Exhibit 10.1

 

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DEL LABORATORIES, INC.

 

AND EACH OF THE SUBSIDIARY GUARANTORS FROM TIME TO TIME

PARTY HERETO

 

SENIOR SECURED FLOATING RATE NOTES DUE 2011

 

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INDENTURE

 

Dated as of October 28, 2005

 

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Wells Fargo Bank, National Association

 

Trustee

 

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CROSS-REFERENCE TABLE*

 

Trust Indenture

Act Section

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   Indenture Section

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310(a)(1)    7.10       (a)(2)    7.10       (a)(3)    N.A.       (a)(4)    N.A.
      (a)(5)    7.10       (b)    7.10       (c)    N.A. 311(a)    7.11
      (b)    7.11       (c)    N.A. 312(a)    2.05       (b)    13.03       (c)
   13.03 313(a)    7.06       (b)(1)    10.03; 7.06       (b)(2)    7.06; 7.07
      (c)    7.06; 13.02       (d)    7.06 314(a)    4.03;13.02; 13.05       (b)
   10.03       (c)(1)    13.04       (c)(2)    13.04       (c)(3)    N.A.
      (d)    10.03       (e)    13.05       (f)    N.A. 315(a)    7.01       (b)
   7.05; 13.02       (c)    7.01       (d)    7.01       (e)    6.11 316(a)
(last sentence)    2.09       (a)(1)(A)    6.05       (a)(1)(B)    6.04
      (a)(2)    N.A.       (b)    6.07       (c)    2.12 317(a)(1)    6.08
      (a)(2)    6.09       (b)    2.04 318(a)    13.01       (b)    N.A.
      (c)    13.01

 

N.A. means not applicable.

 

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

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TABLE OF CONTENTS

 

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ARTICLE 1      DEFINITIONS AND INCORPORATION      BY REFERENCE      Section 1.01
   Definitions    1 Section 1.02    Other Definitions    43 Section 1.03   
Incorporation by Reference of Trust Indenture Act    43 Section 1.04    Rules of
Construction    44 ARTICLE 2      THE NOTES      Section 2.01    Form and Dating
   44 Section 2.02    Execution and Authentication    45 Section 2.03   
Registrar and Paying Agent    45 Section 2.04    Paying Agent to Hold Money in
Trust    46 Section 2.05    Holder Lists    46 Section 2.06    Transfer and
Exchange    46 Section 2.07    Replacement Notes    58 Section 2.08   
Outstanding Notes    58 Section 2.09    Treasury Notes    59 Section 2.10   
Temporary Notes    59 Section 2.11    Cancellation    59 Section 2.12   
Defaulted Interest    59 ARTICLE 3      REDEMPTION AND PREPAYMENT      Section
3.01    Notices to Trustee    59 Section 3.02    Selection of Notes to Be
Redeemed or Purchased    60 Section 3.03    Notice of Redemption    60 Section
3.04    Effect of Notice of Redemption    61 Section 3.05    Deposit of
Redemption or Purchase Price    61 Section 3.06    Notes Redeemed or Purchased
in Part    62 Section 3.07    Optional Redemption    62 Section 3.08   
Mandatory Redemption    63 ARTICLE 4      COVENANTS      Section 4.01    Payment
of Notes    64 Section 4.02    Maintenance of Office or Agency    64 Section
4.03    SEC Reports    64 Section 4.04    Compliance Certificate    65 Section
4.05    [Intentionally Omitted]    65 Section 4.06    Stay, Extension and Usury
Laws    65 Section 4.07    Limitation on Restricted Payments    66 Section 4.08
   Limitation on Restrictions on Distributions from Restricted Subsidiaries   
70 Section 4.09    Limitation on Indebtedness    72 Section 4.10    Limitation
on Sales of Assets and Subsidiary Stock    75 Section 4.11    Limitation on
Transactions with Affiliates    80

 

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Section 4.12    Limitation on Liens    82 Section 4.13    Business Activities   
82 Section 4.14    Corporate Existence    82 Section 4.15    Offer to Repurchase
Upon Change of Control    82 Section 4.16    [Intentionally Omitted]    85
Section 4.17    Limitation on the Sale or Issuance of Preferred Stock of
Restricted Subsidiaries    85 Section 4.18    Future Subsidiary Guarantors    85
Section 4.19    Further Assurances; Insurance    85 ARTICLE 5      SUCCESSORS   
  Section 5.01    Merger and Consolidation    86 Section 5.02    Successor
Corporation Substituted    86 ARTICLE 6      DEFAULTS AND REMEDIES      Section
6.01    Default    87 Section 6.02    Acceleration    89 Section 6.03    Other
Remedies    90 Section 6.04    Waiver of Past Defaults    90 Section 6.05   
Control by Majority    90 Section 6.06    Limitation on Suits    90 Section 6.07
   Rights of Holders of Notes to Receive Payment    91 Section 6.08   
Collection Suit by Trustee    91 Section 6.09    Trustee May File Proofs of
Claim    91 Section 6.10    Priorities    91 Section 6.11    Undertaking for
Costs    92 ARTICLE 7      TRUSTEE      Section 7.01    Duties of Trustee    92
Section 7.02    Rights of Trustee    93 Section 7.03    Individual Rights of
Trustee    93 Section 7.04    Trustee’s Disclaimer    94 Section 7.05    Notice
of Defaults    94 Section 7.06    Reports by Trustee to Holders of the Notes   
94 Section 7.07    Compensation and Indemnity    94 Section 7.08    Replacement
of Trustee    95 Section 7.09    Successor Trustee by Merger, etc.    96 Section
7.10    Eligibility; Disqualification    96 Section 7.11    Preferential
Collection of Claims Against Company    96 ARTICLE 8      LEGAL DEFEASANCE AND
COVENANT DEFEASANCE      Section 8.01    Option to Effect Legal Defeasance or
Covenant Defeasance    96 Section 8.02    Legal Defeasance and Discharge    96
Section 8.03    Covenant Defeasance    97 Section 8.04    Conditions to Legal or
Covenant Defeasance    98 Section 8.05    Deposited Money and U.S. Government
Obligations to be Held in Trust; Other Miscellaneous Provisions    99 Section
8.06    Repayment to Company    99 Section 8.07    Reinstatement    99

 

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ARTICLE 9      AMENDMENT, SUPPLEMENT AND WAIVER      Section 9.01    Without
Consent of Holders of Notes    100 Section 9.02    With Consent of Holders of
Notes    101 Section 9.03    Compliance with Trust Indenture Act    102 Section
9.04    Revocation and Effect of Consents    102 Section 9.05    Notation on or
Exchange of Notes    103 Section 9.06    Trustee to Sign Amendments, etc.    103
ARTICLE 10      COLLATERAL AND SECURITY      Section 10.01    Collateral and
Note Lien Security Documents    103 Section 10.02    Equal and Ratable Sharing
of Collateral by Holders of Note Lien Debt    104 Section 10.03    Recording;
Certificates and Opinions    104 Section 10.04    Freedom to Deal    105 Section
10.05    Enforcement of Note Liens    105 Section 10.06    Relative Rights   
105 Section 10.07    Authorization of Receipt of Funds by the Trustee Under the
Note Lien Security Documents    106 Section 10.08    Release of Liens in Respect
of Notes    106 Section 10.09    Intercreditor Agreement; Lien Sharing    107
Section 10.10    Sufficiency of Release    107 ARTICLE 11      SUBSIDIARY
GUARANTEES      Section 11.01    Guarantee    108 Section 11.02   
[Intentionally Omitted]    109 Section 11.03    Limitation on Subsidiary
Guarantor Liability    109 Section 11.04    Delivery of Subsidiary Guarantee   
109 Section 11.05    Subsidiary Guarantors May Consolidate, etc., on Certain
Terms    110 Section 11.06    Releases    110 ARTICLE 12      SATISFACTION AND
DISCHARGE      Section 12.01    Satisfaction and Discharge    111 Section 12.02
   Application of Trust Money    112 Section 12.03    Repayment to Company   
113 ARTICLE 13      MISCELLANEOUS      Section 13.01    Trust Indenture Act
Controls    113 Section 13.02    Notices    113 Section 13.03    Communication
by Holders of Notes with Other Holders of Notes    114 Section 13.04   
Certificate and Opinion as to Conditions Precedent    114 Section 13.05   
Statements Required in Certificate or Opinion    115 Section 13.06    Rules by
Trustee and Agents    115 Section 13.07    No Personal Liability of Directors,
Officers, Employees and Stockholders    115 Section 13.08    Governing Law   
115 Section 13.09    No Adverse Interpretation of Other Agreements    115

 

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Section 13.10

   Successors    115

Section 13.11

   Severability    116

Section 13.12

   Counterpart Originals    116

Section 13.13

   Table of Contents, Headings, etc.    116

 

EXHIBITS

 

Exhibit A    FORM OF NOTE Exhibit B    FORM OF CERTIFICATE OF TRANSFER Exhibit C
   FORM OF CERTIFICATE OF EXCHANGE Exhibit D    FORM OF CERTIFICATE OF ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR Exhibit E    FORM OF SUPPLEMENTAL INDENTURE
FOR FUTURE SUBSIDIARY GUARANTORS

 

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INDENTURE dated as of October 28, 2005 among Del Laboratories, Inc., a Delaware
corporation, the Subsidiary Guarantors (as defined) and Wells Fargo Bank,
National Association, as trustee.

 

The Company, the Subsidiary Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the Senior Secured Floating Rate Notes due 2011 (the “Notes”):

 

ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE

 

Section 1.01 Definitions.

 

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

 

“Accounts” means all “accounts” as defined in Article 9 of the UCC.

 

“Acquisition” means the acquisition of Del Laboratories, Inc. by DLI Acquisition
Corp. on January 27, 2005, pursuant to the Acquisition Agreement.

 

“Acquisition Agreement” means the Agreement and Plan of Merger among Del
Laboratories, Inc., DLI Holding Corp. and DLI Acquisition Corp., dated as of
July 1, 2004, as the same may be amended, modified or supplemented from time to
time.

 

“Additional Notes” means additional Notes (other than (x) the Initial Notes,
(y) any Exchange Note or (z) any Note issued pursuant to Sections 2.06(a), (c),
(e) or (f), Section 2.07 or Section 2.10 hereof) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.

 

“Additional Assets” means:

 

(1) any property or assets (other than Indebtedness and Capital Stock) to be
used by the Company or a Restricted Subsidiary in a Permitted Business; or

 

(2) the Capital Stock of a Restricted Subsidiary or of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary.

 

“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 the purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

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

 

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“Applicable Eurodollar Rate” means, for each quarterly period during which any
Note is outstanding subsequent to the initial quarterly period, 500 basis points
over the rate determined by the Company (notice of such rate to be sent to the
Trustee by the Company on the date of determination thereof) equal to the
applicable British Bankers’ Association LIBOR rate for deposits in U.S. dollars
for a period of three months as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such quarterly period; provided that, if no such British
Bankers’ Association LIBOR rate is available to the Company, the Applicable
Eurodollar Rate for the relevant quarterly period shall instead be the rate at
which Bear, Stearns & Co. Inc. or one of its affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
for a period of three months at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such quarterly period, in amounts equal
to $1.0 million (notice of such rate to be sent to the Trustee by the Company on
the date of determination). Notwithstanding the foregoing, the Applicable
Eurodollar Rate for the initial quarterly period shall be 9.19375%.

 

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

 

“Asset Disposition” means any sale, lease, transfer or other disposition (or
series of related sales, leases, transfers or dispositions) by the Company or
any Restricted Subsidiary, including any disposition by means of a merger,
consolidation, or similar transaction (each referred to for the purposes of this
definition as a “disposition”), of:

 

(1) any shares of Capital Stock of a Restricted Subsidiary (other than
directors’ qualifying shares or shares required by applicable law to be held by
a Person other than the Company or a Restricted Subsidiary);

 

(2) all or substantially all the assets of any division or line of business of
the Company or any Restricted Subsidiary; or

 

(3) any other assets of the Company or any Restricted Subsidiary outside of the
ordinary course of business of the Company or such Restricted Subsidiary;

 

other than, in the case of (1), (2) and (3) above,

 

(a) a disposition by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary or by the Company to a Restricted Subsidiary;

 

(b) for purposes of the provisions of Section 4.10 hereof only, a disposition
subject to Section 4.07 hereof;

 

(c) any transaction or series of related transactions for which the Company or
its Restricted Subsidiaries receive aggregate consideration of less than $5.0
million;

 

(d) the sale, lease, conveyance, disposition or other transfer of all or
substantially all of the assets of the Company as permitted under Section 5.01
hereof;

 

(e) the sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof;

 

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(f) the factoring of accounts receivable arising in the ordinary course of
business pursuant to arrangements customary in the industry;

 

(g) the licensing of intellectual property;

 

(h) disposals or replacements of obsolete equipment in the ordinary course of
business;

 

(i) sales of accounts receivable and related assets of the type specified in the
definition of “Qualified Receivables Transaction” to a Receivables Entity;

 

(j) transfers of accounts receivable and related assets of the type specified in
the definition of “Qualified Receivables Transaction” (or a fractional undivided
interest therein) by a Receivables Entity in a Qualified Receivables
Transaction; and

 

(k) leases or subleases to third persons not interfering in any material respect
with the business of the Company or any of its Restricted Subsidiaries.

 

“Average Life” means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing:

 

(1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or scheduled redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment; by

 

(2) the sum of all such payments.

 

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

 

“Board of Directors” of the Company or any other Person means (i) with respect
to a corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board; (ii) with respect to a
partnership, the Board of Directors of the general partner of the partnership;
(iii) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof; and (iv) with
respect to any other Person, the board or committee of such Person serving a
similar function.

 

“Board of Directors Approval” means the approval of a transaction by a majority
of directors who do not have a personal stake in the transaction being voted
upon, evidenced by a written resolution of the Board of Directors authorizing
such transaction.

 

“Borrowing Base” means, as of any date of determination, an amount equal to:

 

(1) 85% of the face amount of all Receivables owned by the Company and its
Restricted Subsidiaries as reported in accordance with GAAP on the Company’s
consolidated balance sheet (or notes thereto) as of the end of the most recent
fiscal quarter preceding such determination date, excluding (A) Receivables that
were more than 90 days past due as of such balance sheet date and (B) the
aggregate amount of all Receivables transferred to a Receivables Entity or
Receivables Subsidiary in a Financing Disposition or a Qualified Receivables
Transaction as of

 

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or prior to such balance sheet date that are included in the total Receivables
of the Company and its Restricted Subsidiaries on such balance sheet (or notes
thereto); plus

 

(2) 65% of the book value of all Inventory owned by the Company and its
Restricted Subsidiaries as reported in accordance with GAAP on the Company’s
consolidated balance sheet (or notes thereto) as of the end of the most recent
fiscal quarter preceding such determination date.

 

“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

 

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

 

“Capital Expenditures” means for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which would, in accordance with GAAP, be set
forth as capital expenditures in the consolidated statement of cash flow of such
Person, including, in any event, expenditures in connection with sales displays.

 

“Capital Stock” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any Preferred Stock,
but excluding any debt securities convertible into or exchangeable for such
equity.

 

“Capitalized Lease Obligations” means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the amount of such obligation required to be reflected as a
liability on a balance sheet prepared in accordance with GAAP; and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
similar amount due under such lease prior to the first date upon which such
lease may be prepaid by the lessee without payment of a penalty.

 

“Cash Management Obligations” means all monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise of the Company or any of its Subsidiaries arising out of any
cash management, clearing house, wire transfer, depository or investment
services provided by any lender under any Credit Facility or an Affiliate of
such lender.

 

“Cash Proceeds” means all Proceeds of any Collateral received by any Grantor
consisting of cash and checks.

 

“Casualty Event” means any taking under power of eminent domain or similar
proceeding and any insured loss (excluding business interruption), in each case
relating to property or other assets that constitute Fixed Collateral.

 

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

 

(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power of the Voting
Stock of the Company, provided that so long as the Company is a Subsidiary of a
Parent, no Person shall be deemed to be or become a “beneficial owner” of

 

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more than 50% of the total voting power of the Voting Stock of the Company
unless such Person shall be or become a “beneficial owner” of more than 50% of
the total voting power of the Voting Stock of such Parent;

 

(2) during any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of the Company (together with
any new individuals whose election by such Board of Directors of the Company or
whose nomination for election by the stockholders of the Company was approved by
any Permitted Holder or a vote of a majority of the individuals of the Company
then still in office who were either on the Board of Directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company;

 

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

 

(4) the Company merges or consolidates with or into, or sells or transfers (in
one or a series of related transactions) all or substantially all of the assets
of the Company and its Restricted Subsidiaries to, another Person (other than
one or more Permitted Holders) and any “person” (as defined in clause
(1) above), other than one or more Permitted Holders, is or becomes the
“beneficial owner” (as so defined), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the surviving Person in such
merger or consolidation, or the transferee Person in such sale or transfer of
assets, as the case may be, provided that so long as such surviving or
transferee Person is a Subsidiary of a Parent, no Person shall be deemed to be
or become a “beneficial owner” of more than 50% of the total voting power of the
Voting Stock of such surviving or transferee Person unless such Person shall be
or become a “beneficial owner” of more than 50% of the total voting power of the
Voting Stock of such Parent.

 

For purposes of the foregoing, no Person who is a member of a “group” (as so
defined) or a “beneficial owner” (as so defined) in respect of any such Voting
Stock solely as a consequence of any agreement or arrangement with Permitted
Holders shall be deemed a member of such “group” or such a “beneficial owner”
for so long as (without giving effect to such agreement or arrangement) the
Permitted Holders “beneficially own” (as so defined) a percentage of the total
voting power of the Voting Stock of the Company (or any Parent or such surviving
or transferee Person, as the case may be) at such time equal to or greater than
that “beneficially owned” (as so defined) by such other Person.

 

“Chattel Paper” means all “chattel paper” as defined in Article 9 of the UCC,
including, without limitation, “electronic chattel paper” or “tangible chattel
paper,” as each term is defined in Article 9 of the UCC.

 

“Clearstream” means Clearstream Banking, S.A.

 

“Closing Date” means October 28, 2005.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, constituting either Fixed Collateral or Liquid Collateral.

 

“Collateral Agency Agreement” means the Collateral Agency Agreement, dated as of
October 28, 2005, among the Company, the Subsidiary Guarantors, the Trustee and
the Note Collateral Agent.

 

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“Collateral Agent” means:

 

(1) with respect to holders of Note Lien Obligations, the Note Collateral Agent,
and

 

(2) with respect to holders of Credit Facility Lien Obligations, the Credit
Facility Collateral Agent.

 

“Collateral Agreement” means the Collateral Agreement, dated as of October 28,
2005, among the Company, the Subsidiary Guarantors, the other grantors party
thereto and the Note Collateral Agent, as such agreement may be amended,
modified or supplemented from time to time.

 

“Collateral Records” means all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.

 

“Collateral Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

 

“Commercial Tort Claims” means all “commercial tort claims” as defined in
Article 9 of the UCC.

 

“Commodity Agreements” means, in respect of a Person, any commodity futures
contract, forward contract, option or similar agreement or arrangement
(including derivative agreements or arrangements), as to which such Person is a
party or beneficiary.

 

“Company” means Del Laboratories, Inc., a Delaware corporation; and any
successor thereto.

 

“Consolidated Coverage Ratio” as of any date of determination means the ratio of
(i) the aggregate amount of Consolidated EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to
(ii) Consolidated Interest Expense for such four fiscal quarters (in the case of
each of clauses (i) and (ii)), determined, for each fiscal quarter (or portion
thereof) of the four fiscal quarters ending prior to January 27, 2005, on a pro
forma basis to give effect to the Acquisition as if it had occurred at the
beginning of such four-quarter period), and subject and giving effect to the
following adjustments:

 

(1) Incurrence of Indebtedness. If since the beginning of such period the
Company or any Restricted Subsidiary has Incurred any Indebtedness that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (except that in making such computation, the amount of Indebtedness under
any revolving credit facility outstanding on the date of such calculation shall
be computed based on (A) the average daily balance of such Indebtedness during
such four fiscal quarters or such shorter period for which such facility was
outstanding or (B) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such Indebtedness during the
period from the date of creation of such facility to the date of such
calculation).

 

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(2) Discharge of Indebtedness. If since the beginning of such period the Company
or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or
otherwise acquired, retired or discharged any Indebtedness (each, a “Discharge”)
or if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio involves a Discharge of Indebtedness (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and the commitments in respect thereof
have been permanently terminated), Consolidated EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to such Discharge of such Indebtedness, including with the proceeds of
such new Indebtedness, as if such Discharge had occurred on the first day of
such period.

 

(3) Sales. If since the beginning of such period the Company or any Restricted
Subsidiary shall have disposed of any company, any business or any group of
assets constituting an operating unit of a business (any such disposition, a
“Sale”), the Consolidated EBITDA for such period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the assets that
are the subject of such Sale for such period or increased by an amount equal to
the Consolidated EBITDA (if negative) attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to (A) the Consolidated Interest Expense attributable to any Indebtedness
of the Company or any Restricted Subsidiary repaid, repurchased, redeemed,
defeased or otherwise acquired, retired or discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such Sale
for such period (including but not limited to through the assumption of such
Indebtedness by another Person) plus (B) if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such Sale.

 

(4) Purchase. If since the beginning of such period the Company or any
Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary, or
otherwise acquired any company, any business or any group of assets constituting
an operating unit of a business, including any such Investment or acquisition
occurring in connection with a transaction causing a calculation to be made
hereunder (any such Investment or acquisition, a “Purchase”), Consolidated
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any related
Indebtedness), as if such Purchase occurred on the first day of such period.

 

(5) Adjustments for Acquired Person. If since the beginning of such period any
Person became a Restricted Subsidiary or was merged or consolidated with or into
the Company or any Restricted Subsidiary, and since the beginning of such period
such Person shall have Discharged any Indebtedness or made any Sale or Purchase
that would have required an adjustment pursuant to clause (2), (3) or (4) above
if made by the Company or a Restricted Subsidiary during such period,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Discharge, Sale or
Purchase occurred on the first day of such period.

 

For purposes of this definition, whenever pro forma effect is to be given to any
Sale, Purchase or other transaction, or the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or
otherwise acquired, retired or discharged in connection therewith, the pro forma
calculations in respect thereof (including without limitation in respect of
anticipated cost savings or synergies relating to any

 

7

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such Sale, Purchase or other transaction) shall be as determined 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 expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness to the extent of the remaining term of such Interest Rate
Agreement). If any Indebtedness bears, at the option of the Company or a
Restricted Subsidiary, a rate of interest based on a prime or similar rate, a
eurocurrency interbank offered rate or other fixed or floating rate, and such
Indebtedness is being given pro forma effect, the interest expense on such
Indebtedness shall be calculated by applying such optional rate as the Company
or such Restricted Subsidiary may designate. If any Indebtedness that is being
given pro forma effect was Incurred under a revolving credit facility, the
interest expense on such Indebtedness shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. Interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
determined in good faith 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.

 

“Consolidated EBITDA” means, for any period, the Consolidated Net Income for
such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) provision for all taxes based on income, profits or
capital, including, without limitation, state, franchise, value added, foreign
or similar taxes; (ii) Consolidated Interest Expense; (iii) depreciation,
amortization (including but not limited to amortization of goodwill and
intangibles and amortization and write-off of financing costs) and any non-cash
impairment charges related to goodwill, other intangibles or long-lived assets;
(iv) any expenses or charges related to any Equity Offering, Investment or
Indebtedness permitted by this Indenture (whether or not consummated or
incurred); (v) the amount of any minority interest expense; (vi) the amount, up
to $1.2 million per year, paid to Kelso in respect of management, monitoring,
consulting and advisory fees; (vii) any non-cash impairment charges resulting
from the application of Statement of Financial Accounting Standards No. 142 and
144, and the write-off, depreciation or amortization of intangibles arising
pursuant to Statement of Financial Accounting Standards No. 141 and any other
charges as a result of the application of purchase accounting; (viii) other
non-cash expenses reducing Consolidated Net Income for such period (including
deferred rent but excluding any other such charge which requires an accrual of
or reserve for cash charges for any future period); and (ix) cash restructuring
charges not to exceed $2.5 million per year and not to exceed $5.0 million in
the aggregate.

 

“Consolidated Interest Expense” means, for any period, (i) the total interest
expense of the Company and its Restricted Subsidiaries to the extent deducted in
calculating Consolidated Net Income, net of any interest income of the Company
and its Restricted Subsidiaries, including without limitation any such interest
expense consisting of (a) interest expense attributable to Capitalized Lease
Obligations; (b) amortization of debt discount; (c) the interest portion of any
deferred payment obligation; (d) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing; and (e) to the extent not otherwise included in such interest
expense, Receivables Fees; plus (ii) Preferred Stock dividends paid in cash in
respect of Disqualified Stock of the Company held by Persons other than the
Company or a Restricted Subsidiary; and minus (iii) to the extent otherwise
included in such interest expense, amortization or write-off of financing costs,
in each case under clauses (i) through (iii) as determined on a Consolidated
basis in accordance with GAAP; provided, that gross interest expense shall be
determined after giving effect to any net payments made or received by the
Company and its Restricted Subsidiaries with respect to Interest Rate
Agreements.

