee on the Notes.

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

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

If required by Section 4.15 hereof, the Company shall cause any Restricted
Subsidiary that is not a Guarantor to comply with the provisions of Section 4.15
hereof and this Article 10, to the extent applicable.

Section 10.04. Subrogation. Each Guarantor shall be subrogated to all rights of
Holders of Notes against the Issuers in respect of any amounts paid by any
Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if
an Event of Default has occurred and is continuing, no Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such
right of subrogation until all amounts then due and payable by the Issuers under
this Indenture or the Notes shall have been paid in full.

 

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Section 10.05. Benefits Acknowledged. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the guarantee and waivers made by it
pursuant to its Guarantee are knowingly made in contemplation of such benefits.

Section 10.06. Release of Guarantees. A Guarantee by a Guarantor shall be
automatically and unconditionally released and discharged, and no further action
by such Guarantor, the Issuers or the Trustee is required for the release of
such Guarantor’s Guarantee, upon:

(a) (i) except in the case of Parent, any sale, exchange or transfer (by merger
or otherwise) of the Capital Stock of such Guarantor (including any sale,
exchange or transfer), after which the applicable Guarantor is no longer a
Restricted Subsidiary which sale, exchange or transfer is made in compliance
with the applicable provisions of this Indenture;

(ii) the release or discharge of the guarantee by such Guarantor of the Senior
Credit Facilities or the guarantee which resulted in the creation of such
Guarantee, except a discharge or release by or as a result of payment under such
guarantee;

(iii) the proper designation of any Restricted Subsidiary that is a Guarantor as
an Unrestricted Subsidiary; or

(iv) the Issuers exercising their Legal Defeasance option or Covenant Defeasance
option in accordance with Article 8 hereof or the Issuers’ obligations under
this Indenture being discharged in accordance with the terms of this Indenture;
and

(b) such Guarantor delivering to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for in
this Indenture relating to such transaction have been complied with.

ARTICLE 11

SATISFACTION AND DISCHARGE

Section 11.01. Satisfaction and Discharge. This Indenture shall be discharged
and shall cease to be of further effect as to all Notes, when either:

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

 

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(b) (i) all Notes not theretofore delivered to the Trustee for cancellation have
become due and payable by reason of the making of a notice of redemption or
otherwise, shall become due and payable within one year or 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 Issuers and any Issuer or Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders of the Notes, cash in U.S. dollars, Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge the
entire indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the date of
maturity or redemption;

(ii) no Default (other than that resulting from borrowing funds to be applied to
make such deposit and any similar and simultaneous deposit relating to other
Indebtedness) with respect to this Indenture or the Notes shall have occurred
and be continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under the Senior Credit Facilities or any other material
agreement or instrument (other than this Indenture) to which any Issuer or
Guarantor is a party or by which any Issuer or Guarantor is bound (other than
that resulting from any borrowing of funds to be applied to make such deposit
and any similar and simultaneous deposit relating to other Indebtedness);

(iii) the Issuers have paid or caused to be paid all sums payable by them under
this Indenture; and

(iv) the Issuers have delivered irrevocable instructions to the Trustee to apply
the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be.

In addition, the Issuers must deliver an Officer’s Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall
have been deposited with the Trustee pursuant to subclause(i) of clause (b) of
this Section 11.01, the provisions of Section 11.02 and Section 8.06 hereof
shall survive.

Section 11.02. Application of Trust Money. Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to
Section 11.01 hereof shall be held in trust and applied by it, in accordance
with the provisions of the Notes and this Indenture, to the payment, either
directly or

 

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through any Paying Agent (including the Issuers acting as their own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 hereof 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
Issuers’ and any Guarantor’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01 hereof; provided that if the Issuers have made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.

ARTICLE 12

MISCELLANEOUS

Section 12.01. Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Trust Indenture Act
Section 318(c), the imposed duties shall control.