 

8

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“Consolidated Net Income” means, for any period, the net income (loss) of the
Company and its Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP and before any reduction in respect of Preferred Stock
dividends; provided, that there shall not be included in such Consolidated Net
Income:

 

(1) any net income of any Person if such Person is not a Restricted Subsidiary
or is accounted for by the equity method of accounting, except that the
Company’s equity in the net income (but not loss) of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate
amount actually distributed by such Person during such period to the Company or
a Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (3) below);

 

(2) any net income (loss) of any Restricted Subsidiary that is not a Subsidiary
Guarantor if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of similar distributions
by such Restricted Subsidiary, directly or indirectly, to the Company by
operation of the terms of such Restricted Subsidiary’s charter or any agreement,
instrument, judgment, decree, order, statute or governmental rule or regulation
applicable to such Restricted Subsidiary or its stockholders (other than
(x) restrictions that have been waived or otherwise released and
(y) restrictions pursuant to the Notes or this Indenture), except that the
Company’s equity in the net income (but not loss) of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of any dividend or distribution that was or that could
have been made by such Restricted Subsidiary during such period to the Company
or another Restricted Subsidiary and the Company’s equity in a net loss of any
such Restricted Subsidiary for such period shall be included in determining such
Consolidated Net Income up to the amount of loans, advances or other
contributions, if any, made to such Restricted Subsidiary by the Company or any
other Restricted Subsidiary during such period;

 

(3) any gain or loss realized upon the sale or other disposition of any asset of
the Company or any Restricted Subsidiary (including pursuant to any
sale/leaseback transaction) that is not sold or otherwise disposed of in the
ordinary course of business (as determined in good faith by the Board of
Directors) and any gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person;

 

(4) any extraordinary, unusual or nonrecurring gain, loss or charge (including,
without limitation, option and severance expense, change of control payments and
other fees, expenses and charges associated with the Merger Transactions and any
acquisition, merger or consolidation after January 27, 2005);

 

(5) the cumulative effect of a change in accounting principles;

 

(6) any gains or losses in connection with any early extinguishment of
Indebtedness or the termination of any Currency Agreement in connection
therewith;

 

(7) any unrealized gains or losses in respect of Currency Agreements;

 

(8) any unrealized foreign currency transaction gains or losses in respect of
Indebtedness of any Person denominated in a currency other than the functional
currency of such Person;

 

(9) any write-offs or write-downs of inventory or realized losses on sales or
other dispositions of inventory in an amount not to exceed $2.5 million in any
four-quarter period;

 

(10) any non-cash compensation charge arising from any grant of stock, stock
options or other equity-based awards; and

 

9

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(11) any increase in depreciation, depletion or amortization or any one-time
non-cash charges (such as capitalized manufacturing profit in inventory)
resulting from the purchase accounting in connection with the Merger
Transactions or any acquisition, merger or consolidation that is consummated
after January 27, 2005.

 

In the case of any unusual or nonrecurring gain, loss or charge not included in
Consolidated Net Income pursuant to clause (4) above in any determination
thereof, the Company will deliver an Officer’s Certificate to the Trustee
promptly after the date on which Consolidated Net Income is so determined,
setting forth the nature and amount of such unusual or nonrecurring gain, loss
or charge.

 

“Consolidated Net Worth” means the total of the amounts shown on the balance
sheet of the Company and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as

 

(1) the par or stated value of all outstanding Capital Stock of the Company;
plus

 

(2) paid-in capital or capital surplus relating to such Capital Stock; plus

 

(3) any retained earnings or earned surplus; less

 

(a) any accumulated deficit; and

 

(b) any amounts attributable to Disqualified Stock.

 

“Consolidation” means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that “Consolidation” will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term “Consolidated” has a correlative
meaning.

 

“Copyright Licenses” means, with respect to any Grantor, all agreements (whether
or not in writing) naming such Grantor as licensor or licensee, granting any
right under any Copyright, including the grant of rights to print, publish,
copy, distribute, exploit and sell materials derived from any Copyright, subject
in each case, to the terms of such agreements, and the right to prepare for
sale, sell and advertise for sale, all Inventory now or hereafter covered by
such agreements.

 

“Copyrights” means:

 

  (1) all United States and foreign copyrights, whether or not the underlying
works of authorship have been published, and all copyright registrations and
copyright applications, and any renewals or extensions thereof;

 

  (2) the right to sue or otherwise recover for any and all past, present and
future infringements thereof;

 

  (3) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages and
payments for past, present or future infringements thereof); and

 

10

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  (4) all other rights of any kind whatsoever accruing thereunder or pertaining
thereto.

 

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

 

“Credit Agreement” means the Initial Credit Agreement and, to the extent it
Refinances the Initial Credit Agreement, the Permanent ABL Facility.

 

“Credit Agreement Agent” means, at any time, the Person serving at such time as
the “Agent” or “Administrative Agent” under the Credit Agreement or any other
representative then most recently designated in accordance with the applicable
provisions of the Credit Agreement, together with its successors in such
capacity.

 

“Credit Facilities” means, (x) the Credit Agreement and (y) to the extent
specified by the Company by notice to the Trustee, one or more other debt
facilities or commercial paper facilities, in each case, with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.

 

“Credit Facility Collateral Agent” means JPMorgan Chase Bank, N.A., in its
capacity as collateral agent under the Credit Facility Lien Security Documents,
together with its successors in such capacity.

 

“Credit Facility Lien” means a Lien on Collateral granted by a Credit Facility
Lien Security Document to the Credit Facility Collateral Agent, at any time,
upon any property of the Company or any Subsidiary Guarantor to secure Credit
Facility Lien Obligations.

 

“Credit Facility Lien Debt” means:

 

  (1) Indebtedness of the Company or any Subsidiary Guarantor under the Credit
Agreement that is secured by a Credit Facility Lien that was permitted to be
incurred and so secured under this Indenture (or as to which the lenders under
the Credit Agreement obtained an Officer’s Certificate at the time of incurrence
to the effect that such Indebtedness was permitted to be Incurred and secured by
this Indenture) and Guarantees thereof by the Subsidiary Guarantors;

 

  (2) Indebtedness of the Company or any Subsidiary Guarantor under any other
Credit Facility that is secured by a Credit Facility Lien that was permitted to
be incurred and so secured under this Indenture (or as to which the lenders
under the Credit Agreement obtained an Officer’s Certificate at the time of
incurrence to the effect that such Indebtedness was permitted to be Incurred and
secured by this Indenture) and Guarantees thereof by the Subsidiary Guarantors;
provided, in the case of any Indebtedness referred to in this clause (2), that:

 

  (a)

on or before the date on which such Indebtedness is incurred by the Company,
such Indebtedness is designated by the Company, in an Officer’s Certificate
delivered to each Credit Facility Lien Representative, the Credit Facility
Collateral Agent and the Note Collateral Agent, as “Credit Facility Lien Debt”
for the purposes of the Secured

 

11

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Debt Documents; provided that no Series of Secured Debt may be designated as
both Note Lien Debt and Credit Facility Lien Debt;

 

  (b) such Indebtedness is governed by a credit agreement or other agreement
that includes a Lien Sharing and Priority Confirmation; and

 

  (c) all requirements set forth in the Intercreditor Agreement as to the
confirmation, grant or perfection of the Credit Facility Collateral Agent’s Lien
to secure such Indebtedness or Obligations in respect thereof are satisfied (and
the satisfaction of such requirements and the other provisions of this
clause (c) will be conclusively established if the Company delivers to the
Credit Facility Collateral Agent and the Note Collateral Agent an Officer’s
Certificate stating that such requirements and other provisions have been
satisfied and that such Indebtedness is “Credit Facility Lien Debt”); and

 

  (3) Hedging Obligations of the Company or any Subsidiary Guarantor incurred to
hedge or manage interest rate risk (in a notional amount not to exceed the
aggregate amount of the Company’s and its Subsidiaries’ consolidated variable
interest rate Indebtedness then outstanding or committed) and Cash Management
Obligations of the Company or any Subsidiary Guarantor; provided that:

 

  (a) such Hedging Obligations and Cash Management Obligations are secured by a
Credit Facility Lien on all of the assets and properties that secure Credit
Facility Lien Debt; and

 

  (b) such Credit Facility Lien is senior to or on a parity with the Credit
Facility Liens securing Credit Facility Lien Debt;

 

in each case to the extent secured by Liens permitted by clause (2) of the
definition of Permitted Liens.

 

“Credit Facility Lien Documents” means, collectively, the Credit Agreement, any
credit agreement or other agreement governing each other Series of Credit
Facility Lien Debt, and the Credit Facility Lien Security Documents.

 

“Credit Facility Lien Obligations” means the Credit Facility Lien Debt and all
other Obligations in respect of Credit Facility Lien Debt.

 

“Credit Facility Lien Representative” means (1) the Credit Agreement Agent or
(2) in the case of any other Series of Credit Facility Lien Debt, the trustee,
agent or representative of the holders of such Series of Credit Facility Lien
Debt who maintains the transfer register for such Series of Credit Facility Lien
Debt and is appointed as a representative of the Priority Debt (for purposes
related to the administration of the security documents) pursuant to the credit
agreement or other agreement governing such Series of Credit Facility Lien Debt.

 

“Credit Facility Lien Security Documents” means the Intercreditor Agreement,
each Lien Sharing and Priority Confirmation relating to Credit Facility Lien
Obligations, and all security agreements, pledge agreements, collateral
assignments, mortgages, deeds of trust, collateral agency agreements, control
agreements or other grants or transfers for security executed and delivered by
the Company or any Subsidiary Guarantor creating (or purporting to create) a
Credit Facility Lien upon collateral in favor of the Credit Facility Collateral
Agent to secure Credit Facility Lien Obligations, in

 

12

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each case, as amended, modified, renewed, restated or replaced, in whole or in
part, from time to time, in accordance with its terms.

 

“Credit Facility Priority Lien Cap” means, as of any date, an aggregate
principal amount equal to the sum of (a) the aggregate principal amount of
Indebtedness permitted to be Incurred under clause (1) of the definition of
Permitted Debt (regardless of the amount actually Incurred) as of such date,
plus (b) the principal amount of Indebtedness permitted to be Incurred under
Section 4.09(b)(13) hereof (regardless of the amount actually Incurred) as of
such date.

 

“Currency Agreement” means with respect to any Person any foreign exchange
contract, currency swap agreements or other similar agreement or arrangement to
which such Person is a party or of which it is a beneficiary.

 

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

 

“Default” means any event which is, or after notice or passage of time or both
would be, an Event of Default.

 

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

 

“Deposit Accounts” means all “deposit accounts” as defined in Article 9 of the
UCC of any applicable jurisdiction and, in any event including any demand, time,
savings, passbook or like account maintained with a depositary institution.

 

“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 any non-cash
consideration that is received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Disposition and that is designated as
Designated Non-Cash Consideration pursuant to an Officer’s Certificate. A
particular item of Designated Non-Cash Consideration will no longer by
considered to be outstanding when it has been paid, redeemed or otherwise
retired or sold or otherwise disposed of in compliance with Section 4.10 hereof.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock which
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable or exercisable) or upon the happening of any event:

 

(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise

 

(2) is convertible or exchangeable for Indebtedness or Disqualified Stock
(excluding Capital Stock convertible or exchangeable solely at the option of the
Company or a Restricted Subsidiary; provided, however, that any such conversion
or exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock,
as applicable); or

 

13

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(3) is redeemable at the option of the holder thereof, in whole or in part,

 

in the case of each of clauses (1), (2) and (3), on or prior to the 90th day
after the Stated Maturity of the Notes; provided, however, that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an “asset sale” or “change of control”
occurring prior to the 90th day after the Stated Maturity of the Notes shall not
constitute Disqualified Stock.

 

“DLI Holding Corp.” means DLI Holding Corp., a Delaware corporation, and any
successor in interest thereto.

 

“DLI Holding II Corp.” means DLI Holding II Corp., a Delaware corporation, and
any successor in interest thereto.

 

“DLI Holding, LLC” means DLI Holding, LLC, a Delaware limited liability company,
and any successor in interest thereto.

 

“Documents” means all “documents” as defined in Article 9 of the UCC.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was
formed under the laws of the United States or any state of the United States or
the District of Columbia, other than any Foreign Subsidiary Holding Company.

 

“equally and ratably” means, in reference to sharing of Liens or proceeds
thereof as between holders of Note Lien Obligations, that such Liens or
proceeds:

 

  (1) will be allocated and distributed first to the Note Lien Representative
for each outstanding Series of Note Lien Debt, for the account of the holders of
such Note Lien Debt, ratably in proportion to the principal of, and interest and
premium (if any) and reimbursement obligations (contingent or otherwise) with
respect to letters of credit, if any, outstanding (whether or not drawings have
been made under such letters of credit) on each outstanding Series of Note Lien
Debt when the allocation or distribution is made; and thereafter,

 

  (2) will be allocated and distributed (if any remain after payment in full of
all of the principal of, and interest and premium (if any) and reimbursement
obligations (contingent or otherwise) with respect to letters of credit, if any,
outstanding (whether or not drawings have been made on such letters of credit)
on all outstanding Note Lien Obligations) to the Note Lien Representative for
each outstanding Series of Note Lien Debt, for the account of the holders of any
remaining Note Lien Obligations, ratably in proportion to the aggregate unpaid
amount of such remaining Note Lien Obligations due and demanded (with written
notice to the applicable Note Lien Representative and the Note Collateral Agent)
prior to the date such distribution is made.

 

“Equipment” means all “equipment” as defined in Article 9 of the UCC and
including, in any event, all sales displays.

 

“Equity Interests” means:

 

  (1)

all shares of Capital Stock owned by the Company or any of its Subsidiaries, and
the certificates, if any, representing such shares and any interest of the
Company or any of its

 

14

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Subsidiaries in the entries on the books of the issuer of such shares or on the
books of any securities intermediary pertaining to such shares, and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares;

 

  (2) all interests of the Company or any of its Subsidiaries in any limited
liability company and the certificates, if any, representing such limited
liability company interests and any interest of the Company or any of its
Subsidiaries on the books and records of such limited liability company or on
the books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests;

 

  (3) all interests of the Company or any of its Subsidiaries in any general
partnership, limited partnership, limited liability partnership or other
partnership and the certificates, if any, representing such partnership
interests and any interest of the Company or any of its Subsidiaries on the
books and records of such partnership or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests;

 

  (4) all interests of the Company or any of its Subsidiaries in a Delaware
business trust or other trust and the certificates, if any, representing such
trust interests and any interest of the Company or any of its Subsidiaries on
the books and records of such trust or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests;
and

 

  (5) any “securities” of any of the Company’s “affiliates” (as such terms are
used in Rule 3-16 of Regulation S-X under the Securities Act).

 

“Equity Offering” means (x) a sale of Capital Stock (other than Disqualified
Stock) that is a sale of Capital Stock of the Company, or (y) a capital
contribution to the Company or any of its Restricted Subsidiaries.

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Notes” has the meaning set forth in the Registration Rights Agreement.

 

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

 

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

 

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“Excluded Assets” means all Equity Interests and any of the following property
to the extent that and for as long as such grant of a security interest therein:

 

  (1) is prohibited by any Requirement of Law; provided that (a) such property
shall cease to be an Excluded Asset immediately and automatically (without need
for any further grant or act) at such time as the condition described in this
clause (1) ceases to exist and (b) to the extent severable, all such rights that
are not subject to the applicable condition described in clause (1) in respect
of such property shall not constitute an Excluded Asset;

 

  (2) requires a filing with or consent from any Governmental Authority pursuant
to any Requirement of Law that has not been made or obtained;

 

  (3) constitutes a breach or default under or results in the termination of, or
requires any consent not obtained under, any lease, license or agreement, except
to the extent that such Requirement of Law or provisions of any such lease,
license or agreement is ineffective under applicable law or would be ineffective
under Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC to prevent the
attachment of the security interest granted hereunder; provided that such lease,
license, contract, property right or agreement will cease to be an Excluded
Asset and will become subject to the Lien granted under the security documents,
immediately and automatically, at such time as the grant of a Lien under the
security documents no longer constitutes or results in a breach, termination or
default under any lease, license, contract, property right or agreement;

 

  (4) is in (A) any of the following real property: (i) Riverside Industrial
Park, Little Falls, New York, (ii) Little Falls Industrial Park, Little Falls,
New York, (iii) 99 Creek Street, Canajoharie, New York, (iv) 660, 682 and 684
So. 17th Street, Newark, New Jersey, (iv) The Carlyle Hotel, Apt. #1002, 35 East
76th Street, New York City, New York, (v) 316 Bayview Drive, Barrie, Ontario,
Canada, and (vi) all real property a fee interest in which is acquired by the
Company or any Subsidiary Guarantor after the Closing Date that has a fair
market value not exceeding $3.0 million per contiguous parcel, or (B) any
leasehold interest in any real property leased by the Company or any Subsidiary
Guarantor;

 

  (5) is in any other property or assets (other than Intellectual Property) in
which a Lien cannot be perfected either automatically or by the filing of a
financing statement under the UCC of the relevant jurisdiction, so long as the
aggregate fair market value of all such property and assets does not at any one
time exceed $5.0 million.

 

“Excluded Perfection Assets” means:

 

  (1) any Vehicle having a value less than $100,000 individually, not to exceed
$1.0 million in the aggregate for all such Vehicles;

 

  (2) Goods included in Collateral received by any Person for “sale or return”
within the meaning of Section 2-326 of the Uniform Commercial Code of the
applicable jurisdiction, to the extent of claims of creditors of such Person;

 

  (3) Money which has not been transferred to or deposited in a Deposit Account
in which the Priority Lien Collateral Agent maintains “control” as described in
the UCC and which does not constitute identifiable Cash Proceeds of other
Collateral;

 

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  (4) any Deposit Account (other than the Net Available Cash Account) containing
an average daily balance of less than $200,000 individually, not to exceed $1.0
million in the aggregate for all such Deposit Accounts;

 

  (5) any Intellectual Property outside of the United States;

 

  (6) any other item of Collateral the aggregate value of which shall not exceed
at any time $500,000 and for which the perfection of Liens thereon requires
filings in or other actions under the laws of jurisdictions outside the United
States; and

 

  (7) any other property or assets (other than Intellectual Property) in which a
Lien cannot be perfected either automatically or by the filing of a financing
statement under the UCC of the relevant jurisdiction, so long as the aggregate
fair market value of all such property and assets does not at any one time
exceed $10.0 million.

 

“Existing Credit Agreement” means the credit agreement dated as of January 27,
2005, as amended, restated, supplemented, waived, replaced (whether or not upon
termination, and whether with the original lenders or otherwise), refinanced,
restructured or otherwise modified from time to time, among the Company, the
lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, Bear
Stearns Corporate Lending Inc., as syndication agent and Deutsche Bank
Securities, Inc., as documentation agent.

 

“Fair Market Value” means, with respect to any asset or property, the price
which could be negotiated in an arm’s-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. The Fair Market Value
of property or assets other than cash which involves (1) an aggregate amount in
excess of $1.0 million, shall be set forth in a resolution approved by a
majority of the Board of Directors and (2) an aggregate amount in excess of
$20.0 million, shall have been determined in writing by a nationally recognized
appraisal, accounting or investment banking firm.

 

“Financing Disposition” means any sale, transfer, conveyance or other
disposition of property or assets by the Company or any Subsidiary thereof to
any Receivables Entity, or by any Receivables Subsidiary, in each case in
connection with the Incurrence by a Receivables Entity of Indebtedness, or
obligations to make payments to the obligor on Indebtedness, which may be
secured by a Lien in respect of such property or assets.

 

“Fixed Collateral” means, except as provided below, all of the following
property of the Company and each Subsidiary Guarantor now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest:

 

  (1) the Net Available Cash Account;

 

  (2) all Equipment;

 

  (3) all Fixtures;

 

  (4) all fee interest of the Grantors in real property on which the Grantors
are required to provide a Priority Lien to the Note Secured Parties pursuant to
the Note Lien Security Documents;

 

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  (5) all Intellectual Property, to the extent of each Grantor’s right, title or
interest therein (except for “intent-to-use” applications for trademark or
service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15
U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use
under Sections 1(c) and 1(d) of said Act has been filed, to the extent that any
assignment of an “intent-to-use” application prior to such filing would violate
the Lanham Act);

 

  (6) all General Intangibles, including without limitation commercial contracts
but excluding General Intangibles constituting Payment Intangibles or Commercial
Tort Claims (except as set forth in the next succeeding clause);

 

  (7) identified Commercial Tort Claims to the extent that they relate to the
infringement, impairment, damage or destruction of any of the items referred to
in the preceding clauses (1) through (6) (“Fixed Collateral Commercial Tort
Claims”);

 

  (8) to the extent relating to any of the items referred to in the preceding
clauses (1) through (7) and subject to the proviso below, all Documents;

 

  (9) to the extent relating to any of the items referred to in the preceding
clauses (1) through (8), all Supporting Obligations;

 

  (10) subject to the proviso below, all books, Records and Collateral Records
relating to the foregoing (including without limitation all books, databases,
customer lists, engineer drawings, Records and Collateral Records, whether
tangible or electronic, which contain any information relating to any of the
foregoing);

 

  (11) all identifiable non-Cash Proceeds and, solely to the extent not
constituting Liquid Collateral, Cash Proceeds, products, accessions, rents and
profits of or in respect of any of the foregoing and all collateral security,
guarantees and other Collateral Support given by any Person with respect to any
of the foregoing;

 

provided that to the extent any of the items specified in the foregoing clauses
(8), (9) or (10) also relates to Liquid Collateral, only that portion related to
the items referred to in the preceding clauses (1) through (7) as being included
in the Fixed Collateral shall be included in the Fixed Collateral.
Notwithstanding the foregoing, “Fixed Collateral” will exclude:

 

(A) Liquid Collateral;

 

(B) Excluded Assets; and

 

(C) any properties and assets in which each Collateral Agent is required to
release or releases its Liens pursuant to Section 10.08 hereof or as
contemplated in Section 2.7 of the Intercreditor Agreement; provided that, in
the case of this clause (C), if such Liens are required to be released as a
result of the sale, transfer or other disposition of any properties or assets of
the Company or any Subsidiary Guarantor, such assets or properties will cease to
be excluded from the Collateral if the Company or any Subsidiary Guarantor
thereafter acquires or reacquires such assets or properties.

 

“Fixtures” means all “fixtures” as defined in Article 9 of the UCC.

 

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“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not
a Domestic Subsidiary, including without limitation, any Foreign Subsidiary
Holding Company.

 

“Foreign Subsidiary Holding Company” means any Restricted Subsidiary that
(a) has no material assets other than securities of one or more Foreign
Subsidiaries and other assets relating to the ownership interest in any such
securities and (b) does not guarantee any Indebtedness of the Company or any
Domestic Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect as of the Closing Date, including those set forth in:

 

  (1) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants;

 

  (2) statements and pronouncements of the Financial Accounting Standards Board;

 

  (3) rules adopted by the Public Company Accounting Oversight Board and
approved by the SEC;

 

  (4) such other statements by such other entities as approved by a significant
segment of the accounting profession; and

 

  (5) the rules and regulations of the SEC governing the inclusion of financial
statements in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.

 

All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.

 

“General Intangibles” means all “general intangibles” as defined in Article 9 of
the UCC.

 

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) 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 deposited with or on behalf of
and registered in the name of the Depository or its nominee, substantially in
the form of Exhibit A hereto and that bears the Global Note Legend and that has
the “Schedule of Exchanges of Interests in the Global Note” attached thereto,
issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or
2.06(f) hereof.

 

“Goods” means all “goods” as defined in Article 9 of the UCC.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

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“Grantors” means the Company and each of the Subsidiary Guarantors that have
executed and delivered, or may from time to time execute and deliver, a Note
Lien Security Document or a Credit Facility Lien Security Document.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person:

 

(1) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation of such other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
condition or otherwise), entered into in favor and for the benefit of the
obligee of such Indebtedness or other obligation; or

 

(2) entered into primarily for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);

 

provided, however, that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business. The term “Guarantee”
used as a verb has a corresponding meaning. The term “Guarantor” shall mean any
Person Guaranteeing any obligation.

 

“Guaranteed Obligations” means all monetary Obligations of the Company under
this Indenture (including obligations to the Trustee) and the Notes, whether for
payment of principal of or interest on the Notes, expenses, indemnification or
otherwise.