Section 12.02. Notices. Any notice or communication by the Issuers, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in person or mailed by first-class mail (registered or certified, return receipt
requested), fax or overnight air courier guaranteeing next day delivery, to the
others’ address:

If to the Issuers and/or any Guarantor:

Education Management LLC

210 Sixth Avenue, 33rd Floor

Pittsburgh, Pennsylvania 15222-2603

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38th Floor

Pittsburg, Pennsylvania 15252

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

 

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

All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five calendar days after being deposited in the mail, postage
prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery; provided that any notice or
communication delivered to the Trustee shall be deemed effective upon actual
receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed to any Person
described in Trust Indenture Act Section 313(c), to the extent required by the
Trust Indenture Act. 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 within the
time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuers mail a notice or communication to Holders, they shall mail a copy
to the Trustee and each Agent at the same time.

Section 12.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Issuers, the Trustee, the Registrar and anyone else shall have the
protection of Trust Indenture Act Section 312(c).

Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Issuers or any of the Guarantors to the Trustee to
take any action under this Indenture, the Issuers or such Guarantor, as the case
may be, shall furnish to the Trustee:

(a) An Officer’s Certificate in form reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 12.05 hereof) stating
that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action have been
satisfied; and

(b) An Opinion of Counsel in form reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 12.05 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and covenants have
been satisfied; provided that no such Opinion of Counsel shall be required to be
delivered in connection with the issuance of the Notes that are issued on the
Issue Date.

 

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Section 12.05. Statements Required in Certificate or Opinion. Each certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture (other than a certificate provided pursuant to Section 4.04
hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the
provisions of Trust Indenture Act Section 314(e) and shall include:

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

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

(c) a statement that, in the opinion of such Person, he or she has 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, in the case of an Opinion of Counsel, may be limited to
reliance on an Officer’s Certificate as to matters of fact); and

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

Section 12.06. Rules by Trustee and Agents. The Trustee may make reasonable
rules for action by or at a meeting of Holders. The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.

Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator, member or
stockholder of any Issuer or Guarantor or any of their parent companies shall
have any liability for any obligations of the Issuers or the Guarantors under
the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation. Each Holder by
accepting Notes waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.

Section 12.08. Governing Law; Submission to Jurisdiction. THIS INDENTURE, THE
NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS INDENTURE, THE NOTES AND ANY
GUARANTEE AND ANY ACTION FOR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF MAY

 

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BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE RESIDING IN THE
COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH OF
THE PARTIES HERETO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND APPELLATE COURTS FROM ANY THEREOF. THE ISSUER HERETO IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUERS AT THE ADDRESS REFERRED TO IN
SECTION 12.02. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE BROUGHT IN THE
COURTS REFERRED TO ABOVE AND TO THE FULLEST EXTENT IT MAY DO SO UNDER APPLICABLE
LAW HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED IN ANY OTHER JURISDICTION.

Section 12.09. Waiver of Jury Trial. EACH OF THE ISSUERS, THE GUARANTORS AND THE
TRUSTEE, AND EACH HOLDER OF A NOTES BY ITS ACCEPTANCE THEREOF, HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 12.10. Force Majeure. In no event shall the Trustee be responsible or
liable for any failure or delay in the performance of its obligations under this
Indenture arising out of or caused by, directly or indirectly, forces beyond its
reasonable control, including, without limitation, strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software or hardware) services.

Section 12.11. No Adverse Interpretation of Other Agreements. This Indenture may
not be used to interpret any other indenture, loan or debt agreement of the
Company or its Restricted Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

 

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Section 12.12. Successors. All agreements of the Issuers in this Indenture and
the Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of each Guarantor in this
Indenture shall bind its successors, except as otherwise provided in
Section 10.06 hereof.

Section 12.13. Severability. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

Section 12.14. Counterpart Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

Section 12.15. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

Section 12.16. Qualification of Indenture. The Issuers and the Guarantors shall
qualify this Indenture under the Trust Indenture Act and shall pay all
reasonable costs and expenses (including attorneys’ fees and expenses for the
Issuers, the Guarantors and the Trustee) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this
Indenture and the Notes and printing this Indenture and the Notes. The Trustee
shall be entitled to receive from the Issuers and the Guarantors any such
Officer’s Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this Indenture
under the Trust Indenture Act.