 

“Hedging Obligations” of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.

 

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

 

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

 

“Immaterial Indebtedness” means Indebtedness that, individually or in the
aggregate, does not exceed $25.0 million at any one time outstanding.

 

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose
total assets, as of that date, are less than $100,000 and whose total revenues
for the most recent 12-month period do not exceed $100,000.

 

“Incur” means issue, assume, enter into any Guarantee of, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Person at the time it becomes a Subsidiary and Indebtedness secured by a
Lien encumbering any asset acquired by a Person shall be deemed to be Incurred
by such Person at the time it acquires such asset. The term “Incurrence” when
used as a noun shall have a correlative meaning. The amortization or accretion
of principal of a non-interest bearing or other discount security, the accrual
of interest, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same

 

20

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terms and the payment of dividends on Disqualified Stock of the Company in the
form of additional shares of the same class of Disqualified Stock shall not be
deemed the Incurrence of Indebtedness.

 

“Indebtedness” means, with respect to any Person on any date of determination,
without duplication:

 

  (1) the principal of in respect of indebtedness of such Person for borrowed
money;

 

  (2) the principal of in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments;

 

  (3) all obligations of such Person in respect of letters of credit or other
similar instruments (including reimbursement obligations with respect thereto);

 

  (4) all obligations of such Person to pay the deferred and unpaid purchase
price of property (except Trade Payables and other accrued current liabilities
arising in the ordinary course of business), which purchase price is due more
than twelve months after the date of placing such property in service or taking
delivery and title thereto;

 

  (5) all Capitalized Lease Obligations of such Person;

 

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

 

  (7) all Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person; provided,
however, that the amount of Indebtedness of such Person shall be the lesser of:

 

  (a) the fair market value of such asset at such date of determination and

 

  (b) the amount of such Indebtedness of such other Persons;

 

  (8) Hedging Obligations of such Person; and

 

  (9) all obligations of the type referred to in clauses (1) through (8) of
other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any Guarantee;

 

provided, however, that Indebtedness shall not include (x) any obligation of the
Company or any Subsidiary in respect of the Acquisition Agreement, (y) any
liability for Federal, state, provincial, foreign, local or other taxes owed or
owing by such Person or (z) any Cash Management Obligations to the extent that
such monetary obligations would not appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP.

 

The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.

 

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

 

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

 

“Initial Credit Agreement” means the interim credit agreement, to be dated on or
about the Closing Date, among the Company, the lenders named therein and
JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated,
supplemented, waived, replaced (whether or not upon termination, and whether
with the original lenders or otherwise), refinanced, restructured or otherwise
modified from time to time.

 

“Initial Notes” means (i) the first $185,000,000 aggregate principal amount of
Notes issued under this Indenture on the date hereof, (ii) any Exchange Note,
and (iii) any Note issued pursuant to Sections 2.06(a), (c), (e) or (f),
Section 2.07 or Section 2.10 hereof.

 

“Initial Purchasers” means Bear, Stearns & Co. Inc., J.P. Morgan Securities Inc.
and Deutsche Bank Securities Inc.

 

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

 

“insolvency or liquidation proceeding” means:

 

  (1) any case commenced by or against the Company or any Subsidiary Guarantor
under Title 11, U.S. Code or any similar federal or state law for the relief of
debtors, any other proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company or any
Subsidiary Guarantor, any receivership or assignment for the benefit of
creditors relating to the Company or any Subsidiary Guarantor or any similar
case or proceeding relative to the Company or any Subsidiary Guarantor or its
creditors, as such, in each case whether or not voluntary;

 

  (2) any liquidation, dissolution, marshalling of assets or liabilities or
other winding up of or relating to the Company or any Subsidiary Guarantor, in
each case whether or not voluntary and whether or not involving Credit Facility
bankruptcy or insolvency; or

 

  (3) any other proceeding of any type or nature in which substantially all
claims of creditors of the Company or any Subsidiary Guarantor are determined
and any payment or distribution is or may be made on account of such claims.

 

“Instruments” means all “instruments” as defined in Article 9 of the UCC.

 

“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses,
Trade Secrets, and Trade Secret Licenses and all rights to sue at law or in
equity for any past, present and future infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

 

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the
date of this Indenture, among the Company, the Subsidiary Guarantors, the Credit
Agreement Agent, the Credit Facility Collateral Agent, the Trustee and the Note
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.

 

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“Interest Rate Agreement” means with respect to any Person any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement to which such Person is party or of which it is a beneficiary.

 

“Inventory” means all “inventory” as defined in Article 9 of the UCC.

 

“Investment” in any Person means any direct or indirect advance, loan (other
than advances to customers and suppliers in the ordinary course of business) or
other extension of credit (including by way of Guarantee or similar arrangement)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
“Unrestricted Subsidiary” and Section 4.07 hereof:

 

(1) “Investment” shall include the aggregate fair market value of all
outstanding Investments owned directly or indirectly by the Company in the
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 Company’s pro rata portion (proportionate to the Company’s direct or
indirect 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.

 

The amount of any Investment outstanding at any time shall be the original cost
of such Investment, reduced (at the Company’s option) by any dividend,
distribution, interest payment, return of capital, repayment or other amount or
value received in respect of such Investment; provided that to the extent the
amount of Restricted Payments outstanding at any time is so reduced by any
portion of any such amount or value that would otherwise be included in the
calculation of Consolidated Net Income, such portion of such amount or value
shall not be so included for purposes of calculating the amount of Restricted
Payments that may be made pursuant to paragraph (a) of Section 4.07 hereof. For
purposes of calculating the amount at any time of Restricted Payments under
paragraph (b)(15) of Section 4.07 hereof, the amount of such Restricted Payments
constituting Investments shall be the amount of such Investments outstanding at
such time.

 

“Investment Property” means the collective reference to all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than Equity Interests).

 

“IP Security Agreement” means the IP Security Agreement, dated as of October 28,
2005, among the Company, the Subsidiary Guarantors, the other grantors party
thereto and the Note Collateral Agent, as such agreement may be amended,
modified or supplemented from time to time.

 

“Junior Lien” means:

 

  (1) with respect to Fixed Collateral, the Credit Facility Liens; and

 

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  (2) with respect to Liquid Collateral, the Note Liens.

 

“Kelso” means Kelso & Company, L.P.

 

“Kelso Agreements” means the Financial Advisory Agreement, dated as of
January 27, 2005, among DLI Holding Corp. and Kelso, and the Registration Rights
Agreement, dated as of January 27, 2005, among DLI Holding Corp., DLI Holding,
LLC and the other parties thereto, in each case, as the same may be amended,
modified or supplemented from time to time.

 

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

 

“Letter of Credit Right” means “letter-of-credit right” as defined in Article 9
of the UCC.

 

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

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).

 

“Lien Sharing and Priority Confirmation” means:

 

  (1) as to any Series of Credit Facility Lien Debt, the written agreement of
the holders of such Series of Credit Facility Lien Debt, as set forth in the
indenture, credit agreement or other agreement governing such Series of Credit
Facility Lien Debt, for the enforceable benefit of all holders of each existing
and future Series of Note Lien Debt and each existing and future Note Lien
Representative:

 

  (a) that the holders of Obligations in respect of such Series of Credit
Facility Lien Debt are bound by the provisions of the Intercreditor Agreement,
including the provisions relating to the ranking of Credit Facility Liens; and

 

  (b) consenting to and directing the Credit Facility Collateral Agent to
perform its obligations under the Intercreditor Agreement and the other security
documents; and

 

  (2) as to any Series of Note Lien Debt, the written agreement of the holders
of such Series of Note Lien Debt, as set forth in the indenture, credit
agreement or other agreement governing such Series of Note Lien Debt, for the
enforceable benefit of all holders of each existing and future Series of Credit
Facility Lien Debt and each existing and future Credit Facility Lien
Representative:

 

  (a) that all Note Lien Obligations will be and are secured equally and ratably
by all Note Liens at any time granted by the Company or any Subsidiary Guarantor
to secure any Obligations in respect of such Series of Note Lien Debt, whether
or not upon property otherwise constituting collateral for such Series of Note
Lien Debt, and that all such Note Liens will be enforceable by the Note
Collateral Agent for the benefit of all holders of Note Lien Obligations equally
and ratably;

 

  (b) that the holders of Obligations in respect of such Series of Note Lien
Debt are bound by the provisions of the Intercreditor Agreement, including the
provisions relating to the ranking of Note Liens; and

 

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  (c) consenting to and directing the Note Collateral Agent to perform its
obligations under the Intercreditor Agreement and the other Note Lien Security
Documents.

 

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

 

“Liquid Collateral” means, except as provided below, all of the following
property of the Company and each Subsidiary Guarantor now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest:

 

  (1) all Accounts;

 

  (2) all Chattel Paper;

 

  (3) all Instruments;

 

  (4) all identified Commercial Tort Claims other than Fixed Collateral
Commercial Tort Claims;

 

  (5) all Letter of Credit Rights;

 

  (6) all Payment Intangibles;

 

  (7) all Receivables;

 

  (8) (a) all Deposit Accounts (other than the Net Available Cash Account, to
the extent that it constitutes a Deposit Account) and all cash, checks,
Temporary Cash Investments, and other property held therein or credited thereto,
(b) all Money and (c) all Securities (other than Equity Interests), Security
Entitlements, and Securities Accounts (other than the Net Available Cash
Account, to the extent that it constitutes a Securities Account) and other
Investment Property, and all cash, checks, Temporary Cash Investments,
securities, financial assets or other property held therein or credited thereto;

 

  (9) all Inventory;

 

  (10) to the extent relating to any of the items referred to in the preceding
clauses (1) through (9) and subject to the proviso below, all Documents;

 

  (11) to the extent relating to any of the items referred to in the preceding
clauses (1) through (10) and subject to the proviso below, all Supporting
Obligations;

 

  (12) all books, Records, Receivables Records and Collateral Records relating
to the foregoing (including without limitation all books, databases, customer
lists, engineer drawings, Records, Receivables Records and Collateral Records,
whether tangible or electronic, which contain any information relating to any of
the foregoing); and

 

  (13) all identifiable Cash Proceeds and, solely to the extent not constituting
Fixed Collateral, non-Cash Proceeds, products, accessions, rents and profits of
or in respect of any of the foregoing (including without limitation, all
insurance proceeds) and all collateral security, guarantees and other Collateral
Support given by any Person with respect to any of the foregoing;

 

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provided that to the extent any of items specified in the preceding clauses
(10), (11) and (12) also relates to Fixed Collateral, only that portion related
to the items referred to in the preceding clauses (1) through (9) as being
included in the Liquid Collateral shall be included in the Liquid Collateral.
Notwithstanding the foregoing, “Liquid Collateral” will exclude:

 

(A) Fixed Collateral;

 

(B) Excluded Assets; and

 

(C) any properties and assets in which each Collateral Agent releases its Liens
pursuant to Section 10.08 hereof or as contemplated in Section 2.7 of the
Intercreditor Agreement; provided that, in the case of this clause (C), if such
Liens are required to be released as a result of the sale, transfer or other
disposition of any properties or assets of the Company or any Subsidiary
Guarantor, such assets or properties will cease to be excluded from the
Collateral if the Company or any Subsidiary Guarantor thereafter acquires or
reacquires such assets or properties.

 

“Management Investor” means, the officers, directors, employees and other
members of the management of any Parent, the Company or any of its Subsidiaries,
or family members or relatives thereof, or trusts or partnerships for the
benefit of any of the foregoing, or any of their heirs, executors, successors
and legal representatives, who at any date beneficially own or have the right to
acquire, directly or indirectly, Capital Stock of the Company or any Parent, and
any Affiliate of any of the foregoing.

 

“Merger Transaction Documents” means the Kelso Agreements, the agreements
relating to the Acquisition, the financing thereof, or the services provided or
to be provided in connection therewith (including pursuant to the Kelso
Agreements), and the various ancillary documents, commitment letters and
agreements relating thereto, as the same may be amended, modified or
supplemented from time to time.

 

“Merger Transactions” means the Acquisition and the financing thereof and the
various other transactions relating thereto.

 

“Money” means “money” as defined in the UCC.

 

“Net Available Cash” from an Asset Disposition or Casualty Event means the
amount equal to the aggregate cash payments received (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other
disposition of any securities received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets that were the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of:

 

(1) all legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and tax payments made with respect to such Asset Disposition;

 

(2) all payments made on any Indebtedness which is secured by any assets subject
to such Asset Disposition, in accordance with the terms of any Lien upon or
other security agreement of any kind with respect to such assets, or which must
by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition;

 

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

 

(4) appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.

 

“Net Available Cash Account” means any Deposit Account or Securities Account
established by the Company or its Restricted Subsidiaries in accordance with
Section 4.10 hereof into which the proceeds from any Sale of Fixed Collateral
shall be deposited pending final application in accordance with Section 4.10
hereof.

 

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

 

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

 

“Note Collateral Agent” means Wells Fargo Bank, National Association, in its
capacity as collateral agent under the Collateral Agency Agreement, together
with its successors in such capacity.

 

“Note Documents” means the Notes, the notations of Subsidiary Guarantee, if any,
this Indenture and the Registration Rights Agreement.

 

“Note Lien” means a Lien granted by a security document to the Note Collateral
Agent, at any time, upon any property of the Company or any Subsidiary Guarantor
to secure Note Lien Obligations.

 

“Note Lien Debt” means:

 

  (1) the Notes issued on the date of this Indenture and Notes issued under this
Indenture in exchange therefor in accordance with the Registration Rights
Agreement and, in each case, the Guarantees thereof by the Subsidiary
Guarantors; and

 

  (2) any other Indebtedness of the Company (including Additional Notes) that is
secured equally and ratably with the Notes by a Note Lien that was permitted to
be incurred and so secured under each applicable Secured Debt Document and the
Guarantees thereof by the Subsidiary Guarantors; provided that:

 

  (a) the net proceeds are used to refund, refinance, replace, defease,
discharge or otherwise acquire or retire Credit Facility Lien Debt or other Note
Lien Debt; or

 

  (b) on the date of incurrence of such Indebtedness, after giving pro forma
effect to the incurrence thereof and the application of the proceeds therefrom,
the aggregate principal amount of Note Lien Debt outstanding does not exceed
$210.0 million;

 

provided further, in the case of any Indebtedness referred to in clause (2) of
this definition:

 

(i) on or before the date on which such Indebtedness is incurred by the Company,
such Indebtedness is designated by the Company, in an Officer’s

 

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Certificate delivered to each Note Lien Representative, the Note Collateral
Agent and the Credit Facility Collateral Agent, as “Note Lien Debt” for the
purposes of this Indenture and the Intercreditor Agreement; provided that no
Series of Secured Debt may be designated as both Note Lien Debt and Credit
Facility Lien Debt;

 

(ii) such Indebtedness is governed by an Indenture, credit agreement or other
agreement that includes a Lien Sharing and Priority Confirmation; and

 

(iii) all requirements set forth in the Intercreditor Agreement as to the
confirmation, grant or perfection of the Note Collateral Agent’s Liens to secure
such Indebtedness or Obligations in respect thereof are satisfied (and the
satisfaction of such requirements and the other provisions of this clause
(iii) will be conclusively established if the Company delivers to the Note
Collateral Agent and the Credit Facility Collateral Agent an Officer’s
Certificate stating that such requirements and other provisions have been
satisfied and that such Indebtedness is “Note Lien Debt”).

 

“Note Lien Documents” means, collectively, the Note Documents, the Indenture,
credit agreement or other agreement governing each other Series of Note Lien
Debt, and the Note Lien Security Documents.

 

“Note Lien Obligations” means Note Lien Debt and all other Obligations in
respect thereof.

 

“Note Lien Representative” means:

 

  (1) in the case of the Notes, the Trustee;

 

  (2) in the case of any other Series of Note Debt, the trustee, agent or
representative of the holders of such Series of Note Lien Debt who maintains the
transfer register for such Series of Note Lien Debt and (a) is appointed as a
Note Lien Representative (for purposes related to the administration of the
security documents) pursuant to the indenture, credit agreement or other
agreement governing such Series of Note Lien Debt, together with its successors
in such capacity, and (b) has become a party to the Intercreditor Agreement by
executing a joinder in the form required under the Intercreditor Agreement.

 

“Note Lien Security Documents” means the Intercreditor Agreement, the Collateral
Agency Agreement, the Collateral Agreement, the IP Security Agreement, each Lien
Sharing and Priority Confirmation with respect to Note Lien Obligations, and all
security agreements, pledge agreements, collateral assignments, mortgages, deeds
of trust, collateral agency agreements, control agreements or other grants or
transfers for security executed and delivered by the Company or any Subsidiary
Guarantor creating (or purporting to create) a Note Lien upon Collateral in
favor of the Note Collateral Agent to secure Note Lien Obligations, in each
case, as amended, modified, renewed, restated or replaced, in whole or in part,
from time to time, in accordance with its terms and the amendment provisions of
the Collateral Agency Agreement.

 

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

 

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“Note Secured Parties” means the Trustee and the Holders (together with any
other holders of Note Lien Obligations).

 

“Obligations” means any principal (including reimbursement obligations with
respect to letters of credit whether or not drawn), interest (including, to the
extent legally permitted, all interest accrued thereon after the commencement of
any insolvency or liquidation proceeding at the rate, including any applicable
post-default rate, specified in the Credit Facility Lien Documents, even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium (if any), penalties, fees, indemnifications,
reimbursements, damages, expenses and other liabilities payable under the
documentation governing any Indebtedness.

 

“Offering Memorandum” means the offering memorandum of the Company, dated
October 20, 2005, relating to the initial offering of the Initial Notes.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company. “Officer” of a Subsidiary Guarantor has a correlative
meaning.

 

“Officer’s Certificate” means a certificate signed by an Officer as provided in
Section 13.05 hereof.

 

“Opinion of Counsel” means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, a Subsidiary Guarantor or the Trustee.

 

“Parent” means any of DLI Holding, LLC, DLI Holding Corp., DLI Holding II Corp.
and any other Person of which the Company at any time is or becomes a Subsidiary
after the Closing Date.

 

“Parent Expenses” means, without duplication, (a) costs (including all
professional fees and expenses) incurred by any Parent in connection with its
reporting obligations under or in compliance with applicable laws, applicable
rules or regulations of any governmental, regulatory or self-regulatory body or
stock exchange, this Indenture or any other agreement or instrument relating to
Indebtedness of the Company or any Restricted Subsidiary, including any reports
filed with respect to the Securities Act, Exchange Act or the respective rules
and regulations promulgated thereunder, (b) indemnification obligations of any
Parent owing to directors, officers, employees or other Persons under its
charter or by-laws or pursuant to written agreements with any such Person,
(c) fees and expenses payable by any Parent in connection with the Merger
Transactions, (d) other operational expenses of any Parent incurred in the
ordinary course of business, and (e) expenses incurred by any Parent in
connection with any public offering of Capital Stock or Indebtedness (x) where
the net proceeds of such offering are intended to be received by or contributed
or loaned to the Company or a Restricted Subsidiary, or (y) in a prorated amount
of such expenses in proportion to the amount of such net proceeds intended to be
so received, contributed or loaned, or (z) otherwise on an interim basis prior
to completion of such offering so long as any Parent shall cause the amount of
such expenses to be repaid to the Company or the relevant Restricted Subsidiary
out of the proceeds of such offering promptly if completed.

 

“Parent Taxes” means, without duplication, (x) any taxes, charges or
assessments, including but not limited to sales, use, transfer, rental, ad
valorem, value-added, stamp, property, consumption, franchise, license, capital,
net worth, gross receipts, excise occupancy, intangibles or similar taxes,
charges or assessments (other than federal, state or local taxes measured by
income and federal, state or local withholding imposed on payments made by any
Parent), required to be paid by any Parent by virtue of its being incorporated
or otherwise organized or having Capital Stock outstanding (but not by virtue of

 

29

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owning stock or other equity interests of any corporation or other entity other
than the Company, any of its Subsidiaries or any Parent), or being a holding
company parent of the Company or receiving dividends from or other distributions
in respect of the Capital Stock of the Company, or having guaranteed any
obligations of the Company or any Subsidiary thereof, or having made any payment
in respect of any of the items for which the Company is permitted to make
payments to any Parent pursuant to Section 4.07 hereof, or (y) for so long as
the Company is a member of a group filing a consolidated, combined or unitary
tax return with any Parent, amounts not to exceed the amount of the relevant tax
(including any penalties and interest) that the Company would owe if the Company
were filing a separate tax return (or a separate consolidated or combined return
with its Subsidiaries that are members of the consolidated or combined group),
taking into account any carryovers and carrybacks of tax attributes (such as net
operating losses) that would be available to the Company (and any such
Subsidiaries) from other taxable years if the Company were filing a separate tax
return (or a separate consolidated or combined return with any such
Subsidiaries).

 

“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).

 

“Patent License” means, with respect to any Grantor, all agreements (whether or
not in writing) providing for the grant by or to such Grantor of any right to
manufacture, use, import, export, distribute, offer for sale or sell any
invention covered in whole or in part by a Patent, subject in each case, to the
terms of such agreements, and the right to prepare for sale, sell and advertise
for sale, all Inventory now or hereafter covered by such agreements.

 

“Patents” means:

 

  (1) all United States and foreign patents, patent applications and patentable
inventions;

 

  (2) all inventions and improvements described and claimed therein;

 

  (3) the right to sue or otherwise recover for any and all past, present and
future infringements thereof;

 

  (4) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements thereof); and

 

  (5) all reissues, divisions, continuations, continuations-in-part,
substitutes, renewals, and extensions thereof, all improvements thereon and all
other rights of any kind whatsoever accruing thereunder or pertaining thereto.

 

“Payment Intangibles” means all “payment intangibles” as defined in Article 9 of
the UCC.

 

“Permanent ABL Facility” means the committed asset based loan credit facility
described in the Offering Memorandum under the caption “Description of Other
Indebtedness” that is expected to Refinance in full and replace the Initial
Credit Agreement, as amended, restated, supplemented, waived, replaced (whether
or not upon termination, and whether with the original lenders or otherwise),
refinanced, restructured or otherwise modified from time to time.

 

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“Permitted Business” means any business engaged in by the Company or any
Restricted Subsidiary on the Closing Date and any Related Business.

 

“Permitted Holders” means any of (a) Kelso and its Affiliates, (b) the
Management Investors (but only with respect to their “beneficial ownership”
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of up to
10% in the aggregate of the total voting power of the Voting Stock of the
Company or any Parent, as the case may be), (c) Magnetite Asset Investors III
LLC and its Affiliates (but only with respect to their beneficial ownership of
up to 3% in the aggregate of the total voting power of the Voting Stock of the
Company or any Parent, as the case may be) and (d) any Person acting in the
capacity of an underwriter in connection with a public or private offering of
the Capital Stock of the Company or any Parent or securities convertible into or
exchangeable or exercisable for such Capital Stock. Any person or group whose
acquisition of beneficial ownership constitutes a Change of Control in respect
of which a Change of Control Offer is made in accordance with the requirements
of this Indenture will thereafter, together with its Affiliates, constitute an
additional Permitted Holder.

 

“Permitted Investment” means an Investment by the Company or any Restricted
Subsidiary in:

 

  (1) the Company, a Restricted Subsidiary or a Person that will, upon the
making of such Investment, become a Restricted Subsidiary; provided, however,
that the primary business of such Restricted Subsidiary is a Permitted Business;

 

  (2) another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary
provided, however, that such Person’s primary business is a Permitted Business;

 

  (3) Temporary Cash Investments;

 

  (4) receivables owing to the Company or any Restricted Subsidiary if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;

 

  (5) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business;

 

  (6) loans or advances to employees made in the ordinary course of business and
not exceeding $5.0 million in the aggregate outstanding at any one time;

 

  (7) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or upon bankruptcy or insolvency of
creditors or customers;

 

  (8) any Person to the extent such Investment represents the noncash portion of
the consideration received for an Asset Disposition that was made pursuant to
and in compliance with Section 4.10 hereof;

 

  (9) Investments existing on the Closing Date;

 

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  (10) Currency Agreements, Interest Rate Agreements and Commodity Agreements
entered into by the Company or any of its Restricted Subsidiaries for bona fide
business reasons and not for speculative purposes, and otherwise in compliance
with this Indenture;

 

  (11) guarantees by the Company or any of its Restricted Subsidiaries of
Indebtedness otherwise permitted to be incurred by the Company or any of its
Restricted Subsidiaries under this Indenture

 

  (12) any Investment by the Company or a Restricted Subsidiary of the Company
in a Receivables Entity or any Investment by a Receivables Entity in any other
Person in connection with the Qualified Receivables Transaction;

 

  (13) that portion of any Investment where the consideration provided is
Capital Stock of the Company or any Parent (other than Disqualified Stock);

 

  (14) the Notes; or

 

  (15) other Investments in an aggregate amount outstanding at any time not to
exceed $20.0 million.