Section 12.17. Calculations. The Issuers (or their agents) will be responsible
for making all calculations called for under this Indenture or the Notes. The
Issuers (or their agents) will make all such calculations in good faith and,
absent manifest error, their calculations will be final and binding on Holders.
The Issuers (or their agents) will provide a schedule of its calculations to the
Trustee and the Trustee is entitled to rely conclusively upon the accuracy of
such calculations without independent verification.

[Signatures on following page]

 

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EDUCATION MANAGEMENT LLC By:  

 

  Name:   Title:

EDUCATION MANAGEMENT FINANCE CORP.

By:  

 

  Name:   Title:

EDUCATION MANAGEMENT CORPORATION

By:  

 

  Name:   Title:

Signature Page to Indenture

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

AID Restaurant, Inc.

AIH Restaurant, Inc.

AIIM Restaurant, Inc.

Argosy University Family Center, Inc.

The Connecting Link, Inc.

EDMC Marketing and Advertising, Inc.

Higher Education Services, Inc.

MCM University Plaza, Inc.

AICA-IE Restaurant, Inc.

AIIN Restaurant LLC

AIT Restaurant, Inc.

AITN Restaurant, Inc.

By:  

 

  Name:   Title:

Signature Page to Indenture

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

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee

By:  

 

  Name: Teresa Petta   Title: Vice President

Signature Page to Indenture

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

EXHIBIT A

[Face of Note]

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to
the provisions of the Indenture]

[Insert the Tax Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert “This is a PIK Note.” if applicable]

 

A-1

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CUSIP: [            ]

ISIN: [            ]2

[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$            ]

Senior PIK Toggle Notes due 2018

 

No.         [$             ]

EDUCATION MANAGEMENT LLC

EDUCATION MANAGEMENT FINANCE CORP.

promise to pay to CEDE & CO. or registered assigns, the principal sum [set forth
on the Schedule of Increases and Decreases of Interests in the Global Note
attached hereto] [of             United States Dollars], plus the additional
principal amount referred to on the back of this Note on July 1, 2018.

Interest Payment Dates: March 30 and September 30 and at maturity

Record Dates: March 15 and September 15

 

2  Rule 144A Note CUSIP: 28140J AG5

   Rule 144A Note ISIN: US28140JAG58

   Regulation S Note CUSIP: U27895 AD0

   Regulation S Note ISIN: USU27895AD09

 

A-2

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IN WITNESS HEREOF, the Issuers have caused this instrument to be duly executed.

Dated: [            ], 20[            ]

 

EDUCATION MANAGEMENT LLC By:  

 

  Name:   Title: EDUCATION MANAGEMENT FINANCE CORP. By:  

 

  Name:   Title:

 

A-3

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

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee

By:  

 

  Authorized Signatory

 

A-4

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[Back of Note]

Senior PIK Toggle Notes due 2018

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

1. INTEREST. Education Management LLC, a Delaware limited liability company, and
Education Management Finance Corp., a Delaware corporation (collectively, the
“Issuers”), promise to pay interest in cash on the principal amount of this Note
at 15% per annum from March 30, 20143 until maturity. The Issuers will pay
interest semi-annually in arrears on March 30 and September 30 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day
(each, an “Interest Payment Date”) and at maturity. The first Interest Payment
Date shall be September 30, 2014. Interest on the Notes will accrue from the
most recent date to which interest has been paid; provided that with respect to
the first Interest Payment Date of September 30, 2014 interest on the Notes will
accrue from March 30, 2014. At the maturity date of the Notes, an additional
principal amount of 13% of the then aggregate principal amount of the Notes
outstanding as of such maturity date (including PIK Interest as of such maturity
date) shall be due and payable in cash to Holders of record of the Notes on such
maturity date.