 

“Permitted Liens” means the following types of Liens:

 

  (1) Liens on Collateral held by the Note Collateral Agent equally and ratably
securing (a) the Notes to be issued on the date of this Indenture and all
related Note Lien Obligations and (b) all future Note Lien Debt, subject to the
limits thereon set forth in the definition thereof, and all related Note Lien
Obligations;

 

  (2) Liens on Collateral, Liens on the Capital Stock of the Company’s
Subsidiaries and Liens on other Excluded Assets to the extent such Excluded
Assets would not constitute Fixed Collateral if not classified as Excluded
Assets, in each case held by the Credit Facility Collateral Agent securing
Credit Facility Lien Obligations; provided that:

 

  (a) without otherwise limiting the amount secured by such Liens insofar as
they attach to any property other than Liquid Collateral or secure Credit
Facility Lien Obligations that are not Indebtedness, the aggregate principal
amount of all Indebtedness (including all fixed and contingent reimbursement
obligations in respect of letters of credit but excluding Hedging Obligations
and Cash Management Obligations) secured by such Liens insofar as they attach to
Liquid Collateral shall not at any time exceed the Credit Facility Priority Lien
Cap; and

 

  (b) all such Liens on Collateral are subject to the Intercreditor Agreement;

 

  (3) Liens securing indebtedness incurred in reliance on clause (b)(4) of
Section 4.09 hereof; provided that such Liens do not extend to or cover any
property or assets of the Company or of any Restricted Subsidiary other than the
property or assets that secured such Indebtedness prior to the time the
applicable Restricted Subsidiary became a Restricted Subsidiary;

 

  (4) Liens securing indebtedness incurred in reliance on clause (b)(6) of
Section 4.09 hereof;

 

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  (5) Liens existing on the Closing Date (other than Credit Facility Liens and
Note Liens), together with any Liens securing Refinancing Indebtedness Incurred
to refinance Indebtedness secured by Liens existing on the Closing Date (other
than Credit Facility Liens and Note Liens); provided that the Liens securing the
Refinancing Indebtedness shall not extend to property other than that pledged
under the Liens securing the Indebtedness being refinanced;

 

  (6) Liens in favor of the Company or any Subsidiary Guarantor on the property
or assets, or any proceeds, income or profit therefrom, of any Restricted
Subsidiary;

 

  (7) Liens for taxes, assessments or governmental charges or claims either:

 

  (a) not delinquent; or

 

  (b) contested in good faith by appropriate proceedings and as to which the
Company or the applicable Restricted Subsidiary has set aside on its books such
reserves as may be required pursuant to GAAP;

 

  (8) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen and repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not overdue for a period of
more than 60 days or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP has been made in
respect thereof;

 

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

 

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

 

  (11) easements, rights-of-way, zoning restrictions and other similar charges
or encumbrances or title defects or irregularities in respect of real property
not interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;

 

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

 

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

 

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

 

  (15) Liens securing (A) Interest Rate Agreements entered into in the ordinary
course of business and not for purposes of speculation which Interest Rate
Agreements relate to Indebtedness that is otherwise permitted under this
Indenture and (B) all related Obligations;

 

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  (16) Liens securing (A) Indebtedness under Currency Agreements entered into in
the ordinary course of business and not for purposes of speculation and (B) all
related Obligations;

 

  (17) Liens on assets transferred to a Receivables Entity or on assets of a
Receivables Entity, in either case incurred in connection with a Qualified
Receivables Transaction;

 

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

 

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

 

  (20) 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;

 

  (21) title defects, survey exceptions and other irregularities or deficiencies
in title to real property constituting Collateral which are set forth in the
title insurance reports delivered to the Note Collateral Agent in respect of the
real property Collateral on the Closing Date;

 

  (22) Liens incurred in the ordinary course of business with respect to
obligations that do not exceed $2.5 million at any one time outstanding and
that:

 

  (a) are not incurred in connection with the borrowing of money or obtaining of
advances or credit (other than trade credit in the ordinary course of business);
and

 

  (b) do not in the aggregate materially detract from the value of the property
or materially impair the use thereof in the operation of the business of the
Company and the Restricted Subsidiaries; and

 

  (23) other Liens provided that the maximum aggregate amount of outstanding
obligations secured thereby shall not at any time exceed $5.0 million.

 

“Permitted Prior Liens” means:

 

  (1) Liens described in clauses (3), (4), (5) or (6) of the definition of
“Permitted Liens”; and

 

  (2) Permitted Liens that arise by operation of law and are not voluntarily
granted, to the extent entitled by law to priority over the Liens created by the
Credit Facility Lien Security Documents or the Note Lien Security Documents.

 

“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

 

“Preferred Stock” as applied to the Capital Stock of any Person, means Capital
Stock of any class or classes (however designated) that is preferred as to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares of Capital
Stock of any other class of such Person.

 

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“principal” of a Note means the principal of the Note payable on the Note which
is due or overdue or is to become due at the relevant time.

 

“Priority Liens” means:

 

  (1) with respect to Fixed Collateral, the Note Liens; and

 

  (2) with respect to Liquid Collateral, the Credit Facility Liens.

 

“Priority Lien Collateral Agent” means:

 

  (1) with respect to Fixed Collateral, the Note Collateral Agent; and

 

  (2) with respect to Liquid Collateral, the Credit Facility Collateral Agent.

 

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

 

“Proceeds” shall mean all “proceeds” as defined in Article 9 of the UCC
including, in any event all dividends, returns of capital and other
distributions from Investment Property and all collection thereon and payments
with respect thereto.

 

“Purchase Money Indebtedness” means Indebtedness:

 

(1) consisting of or Incurred to finance the deferred purchase price of an
asset, conditional sale obligations, obligations under any title retention
agreement and other purchase money obligations, in each case where the maturity
of such Indebtedness does not exceed the anticipated useful life of the asset
being financed; and

 

(2) Incurred to finance the acquisition by the Company or a Restricted
Subsidiary of such asset, including additions and improvements;

 

provided, however, that such Indebtedness is Incurred on or prior to the date
that is 180 days after the acquisition by the Company or such Restricted
Subsidiary of such asset.

 

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

 

“Qualified Receivables Transaction” means any transaction or series of
transactions that may be entered into by the Company or any of its Subsidiaries
pursuant to which the Company or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Receivables Entity (in the case of a transfer by the
Company or any of its Subsidiaries); and (b) any other Person (in the case of a
transfer by a Receivables Entity), or may grant a security interest in, any
accounts receivable (whether now existing or arising in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.

 

“Receivable” means any right to payment or goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been

 

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earned by performance (including all Accounts); provided that, for purposes of
the definitions of “Receivables Entity,” “Receivables Financing” and
“Receivables Subsidiary,” the term “Receivables” shall mean a right to receive
payment arising from a sale or lease of goods or services by a Person pursuant
to an arrangement with another Person pursuant to which such other Person is
obligated to pay for goods or services under terms that permit the purchase of
such goods and services on credit.

 

“Receivables Entity” means (x) any Receivables Subsidiary; or (y) any other
Person that is engaged in the business of acquiring, selling, collecting,
financing or refinancing Receivables, accounts (as defined in the Uniform
Commercial Code as in effect in any jurisdiction from time to time), other
accounts and/or other receivables, and/or related assets.

 

“Receivables Fees” means distributions or payments made directly or by means of
discounts with respect to any participation interest issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Financing.

 

“Receivables Financing” means any financing of Receivables of the Company or any
Restricted Subsidiary that have been transferred to a Receivables Entity in a
Financing Disposition.

 

“Receivables Records” shall mean (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Receivables,
including, without limitation, all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of the Grantor
or any computer bureau or agent from time to time acting for the Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
secured parties, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.

 

“Receivables Subsidiary” means a Subsidiary of the Company that (a) is engaged
solely in the business of acquiring, selling, collecting, financing or
refinancing Receivables, accounts (as defined in the Uniform Commercial Code as
in effect in any jurisdiction from time to time) and other accounts and
receivables (including any thereof constituting or evidenced by chattel paper,
instruments or general intangibles), all proceeds thereof and all rights
(contractual and other), collateral and other assets relating thereto, and any
business or activities incidental or related to such business; and (b) is
designated as a “Receivables Subsidiary” by the Board of Directors.

 

“Record” shall have the meaning specified in Article 9 of the UCC.

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness
in exchange or replacement for, such Indebtedness. “Refinanced” and
“Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) any Indebtedness of the Company or any Restricted
Subsidiary existing on the Closing Date or Incurred in compliance with this
Indenture (including Indebtedness of the Company that Refinances Refinancing
Indebtedness); provided, however, that:

 

(1) if the Indebtedness being refinanced is Subordinated Obligations, the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced;

 

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(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the sum of (x) the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being Refinanced plus (y) fees, underwriting
discounts, interest, premiums and other costs and expenses in connection with
the issuance of the Refinancing Indebtedness and repayment of the Indebtedness
being refinanced; and

 

(3) if the Indebtedness being Refinanced is subordinated in right of payment to
the Notes, such Refinancing Indebtedness is subordinated in right of payment to
the Notes at least to the same extent as the Indebtedness being Refinanced;

 

provided further, however, that Refinancing Indebtedness shall not include:

 

  (a) Indebtedness of a Restricted Subsidiary (other than a Subsidiary
Guarantor) that Refinances Indebtedness of the Company; or

 

  (b) Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.

 

“Refinancing Transactions” means the issuance and sale of the Initial Notes and
related Subsidiary Guarantees and the application of the net proceeds therefrom
to repay Indebtedness outstanding under the Existing Credit Agreement and to pay
related fees and expenses.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of October 28, 2005, among the Company, the Subsidiary Guarantors and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Subsidiary Guarantors and the other parties thereto, as such agreement(s)
may be amended, modified or supplemented from time to time, relating to rights
given by the Company to the purchasers of Additional Notes with respect to the
registration of such Additional Notes, and any Notes issued in exchange
therefor, under the Securities Act.

 

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

 

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

 

“Related Business” means any business related, ancillary or complementary to the
businesses of the Company and the Restricted Subsidiaries on the Closing Date.

 

“Requirement of Law” means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or two which such Person or any of its property is subject.

 

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“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 Subsidiary” means any Subsidiary of the Company other than an
Unrestricted Subsidiary.

 

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

 

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

 

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

 

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

 

“SEC” means the Securities and Exchange Commission.

 

“Sale of Fixed Collateral” means any Asset Disposition involving a sale or other
disposition of Fixed Collateral.

 

“Secured Debt Documents” means the Note Lien Documents and the Credit Facility
Lien Documents.

 

“Securities” means all “securities” as defined in Article 8 of the UCC, any
stock, shares, partnership interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

 

“Securities Accounts” means all “securities accounts” as defined in Article 8 of
the UCC.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Entitlements” means all “securities entitlements” as defined in
Article 8 of the UCC.

 

“Senior Subordinated Note Indenture” means that certain indenture, dated as of
January 27, 2005, among the Company, the subsidiary guarantors named therein and
Wells Fargo Bank, National Association, as trustee, governing the Senior
Subordinated Notes, as amended from time to time.

 

“Senior Subordinated Notes” means the Company’s 8% Senior Subordinated Notes due
2012, initially issued in an aggregate principal amount of $175.0 million on
January 27, 2005, pursuant to the Senior Subordinated Note Indenture.

 

“Series of Credit Facility Lien Debt” means, severally, the Indebtedness
outstanding under the Credit Agreement and any other Credit Facility that
constitutes Credit Facility Lien Debt.

 

“Series of Note Lien Debt” means, severally, the Notes and each other issue or
series of Note Lien Debt for which a single transfer register is maintained.

 

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“Series of Secured Debt” means each Series of Note Lien Debt and each Series of
Credit Facility Lien Debt.

 

“Shelf Registration Statement” means the Shelf Registration Statement as defined
in the Registration Rights Agreement.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a
“significant subsidiary” of the Company within the meaning of Article 1, Rule
1-02 under Regulation S-X promulgated by the SEC.

 

“Standard Receivable Obligations” means representations, warranties, covenants,
indemnities and other obligations (including Guarantees and Indebtedness) which
are reasonably customary in a Financing Disposition (as determined by the
Company in good faith), including, without limitation, those relating to the
servicing of the assets of a Receivables Entity, it being understood that any
Receivables Repurchase Obligation shall be deemed to be a Standard Receivable
Obligation.

 

“Stated Maturity” means, with respect to any security, the date specified in
such security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency).

 

“Subordinated Obligation” means any Indebtedness of the Company (other than such
Indebtedness as is described in clause (2) of paragraph (b) of Section 4.09
hereof) (whether outstanding on the Closing Date or thereafter Incurred) that is
expressly subordinated in right of payment to the Notes pursuant to a written
agreement.

 

“Subordinated Obligation” of a Subsidiary Guarantor has a correlative meaning
with respect to Indebtedness that is expressly subordinated in right of payment
to the Subsidiary Guarantees pursuant to a written agreement.

 

“Subsidiary” of any Person means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock or other interests entitled (without regard to the occurrence of any
contingency and after giving effect to any voting agreement or stockholders’
agreement that effectively transfers voting power) to vote in the election of
directors, members of the Board of Directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by:

 

(1) such Person,

 

(2) such Person and one or more Subsidiaries of such Person or

 

(3) one or more Subsidiaries of such Person, or

 

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

 

“Subsidiary Guarantee” means each Guarantee of the obligations with respect to
the Notes issued by a Subsidiary of the Company pursuant to the terms of this
Indenture.

 

“Subsidiary Guarantor” means any Subsidiary that has issued a Subsidiary
Guarantee.

 

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“Supporting Obligation” means all “supporting obligations” as defined in Article
9 of the UCC.

 

“Temporary Cash Investments” means any of the following:

 

(1) any investment in U.S. Government Obligations or obligations Guaranteed by
the United States of America or any agency thereof;

 

(2) investments in time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition thereof
issued by a bank or trust company that is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by the
United States of America having capital, surplus and undivided profits
aggregating in excess of $250.0 million (or the foreign currency equivalent
thereof) and whose long-term debt is rated “A” (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act);

 

(3) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) above entered into with a bank
meeting the qualifications described in clause (2) above;

 

(4) investments in commercial paper, maturing not more than 270 days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of “P-1” (or
higher) according to Moody’s Investors Service, Inc. (“Moody’s”) or “A-1” (or
higher) according to Standard and Poor’s Ratings Service, a division of The
McGraw-Hill Companies, Inc. (“S&P”);

 

(5) investments in securities with maturities of one year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s
Investors Service, Inc.;

 

(6) investment funds investing 95% of their assets in securities of the type
described in clauses (1) through (5) above (which funds may also hold reasonable
amounts of cash pending investment and/or distribution);

 

(7) investments in money market funds subject to the risk limiting conditions of
Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of
1940, as amended; and

 

(8) similar investments approved by the Board of Directors in the ordinary
course of business.

 

“TIA” means the Trust Indenture Act of 1939, as amended from time to time.

 

“Trade Payables” means, with respect to any Person, any accounts payable or any
indebtedness or monetary obligation to trade creditors created, assumed or
Guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.

 

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“Trademark License” means with respect to any Grantor, any agreement (whether or
not in writing) providing for the grant by or to such Grantor of any right to
use any Trademark, subject in each case, to the terms of such agreements, and
the right to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such agreements.

 

“Trademarks” means:

 

  (1) all United States, state and foreign trademarks, service marks, trade
names, domain names, corporate names, company names, business names, trade
dress, trade styles, logos, or other indicia of origin or source identification,
and all registrations of and applications to register the foregoing and any new
renewals thereof;

 

  (2) the right to sue or otherwise recover for any and all past, present and
future infringements and dilutions thereof;

 

  (3) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements and dilutions thereof); and

 

  (4) all other rights of any kind whatsoever accruing thereunder or pertaining
thereto, together in each case with the goodwill of the business connected with
the use of, and symbolized by, each of the above.

 

“Trade Secret License” means, with respect to any Grantor, any agreement,
whether written or oral, providing for the grant by or to such Grantor of any
right to use any Trade Secret, subject in each case, to the terms of such
agreements, and the right to prepare for sale, sell and advertise for sale, all
Inventory now or hereafter covered by such agreements.

 

“Trade Secrets” means (1) all trade secrets and all confidential information,
(2) the right to sue or otherwise recover for any and all past, present and
future misappropriations thereof, (3) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including
payments under all licenses entered into in connection therewith, and damages
and payments for past, present or future misappropriations thereof), and (4) all
other rights of any kind whatsoever accruing thereunder or pertaining thereto.

 

“Trustee” means Wells Fargo Bank, National Association until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

 

“Trust Officer” means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

 

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code (or any
similar or equivalent legislation) as in effect in the State of New York, or
where the context requires, each other applicable jurisdiction.

 

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

 

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

 

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below, and (2) any Subsidiary of an
Unrestricted Subsidiary.

 

The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or owns or holds any Lien on any property
of, the Company or any other Subsidiary of the Company that is not a Subsidiary
of the Subsidiary to be so designated; provided, however, that either:

 

  (a) the Subsidiary to be so designated has total consolidated assets of $1,000
or less; or

 

  (b) if such Subsidiary has consolidated assets greater than $1,000, then such
designation would be permitted under Section 4.07 of this Indenture.

 

The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:

 

(x) the Company could Incur $1.00 of additional Indebtedness under paragraph
(a) of the covenant described under Section 4.09 of this Indenture and

 

(y) no Default shall have occurred and be continuing.

 

Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officer’s Certificate
certifying that such designation complied with the foregoing provisions.

 

“U.S. Government Obligations” means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer’s option.

 

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

 

“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles, vessels and aircraft covered by a certificate of
title law of any jurisdiction and all appurtenances thereto.

 

“Voting Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests and limited liability company interests) of
such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, members of
the Board of Directors, managers or trustees thereof.

 

“Wholly-Owned Subsidiary” means a Restricted Subsidiary of the Company all the
Capital Stock of which (other than directors’ qualifying shares or similar
immaterial equity interests) is owned by the Company or another Wholly Owned
Subsidiary.

 

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Section 1.02 Other Definitions.

 

Term

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

  

Defined in

Section

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

“Affiliate Transaction”

   4.11

“Authentication Order”

   2.02

“Change of Control Offer”

   4.15

“Change of Control Payment Date”

   4.15

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Event of Default”

   6.01

“Legal Defeasance”

   8.02

“Offer”

   4.10

“Offer Amount”

   4.10

“Offer Period”

   4.10

“Paying Agent”

   2.03

“Permitted Debt”

   4.09

“Permitted Payment”

   4.07

“Purchase Date”

   4.10

“Registrar”

   2.03

“Restricted Payment”

   4.07

“Successor Company”

   5.01

“Successor Guarantor”

   11.05

 

Section 1.03 Incorporation by Reference of Trust Indenture Act.

 

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

 

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

 

“indenture securities” means the Notes;

 

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

 

“indenture to be qualified” means this Indenture;

 

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

 

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

 

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

 

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Section 1.04 Rules of Construction.

 

(a) Unless the context otherwise requires:

 

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

 

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

 

  (3) “or” is not exclusive;

 

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

 

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

 

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

 

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

 

(b) All percentages resulting from the calculation of the Applicable Eurodollar
Rate will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point being rounded
upwards (e.g., 9.876545% will be rounded to 9.87655%) and all dollar amounts
used in or resulting from such calculations will be rounded to the nearest cent,
with one-half cent being rounded upwards.

 

ARTICLE 2

THE NOTES

 

Section 2.01 Form and Dating.

 

(a) General. The Notes and the Trustee’s certificate of authentication will be
substantially in the form of Exhibit A hereto. The Notes may have such
appropriate insertions, omissions, substitutions, notations, legends,
endorsements identifications and other variations as are required or permitted
by law, stock exchange rule or depositary rule or usage, agreements to which the
Company is subject, if any, or other customary usage, or as may consistently
herewith be determined by the Officer or Officers of the Company executing such
Notes, as evidenced by such execution (provided always that any such notation,
legend, endorsement, identification or variation is in a form acceptable to the
Company). Each Note will be dated the date of its authentication. The Notes will
be issued in fully registered form, without coupons, in denominations of $1,000
and any integral multiple of $1,000.

 

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

 

(b) Global Notes. Notes issued in global form will be substantially in the form
of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule
of Exchanges of Interests in the Global Note” attached thereto). Notes issued in
definitive form will be substantially in the form of Exhibit A hereto (but
without the Global Note Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Each Global Note will represent
such of the outstanding

 

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Notes as will be specified therein and each shall provide that it represents the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, by
adjustments made thereon and/or in the records of the Custodian to reflect
exchanges and redemptions as herein after provided. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.

 

(c) [Intentionally Omitted].

 

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

 

Section 2.02 Execution and Authentication.

 

At least one Officer must sign the Notes for the Company by manual or facsimile
signature.

 

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

 

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

 

The Trustee will, upon receipt of a written order of the Company signed by an
Officer (an “Authentication Order”), authenticate Notes for original issue that
may be validly issued under this Indenture, including any Additional Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed the
aggregate principal amount of Notes authorized for issuance by the Company
pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.

 

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

 

Section 2.03 Registrar and Paying Agent.

 

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

 

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

 

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

 

Section 2.04 Paying Agent to Hold Money in Trust.

 

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

 

Section 2.05 Holder Lists.

 

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

 

Section 2.06 Transfer and Exchange.

 

(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee
of the Depositary to the Depositary or to another nominee of the Depositary, or
by the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary. All Global Notes will be exchanged by the Company for
Definitive Notes if:

 

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

 

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

 

  (3) there has occurred and is continuing a Default or Event of Default with
respect to the Notes, and the Depositary requests such exchange.

 

Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged

 

46

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or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or
2.10 hereof, shall be authenticated and delivered in the form of, and shall be,
a Global Note, except as provided in this Section 2.06(a). A Global Note may not
be exchanged for another Note other than as provided in this Section 2.06(a);
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.

 

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Neither the Company nor any agent of
the Company shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. Beneficial interests in
the Restricted Global Notes will be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also will require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

 

  (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1).

 

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

 

  (A) both:

 

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

 

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

 

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  (B) both:

 

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

 

(ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above.

 

Upon 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, the Custodian or
the Depositary or its nominee, as the case may be, shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

 

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

 

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

 

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

 

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

 

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

 

  (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, provides the certifications required by
the applicable Letter of Transmittal and Exchange Offer Registration Statement;

 

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

 

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

 

  (D) the Registrar receives the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  (2) [Intentionally Omitted]

 

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

 

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

 

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

 

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

 

(D) the Registrar receives the following:

 

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

 

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

 

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

 

  (4) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(2) hereof, the Trustee, the Custodian or the Depositary
or its nominee, as the case may be, will cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company will execute and the Trustee will authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(4) will be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the
Private Placement Legend.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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(D) the Registrar receives the following:

 

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

 

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

 

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

 

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or
cause to be increased the aggregate principal amount of the Unrestricted Global
Note.

 

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

 

If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when
an Unrestricted Global Note has not yet been issued, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive Notes so
transferred.

 

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request
by a Holder of Definitive Notes and such Holder’s compliance with the provisions
of this Section 2.06(e), the Registrar will register the transfer or exchange of
Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder must present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Company duly executed by such Holder or by
its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this
Section 2.06(e).

 

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

 

(A) if the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate 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; and

 

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

 

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

 

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

 

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

 

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

 

(D) the Registrar receives the following:

 

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

 

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

 

and, in each such case set forth in this subparagraph (D), if the Registrar or
the Company so requests, an opinion of counsel (which opinion and counsel shall
be reasonably satisfactory to the Company and the Trustee) 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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  (3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder
of Unrestricted Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of
a request to register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.

 

(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with
the Registration Rights Agreement, the Company will issue and, upon receipt of
an Authentication Order in accordance with Section 2.02 hereof, the Trustee will
authenticate one or more Unrestricted Global Notes and/or Unrestricted
Definitive Notes in an aggregate principal amount equal to the aggregate
principal amount of the beneficial interests in the Restricted Global Notes, or
the Restricted Definitive Notes, as the case may be, accepted for exchange in
the Exchange Offer in accordance with the Registration Rights Agreement and
applicable law.

 

Concurrently with the issuance of such Notes, the Trustee, the Custodian or the
Depositary or its nominee, as the case may be, will cause the aggregate
principal amount of the applicable Restricted Global Notes to be reduced
accordingly.

 

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

 

  (1) Private Placement Legend.

 

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

 

“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”)) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e)

 

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IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.”

 

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3)
or (f) of this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement Legend.

 

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

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

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

 

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

 

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

 

(i) General Provisions Relating to Transfers and Exchanges.