In addition to cash interest as specified above, the Issuers promise to pay
interest in kind (“PIK Interest”) on the Notes, which will accrue at a rate of
(i) 1.0% per annum for the period from March 30, 2014 through and including
March 30, 2015, (ii) 2.0% per annum for the period from March 30, 2015 through
and including March 30, 2016, (iii) 3.0% per annum for the period from March 30,
2016 through and including March 30, 2017 and (iv) 4.0% per annum for the period
from March 30, 2017 through and including July 1, 2018 and, in each case, be
payable at the relevant Interest Payment Date by the making by the Issuers of a
PIK Payment.

Notwithstanding the foregoing, for each of the Interest Payment Dates occurring
on September 30, 2014 and March 30, 2015, interest on the Notes shall be paid
entirely in PIK Interest by increasing the principal amount of the outstanding
Notes or by issuing Notes (“PIK Notes”) (rounded up to the nearest $1.00) under
this Indenture, with any additional Notes issued having the same terms and
conditions as the Initial Notes (in each case, a “PIK Payment”).

PIK Interest shall be payable (x) with respect to Notes represented by one or
more Global Notes registered in the name of, or held by, The Depository Trust
Company (“DTC”) or its nominee on the relevant record date, by increasing the
principal amount of the outstanding Global Note by an amount equal to the

 

3 

With respect to the Initial Notes

 

A-5

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amount of PIK Interest for the applicable interest period (rounded up to the
nearest $1.00) and (y) with respect to Notes represented by certificated notes,
by issuing PIK Notes in certificated form in an aggregate principal amount equal
to the amount of PIK Interest for the applicable period (rounded up to the
nearest $1.00), and the Trustee will, at the request of the Issuers,
authenticate and deliver such PIK Notes in certificated form for original
issuance to the Holders on the relevant Record Date, as shown by the records of
the register of Holders. Following an increase in the principal amount of the
outstanding Global Notes as a result of a PIK Payment, the Global Notes will
bear interest on such increased principal amount from and after the date of such
PIK Payment. Any PIK Notes issued in certificated form will be dated as of the
applicable Interest Payment Date and will bear interest from and after such
date. All PIK Notes will be governed by, and subject to the terms, provisions
and conditions of, this Indenture and shall have the same rights and benefits as
the Notes issued on the Issue Date. Any certificated Notes will be issued with
the description PIK on the face of such Note, and references to the “principal
amount” of the Notes shall include any increase in the principal amount of the
outstanding Notes as a result of any PIK Payment. Interest that is paid in the
form of PIK Interest shall be considered paid or duly provided for, for all
purposes of this Indenture, and shall not be considered overdue.

Notwithstanding anything to the contrary, the payment of accrued interest in
connection with any redemption or repurchase of the Notes as described in
Sections 3.07, 3.09, 4.10 and 4.14 of the Indenture and upon acceleration or at
maturity shall, in each case, be made solely in cash.

The calculation of PIK Interest will be made by the Issuers or on behalf of the
Issuers by such Person as the Issuers shall designate, and such calculation and
the correctness thereof shall not be a duty or obligation of the Trustee.

The Issuers shall pay in cash interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful (provided,
however, that if the Trustee or the Holders of at least 25% in principal amount
of the then total outstanding Notes declare the principal on all the then
outstanding Notes to be due and payable immediately upon the occurrence and
continuation of an Event of Default under Section 6.01(ix), interest thereon
shall accrue at the rate equal to the then applicable interest rate on the Notes
plus 5.0% to the extent lawful); they shall pay in cash interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes to the Persons
who are registered Holders of Notes at the close of business on the applicable
Record Date (whether or not a Business Day) next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and

 

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on or before such Interest Payment Date, except as provided in Section 2.12 of
the Indenture with respect to defaulted interest. Payment of cash interest may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders, provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium, if any, on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Issuers or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust
Company, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to the Holders. The Issuers or any of their respective Subsidiaries may act in
any such capacity.

4. INDENTURE. The Issuers issued the Notes under an Indenture, dated as of
September 5, 2014 (the “Indenture”), among the Issuers, the Guarantors named
therein and the Trustee. This Note is one of a duly authorized issue of notes of
the Issuers designated as its Senior PIK Toggle Notes due 2018. The Issuers
shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of
the Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling.

5. OPTIONAL REDEMPTION.

(a) [Reserved].

(b) [Reserved].

(c) [Reserved].

 

A-7

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(d) On and after the Issue Date, the Issuers may redeem the Notes, in whole or
in part, at any time and from time to time, upon not less than 30 nor more than
60 days’ prior notice by first-class mail, postage prepaid, with a copy to the
Trustee, to each Holder of Notes at the address of such Holder appearing in the
security register, at the redemption prices (expressed as percentages of
principal amount of the Notes to be redeemed) set forth below, plus accrued and
unpaid interest thereon to the applicable date of redemption, subject to the
right of Holders of Notes of record on the relevant Record Date to receive
interest due on the relevant Interest Payment Date, if redeemed during the
twelve month period beginning on March 30 of each of the years indicated below:

 

Year

   Percentage  

2014

     107.50 % 

2015

     107.50 % 

2016

     110.00 % 

2017 and thereafter

     113.00 % 

(e) Any redemption pursuant to this paragraph 5 shall be made pursuant to the
provisions of Section 3.01 through Section 3.06 of the Indenture.

6. MANDATORY REDEMPTION.

(a) Except as set forth below, the Issuers shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.

(b) If the Notes would otherwise constitute “applicable high yield discount
obligations” within the meaning of Section 163(i)(1) of the Internal Revenue
Code of 1986, as amended (the “Code”), at the end of the first “accrual period”
(as defined in Section 1272(a)(5) of the Code) ending after the fifth
anniversary of the Notes’ issuance (the “AHYDO redemption date”), the Issuers
will be required to redeem for cash a portion of each Note then outstanding
equal to the “Mandatory Principal Redemption Amount” (each such redemption, a
“Mandatory Principal Redemption”). The redemption price for the portion of each
Note redeemed pursuant to any Mandatory Principal Redemption will be 100% of the
principal amount of such portion plus any accrued interest thereon on the date
of redemption. “Mandatory Principal Redemption Amount” means, as of the AHYDO
redemption date, the portion of a Note required to be redeemed to prevent such
Note from being treated as an “applicable high yield discount obligation” within
the meaning of Section 163(i)(1) of the Code. No partial redemption or
repurchase of the Notes prior to the AHYDO redemption date pursuant to any other
provision of the Indenture will alter the Issuers’ obligation to make any
Mandatory Principal Redemption with respect to any Notes that remain outstanding
on the AHYDO redemption date.

(c) Any redemption pursuant to this paragraph 6 shall be made pursuant to the
provisions of Section 3.01 through Section 3.06 of the Indenture.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of
redemption will be mailed by first-class mail at least 30 days but not more than
60 days before the redemption date (except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in
connection with Article 8 or Article 11 of the Indenture) to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $2,000 may be redeemed in part but only in multiples of $1.00 in
excess of $2,000 (and, if PIK Interest has been paid, in minimum denominations
of $1.00 or an integral multiple of $1.00 in excess thereof), unless all of the
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.

 

A-8

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8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, the Issuers shall make an offer
(a “Change of Control Offer”) to each Holder to repurchase all or any part
(equal to $2,000 or a multiple of $1.00 in excess thereof) of each Holder’s
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest to the date of purchase (the “Change of
Control Payment”). The Change of Control Offer shall be made in accordance with
Section 4.14 of the Indenture.