 

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

 

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

 

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

 

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

 

  (5) Neither the Registrar nor the Company will be required:

 

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

 

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

 

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

 

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

 

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

 

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  (8) All certifications, certificates and opinions of counsel required to be
submitted to the Trustee and/or the Company pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by facsimile
unless the Trustee or the Company otherwise require.

 

The Trustee shall retain copies of all letters, notices and other written
communications received pursuant to this Section 2.06 (including all Notes
received for transfer pursuant to Section 2.06). The Company shall have the
right to require the Trustee to deliver to the Company, at the Company’s
expense, copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the Trustee.

 

In connection with any transfer of any Note, the Trustee and the Company shall
be entitled to receive, shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in relying upon the
certificates, opinions and other information referred to herein (or in the forms
provided herein, attached hereto or to the Notes, or otherwise) received from
any Holder and any transferee of any Note regarding the validity, legality and
due authorization of any such transfer, the eligibility of the transferee to
receive such Note and any other facts and circumstances related to such
transfer.

 

Section 2.07 Replacement Notes.

 

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

 

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

 

Section 2.08 Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.

 

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

 

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

 

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

 

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Section 2.09 Treasury Notes.

 

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

 

Section 2.10 Temporary Notes.

 

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

 

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

 

Section 2.11 Cancellation.

 

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

 

Section 2.12 Defaulted Interest.

 

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

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01 Notices to Trustee.

 

If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days (unless a shorter notice shall be satisfactory to the Trustee) but not more
than 60 days before a redemption date, an Officer’s Certificate setting forth:

 

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

 

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  (2) the expected redemption date;

 

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

 

  (4) the redemption price; and

 

  (5) any conditions precedent to such redemption.

 

Section 3.02 Selection of Notes to Be Redeemed or Purchased.

 

If less than all of the Notes are to be redeemed or purchased in an offer to
purchase at any time, the Trustee will select Notes for redemption or purchase
on a pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate, except:

 

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

 

  (2) if otherwise required by law.

 

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

 

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

 

Section 3.03 Notice of Redemption.

 

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

 

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

 

  (1) the expected redemption date;

 

  (2) the redemption price;

 

  (3)

if any Note is being redeemed in part, the portion of the principal amount of
such Note to be redeemed and that, after the redemption date upon surrender of
such Note, a new Note

 

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or Notes in principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;

 

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

 

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

 

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

 

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

 

  (8) any conditions precedent to such redemption; and

 

  (9) 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.

 

In addition, if such redemption, purchase or notice is subject to satisfaction
of one or more conditions precedent, as permitted by Section 3.07, such notice
shall describe each such condition, and if applicable, shall state that, in the
Company’s discretion, the redemption date may be delayed (but may not be delayed
more than 60 days beyond the date the Company mails the applicable notice of
redemption) until such time as any or all such conditions are satisfied, or such
redemption or purchase may not occur and such notice may be rescinded in the
event that any or all such conditions shall not have been satisfied by the
redemption date.

 

At the Company’s request, the Trustee will give the notice of redemption in the
Company’s name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days (unless a shorter notice shall be
satisfactory to the Trustee) prior to the expected redemption date, 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.

 

The notice if mailed in the 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 as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Note.

 

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; provided that Notes called for redemption may be
subject to the satisfaction of one or more conditions precedent, as provided in
Section 3.07 of this Indenture, and included in the redemption notice mailed to
Holders pursuant to Section 3.03 hereof. Such redemption may be extended or
delayed, and such redemption may be rescinded, as provided in Section 3.03.

 

Section 3.05 Deposit of Redemption or Purchase Price.

 

One Business Day prior to the redemption date, or any purchase date referred to
in Section 4.10(c) or Section 4.15 hereof, as applicable, the Company will
deposit with the Trustee or with the

 

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

 

If a redemption is subject to one or more conditions precedent that have been
included in the redemption notice mailed to Holders pursuant to Section 3.03
hereof, and any of such conditions precedent have not been satisfied or waived
by the Company prior to the close of business on the redemption date given in
the notice of redemption mailed to the Holders pursuant to Section 3.03 hereof
(as such date may have been extended or delayed as provided in Section 3.03
hereof), or such redemption shall have been rescinded as provided in
Section 3.03 hereof, the Trustee or Paying Agent will promptly return to the
Company money deposited with the Trustee or the Paying Agent by the Company to
pay the redemption price of, and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed. If the Trustee returns the redemption price
of, and accrued interest and Liquidated Damages, if any, on all Notes to be
redeemed because such condition precedent has not been satisfied, then, within
15 days following the redemption date given in the notice of redemption mailed
to Holders (as such date may be have been extended or delayed as provided in
Section 3.03 hereof), the Company will mail or caused to be mailed, by first
class mail, a notice to each Holder whose Notes were to be redeemed at its
registered address, stating that (i) such redemption has been rescinded in
accordance with Section 3.03 hereof, (ii) any Notes surrendered for redemption
by such Holder have been credited to such Holder’s account or otherwise returned
to such Holder, (iii) such Notes remain issued and outstanding and (iv) interest
on the Notes did not cease to accrue and will continue to accrue pursuant to
this Indenture, and including such other information as determined by the
Company, consistent with this Article 3.

 

Subject to the final sentence of this paragraph, if the Company complies with
the provisions of the first paragraph of this Section 3.05, on and after the
redemption or purchase date, interest will cease to accrue on the Notes or the
portions of Notes called for redemption or purchase. If a Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Company to
comply with the first paragraph of this Section 3.05, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof. If any Note called for redemption is not so paid upon surrender for
redemption on the redemption date because one or more conditions precedent to
redemption is not satisfied, interest shall continue to accrue on such Note or
the portions thereof called for redemption.

 

Section 3.06 Notes Redeemed or Purchased in Part.

 

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

 

Section 3.07 Optional Redemption.

 

(a) At any time prior to November 1, 2007, the Company may on any one or more
occasions redeem up to a maximum of 35% of the original aggregate principal
amount of Notes calculated giving effect to any issuance of Additional Notes)
with funds in the aggregate amount not exceeding the

 

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aggregate Net Cash Proceeds of one or more Equity Offerings, at a redemption
price (expressed as a percentage of principal amount) equal to 100% plus the
Applicable Eurodollar Rate then in effect, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date (subject to the right
of Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
any such redemption:

 

  (1) at least 65% of the original aggregate principal amount of the Notes
(calculated giving effect to any issuance of Additional Notes) remains
outstanding; and

 

  (2) any such redemption by the Company must be made within 90 days of the
related Equity Offering and must be made in accordance with certain procedures
set forth in this Indenture.

 

Any notice of such redemption may be given prior to the completion of the
related Equity Offering, and any such redemption or notice may, at the Company’s
discretion, be subject to the satisfaction of one or more conditions precedent,
including but not limited to the completion of the related Equity Offering.

 

(b) Except pursuant to the preceding paragraph, the Notes will not be redeemable
at the Company’s option prior to November 1, 2007.

 

(c) On or after November 1, 2007, the Company may redeem all or a part of the
Notes, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
on the Notes redeemed to the applicable redemption date, subject to the rights
of Holders on the relevant record date to receive interest on the relevant
interest payment date if redeemed during the twelve-month period commencing on
November 1 of the years indicated below.

 

Year

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

   Percentage

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

 

2007

   102.000 %

2008

   101.000 %

2009 and thereafter

   100.000 %

 

Unless the Company defaults in the payment of the redemption price or such
redemption is rescinded as provided in Section 3.03 hereof, interest will cease
to accrue on the Notes or portions thereof called for redemption on the
applicable redemption date.

 

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

 

Section 3.08 Mandatory Redemption.

 

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

 

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ARTICLE 4

COVENANTS

 

Section 4.01 Payment of Notes.

 

The Company will pay or cause to be paid the principal of, premium, if any, and
interest and Liquidated Damages, if any, on, the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest and
Liquidated Damages, if any will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. If
a payment date is not a Business Day, payment may be made on the next succeeding
day that is a Business Day and no interest shall accrue on such payment for the
intervening period. The Company will pay all Liquidated Damages, if any, in the
same manner on the dates and in the amounts set forth in the Registration Rights
Agreement.

 

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

 

Section 4.02 Maintenance of Office or Agency.

 

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

 

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

 

Section 4.03 SEC Reports.

 

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

 

  (1) all quarterly and annual reports that would be required to be filed with
the SEC on Forms 10-Q and 10-K if the Company were required to file reports; and

 

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

 

All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports. Each annual report
on Form 10-K will include a report on the Company’s consolidated financial
statements by the Company’s certified independent accountants. In addition,
following the consummation of the Exchange Offer contemplated by the
Registration Rights Agreement, the Company will file a copy of each of the
reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the rules and regulations
applicable to such reports (unless the SEC will not accept such a filing). The
Company will at all times comply with TIA § 314(a).

 

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If, at any time after consummation of the Exchange Offer contemplated by the
Registration Rights Agreement, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless continue filing the reports specified in the preceding paragraphs
with the SEC within the time periods specified above unless the SEC will not
accept such a filing. If, notwithstanding the foregoing, the SEC will not accept
the Company’s filings for any reason, the Company will post the reports referred
to in the preceding paragraphs on its website (if it then maintains a website)
within the time periods that would apply if the Company were required to file
those reports with the SEC.

 

(b) For so long as any Notes remain outstanding, if at any time they are not
required to file with the SEC the reports required by paragraphs (a) and (b) of
this Section 4.03, the Company and the Subsidiary Guarantors will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

 

Section 4.04 Compliance Certificate.

 

(a) The Company and each Subsidiary Guarantor (to the extent that such
Subsidiary Guarantor is so required under the TIA) shall deliver to the Trustee,
within 120 days after the end of each fiscal year, an Officer’s Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officer with a view to determining whether the Company 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 the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions, conditions and
covenants of this Indenture (or, if a Default or Event of Default has occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.

 

(b) So long as any of the Notes are outstanding, the Company will deliver to the
Trustee, within 30 days after the occurrence thereof, specifying such Default or
Event of Default, its status and what action the Company is taking or proposes
to take in respect thereof.

 

Section 4.05 [Intentionally Omitted]

 

Section 4.06 Stay, Extension and Usury Laws.

 

The Company and each of the Subsidiary Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted. Notwithstanding the foregoing, in no event will the interest on the
principal amount of the Notes be higher than the maximum rate permitted by New
York law as the same may be modified by U.S. law of general application.

 

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Section 4.07 Limitation on Restricted Payments.

 

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

 

  (1) declare or pay any dividend or make any distribution on or in respect of
its Capital Stock (including any payment in connection with any merger or
consolidation involving the Company or any Subsidiary of the Company) to the
holders of its Capital Stock in their capacity as such, except (x) dividends or
distributions payable solely in its Capital Stock (other than Disqualified Stock
or, in the case of a Subsidiary, Preferred Stock) and (y) dividends or
distributions payable to the Company or a Restricted Subsidiary (and, if such
Restricted Subsidiary has stockholders or equity owners other than the Company
or other Restricted Subsidiaries, to its other stockholders or equity owners on
a pro rata basis);

 

  (2) purchase, repurchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company held by Persons other than the Company or a
Restricted Subsidiary or any Capital Stock of any Parent;

 

  (3) purchase, repurchase, redeem, retire, defease or otherwise acquire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment any Subordinated Obligations (other than the purchase, repurchase
redemption, retirement, defeasance or other acquisition for value of
Subordinated Obligations acquired in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of acquisition); or

 

  (4) make any Investment (other than a Permitted Investment) in any other
Person;

 

(any such dividend, distribution, payment, purchase, redemption, repurchase,
defeasance, retirement, or other acquisition or Investment being herein referred
to as a “Restricted Payment”),

 

if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:

 

(A) a Default will have occurred and be continuing (or would result therefrom);

 

(B) the Company could not Incur at least $1.00 of additional Indebtedness under
paragraph (a) of Section 4.09 hereof; or

 

(C) the aggregate amount of such Restricted Payment and all other Restricted
Payments (the amount so expended, if other than in cash, to be determined in
good faith by the Board of Directors, whose determination will be conclusive and
evidenced by a resolution of the Board of Directors) declared or made subsequent
to the Closing Date would exceed the sum, without duplication, of:

 

(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from April 1, 2005 to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit);

 

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(ii) the aggregate Net Cash Proceeds and Fair Market Value of property or assets
received by the Company as capital contributions to the Company or from the
issue or sale of its Capital Stock (other than Disqualified Stock) in each case,
subsequent to January 27, 2005 (other than an issuance or sale to (x) a
Subsidiary of the Company or (y) an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries, except to the extent that
Consolidated Net Worth increases as a result of such issue or sale to such plan
or trust);

 

(iii) the amount by which Indebtedness of the Company or any of its Restricted
Subsidiaries is reduced on the Company’s balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) subsequent to January 27,
2005 of any Indebtedness of the Company or any of its Restricted Subsidiaries
issued after January 27, 2005 which is convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company or any Parent (less the
amount of any cash or the Fair Market Value of other property distributed by the
Company or any Restricted Subsidiary upon such conversion or exchange plus the
amount of cash, property or assets (determined as provided above) received by
the Company or any Restricted Subsidiary upon such conversion or exchange);

 

(iv) the amount equal to the net reduction in Investments in Unrestricted
Subsidiaries resulting from (x) payments of dividends, repayments of the
principal of loans or advances or other transfers of assets to the Company or
any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of “Investment”) not to exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments previously made
by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary,
which amount was included in the calculation of the amount of Restricted
Payments; and

 

(v) in the case of any disposition or repayment or return of all or any portion
of any Investment other than a Permitted Investment (without duplication of any
amount deducted in calculating the amount of Investments at any time outstanding
included in the amount of Restricted Payments), an amount in the aggregate equal
to the lesser of the return of capital, repayment or other proceeds with respect
to all such Investments and the initial amount of all such Investments.

 

(b) The provisions of the foregoing paragraph (a) will not prohibit any of the
following (each a “Permitted Payment”):

 

  (1) the making of any Restricted Payment in exchange for, or out of the Net
Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary
of the Company) of, Capital Stock of the Company (other than Disqualified Stock)
or from the substantially concurrent contribution of common equity capital to
the Company; provided, however, that:

 

(A) such Restricted Payment will be excluded in the calculation of the amount of
Restricted Payments under paragraph (a) above; and

 

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(B) the Net Cash Proceeds from such sale applied in the manner set forth in this
clause (1) will be excluded from the calculation of amounts under clause
(4)(C)(ii) of paragraph (a) above;

 

  (2) any prepayment, repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company that is permitted to be Incurred
pursuant to Section 4.09(b) hereof; provided, however, that such prepayment,
repayment, purchase, repurchase, redemption, retirement, defeasance or other
acquisition for value will be excluded in the calculation of the amount of
Restricted Payments under paragraph (a) above;

 

  (3) any prepayment, repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of Subordinated Obligations (i) from
Net Available Cash to the extent permitted by Section 4.10 hereof (ii) to the
extent provided by the agreement governing such Subordinated Obligations,
following the occurrence of a Change of Control (or, in the case of Indebtedness
of a Restricted Subsidiary Incurred and outstanding on or prior to the date on
which such Restricted Subsidiary was acquired by or became a Restricted
Subsidiary of the Company, any similar event), but only if, in each case, the
Company shall have complied with Section 4.15 hereof and, if required, purchased
all Notes tendered pursuant to the offer to repurchase all the Notes tendered
thereby prior to purchasing such Subordinated Obligations; and (iii) to the
extent such Subordinated Obligations were Indebtedness of a Restricted
Subsidiary Incurred and outstanding on or prior to the date on which such
Restricted Subsidiary was acquired by or became a Restricted Subsidiary of the
Company that was not Incurred in connection with, or in anticipation or
contemplation of, the acquisition giving rise to the Incurrence of such acquired
Indebtedness; provided, however, that such prepayment, repayment, purchase,
repurchase, redemption, retirement, defeasance or other acquisition for value
will be excluded in the calculation of the amount of Restricted Payments under
paragraph (a) above;

 

  (4) dividends paid within 60 days after the date of declaration thereof if at
such date of declaration such dividends would have complied with this covenant;
provided, however, that such dividends will be included in the calculation of
the amount of Restricted Payments under paragraph (a) above;

 

  (5)

any purchase, repurchase, redemption, retirement or other acquisition for value
of, or options to purchase, Capital Stock of the Company or any Parent from
employees, former employees, directors or former directors of the Company or any
of its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of agreements
(including employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, such Capital Stock or upon death,
resignation or termination of employment, and loans, advances, dividends or
distributions by the Company to any Parent to permit any Parent to make any such
purchase, repurchase, redemption, retirement or other acquisition for value;
provided, however, that the aggregate amount of such purchases, repurchases,
redemptions, retirements and other acquisitions for value will not exceed $2.5
million in any calendar year (which amount shall be increased by the amount of
any cash proceeds to the Company or any Parent from, or as a contribution to its
capital from, (x) sales of Capital Stock to directors, officers or employees of
the Company or any of its

 

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Subsidiaries subsequent to January 27, 2005 and (y) any “key man” life insurance
policies which are used to make such redemptions or repurchases); provided that
any unused amounts in one year can be carried forward to the next year, but
cannot be carried forward to any succeeding year; provided further, however,
that such purchases, repurchases, redemptions, retirements and other
acquisitions for value shall be included in the calculation of the amount of
Restricted Payments under paragraph (a) above;

 

  (6) loans, advances, dividends or distributions to any Parent or other
payments by the Company or any of its Restricted Subsidiaries to pay or permit
any Parent to pay Parent Taxes or Parent Expenses; provided that such payments
shall be excluded in the calculation of the amount of Restricted Payments under
paragraph (a) above;

 

  (7) the payment of fees and compensation as permitted under clause (5) or
(7) of paragraph (b) of Section 4.11 hereof; provided that such payments shall
be excluded in the calculation of the amount of Restricted Payments under
paragraph (a) above;

 

  (8) repurchases of Capital Stock deemed to occur upon the exercise of stock
options if such Capital Stock represents all or a portion of the exercise price
thereof or taxes due in connection with such exercise; provided that such
repurchases shall be excluded in the calculation of the amount of Restricted
Payments under paragraph (a) above;

 

  (9) Restricted Payments made pursuant to, or contemplated by, or made to any
Parent to permit any Parent to perform its obligations under, the provisions of
any Merger Transaction Document as in effect on the date of this Indenture, and
as the same may be amended or replaced either by a Board of Directors Approval
or by any such amendment or replacement that is not materially more
disadvantageous to the Holders in any material respect than the original Merger
Transaction Document as in effect on the date of this Indenture; provided, that
such payments shall be excluded in the calculation of the amount of Restricted
Payments under paragraph (a) above;

 

  (10) the declaration and payment of regularly scheduled or accrued dividends
to holders of any class or series of Disqualified Stock of the Company or any
Restricted Subsidiary of the Company issued on or after the date of this
Indenture in accordance with Section 4.09 hereof; provided that such payments
shall be excluded in the calculation of the amount of Restricted Payments under
paragraph (a) above;

 

  (11) the distribution of Capital Stock of an Unrestricted Subsidiary to
holders of Capital Stock of the Company; provided that such distribution is made
promptly following the formation of, and investment in, such Unrestricted
Subsidiary; and provided further that such distribution (but not such
investment) shall be excluded in the calculation of the amount of Restricted
Payments under paragraph (a) above;

 

  (12) the Company or any Restricted Subsidiary from purchasing all (but not
less than all), excluding directors’ qualifying shares, of the Capital Stock or
other ownership interests in a Subsidiary of the Company which Capital Stock or
other ownership interests were not theretofore owned by the Company or a
Restricted Subsidiary of the Company; provided that such purchases shall be
excluded in the calculation of the amount of Restricted Payments under paragraph
(a) above;

 

  (13)

loans, advances, dividends, distributions or other payments, not to exceed
$100,000 in the aggregate, to enable the Company or any Parent to make payments
to holders of its

 

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Capital Stock in lieu of the issuance of fractional shares of its Capital Stock;
provided that such loans, advances, dividends, distributions or other payments
shall be excluded in the calculation of the amount of Restricted Payments under
paragraph (a) above;

 

  (14) Restricted Payments made in connection with the Merger Transactions;
provided that such Restricted Payments shall be excluded in the calculation of
the amount of Restricted Payments under paragraph (a) above;

 

  (15) Restricted Payments made to purchase, repurchase, redeem, retire,
defease, or otherwise acquire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment any Subordinated Obligations in an
aggregate amount not to exceed $10.0 million; provided that such Restricted
Payments shall be excluded in the calculation of the amount of Restricted
Payments under paragraph (a) above; or

 

  (16) Restricted Payments (including loans and advances) in an aggregate amount
not to exceed $20.0 million (net of repayments of any such loans or advances);
provided that such payments shall be excluded in the calculation of the amount
of Restricted Payments under paragraph (a) above.

 

The amount of all Restricted Payments (other than cash) will be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.

 

Section 4.08 Limitation on Restrictions on Distributions from Restricted
Subsidiaries.

 

(a) The Company will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary, other
than a Subsidiary Guarantor, to:

 

  (1) pay dividends or make any other distributions on its Capital Stock or pay
any Indebtedness or other obligations owed to the Company;

 

  (2) make any loans or advances to the Company; or

 

  (3) transfer any of its property or assets to the Company,

except:

 

(A) any encumbrance or restriction pursuant to applicable law or an agreement in
effect at or entered into on the Closing Date (including, without limitation,
this Indenture, the Senior Subordinated Note Indenture, the Credit Agreement,
the Intercreditor Agreement or any other Secured Debt Document) and any
encumbrance or restriction pursuant to any Credit Facility of the Company or a
Restricted Subsidiary;

 

(B) any encumbrance or restriction with respect to a Restricted Subsidiary or
any of its Subsidiaries pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, in contemplation of, or to provide all or any
portion of the funds or credit support utilized to consummate the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired by the Company)

 

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and outstanding on such date, which encumbrance or restriction is not applicable
to the Company or its Restricted Subsidiaries, or the properties or assets of
the Company or its Restricted Subsidiaries, other than the Restricted
Subsidiary, or the property or assets of the Restricted Subsidiary, so acquired,
or any Subsidiary thereof or the property or assets of any such Subsidiary;

 

(C) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (A) or (B) of this covenant or this clause (C) or contained in any
amendment to an agreement referred to in clause (A) or (B) of this covenant or
this clause (C); provided, however, that the encumbrances and restrictions
contained in any such Refinancing agreement or amendment are not materially less
favorable taken as a whole, as determined by the Board of Directors acting in
good faith, to the Holders than the encumbrances and restrictions contained in
such predecessor agreement;

 

(D) in the case of clause (3), any encumbrance or restriction:

 

(i) that restricts the subletting, assignment or transfer of any property or
asset or right and is contained in any lease, license or other contract entered
into in the ordinary course of business; or

 

(ii) contained in security agreements securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the transfer
of the property subject to such security agreements;

 

(E) with respect to a Restricted Subsidiary, any restriction imposed pursuant to
an agreement entered into for the sale or disposition of all or substantially
all the Capital Stock or assets of such Restricted Subsidiary pending the
closing of such sale or disposition;

 

(F) any encumbrances or restrictions contained in any Credit Facility extended
to any Foreign Subsidiary of the Company;

 

(G) any encumbrance or restriction arising under or in connection with
Indebtedness or other contractual requirements of a Receivables Entity in
connection with a Qualified Receivables Transaction; provided that such
restrictions apply only to such Receivables Entity;

 

(H) restrictions on the transfer of assets pursuant to any Permitted Lien;

 

(I) any encumbrance or restriction arising under or in connection with any
agreement or instrument relating to any Indebtedness permitted to be Incurred
subsequent to the Closing Date pursuant to the provisions of Section 4.09
hereof, if (x) either (i) the encumbrance or restriction applies only in the
event of a payment default or a default with respect to a financial covenant
contained in the terms of such agreement or instrument or (ii) the Company in
good faith determines that such encumbrance or restriction will not cause the
Company not to have the funds necessary to pay the principal of or interest on
the Notes and (y) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company in good faith);

 

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(J) any encumbrance or restriction arising under or in connection with any
agreement or instrument governing Capital Stock of any Person other than a
Wholly Owned Subsidiary that is acquired after the Closing Date; and

 

(K) any encumbrance or restriction arising under or in connection with this
Indenture and the Notes.

 

Section 4.09 Limitation on Indebtedness.

 

(a) The Company will not, and will not permit any Restricted Subsidiary to,
Incur, directly or indirectly, any Indebtedness; provided, however, that the
Company or any Subsidiary Guarantor may Incur Indebtedness if on the date of
such Incurrence and after giving effect thereto the Consolidated Coverage Ratio
would be greater than 2.0:1.0.