(b) If the Company or any of its Restricted Subsidiaries consummates an Asset
Sale, within 10 Business Days of each date that Excess Proceeds exceed $25.0
million, the Issuers shall commence an offer to all Holders of the Notes and, if
required by the terms of any Indebtedness that is pari passu with the Notes
(“Pari Passu Indebtedness”), to the holders of such Pari Passu Indebtedness (an
“Asset Sale Offer”), to purchase the maximum principal amount of Notes
(including any Additional Notes) and such other Pari Passu Indebtedness that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes (including any Additional Notes) and such Pari Passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Issuers may use any remaining Excess Proceeds for general corporate purposes,
subject to other covenants contained in the Indenture. If the aggregate
principal amount of Notes or the Pari Passu Indebtedness surrendered by such
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis
based on the accreted value or principal amount of the Notes or such Pari Passu
Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount
of Excess Proceeds shall be reset at zero. Additionally, the Issuers, at their
option, may make an Asset Sale Offer using proceeds from any Asset Sale at any
time after consummation of such Asset Sale. Upon consummation of such Asset Sale
Offer, any Net Proceeds not required to be used to purchase Notes shall not be
deemed excess proceeds. Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Issuers prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in denominations of $2,000 and integral multiples of $1.00 in excess
thereof; provided that any PIK Payment shall be in denominations of $1.00 and
integral multiples of $1.00. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a

 

A-9

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Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Issuers need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed.

10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.

11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes
may be amended or supplemented as provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are
defined in Section 6.01 of the Indenture. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare the principal, premium, if any, interest
and any other monetary obligations on all the then outstanding Notes to be due
and payable immediately. Notwithstanding the foregoing, in the case of an Event
of Default arising from certain events of bankruptcy or insolvency with respect
to the Company, all outstanding Notes will become due and payable immediately
without further action or notice. Holders may not enforce the Indenture, the
Notes or the Guarantees except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default (except a Default relating to the payment of principal, premium, if any,
or interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or and its consequences under the Indenture
except a continuing Default in payment of the principal of, premium, if any, or
interest on, any of the Notes held by a non-consenting Holder. The Issuers and
each Guarantor (to the extent that such Guarantor is so required under the Trust
Indenture Act) are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers are required within
thirty days after becoming aware of any Default, to deliver to the Trustee a
statement specifying such Default and what action the Issuers propose to take
with respect thereto.

13. AUTHENTICATION. This Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose until authenticated by the
manual signature of the Trustee.

14. [Reserved]

15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

 

A-10

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16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

The Issuers will furnish to any Holder upon written request and without charge a
copy of the Indenture. Requests may be made to the Issuers at the following
address:

Education Management LLC

210 Sixth Avenue, 33rd Floor

Pittsburgh, Pennsylvania 15222-2603

Attention: General Counsel

 

A-11

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:           
                                         
                                         
                                         
                                         

(Insert assignee’ legal name)                                        
                    

 

                                                                    
                                         
                                         
                                         
                                                                    

(Insert assignee’s soc. sec. or tax I.D. no.)

                                                                    
                                         
                                         
                                         
                                                                    

                                                                    
                                         
                                         
                                         
                                                                    

                                                                    
                                         
                                         
                                         
                                                                    

                                                                    
                                         
                                         
                                         
                                                                    

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

and irrevocably appoint                    
                                         
                                         
                                         
                                                                     

to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.

Date:                     

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:                                          
                           

 

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

 

A-12

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or Section 4.14 of the Indenture, check the appropriate box below:

¨ Section 4.10          ¨ Section 4.14

If you want to elect to have only part of this Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:

$             

Date:                     

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:  

 

Signature Guarantee*:                                          
                           

 

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

 

A-13

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SCHEDULE OF INCREASES AND DECREASES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $            .
The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
or Definitive Note for an interest in this Global Note, have been made:

 

Date of

Exchange/PIK

Interest

   Amount of
decrease in
Principal
Amount    Amount of
increase in
Principal
Amount of this
Global Note    Principal
Amount of this
Global Note
following such
decrease or
increase    Signature of
authorized
officer of Trustee
or Note
Custodian                                    

 

*  This schedule should be included only if the Note is issued in global form.

 

A-14

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EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Education Management LLC and Education Management Finance Corp.

210 Sixth Avenue

Pittsburgh, Pennsylvania 15222-2603

Attention: General Counsel

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38th Floor

Pittsburg, Pennsylvania 15252

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

 

  Re: Senior PIK Toggle Notes due 2018

Reference is hereby made to the Indenture, dated as of March 5, 2013 (the
“Indenture”), among Education Management LLC, Education Management Finance Corp.
(together with Education Management LLC, the “Issuers”), the Guarantors named
therein and the Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

                    (the “Transferor”) owns and proposes to transfer the Note[s]
or interest in such Note[s] specified in Annex A hereto, in the principal amount
of $            in such Note[s] or interests (the “Transfer”), to
            (the “Transferee”), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believes is
purchasing the beneficial interest or Definitive Note for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States.

2. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A

 

B-1

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DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Indenture and the
Securities Act.

3. ¨ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT
OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;

or

(b) ¨ such Transfer is being effected to the Issuers or a subsidiary thereof;

or

(c) ¨ such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act.

4. ¨ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

 

B-2

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(a) ¨ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

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

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

 

B-3

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

 

[Insert Name of Transferor] By:  

 

  Name:   Title:

Dated:                     

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

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

[CHECK ONE OF (a) OR (b)]

 

(a) ¨ a beneficial interest in the:

 

  (i) ¨ 144A Global Note (CUSIP [            ]), or

 

  (ii) ¨ Regulation S Global Note (CUSIP [            ]), or

 

(b) ¨ a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

(a) ¨ a beneficial interest in the:

 

  (i) ¨ 144A Global Note (CUSIP [            ]), or

 

  (ii) ¨ Regulation S Global Note ([            ]), or

 

  (iii) ¨ Unrestricted Global Note (CUSIP [            ]); or

 

(b) ¨ a Restricted Definitive Note; or

 

(c) ¨ an Unrestricted Definitive Note, in accordance with the terms of the
Indenture.

 

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EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Education Management LLC and Education Management Finance Corp.

210 Sixth Avenue

Pittsburgh, Pennsylvania 15222-2603

Attention: General Counsel

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38th Floor

Pittsburg, Pennsylvania 15252

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

 

  Re: Senior PIK Toggle Notes due 2018

Reference is hereby made to the Indenture, dated as of March 5, 2013 (the
“Indenture”), among Education Management LLC, Education Management Finance Corp.
(together with Education Management LLC, the “Issuers”), the Guarantors named
therein and the Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.

                    (the “Owner”) owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$            in such Note[s] or interests (the “Exchange”). In connection with
the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE

a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a
beneficial interest in an Unrestricted Global Note in an equal principal amount,
the Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the United States Securities Act of 1933, as
amended (the “Securities Act”), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

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

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

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

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

 

C-2

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

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

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

 

[Insert Name of Transferor] By:  

 

  Name:   Title:

Dated:                     

 

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EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “Supplemental Indenture”), dated as of
            , among             (the “Guaranteeing Subsidiary”), a subsidiary of
Education Management LLC, a Delaware limited liability company (the “Company”),
and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, each of the Company, Education Management Finance Corp. (together with
the Company, the “Issuers”) and the Guarantors (as defined in the Indenture
referred to below) has heretofore executed and delivered to the Trustee an
indenture (the “Indenture”), dated as of September 5, 2014, providing for the
issuance of $175,376,620 aggregate principal amount of Senior PIK Toggle Notes
due 2018 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Issuers’ Obligations under the Notes and the Indenture on
the terms and conditions set forth herein and under the Indenture (the
“Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties mutually
covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:

Section 1. Capitalized terms used herein and not otherwise defined herein are
used as defined in the Indenture.

Section 2. Each Guaranteeing Subsidiary, by its execution of this Supplemental
Indenture, agrees to be a Guarantor under the Indenture and to be bound by the
terms of the Indenture applicable to Guarantors, including, but not limited to,
Article 10 thereof.

Section 3. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for
or in respect of the recitals contained herein, all of which recitals are made
solely by the Guaranteeing Subsidiary.

 

D-1

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Section 3. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.

Section 4. This Supplemental Indenture may be signed in various counterparts
which together will constitute one and the same instrument.

Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and the Indenture and this Supplemental Indenture will henceforth be
read together.

 

D-2

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

 

[GUARANTEEING SUBSIDIARY] By:  

 

  Name:   Title:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:  

 

  Name:   Title:

 

D-3