 

(b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted
Subsidiaries may Incur the following Indebtedness (collectively, “Permitted
Debt”):

 

  (1) Indebtedness of the Company or any Subsidiary Guarantor under Credit
Facilities in an aggregate principal amount at any one time outstanding under
this clause (1) not to exceed the greater of (A) $85.0 million and (B) the
amount of the Borrowing Base as of the date of such Incurrence;

 

  (2) Indebtedness of the Company owed to and held by any Restricted Subsidiary
or Indebtedness of a Restricted Subsidiary owed to and held by the Company or
any Restricted Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event that results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof;

 

  (3) Indebtedness (A) represented by the Notes (not including any Additional
Notes) and the Subsidiary Guarantees, (B) outstanding on the Closing Date (other
than the Indebtedness described in clauses (1) and (2) above), (C) consisting of
Refinancing Indebtedness Incurred in respect of any Indebtedness Incurred
pursuant to clauses (1) or (2) above or this clause (3) (including Indebtedness
that is Refinancing Indebtedness) or the foregoing paragraph (a), and
(D) consisting of Guarantees of any Indebtedness permitted under clauses (1) and
(2) of this paragraph (b);

 

  (4) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or
prior to the date on which such Restricted Subsidiary was acquired by or became
a Restricted Subsidiary of the Company (other than Indebtedness Incurred in
contemplation of, in connection with, as consideration in, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Subsidiary of or was otherwise acquired by the Company);
provided, however, that on the date that such Restricted Subsidiary is acquired
by the Company, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to the foregoing paragraph (a) after giving effect to the
Incurrence of such Indebtedness pursuant to this clause (4) and (B) Refinancing
Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness
Incurred by such Restricted Subsidiary pursuant to this clause (4);

 

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  (5) Indebtedness (A) in respect of performance bonds, bankers’ acceptances,
letters of credit and surety or appeal bonds provided by the Company and the
Restricted Subsidiaries in the ordinary course of their business or other
similar instruments or obligations issued, or relating to liabilities or
obligations Incurred by the Company and the Restricted Subsidiaries in the
ordinary course of their business (including those issued to governmental
entities in connection with self-insurance under applicable workers’
compensation statutes), (B) in respect of the financing of insurance premiums by
the Company or any Restricted Subsidiary in the ordinary course of their
business and (C) under Interest Rate Agreements entered into for bona fide
hedging purposes of the Company in the ordinary course of business, or otherwise
in respect of any Credit Facility, the Notes or any other Note Lien Debt;

 

  (6) Purchase Money Indebtedness and Capitalized Lease Obligations (in an
aggregate principal amount not in excess of $10.0 million at any time
outstanding);

 

  (7) Indebtedness of Foreign Subsidiaries in an aggregate principal amount not
in excess of $20.0 million at any time outstanding;

 

  (8) Guarantees by the Company or any Restricted Subsidiary of Indebtedness or
any other obligation or liability of the Company or any Restricted Subsidiary
not incurred in violation of this Section 4.09;

 

  (9) Indebtedness of a Receivables Subsidiary secured by a Lien on all or part
of the assets disposed of in, or otherwise Incurred in connection with, a
Financing Disposition (which Indebtedness is, except for Standard Receivables
Obligations, otherwise without recourse to the Company or any Restricted
Subsidiary of the Company (other than such Receivables Subsidiary));

 

  (10) Indebtedness of the Company or any Restricted Subsidiary under Currency
Agreements entered into, in the judgment of the Company, to protect the Company
or such Restricted Subsidiary from fluctuations in currency exchange rates and
not entered into for speculative purposes;

 

  (11) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business; provided, however, that
such Indebtedness is extinguished within five Business Days of Incurrence;

 

  (12) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase
price, earn out or other similar obligations, in each case, Incurred or assumed
in connection with the disposition of any business, assets or a Restricted
Subsidiary of the Company, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition, provided that the
maximum assumable liability in respect of all such Indebtedness shall at no time
exceed the gross consideration actually received by the Company and its
Restricted Subsidiaries in connection with such disposition; or

 

  (13)

Indebtedness of the Company or any Subsidiary Guarantor in an aggregate
principal amount on the date of Incurrence that, when added to all other
Indebtedness Incurred

 

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pursuant to this clause (13) and to remain outstanding immediately after such
Incurrence, will not exceed $25.0 million.

 

(c) For purposes of determining compliance with any Dollar-denominated
restriction on the Incurrence of Indebtedness denominated in a foreign currency,
the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant
thereto shall be calculated based on the relevant currency exchange rate in
effect on the date that such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness,
provided that (x) the Dollar-equivalent principal amount of any such
Indebtedness outstanding on the Closing Date shall be calculated based on the
relevant currency exchange rate in effect on the Closing Date; (y) if such
Indebtedness is Incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable
Dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such
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; and (z) the
Dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency and that is incurred under any Credit Facility shall be calculated
based on the relevant currency exchange rate in effect on, at the Company’s
option, (i) the Closing Date; (ii) any date on which any of the respective
commitments under such Credit Facility shall be reallocated between or among
facilities or subfacilities thereunder, or on which such rate is otherwise
calculated for any purpose thereunder; or (iii) the date of such Incurrence. 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. For purposes of determining the
outstanding principal amount of any particular Indebtedness Incurred pursuant to
this covenant:

 

  (1) Indebtedness Incurred pursuant to the Initial Credit Agreement on the
Closing Date shall be treated as Incurred pursuant to clause (1) of paragraph
(b) above,

 

  (2) Indebtedness permitted by this covenant need not be permitted solely by
reference to one provision permitting such Indebtedness but may be permitted in
part by one such provision and in part by one or more other provisions of this
covenant permitting such Indebtedness; and

 

  (3) in the event that Indebtedness meets the criteria of more than one of the
types of Indebtedness described in this covenant, the Company, in its sole
discretion, may classify such Indebtedness and only shall be required to include
the amount of such Indebtedness in one of such clauses but may include the same
in more than one of such clauses.

 

(d) The Company will not Incur, and will not permit any Subsidiary Guarantor to
Incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also
contractually subordinated in right of payment to the Notes and the applicable
Subsidiary Guarantee, as the case may be, on substantially identical terms;
provided, however, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of being unsecured or by virtue of being secured on a first or junior
Lien basis.

 

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Section 4.10 Limitation on Sales of Assets and Subsidiary Stock.

 

  (a) The Company will not, and will not permit any Restricted Subsidiary to,
make any Asset Disposition unless:

 

  (1) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time of
such Asset Disposition at least equal to the fair value, as determined in good
faith by the Board of Directors, of the shares or assets subject to such Asset
Disposition;

 

  (2) at least 75% of the consideration thereof received is in the form of cash;
and

 

  (3) in the case of an Asset Disposition other than a Sale of Fixed Collateral,
an amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be):

 

(A) first, to the extent the Company elects (or is required by the terms of any
Indebtedness (other than Subordinated Obligations)), to prepay, repay, purchase,
repurchase, redeem, retire, defease or otherwise acquire for value Indebtedness
(other than Subordinated Obligations) of the Company or any Restricted
Subsidiary (in each case other than Indebtedness owed to the Company or an
Affiliate of the Company and other than Obligations in respect of Disqualified
Stock) within 365 days after the later of the date of such Asset Disposition or
the receipt of such Net Available Cash;

 

(B) second, to the extent of the balance of Net Available Cash after application
in accordance with clause (A), to the extent the Company or such Restricted
Subsidiary elects, to reinvest in Additional Assets to be owned by the Company
or a Subsidiary Guarantor (including by means of an Investment in Additional
Assets with Net Available Cash) within 365 days from the later of such Asset
Disposition or the receipt of such Net Available Cash, or, if such reinvestment
in Additional Assets is a project authorized by the Board of Directors that will
commence within 365 days but that will take longer than 365 days to complete,
the period of time necessary to complete such project;

 

(C) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), to make an Offer (as defined
in paragraph (b) of this covenant below) to purchase the Notes pursuant to and
subject to the conditions set forth in paragraph (b) of this covenant; provided,
however, that if the Company elects (or is required by the terms of any other
Indebtedness (other than Subordinated Obligations)), such Offer may be made
ratably to purchase the Notes and other Indebtedness (other than Subordinated
Obligations)of the Company; and

 

(D) fourth, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A), (B) and (C), for any general
corporate purpose permitted by the terms of this Indenture;

 

provided, however, that in connection with any prepayment, repayment, purchase,
repurchase, redemption, retirement, defeasance or other acquisition for value of
Indebtedness pursuant to clause (A), (C) or (D) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired,
defeased or otherwise acquired for value;

 

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  (4) in the case of an Asset Disposition that is a Sale of Fixed Collateral,
the Company (or the Restricted Subsidiary that owned the sold assets, as the
case may be) promptly deposits such Proceeds into a segregated Net Available
Cash Account under the control of the Note Collateral Agent that includes only
proceeds from the Sale of Fixed Collateral and interest earned thereon (a “Net
Available Cash Account”) and is free from all other Liens (other than Permitted
Prior Liens and Junior Liens), all on terms and pursuant to arrangements
reasonably satisfactory to the Note Collateral Agent in its reasonable
determination (which may include, at the Note Collateral Agent’s reasonable
request, customary officer’s certificates and legal opinions and shall include
release provisions requiring the Note Collateral Agent to release deposits in
the Net Available Cash Account as requested to permit the Company or its
Restricted Subsidiaries to apply such Net Available Cash in the manner described
below, unless the Note Collateral Agent has received written notice that an
Event of Default has occurred and is continuing from the Trustee or the holders
of at least 25% in aggregate principal amount of Notes then outstanding), and an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be):

 

(A) first, to the extent the Company or such Restricted Subsidiary elects, to
reinvest in Additional Assets constituting Fixed Collateral to be owned by the
Company or a Subsidiary Guarantor (including by means of an Investment in
Additional Assets with Net Available Cash), and the Note Collateral Agent shall
promptly be granted a perfected first priority security interest (subject to
Permitted Prior Liens) on all such assets as Fixed Collateral under the Note
Lien Security Documents to secure the Notes on terms and pursuant to
arrangements reasonably satisfactory to the Note Collateral Agent in its
reasonable determination (which may include, at the collateral agent’s
reasonable request, customary officer’s certificates and legal opinions);
provided that, notwithstanding the foregoing:

 

(x) the Company or such Restricted Subsidiary may reinvest such Net Available
Cash in Additional Assets that do not constitute Fixed Collateral in an
aggregate amount not to exceed $10.0 million since the Closing Date;

 

(y) the Company or such Restricted Subsidiary may use such Net Available Cash
for general corporate purposes in an aggregate amount not to exceed, as of any
date of determination, an amount equal to the lesser of (i) the consolidated
Capital Expenditures of the Company and its Restricted Subsidiaries paid for in
cash (other than with Proceeds from a Sale of Fixed Collateral) during the
period of the most recent four consecutive fiscal quarters ending prior to the
date of such determination for which consolidated financial statements of the
Company are available, and (ii) $7.5 million during any such four-quarter
period; and

 

(B) second, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A) after 365 days from the later of such
Asset Disposition or the receipt of such Net Available Cash (or, if a
reinvestment in Additional Assets in accordance with clause (A) is a project
authorized by the Board of Directors that will commence within 365 days but that
will take longer than 365 days to complete, after 545 days from the later of
such Asset Disposition or the receipt of such Net Available Cash), to make an
Offer (as defined in Section 4.10(b) hereof) to purchase the Notes together with
any other Note Lien Debt pursuant to and subject to the conditions set forth in
paragraph (b) of this covenant; and

 

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(C) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), for any general corporate
purpose permitted by the terms of this Indenture.

 

In addition, upon receipt of any Net Available Cash from a Casualty Event with
respect to Fixed Collateral, the Company (or the Restricted Subsidiary that
owned those assets, as the case may be) shall treat such Net Available Cash as
if it were proceeds of an Asset Disposition from a Sale of Fixed Collateral and
apply such proceeds in accordance with clause (4) of the preceding paragraph.

 

Notwithstanding the foregoing provisions of this covenant, (x) the Company and
the Restricted Subsidiaries will not be required to apply any Net Available Cash
from Asset Dispositions other than Sales of Fixed Collateral in accordance with
this covenant except to the extent that the aggregate Net Available Cash for all
such Asset Dispositions that is not applied in accordance with this covenant
exceeds $10.0 million and (y) the Company and the Restricted Subsidiaries will
not be required to apply any Net Available Cash from Asset Dispositions that are
Sales of Fixed Collateral or from Casualty Events in accordance with
Section 4.10(b) except to the extent that the aggregate Net Available Cash for
all such Asset Dispositions and Casualty Events exceeds $10.0 million.

 

For the purposes of this covenant, the following are deemed to be cash:

 

(A) the amount of any liabilities (as shown on the Company or any Restricted
Subsidiary’s most recent balance sheet or the notes thereto and other than
obligations in respect of Disqualified Stock of the Company or Disqualified
Stock and Preferred Stock of a Restricted Subsidiary that is a Subsidiary
Guarantor) (i) that is assumed by the transferee of such assets and from which
the Company and its Restricted Subsidiaries are unconditionally released or
indemnified against by such transferee or (ii) in respect of which neither the
Company nor any Restricted Subsidiary following such Asset Disposition has any
obligation,

 

(B) securities received by the Company or any Restricted Subsidiary from the
transferee that within 60 days are converted by the Company or such Restricted
Subsidiary into cash, and

 

(C) any Designated Non-Cash Consideration received by the Company or any
Restricted Subsidiary in such Asset Disposition having an aggregate fair market
value, taken together with all other Designated Non-Cash Consideration received
pursuant to this covenant that is at that time outstanding, not to exceed the
greater of (x) 2.0% of the total assets less the goodwill, net, and other
intangible assets, net, of the Company and its Restricted Subsidiaries, in each
case determined on a consolidated basis in accordance with GAAP, as of the most
recent date for which a consolidated balance sheet of the Company and its
Restricted Subsidiaries is available, and (y) $10.0 million at the time of the
receipt of such Designated Non-Cash Consideration (with 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).

 

Notwithstanding the immediately preceding paragraphs of this covenant, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Disposition without complying with such paragraphs to the extent that:

 

(1) at least 75% of the consideration for such Asset Disposition constitutes
Additional Assets; and

 

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(2) such Asset Disposition is for at least fair value, as determined in good
faith by the Board of Directors; provided that the Net Available Cash from any
consideration not constituting Additional Assets received by the Company or any
of its Restricted Subsidiaries in connection with any Asset Disposition
permitted to be consummated under this paragraph shall be subject to the
provisions of the two preceding paragraphs;

 

provided, that (A) at the time of entering into such transaction or immediately
after giving effect thereto, no Default or Event of Default shall have occurred
or be continuing or would occur as a consequence thereof and (B) in any such
Asset Disposition that is a Sale of Fixed Collateral, the Additional Assets
acquired as consideration in accordance with clause (1) above constitute Fixed
Collateral except to the extent permitted pursuant to clause (4)(A)(x) of the
first paragraph of Section 4.10(a).

 

(b) In the event of an Asset Disposition that requires the purchase of Notes
pursuant to clause (a)(3)(C) or (a)(4)(B) of this Section 4.10, the Company
(i) will be required to purchase Notes tendered pursuant to an offer by the
Company to the Holders for the Notes (the “Offer”) at a purchase price of 100%
of their principal amount plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date) in accordance with the procedures (including
prorating in the event of oversubscription), set forth in this Indenture; and
(ii) may purchase other Indebtedness that is Note Lien Debt of the Company that
contains provisions similar to those set forth in this Indenture with respect to
offers to purchase or redeem with the proceeds from the sales of assets of the
Company on the terms and to the extent contemplated thereby (provided that in no
event shall the Company offer to purchase such other Note Lien Debt of the
Company at a purchase price in excess of 100% of its principal amount (without
premium), plus accrued and unpaid interest and liquidated damages, if any,
thereon). If the aggregate purchase price of Notes (and other Note Lien Debt)
tendered pursuant to the Offer is less than the Net Available Cash allotted to
the purchase of the Notes (and other Note Lien Debt (including liquidated
damages, if any)), the Company will apply the remaining Net Available Cash in
accordance with (x) clause (a)(3)(D) of this Section 4.10 to the extent that
such Net Available Cash is from an Asset Disposition other than a Sale of Fixed
Collateral and (y) clause (a)(4)(C) of this Section 4.10 to the extent that such
Net Available Cash is from a Sale of Fixed Collateral. The Company will not be
required to make an Offer for Notes (and other Note Lien Debt) pursuant to this
Section 4.10 if the Net Available Cash available therefor (after application of
the proceeds as provided in clauses (a)(3)(A) and (B) and (a)(4)(A), as
applicable) is less than $10.0 million for any particular Asset Disposition
(which lesser amount will be carried forward for purposes of determining whether
an Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).

 

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

 

The Offer shall be made to all Holders and all holders of other Note Lien Debt
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets in
accordance with this Indenture. The Offer will remain open for a period of at
least 20 Business Days following its commencement and not more than 30 Business
Days, except to the extent that a longer period is required by applicable law
(the “Offer Period”). No later than three Business Days after the termination of
the Offer Period (the “Purchase Date”), the Company will apply all Net Available
Cash (the “Offer Amount”) to the purchase of Notes and such other Note Lien Debt
in accordance with Section 4.10(b). Payment for any Notes so purchased will be
made in the same manner as interest payments are made.

 

If the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest and Liquidated
Damages, if any, will be paid to the Person

 

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in whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to Holders who tender Notes pursuant
to the Offer.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

On or before the Purchase Date, the Company will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Offer Amount of
Notes or portions thereof tendered pursuant to the Offer, or if less than the
Offer Amount has been tendered, all Notes tendered, and will deliver or cause to
be delivered to the Trustee the Notes properly accepted together with an
Officer’s Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 4.10.
The Company, the Depositary or the Paying Agent, as the case may be, will
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each

 

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tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company will
promptly issue a new Note, and the Trustee, upon written request from the
Company, will authenticate and mail or deliver (or cause to be transferred by
book entry) such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Offer on the Purchase Date.

 

(d) The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Notes pursuant to this Section 4.10. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.10, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under this Section 4.10 by virtue thereof.

 

Section 4.11 Limitation on Transactions with Affiliates.

 

(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into or conduct any transaction or series of
related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Company (an
“Affiliate Transaction”) unless such transaction is on terms:

 

  (1) that are fair and reasonable to, and in the best interest of, the Company
or such Restricted Subsidiary, as the case may be, as determined in good faith
by the Board of Directors;

 

  (2) that, in the event such Affiliate Transaction involves an aggregate amount
in excess of $5.0 million;

 

  (i) are set forth in writing; and

 

  (ii) have been approved by a majority of the members of the Board of
Directors; and

 

  (3) that, in the event such Affiliate Transaction involves an amount in excess
of $20.0 million, have been determined by a nationally recognized appraisal,
accounting or investment banking firm to be fair, from a financial point of
view, to the Company or such Restricted Subsidiary, as the case may be.

 

(b) The provisions of the foregoing paragraph (a) will not prohibit:

 

  (1) any Restricted Payment permitted to be paid pursuant to Section 4.07
hereof, any Permitted Payment, or any Permitted Investments described in clauses
(5) and (6) of the definition thereof;

 

  (2) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock or equity options and stock or equity ownership plans approved by the
Board of Directors;

 

  (3) the grant of stock or equity options or similar rights to employees and
directors or members of the Board of Directors of the Company or its
Subsidiaries pursuant to plans and/or contracts approved by the Board of
Directors;

 

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  (4) loans or advances to officers, directors or employees of the Company or
its Subsidiaries in the ordinary course of business in accordance with past
practices of the Company, but in any event not to exceed $5.0 million in the
aggregate outstanding at any one time;

 

  (5) the payment of reasonable fees and compensation to, and the provision of
indemnity on behalf of, directors, officers, employees, consultants or members
of the Board of Directors of the Company or any Subsidiary as determined in good
faith by the Company’s Board of Directors;

 

  (6) any transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries;

 

  (7) any transaction or any payment pursuant to or contemplated by the
provisions of any Merger Transaction Document as in effect on the date of this
Indenture, and as the same may be amended or replaced either by a Board of
Directors Approval or by any such amendment or replacement that is not
materially more disadvantageous to the Holders in any material respect than the
original Merger Transaction Document as in effect on the date of this Indenture;

 

  (8) transactions effected as part of a Qualified Receivables Transaction;

 

  (9) the granting or performance of registration rights under a written
registration rights agreement approved by the Board of Directors and containing
customary terms, taken as a whole;

 

  (10) transactions with Persons solely in their capacity as holders of
Indebtedness or Capital Stock of the Company or any of its Restricted
Subsidiaries, where such Persons are treated no more favorably than holders of
Indebtedness or Capital Stock of the Company or such Restricted Subsidiary
generally;

 

  (11) transactions with customers, clients, suppliers, or purchasers or sellers
of goods or services in the ordinary course of business;

 

  (12) sales of Capital Stock (other than Disqualified Stock or Preferred Stock
of a Subsidiary that is not a Subsidiary Guarantor) for any consideration or any
capital contribution;

 

  (13) any agreement as in effect on the Closing Date and any amendment thereto
or any replacement thereof or any transaction completed pursuant to such
amendment or replacement agreement (including pursuant to any amendment
thereto), so long as any such amendment or replacement agreement is not
materially more disadvantageous to the Holders of Notes in any material respect
than the original agreement as in effect on the Closing Date;

 

  (14) transactions permitted by, and complying with, the provisions of
Section 5.01 hereof;

 

  (15) execution, delivery and performance of a tax sharing agreement with
respect to any of the charges, taxes or assessments described in the definition
of “Parent Taxes;”

 

  (16)

any transaction in the ordinary course of business, or approved by a majority of
the Board of Directors, between the Company or any Restricted Subsidiary and any
Affiliate of the Company controlled by the Company that is a joint venture or
similar entity (in

 

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which no other Affiliate of the Company, other than a Restricted Subsidiary,
owns any Capital Stock); and

 

  (17) any agreement to do any of the foregoing.

 

Section 4.12 Limitation on Liens.

 

The Company will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, create, Incur, assume or otherwise cause or suffer to exist any
Lien of any kind (other than Permitted Liens) upon any property or assets of the
Company or any Restricted Subsidiary, whether owned on the Closing Date or
thereafter acquired; provided that the Company and any Restricted Subsidiary may
incur Liens (in addition to Permitted Liens) securing Indebtedness on property
or assets that are not Collateral if:

 

  (1) in the case of any Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes, the Notes are secured by
a Lien on such property or assets that is senior in right of priority to such
Liens; and

 

  (2) in the case of all Liens securing other Indebtedness, the Notes are
equally and ratably secured by a Lien on such property or assets.

 

Section 4.13 Business Activities.

 

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

 

Section 4.14 Corporate Existence.

 

Subject to Article 5 hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect:

 

  (1) its corporate existence, and the corporate, partnership or other existence
of each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary; and

 

  (2) the rights (charter and statutory), licenses and franchises of the Company
and its Restricted Subsidiaries; provided, however, that the Company shall not
be required to preserve any such right, license or franchise, of the Company or
any Restricted Subsidiary or (ii) the corporate, partnership or other existence
of any Restricted Subsidiary if the maintenance and preservation thereof is in
the judgment of the Company no longer desirable in the conduct of the business
of the Company and its Restricted Subsidiaries, taken as a whole.

 

Section 4.15 Offer to Repurchase Upon Change of Control.

 

(a) Upon the occurrence of any Change of Control, each Holder will have the
right to require the Company to purchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of such Holder’s Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date). In the event that

 

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at the time of such Change of Control the terms of any Credit Facility restrict
or prohibit the repurchase of Notes pursuant to this Section 4.15, then prior to
the mailing of the notice to Holders provided for in the immediately following
paragraph but in any event within 30 days following the date the Company obtains
actual knowledge of any Change of Control, the Company shall:

 

  (1) repay in full all Indebtedness under Credit Facilities the terms of which
require repayment upon a Change of Control or if doing so will allow the
purchase of the Notes, offer to repay in full all Indebtedness under such Credit
Facilities and repay the Indebtedness under such Credit Facilities of each
lender who has accepted such offer; or

 

  (2) obtain the requisite consent under the agreements governing the Credit
Facilities the terms of which require repayment upon a Change of Control to
permit the repurchase of the Notes as provided for in the immediately following
paragraph.

 

(b) Not later than 30 days following the date the Company obtains actual
knowledge of any Change of Control, the Company shall mail a notice to each
Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

 

  (1) that a Change of Control has occurred and that such Holder has the right
to require the Company to purchase all or a portion of such Holder’s Notes at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);

 

  (2) the circumstances and relevant facts and financial information regarding
such Change of Control;

 

  (3) the purchase date (which shall be no earlier than 30 days nor later than
90 days from the date such notice is mailed) (the “Change of Control Payment
Date”);

 

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

 

  (5) that, unless the Company defaults in the payment of a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest on
the relevant interest payment date) in respect of any Notes or portions of Notes
properly tendered, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Payment
Date;

 

  (6) that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled
“Option of Holder to Elect Purchase” attached to the Notes completed, or
transfer by book-entry transfer, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date;

 

  (7)

that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the

 

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name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased;

 

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

 

  (9) such other instructions determined by the Company, consistent with this
Section 4.15 and this Indenture, that a Holder must follow in order to have its
Notes purchased; and

 

  (10) if such notice is mailed prior to the occurrence of a Change of Control,
that such offer is conditioned on the occurrence of such Change of Control.

 

(c) The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the purchase of Notes pursuant to this covenant. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this covenant, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under this covenant by virtue thereof.

 

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

 

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

 

  (2) deposit with the Paying Agent an amount equal to 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest on the relevant interest payment date)
in respect of all Notes or portions of Notes properly tendered; and

 

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

 

The Paying Agent will promptly mail (but in any case not later than five days
after the Change of Control Payment Date) to each Holder of Notes properly
tendered 101% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.

 

(e) Notwithstanding anything to the contrary in this Section 4.15, the Company
will not be required to make a Change of Control Offer upon a Change of Control
if (1) a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 3.07 hereof, unless or until (i) there is a default in payment of the
applicable redemption prices or(ii) the Company

 

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fails to pay the applicable redemption price on the redemption date (as such
redemption date may be extended or delayed, or such redemption may be rescinded,
as provided in Section 3.03 hereof).

 

Section 4.16 [Intentionally Omitted]

 

Section 4.17 Limitation on the Sale or Issuance of Preferred Stock of Restricted
Subsidiaries.

 

The Company will not permit any Subsidiary Guarantor to issue any shares of its
Preferred Stock except to the Company or a Restricted Subsidiary.

 

Section 4.18 Future Subsidiary Guarantors.

 

After the Closing Date, the Company will cause each existing and future Domestic
Subsidiary of the Company (other than any Unrestricted Subsidiary) that
guarantees payment by the Company of any Indebtedness (other than Immaterial
Indebtedness) of the Company to become a Subsidiary Guarantor, and if
applicable, execute and deliver to the Trustee a supplemental indenture in the
form set forth in this Indenture pursuant to which such Domestic Subsidiary
will, jointly and severally, fully and unconditionally Guarantee on a senior
secured basis the Guaranteed Obligations within 10 Business Days of the date on
which it enters into such guarantee of Indebtedness (other than Immaterial
Indebtedness) of the Company; provided that any such future Domestic Subsidiary
that constitutes an Immaterial Subsidiary need not become a Subsidiary Guarantor
until such time as it ceases to be an Immaterial Subsidiary.

 

Section 4.19 Further Assurances; Insurance.

 

(a) The Company and each of the Subsidiary Guarantors will do or cause to be
done all acts that the Note Collateral Agent from time to time may reasonably
request to assure and confirm that the Note Collateral Agent holds, for the
benefit of the holders of Note Lien Obligations, duly created and enforceable
and (except with respect to Excluded Perfection Assets) perfected Note Liens
upon the Collateral (including any property or (other than Excluded Perfection
Assets) assets that are acquired or otherwise become Collateral after the Notes
are issued), in each case, as contemplated by, and with the Lien priority
required under, the Note Lien Documents.

 

(b) Upon the reasonable request of the Note Collateral Agent or any Note Lien
Representative at any time and from time to time, the Company and each of the
Subsidiary Guarantors will promptly execute, acknowledge and deliver such
security documents, instruments, certificates, notices and other documents, and
take such other actions that the Note Collateral Agent may reasonably request,
to create, perfect, protect, assure or enforce the Liens and benefits intended
to be conferred, in each case as contemplated by, and with the Lien priority and
perfection required under, the Note Lien Documents for the benefit of the
holders of Note Lien Obligations.

 

(c) The Company and each of the Subsidiary Guarantors will:

 

(1) keep their properties insured at all times by financially sound and
reputable insurers in such amounts and against such risks (but including in any
event public liability, product liability and business interruption) as are
usually insured against in the same general area by companies in the same or
similar business and, in any event, insuring the Collateral against loss by
fire, explosion or theft or other risks as may be required by the Note Lien
Security Documents;

 

(2) maintain such other insurance as may be required by law; and

 

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(3) maintain title insurance on real property Collateral to the extent required
by the Note Lien Security Documents.

 

(d) The Company and the Subsidiary Guarantors will furnish to the Note
Collateral Agent all information reasonably requested by it as to their property
and liability insurance carriers; provided that the Note Collateral Agent shall
have no obligation or responsibility to monitor such insurance carriers. The
Company and the Subsidiary Guarantors will provide that the Note Collateral
Agent, on behalf of holders of Note Lien Debt, be named as an additional insured
and/or loss payee in respect of casualty insurance for Fixed Collateral
property, with a waiver of subrogation, and 30 days’ notice of any cancellation
of or material change to all insurance policies of the Company and the
Subsidiary Guarantors required by the Note Lien Security Documents. Any payments
received by the Note Collateral Agent in its capacity as additional insured
and/or loss payee in respect of such insurance will be deposited by it into the
Net Available Cash Account and may be applied by the Company and its Restricted
Subsidiaries in accordance Section 4.10(a)(4) hereof.

 

ARTICLE 5

SUCCESSORS

 

Section 5.01 Merger and Consolidation.

 

The Company will not consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person, unless:

 

  (1) the resulting, surviving or transferee Person (the “Successor Company”)
will be a Person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor Company
(if not the Company) will expressly assume, by a supplemental indenture and
registration rights agreement (if applicable), executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all the obligations of
the Company under the Notes, this Indenture and the Registration Rights
Agreement (if applicable);

 

  (2) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;

 

  (3) immediately after giving effect to such transaction and any related
financing transactions on a pro forma basis either (i) the Successor Company
would be able to Incur an additional $1.00 of Indebtedness under paragraph
(a) of Section 4.09 hereof or (ii) the Consolidated Coverage Ratio of the
Successor Company would be greater than the Consolidated Coverage Ratio of the
Company immediately prior to such transaction; and

 

  (4) 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 indenture (if any) comply with this Indenture.

 

Section 5.02 Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties or
assets of the Company in a transaction that is

 

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subject to, and that complies with the provisions of, Section 5.01 hereof, the
successor Person formed by such consolidation or into or with which the Company
is merged or to which such sale, assignment, transfer, lease, conveyance or
other disposition is made shall succeed to, and be substituted for (so that from
and after the date of such consolidation, merger, sale, assignment, transfer,
lease, conveyance or other disposition, the provisions of this Indenture
referring to the “Company” shall refer instead to the successor Person and not
to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein. Notwithstanding Section 5.01 hereof, this Section 5.02
shall apply to the Transactions as if the Transactions are subject to, and
comply with the provisions of, Section 5.01 hereof.

 

The Company may merge with or into, or convey, transfer or lease all or
substantially all its assets to (x) an Affiliate incorporated solely for the
purpose of reincorporating the Company in another jurisdiction or (y) a
Restricted Subsidiary (including a Subsidiary Guarantor) so long as all assets
of the Company and the Restricted Subsidiary immediately prior to such
transaction are owned by such Restricted Subsidiary and its Restricted
Subsidiaries immediately after the consummation thereof

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01 Default.

 

Each of the following is an “Event of Default”:

 

  (1) a default in any payment of interest on any Note when due and payable
continued for 30 days;

 

  (2) a default in the payment of principal of any Note when due and payable at
its Stated Maturity, upon required redemption or repurchase, upon declaration of
acceleration or otherwise;

 

  (3) a default in the observance or performance of any other covenant or
agreement contained in this Indenture, which default continues for a period of
30 days after the Company receives written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Notes;

 

  (4) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Restricted Subsidiary (other than a
Receivables Entity) of the Company, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded, annulled
or otherwise cured within 20 days of receipt by the Company or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal amount
of such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final maturity or which
has been accelerated (in each case with respect to which the 20-day period
described above has elapsed), aggregates $20.0 million or more at any time;

 

  (5) the Company or a Significant Subsidiary pursuant to or within the meaning
of Bankruptcy Law:

 

  (i) commences a voluntary case,

 

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

 

  (iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,

 

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

 

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

 

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

 

  (i) is for relief against the Company or a Significant Subsidiary in an
involuntary case;

 

  (ii) appoints a custodian of the Company or a Significant Subsidiary or for
all or substantially all of the property of the Company or a Significant
Subsidiary; or

 

  (iii) orders the liquidation of the Company or a Significant Subsidiary;

 

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

 

  (7) the rendering of any judgment or decree for the payment of money in excess
of $20.0 million or its foreign currency equivalent against the Company or a
Significant Subsidiary if:

 

  (i) an enforcement proceeding thereon is commenced by any creditor, or

 

  (ii) such judgment or decree remains outstanding for a period of 60 days after
such judgment becomes final and not appealable and is not discharged, paid,
waived or stayed;

 

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

 

  (9) the occurrence of any of the following:

 

(A) except as permitted by this Indenture, any Note Lien Security Document is
held to be unenforceable or invalid in any respect by a court of competent
jurisdiction (and such holding remains unstayed for a period of 30 days) or
otherwise ceases for any reason to be fully enforceable for a period of 30 days
after notice thereof is delivered to the Company by the Trustee or the holders
of at least 25% in aggregate principal amount of Notes then outstanding;
provided that it will not be an Event of Default under this clause (9)(A) if the
sole result of the failure of one or more of any such Note Lien Security
Documents to be fully enforceable is that (x) any Note Lien purported to be
granted thereunder purports to encumber Collateral that has been released in
accordance with the terms of this Indenture and the Note Lien Security Documents
or (y) any Note Lien purported to be granted thereunder on Collateral having,
individually or in the

 

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aggregate, a Fair Market Value not more than $20.0 million, ceases to be an
enforceable and perfected Priority Lien (in the case of Fixed Collateral,
subject only to Permitted Prior Liens) or Junior Lien (in the case of Liquid
Collateral, subject only to Credit Facility Liens and Permitted Prior Liens), as
and to the extent required by the applicable Note Lien Security Documents;

 

(B) any Note Lien purported to be granted under any Note Lien Security Document
on Collateral, individually or in the aggregate, having a Fair Market Value in
excess of $20.0 million ceases to be an enforceable and perfected Priority Lien
(in the case of Fixed Collateral, subject only to Permitted Prior Liens) or
Junior Lien (in the case of Liquid Collateral, subject only to Credit Facility
Liens and Permitted Prior Liens), as and to the extent required by the
applicable Note Lien Security Documents, for a period of 30 days after notice
thereof is delivered to the Company by the Trustee or the holders of at least
25% in aggregate principal amount of Notes then outstanding; or

 

(C) the Company or any Subsidiary Guarantor, or any Person acting on behalf of
any of them, denies or disaffirms, in writing, any obligation of the Company or
any Subsidiary Guarantor set forth in or arising under any Note Lien Security
Document, except to the extent of any Note Lien purported to be granted
thereunder which purports to encumber Collateral that has been released in
accordance with the terms of this Indenture and the Note Lien Security
Documents.

 

The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

 

However, a default under clause (3) will not constitute an Event of Default
until the Trustee notifies the Company or the Holders of at least 25% in
principal amount of the outstanding Notes notify the Company and the Trustee of
the default and the Company or the relevant Subsidiary Guarantor, as applicable,
does not cure such default within the time specified in clause (3) hereof after
receipt of such notice.

 

Section 6.02 Acceleration.

 

If an Event of Default (other than an Event of Default pursuant to
Section 6.01(5) or Section 6.01(6)) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Notes by notice
to the Company may declare the principal of and accrued but unpaid interest and
Liquidated Damages, if any, on all the Notes to be due and payable. Upon such a
declaration, such principal and interest and Liquidated Damages, if any, will be
due and payable immediately. If an Event of Default pursuant to Section 6.01(5)
or Section 6.01(6) relating to the Company occurs, the principal of and interest
and Liquidated Damages, if any, on all the Notes will become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders.

 

The Holders of a majority in 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 or Liquidated Damages, if
any, that has become due solely because of the acceleration) have been cured or
waived.

 

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Section 6.03 Other Remedies.

 

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

 

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

 

Section 6.04 Waiver of Past Defaults.

 

Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, or interest on, the Notes; provided, however, that the Holders of
a majority in aggregate principal amount of the then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

 

Section 6.05 Control by Majority.

 

Holders of a majority in aggregate principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. However, the Trustee 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 Notes or
that would involve the Trustee in personal liability.

 

Section 6.06 Limitation on Suits.

 

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

 

  (1) such Holder gives to the Trustee written notice that an Event of Default
is continuing;

 

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

 

  (3) such Holder or Holders offer and, if requested, provide to the Trustee
security or indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;

 

  (4) the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and

 

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

 

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

 

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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, and interest on the Note, on or after
the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

 

Section 6.08 Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.01(1) or (2) 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 Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on, the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09 Trustee May File Proofs of Claim.

 

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

 

Section 6.10 Priorities.

 

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

 

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

 

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

 

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

 

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

 

Section 6.11 Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate
principal amount of the then outstanding Notes.

 

ARTICLE 7

TRUSTEE

 

Section 7.01 Duties of Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.02 Rights of Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.03 Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee (if this Indenture has been qualified under the TIA) or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.

 

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Section 7.04 Trustee’s Disclaimer.

 

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

 

Section 7.05 Notice of Defaults.

 

If a Default occurs and is continuing and is known to the Trustee, the Trustee
must mail to each Holder notice of the Default within the earlier of 90 days
after it occurs or 30 days after it is known to a Trust Officer or written
notice of it is received by the Trustee. Except in the case of a Default in the
payment of principal of, interest or premium or Liquidated Damages, if any, on
any Note (including payments pursuant to the redemption provisions of such
Note), the Trustee may withhold notice if and so long as a committee of its
Trust Officers in good faith determines that withholding notice is in the
interests of the Holders.

 

Section 7.06 Reports by Trustee to Holders of the Notes.

 

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

 

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

 

Section 7.07 Compensation and Indemnity.

 

(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee’s compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in accordance with any provision of this Indenture, except any such
disbursement, advance or expense as may be attributable to its negligence or bad
faith. Such expenses will include the reasonable compensation, disbursements and
expenses of the Trustee’s agents and counsel.

 

(b) The Company and the Subsidiary Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Subsidiary Guarantors (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company, the
Subsidiary Guarantors, any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee will notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company will not relieve the Company or any of the Subsidiary

 

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Guarantors of their obligations hereunder. The Company or such Subsidiary
Guarantor will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. Neither the Company nor any Subsidiary
Guarantor need pay for any settlement made without its consent.

 

(c) The obligations of the Company and the Subsidiary Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.

 

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

 

(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

 

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

 

Section 7.08 Replacement of Trustee.

 

(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.

 

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

 

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

 

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

 

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

 

  (4) the Trustee becomes incapable of acting.

 

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

 

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

 

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

 

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

 

Section 7.09 Successor Trustee by Merger, etc.

 

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

 

Section 7.10 Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized
and doing business under the laws of the United States of America or of any
state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50.0
million as set forth in its most recent published annual report of condition.

 

This Indenture will always have a Trustee who satisfies the requirements of TIA
§ 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

 

Section 7.11 Preferential Collection of Claims Against Company.

 

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

 

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

 

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

 

Section 8.02 Legal Defeasance and Discharge.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable
to this Section 8.02, the Company and each of the Subsidiary Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with

 

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

 

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

 

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

 

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

 

  (4) this Article 8.

 

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

 

Section 8.03 Covenant Defeasance.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable
to this Section 8.03, the Company and each of the Subsidiary Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.17, 4.18
and 4.19 hereof and clauses (2) and (3) of Section 5.01 hereof and clause (1) of
Section 11.05 hereof with respect to the outstanding Notes on and after the date
the conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes will thereafter be deemed not
“outstanding” for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but will continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Subsidiary Guarantees, the Company and the
Subsidiary Guarantors may omit to comply with and will have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply will
not constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes and
Subsidiary Guarantees will be unaffected thereby. In addition, upon the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Section 6.01(3) and 6.01(4) hereof will not constitute
Events of Default.

 

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Section 8.04 Conditions to Legal or Covenant Defeasance.

 

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

 

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

 

  (2) in the case of an election under Section 8.02 hereof, the Company must
deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Notwithstanding the foregoing, the Opinion of Counsel required by clause
(2) above with respect to a Legal Defeasance need not to be delivered if all
Notes not therefore delivered to the Trustee for cancellation (1) have become
due and payable or (2) will become due and payable on the maturity date within
one year, or are to be called for redemption within one year, under arrangements
reasonably satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company.

 

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

 

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

 

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

 

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

 

Section 8.06 Repayment to Company.

 

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

 

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Section 8.07 Reinstatement.

 

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

 

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01 Without Consent of Holders of Notes.

 

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

 

  (1) cure any ambiguity, omission, defect or inconsistency,

 

  (2) provide for the assumption by a successor of the Company’s or a Subsidiary
Guarantor’s obligations to the Holders of the Notes and Subsidiary Guarantees in
the case of a merger or consolidation or sale, conveyance, transfer or lease of
all or substantially all of the Company’s or such Subsidiary Guarantor’s assets,
as applicable,

 

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

 

  (4) add additional Guarantees with respect to the Notes,

 

  (5) make, complete or confirm any grant of Collateral permitted or required by
this Indenture or any of the Note Lien Security Documents, including adding any
additional assets as Collateral, or any release of Collateral in accordance with
this Indenture or any of the Note Lien Security Documents.

 

  (6) add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred upon the Company,

 

  (7) make any change that does not adversely affect the rights of any Holder,
subject to the provisions of this Indenture,

 

  (8) conform the text of this Indenture, the Subsidiary Guarantees or the Notes
to any provision of the “Description of Notes” section of the Offering
Memorandum to the extent that such provision in that “Description of Notes”
section was intended to be a verbatim recitation of a provision of this
Indenture, the Subsidiary Guarantees or the Notes,

 

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  (9) provide for the issuance of the Exchange Notes or Additional Notes, or

 

  (10) comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.

 

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in
Section 13.04 hereof, the Trustee will join with the Company and the Subsidiary
Guarantors in the execution of any amended or supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee will
not be obligated to enter into such amended or supplemental indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.

 

Section 9.02 With Consent of Holders of Notes.

 

Except as provided below in this Section 9.02, the Company and the Trustee may
amend or supplement this Indenture (including, without limitation, Sections 4.10
and 4.15 hereof) and the Notes and the Subsidiary Guarantees with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding (including, without limitation, Additional Notes, if any)
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, or interest on, the Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision of
this Indenture or the Notes or the Subsidiary Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding (including, without limitation, Additional Notes, if any)
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). In addition, any amendment to, or waiver of, the provisions of this
Indenture or any Note Lien Security Document that has the effect of releasing
one or more of the Subsidiary Guarantors from its Subsidiary Guarantee or of
releasing all or substantially all of the Collateral from the Liens securing the
Notes will require the consent of the Holders of a majority in principal amount
of the Notes then outstanding (including, without limitation, consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
“outstanding” for purposes of this Section 9.02.

 

Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence reasonably
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 13.04
hereof, the Trustee will join with the Company and the Subsidiary Guarantors in
the execution of such amended or supplemental indenture unless such amended or
supplemental indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.

 

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

 

After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not,

 

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however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes or the
Subsidiary Guarantees. However, without the consent of each Holder of an
outstanding Note affected, no amendment, supplement or waiver under this
Section 9.02 may (with respect to any Notes held by a non-consenting Holder):

 

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

 

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

 

  (3) reduce the principal of or change the Stated Maturity of any Note;

 

  (4) reduce the premium payable upon the redemption of any Note or change the
date at which any Note may be redeemed under Section 3.07;

 

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

 

  (6) make any change in the provisions of this Indenture governing the right of
any Holder to receive payment of principal of, and interest on, such Holder’s
Notes on or after the due dates therefor (except a rescission of acceleration of
the Notes by the Holders of a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from such
acceleration) or to institute suit for the enforcement of any payment on or with
respect to such Holder’s Notes;

 

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

 

  (8) make any change to the provisions of this Article 9 which require each
Holder’s consent.

 

Section 9.03 Compliance with Trust Indenture Act.

 

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

 

Section 9.04 Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder’s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date on which the Trustee receives an Officer’s
Certificate certifying that the Holders of the requisite principal amount of
Notes have consented (and not thereafter revoked such consent) to the amendment,
supplement or waiver. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

 

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Section 9.05 Notation on or Exchange of Notes.

 

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

 

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

 

Section 9.06 Trustee to Sign Amendments, etc.

 

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

 

ARTICLE 10

COLLATERAL AND SECURITY

 

Section 10.01 Collateral and Note Lien Security Documents.

 

The due and punctual payment of the principal of and interest and Liquidated
Damages, if any, on the Notes when and as the same shall be due and payable,
whether on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of and interest
and Liquidated Damages (to the extent permitted by law), if any, on the Notes
and performance of all other obligations of the Company to the Holders of Notes
or the Trustee under this Indenture and the Notes, according to the terms
hereunder or thereunder, are secured as provided in the Note Lien Security
Documents (subject to the terms of the Intercreditor Agreement). Wells Fargo
Bank, N.A. will initially act as the Note Collateral Agent. Each Holder of
Notes, by its acceptance thereof, consents and agrees to the terms of the Note
Lien Security Documents (including, without limitation, the provisions providing
for foreclosure and release of Collateral) as the same may be in effect or may
be amended, modified or waived from time to time in accordance with their terms
and the terms of this Indenture, and authorizes and directs the Trustee and the
Note Collateral Agent to enter into the Note Lien Security Documents to which
they are a party, bind the Holders to the terms set forth in such Note Lien
Security Documents and to perform and observe their respective obligations and
exercise their respective rights thereunder in accordance therewith; provided,
however, that if any of the provisions of the Note Lien Security Documents
limits, qualifies or conflicts with a provision of the TIA that is required to
be a part of and govern this Indenture, such TIA provision shall control. The
Company will deliver to the Trustee copies of all documents delivered to the
Note Collateral Agent pursuant to the Note Lien Security Documents and will
comply with the provisions of Section 4.19 hereof. The relative rights of the
holders of Note Liens and the holders of Credit Facility Liens with respect to
the Collateral are governed by, and subject to the terms and conditions of, the
Intercreditor Agreement. The Note Lien Security Documents may be amended,
supplemented or modified in accordance with Section 2.9 of the Collateral Agency
Agreement.

 

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Section 10.02 Equal and Ratable Sharing of Collateral by Holders of Note Lien
Debt.

 

Notwithstanding (1) anything to the contrary contained in the Note Lien Security
Documents; (2) the time of incurrence of any Series of Note Lien Debt; (3) the
order or method of attachment or perfection of any Liens securing any Series of
Note Lien Debt; (4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral, (5) the time of taking possession or control over any
Collateral, (6) that any Note Lien may not have been perfected or may be or have
become subordinated, by equitable subordination or otherwise, to any other Lien
or (7) the rules for determining priority under any law governing relative
priorities of Liens:

 

(A) all Note Liens at any time granted by the Company or any Subsidiary
Guarantor will secure, equally and ratably, all present and future Note Lien
Obligations; and

 

(B) all Proceeds of all Note Liens at any time granted by the Company or any
Subsidiary Guarantor will be allocated and distributed equally and ratably on
account of the Note Lien Debt and other Note Lien Obligations.

 

This Section 10.02 is intended for the benefit of, and will be enforceable as a
third party beneficiary by, each present and future holder of Note Lien
Obligations, each present and future Note Lien Representative and the Note
Collateral Agent as holder of Note Liens. The Note Lien Representative of each
future Series of Note Lien Debt will be required to deliver a Lien Sharing and
Priority Confirmation to the Note Collateral Agent and the Trustee at the time
of incurrence of such Series of Note Lien Debt.

 

Section 10.03 Recording; Certificates and Opinions.

 

(a) The Company will furnish to the Trustee the opinions required by TIA
§314(b). The Company will furnish to the Trustee the annual opinion required by
TIA §314(b)(2) beginning November 1, 2006.

 

(b) To the extent applicable, the Company will cause TIA §313(b), relating to
reports, and TIA §314(d), relating to the release of property or securities
subject to the Lien of the Note Lien Security Documents, to be complied with.
Any certificate or opinion required by TIA §314(d) may be made by an Officer of
the Company except in cases where TIA §314(d) requires that such certificate or
opinion be made by an independent Person, which Person will be an independent
engineer, appraiser or other expert selected by or reasonably satisfactory to
the Trustee. Notwithstanding anything to the contrary in this paragraph, the
Company will not be required to comply with all or any portion of TIA §314(d) if
it determines, in good faith based on advice of counsel (which may be internal
counsel), that under the terms of TIA §314(d) and/or any interpretation or
guidance as to the meaning thereof of the SEC and its staff, including “no
action” letters or exemptive orders, all or any portion of TIA §314(d) is
inapplicable to one or a series of released Collateral.

 

(c) If, in connection with any release of Collateral pursuant to this Indenture,
the Company requests that the Trustee confirm such release or provide any
release or termination statement with respect to such release, the Company will
furnish to the Trustee (i) any certificate or opinion required by TIA §314(d) as
set forth in Section 10.03(b) hereof and (ii) an Opinion of Counsel to the
effect that the documents furnished pursuant to TIA §314(d) satisfy the
requirements of TIA §314(d) or that no such documents are required by TIA
§314(d) in connection with such release, and the Trustee will provide such
requested confirmation or release or termination statement. The Trustee may, to
the extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive
evidence of compliance with this Section 10.03 the appropriate statements
contained in such documents and such Opinion of Counsel.

 

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(d) If, in connection with any release of Collateral pursuant to this Indenture,
the Company requests that the Trustee confirm such release or provide any
release or termination statement with respect to such release and the Company
has delivered the documents required by the Note Lien Security Documents (if
any) and Section 10.03(c) hereof, the Trustee will determine whether it has
received all documentation required by TIA §314(d) in connection with such
release and, based on such determination and the Opinion of Counsel delivered
pursuant to Section 10.03(c) hereof, will deliver upon request a certificate to
the Note Collateral Agent setting forth such determination.

 

Section 10.04 Freedom to Deal.

 

So long as the Note Collateral Agent has not exercised its rights with respect
to Collateral upon the occurrence and during the continuance of an Event of
Default, the Company and the Subsidiary Guarantors will have the right, as
against the Note Collateral Agent, the Note Lien Representatives, the Holders
and any holders of other Note Lien Obligations:

 

(1) to remain in possession and retain exclusive control of the Collateral; to
conduct ordinary course activities with respect to the Collateral; to acquire,
manufacture, process and sell Inventory and collect Receivables and expend the
proceeds thereof; to operate, alter or repair the Collateral; and to collect,
invest and dispose of any income therefrom; and

 

(2) to sell or otherwise dispose of any property subject to the Note Liens,
subject to the restrictions and obligations set forth in Sections 4.10, 5.01 and
11.05 hereof.

 

Section 10.05 Enforcement of Note Liens.

 

Upon the occurrence and during the continuance of an Event of Default, the
Trustee may pursue any available remedy, including directing the Note Collateral
Agent to enforce the Note Liens securing the Notes, subject to the provisions of
the Intercreditor Agreement and to Section 7.01 and 7.02 hereof; and the Trustee
will be subject to such instructions as may be given to it by the Holders of a
majority in outstanding principal amount of the Notes to direct (and in its sole
discretion and without the consent of the Holders may direct) on behalf of the
Holders as the Note Lien Debt Representative with respect to the Notes, the Note
Collateral Agent to take all actions it deems necessary or appropriate in order
to:

 

(1) foreclose upon or otherwise enforce any or all of the Note Liens;

 

(2) enforce any of the terms of the Note Lien Security Documents; or

 

(3) collect and receive payment of any and all of the Note Lien Obligations.

 

Section 10.06 Relative Rights.

 

Nothing in the Note Lien Documents will:

 

(1) impair, as between the Company and the Holders, the obligation of the
Company to pay principal of, premium and interest and Liquidated Damages, if
any, on the Notes in accordance with their terms or any other Obligation of the
Company or any Subsidiary Guarantor

 

(2) affect the relative rights of Holders as against any other creditors of the
Company or any Subsidiary Guarantor (other than holders of Credit Facility
Liens, Permitted Prior Liens or other Note Liens);

 

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(3) restrict the right of any Holder to sue for payments that are then due and
owing (but not enforce any judgment in respect thereof against any Collateral to
the extent specifically prohibited by Sections 2.3 and 2.5 of the Intercreditor
Agreement);

 

(4) restrict or prevent any Holder or any holder of other Note Lien Obligations,
the Note Collateral Agent or any Note Lien Representative from exercising any of
its rights or remedies upon a Default or Event of Default not specifically
restricted or prohibited by Sections 2.3 and 2.5 of the Intercreditor Agreement;
or

 

(5) restrict or prevent any Holder or any holder of other Note Lien Obligations,
the Note Collateral Agent or any Note Lien Representative from taking any lawful
action in an insolvency or liquidation proceeding not specifically restricted or
prohibited by Sections 2.3 and 2.5 of the Intercreditor Agreement.

 

Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Note
Lien Security Documents.

 

The Trustee is authorized to receive any funds for the benefit of the Holders
distributed under the Note Lien Security Documents, and to make further
distributions of such funds to the Holders of Notes according to the provisions
of this Indenture.

 

Section 10.08 Release of Liens in Respect of Notes.

 

The Note Liens upon the Collateral will be released and no longer secure the
Notes outstanding under this Indenture or any other Note Lien Obligations, and
the right of the Holders or any holder of other Note Lien Obligations to the
benefits and proceeds of the Note Liens on the Collateral will terminate and be
discharged:

 

(1) upon satisfaction and discharge of this Indenture pursuant to Article 12
hereof;

 

(2) upon Legal Defeasance or Covenant Defeasance;

 

(3) upon payment in full of all Notes outstanding under this Indenture and all
outstanding Note Lien Obligations due and payable under this Indenture at the
time the Notes are paid in full and discharged;

 

(4) in whole or in part, with the consent of the Holders of a majority in
aggregate principal amount of the Notes in accordance with Section 9.02 hereof;

 

(5) upon the taking of Collateral by eminent domain, condemnation or in similar
circumstances;

 

(6) in the case of Note Liens on Collateral owned by any Subsidiary Guarantor,
upon the release of the Subsidiary Guarantee of such Subsidiary Guarantor in
accordance with Section 11.06 hereof;

 

(7) as to any Collateral that is sold, transferred or otherwise disposed of by
the Company or any Subsidiary Guarantor to a Person that is not (either before
or after such sale, transfer or disposition) the Company or a Restricted
Subsidiary of the Company (i) in a transaction or other circumstance that is not
prohibited by Section 4.10 hereof, at the time of such sale, transfer or other
disposition or to the extent of the interest sold, transferred or otherwise
disposed of or (ii) in

 

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connection with the enforcement of a Permitted Lien so long as the Lien attaches
to the Proceeds of such enforcement action; provided that the Liens on the
Collateral will not be released pursuant to clause (i) of this provision if the
sale or disposition is subject to Section 5.01 or Section 11.05 hereof;

 

(8) as to any Collateral owned by a Subsidiary Guarantor all of the Capital
Stock of which is being sold, transferred or otherwise disposed of, to a Person
that is not (either immediately before or after giving effect to such
transaction) the Company or a Restricted Subsidiary in a transaction that is not
prohibited by Section 4.10 hereof, at the time of such sale, transfer or other
disposition;

 

(9) as to any Liquid Collateral securing Credit Facility Lien Debt upon any
release of such Collateral pursuant to the terms of the Credit Facility Lien
Documents; or

 

(10) upon release of Collateral as provided in the Intercreditor Agreement.

 

Any release of Collateral made in accordance with the provisions of this
Section 10.08 or any Note Lien Security Document will be deemed not to impair
the Liens in the Collateral under this Indenture and the Note Lien Security
Documents in contravention of the provisions hereof.

 

Section 10.09 Intercreditor Agreement; Lien Sharing

 

For the enforceable benefit of all holders of each existing and future Series of
Credit Facility Lien Debt and each existing and future Credit Facility Lien
Representative, each Holder of a Note, by its acceptance thereof:

 

(1) agrees that all Note Lien Obligations will be and are secured equally and
ratably by all Note Liens at any time granted by the Company or any Subsidiary
Guarantor to secure any Obligations in respect of the Notes and the related
Guarantees thereof by the Subsidiary Guarantors, whether or not upon property
otherwise constituting collateral for the Notes and the related Guarantees
thereof by the Subsidiary Guarantors, and that all such Note Liens will be
enforceable by the Note Collateral Agent for the benefit of all holders of Note
Lien Obligations equally and ratably;

 

(2) agrees that the holders of Obligations in respect of the Notes and the
related Guarantees thereof by the Subsidiary Guarantors are bound by the
provisions of the Intercreditor Agreement, including the provisions therein
relating to the ranking of Note Liens; and

 

(3) consents to and directs the Note Collateral Agent to perform its obligations
under the Intercreditor Agreement and the other Note Lien Security Documents.

 

Section 10.10 Sufficiency of Release.

 

All purchasers and grantees of any Collateral purporting to be released will be
entitled to rely upon any release executed by the Note Collateral Agent or the
Trustee as sufficient for the purpose of this Indenture and the Note Lien
Security Documents and as constituting a good and valid release of the
Collateral therein described from the Lien of this Indenture and the Note Lien
Security Documents.

 

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ARTICLE 11

SUBSIDIARY GUARANTEES

 

Section 11.01 Guarantee.

 

(a) Subject to this Article 11, each of the Subsidiary Guarantors hereby, as
primary obligor and not merely as surety, jointly and severally, fully and
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of this Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that:

 

  (1) the principal of, premium and Liquidated Damages, if any, and interest on,
the Notes will be promptly paid in full when due, whether at Stated 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 monetary obligations
of the Company to the Holders or the Trustee hereunder whether for payment of
principal of or interest on the Notes, expenses, indemnification or otherwise,
or thereunder will be punctually paid in full, all in accordance with the terms
hereof and thereof; and

 

  (2) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that same will be punctually paid in full when due 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 for whatever reason, the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. Each Subsidiary Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.

 

Each Subsidiary Guarantor, pursuant to its Subsidiary Guarantee, also hereby
agrees to pay any and all reasonable out-of-pocket expenses (including
reasonable counsel fees and expenses) incurred by the Trustee or the Holders in
enforcing any rights under its Subsidiary Guarantee.

 

(b) The Subsidiary Guarantors hereby agree that (to the fullest extent permitted
by law) their obligations hereunder are unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Subsidiary Guarantor hereby waives (to the fullest
extent permitted by law) diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenant (except as otherwise provided in Section 11.06
hereof) that this Subsidiary Guarantee will not be discharged except by complete
performance of the monetary obligations contained in the Notes and this
Indenture.

 

(c) If any Holder or the Trustee is required by any court or otherwise to return
to the Company, the Subsidiary Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect.

 

(d) Each Subsidiary Guarantor agrees that it will not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Subsidiary Guarantor further agrees (to the fullest extent permitted by
law) that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on

 

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the other hand, (1) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (2) in
the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) will
forthwith become due and payable by the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee. The Subsidiary Guarantors will have the right to seek
contribution from the Company any non-paying Subsidiary Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantee.

 

Section 11.02 [Intentionally Omitted]

 

Section 11.03 Limitation on Subsidiary Guarantor Liability.

 

Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or
fraudulent conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Subsidiary Guarantee. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor will
be limited to the maximum amount that will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Subsidiary
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 Subsidiary Guarantor in respect of the obligations of such
other Subsidiary Guarantor under this Article 11, result in the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or fraudulent conveyance. Each Subsidiary Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that its Subsidiary
Guarantee, and the waiver set forth in Section 11.01(d), are knowingly made in
contemplation of such benefits.

 

Section 11.04 Delivery of Subsidiary Guarantee.

 

The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture or any supplemental indenture on behalf of the Subsidiary
Guarantors. Neither the Company nor any Subsidiary Guarantor shall be required
to make a notation on the Notes to reflect any Subsidiary Guarantee or any such
release, termination or discharge thereof.

 

The Company shall cause each Restricted Subsidiary that is required to become a
Subsidiary Guarantor pursuant to Section 4.18, and each Subsidiary of the
Company that the Company causes to become a Subsidiary Guarantor pursuant to
Section 4.18, to promptly execute and deliver to the Trustee a Supplemental
Indenture substantially in the form set forth in Exhibit E to this Indenture, or
otherwise in form and substance reasonably satisfactory to the Trustee,
evidencing its Subsidiary Guarantee on substantially the terms set forth in this
Article 11.

 

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Section 11.05 Subsidiary Guarantors May Consolidate, etc., on Certain Terms.

 

Except as otherwise provided in this Section 11.05 and Section 11.06, the
Company will not permit any Subsidiary Guarantor to consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of the
assets of such Subsidiary Guarantor to, any Person unless:

 

  (1) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the resulting, surviving or
transferee Person (the “Successor Guarantor”) or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the Successor Guarantor or
such Restricted Subsidiary at the time of such transaction), no Default shall
have occurred and be continuing; and

 

  (2) the Successor Guarantor will be a Person organized and existing under the
laws of the United States of America, any State thereof or the District of
Columbia, and such Person (if not such Subsidiary Guarantor) will expressly
assume, by a supplemental indenture and registration rights agreement (if
applicable), executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee and the Registration Rights Agreement (if
applicable), respectively.

 

In case of any such consolidation, merger, conveyance, transfer or lease and
upon the assumption by the successor Person, by such supplemental indenture, of
such Subsidiary Guarantee, such successor Person will succeed to and be
substituted for the Subsidiary Guarantor with the same effect as if it had been
named herein as a Subsidiary Guarantor. All the Subsidiary Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.

 

Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(1) and (2) above, nothing contained in this Indenture or in any of the Notes
will prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor, or will prevent any sale,
conveyance or transfer of the property of a Subsidiary Guarantor as an entirety
or substantially as an entirety to the Company or another Subsidiary Guarantor.

 

The Company may permit any Subsidiary Guarantor to consolidate or merge, or
convey, transfer or lease all or substantially all of the assets of such
Subsidiary Guarantor if such transaction would result in the release of the
Subsidiary Guarantee of such Subsidiary Guarantor pursuant to Section 11.06
hereof.

 

The Company may permit any Subsidiary Guarantor to merge with or into, or
convey, transfer or lease all or substantially all its assets to an Affiliate
incorporated solely for the purpose of reincorporating such Subsidiary Guarantor
in another jurisdiction.

 

Section 11.06 Releases.

 

The Subsidiary Guarantee of a Subsidiary Guarantor will be released:

 

  (1) in connection with any consolidation or merger if the Subsidiary Guarantor
or surviving Person shall cease to be a Subsidiary of the Company, if the
consolidation or merger complies with the provisions of Section 5.01 hereof;

 

  (2) in connection with any sale or other disposition of all or substantially
all of the assets of that Subsidiary Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the sale or other disposition
complies with the provisions of Section 4.10 hereof;

 

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  (3) if the Subsidiary Guarantor is designated to be an Unrestricted Subsidiary
in accordance with the provisions of this Indenture;

 

  (4) in connection with any (direct or indirect) sale of Capital Stock or other
transaction that results in such Subsidiary Guarantor ceasing to be a Subsidiary
of the Company, if the sale or other transaction complies with the provisions of
Section 4.10 hereof;

 

  (5) upon the release of such Subsidiary Guarantor from its liability in
respect of all Indebtedness of the Company and all other Subsidiary Guarantors
(other than Immaterial Indebtedness of the Company or any other Subsidiary
Guarantor and any other Indebtedness the Guarantee of which by such Subsidiary
Guarantor is also released upon the release of such Subsidiary Guarantor from
its liability in respect of all Indebtedness (other than Immaterial
Indebtedness) of the Company and all other Subsidiary Guarantors);

 

  (6) upon legal defeasance of the Notes in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 12
hereof, each Subsidiary Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee; and

 

  (7) with the consent of Holders of a majority in aggregate principal amount of
Notes then outstanding in accordance with Article 9 hereof.

 

Upon any such occurrence specified in this Section 11.06, the Trustee will
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Subsidiary Guarantee.

 

Any Subsidiary Guarantor not released from its obligations under its Subsidiary
Guarantee as provided in this Section 11.06 will remain liable for the full
amount of principal of and interest and premium and Liquidated Damages, if any,
on the Notes and for the other obligations of any Subsidiary Guarantor under
this Indenture as provided in this Article 11.

 

ARTICLE 12

SATISFACTION AND DISCHARGE

 

Section 12.01 Satisfaction and Discharge.

 

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

 

  (1) either:

 

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

 

  (b)

all Notes that have not been delivered to the Trustee for cancellation have
become due and payable by reason of the mailing of a notice of redemption or
otherwise or will become due and payable within one year , or are to be called
for redemption within one year, and the Company or any Subsidiary Guarantor has
irrevocably

 

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deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, without consideration of any reinvestment of interest, to pay and
discharge the entire Indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if any, and accrued
interest to the date of maturity or redemption;

 

  (2) no Default or Event of Default has occurred and is continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) and the deposit will not
result in a breach or violation of, or constitute a default under, any other
material instrument to which the Company or any Subsidiary Guarantor is a party
or by which the Company or any Subsidiary Guarantor is bound;

 

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

 

  (4) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the Notes at
maturity or on the redemption date, as the case may be.

 

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

 

Section 12.02 Application of Trust Money.

 

Subject to the provisions of Section 8.06 hereof, all money deposited with the
Trustee pursuant to Section 12.01 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 through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Liquidated Damages, 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 U.S. Government
Obligations in accordance with Section 12.01 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
Company’s and any Subsidiary Guarantor’s obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof; provided that if the Company has made any
payment of principal of, premium or Liquidated Damages, if any, or interest on,
any Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.

 

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Section 12.03 Repayment to Company.

 

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

 

ARTICLE 13

MISCELLANEOUS

 

Section 13.01 Trust Indenture Act Controls.

 

If any provision hereof limits, qualifies or conflicts with a provision of the
TIA that is required under the TIA to be a part of and govern this Indenture,
the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed (i) to apply to this Indenture as so modified
or (ii) to be excluded, as the case may be.

 

Section 13.02 Notices.

 

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

 

If to the Company and/or any Subsidiary Guarantor:

 

Del Laboratories, Inc.

178 EAB Plaza

P.O. Box 9357

Uniondale, New York 11553

Facsimile No.: (631) 293-1515

Attention: Chief Financial Officer

 

With a copy to:

 

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Facsimile No.: (212) 909-6836

Attention: Peter J. Loughran

 

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If to the Trustee:

 

Wells Fargo Bank, National Association

213 Court Street, Suite 703

Middletown, CT 06457

Facsimile No.: (860) 704-6219

Attention: Corporate Trust Office

 

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

 

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

 

Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA § 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it will not affect its
sufficiency with respect to other Holders.

 

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

 

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

 

Section 13.03 Communication by Holders of Notes with Other Holders of Notes.

 

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 13.04 Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

 

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

 

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

 

114

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Section 13.05 Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and
must include:

 

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

 

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

 

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

 

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

 

Section 13.06 Rules by Trustee and Agents.

 

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

 

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

 

No director, officer, employee, incorporator or stockholder of the Company or
any Subsidiary Guarantor, as such, will have any liability for any obligations
of the Company or the Subsidiary Guarantors under the Notes, this Indenture, the
Subsidiary Guarantees, the Note Lien Security Documents or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Notes by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.

 

Section 13.08 Governing Law.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE
NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

 

Section 13.09 No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 13.10 Successors.

 

All agreements of the Company in this Indenture and the Notes will bind its
successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Subsidiary Guarantor in this Indenture will
bind its successors, except as otherwise provided in Section 11.05 hereof.

 

115

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Section 13.11 Severability.

 

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

 

Section 13.12 Counterpart Originals.

 

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

 

Section 13.13 Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part of this Indenture and will in no way modify or
restrict any of the terms or provisions hereof.

 

[Signatures on following page]

 

116

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SIGNATURES

 

Dated as of October 28, 2005

DEL LABORATORIES, INC.

By:

    

Name:

  Joseph Sinicropi

Title:

  Executive Vice President and Chief     Financial Officer

 

DEL PHARMACEUTICALS, INC.

 

565 BROAD HOLLOW REALTY CORP.

 

PARFUMS SCHIAPARELLI, INC.

 

ROYCE & RADER, INC.

 

DEL PROFESSIONAL PRODUCTS, INC. By:    

Name:

  Joseph Sinicropi

Title:

  Executive Vice President and Chief     Financial Officer

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

By:    

Name:

   

Title:

   

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

EXHIBIT A

 

[Face of Note]

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

 

CUSIP/CINS                 

 

Senior Secured Floating Rate Notes due 2011

 

No.                 $                

 

DEL LABORATORIES, INC.

 

promises to pay to                      or registered assigns,

 

the principal sum of                                         
                                                              DOLLARS on
November 1, 2011.

 

Interest Payment Dates: February 1, May 1, August 1 and November 1

 

Record Dates: January 15, April 15, July 15 and October 15

 

Dated:             

 

DEL LABORATORIES, INC.

By: 

    

Name:

   

Title:

   

 

This is one of the Notes referred to

in the within-mentioned Indenture:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

By:        

Authorized Signatory

 

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

 

A-1

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[Back of Note]

Senior Secured Floating Rate Notes due 2011

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

 

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

 

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

 

  (1) INTEREST. Del Laboratories, Inc., a Delaware corporation (the “Company”),
promises to pay interest on the principal amount of this Note at a rate equal to
the Applicable Eurodollar Rate (as defined in the Indenture) in effect from time
to time per annum from October 28, 2005 until maturity and shall pay the
Liquidated Damages, if any, payable pursuant to the Registration Rights
Agreement referred to below. Notwithstanding the foregoing, in no event will the
interest on the principal amount of this Note be higher than the maximum rate
permitted by New York law as the same may be modified by U.S. law of general
application. The Company will pay interest and Liquidated Damages, if any,
quarterly in arrears on February 1, May 1, August 1 and November 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each, an “Interest Payment Date”). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided further that the first Interest Payment Date shall be [February 1,
2006]1[                    , 20        ]2. The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the rate
then in effect to the extent lawful; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

 

  (2) METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the
January 15, April 15, July 15 or October 15 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to principal,
premium and Liquidated Damages, if any, and interest at the office or agency of
the Company maintained for such purpose, provided that payment by wire transfer
of immediately available funds will be made with respect to principal of and
interest,

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

1 Include only for Notes issued on the Closing Date.

 

2 For any Additional Notes, insert the Interest Payment Date immediately
preceding the date of issuance of such Additional Notes, or if the date of
issuance of such Additional Notes is an Interest Payment Date, such date of
issuance.

 

A-2

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premium and Liquidated Damages, if any, on, all Global Notes and all other Notes
the Holders of which will have provided wire transfer instructions to the
Company or the Paying Agent, provided, further, that the Company reserves the
right to pay interest and Liquidated Damages, if any, by check mailed directly
to the Holders at their addresses set forth in the register of Holders
maintained by the Registrar. Such payment will be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.

 

  (3) PAYING AGENT, REGISTRAR AND NOTE COLLATERAL AGENT. Initially, Wells Fargo
Bank, National Association, the Trustee under the Indenture, will act as Paying
Agent, Registrar and Note Collateral Agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.

 

  (4) INDENTURE. The Company issued the Notes under an Indenture dated as of
October 28, 2005 (the “Indenture”) among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the TIA. The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are senior secured
obligations of the Company. The Indenture does not limit the aggregate principal
amount of Notes that may be issued thereunder.

 

  (5) OPTIONAL REDEMPTION.

 

(a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company
will not have the option to redeem the Notes prior to November 1, 2007. On or
after November 1, 2007, the Company will have the option to redeem the Notes, in
whole or in part, at the following redemption prices (expressed as percentages
of principal amount) plus accrued and unpaid interest and Liquidated Damages, if
any, on the Notes to the applicable redemption date (subject to the rights of
Holders on the relevant record date to receive interest on the relevant interest
payment date), if redeemed during the twelve-month period commencing on
November 1 of the years set forth below:

 

Year

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

   Percentage

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

 

2007

   102.000 %

2008

   101.000 %

2009 and thereafter

   100.000 %

 

Any such redemption and notice thereof may, in the Company’s discretion, be
subject to the satisfaction of one or more conditions precedent.

 

Unless the Company defaults in the payment of the redemption price or such
redemption is rescinded in accordance with the Indenture, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable
redemption date.

 

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at
any time prior to November 1, 2007, the Company may, on any one or more
occasions, redeem up to 35% of the original aggregate principal amount of Notes
(calculated giving effect to any issuance of Additional Notes) issued under the
Indenture with funds in the aggregate amount not

 

A-3

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exceeding the aggregate Net Cash Proceeds of one or more Equity Offerings, at a
redemption price (expressed as a percentage of principal amount) equal to 100%
plus the Applicable Eurodollar Rate then in effect, plus accrued and unpaid
interest and Liquidated Damages, if any thereon to the redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date); provided, however, that,
after giving effect to any such redemption: (1) at least 65% of the original
aggregate principal amount of the Notes (calculated giving effect to any
issuance of Additional Notes) remains outstanding and (2) any such redemption by
the Company must be made within 90 days of the related Equity Offering and must
be made in accordance with certain procedures set forth in the Indenture.

 

Any notice of such redemption may be given prior to the completion of the
related Equity Offering, and any such redemption or notice may, at the Company’s
discretion, be subject to the satisfaction of one or more conditions precedent,
including but not limited to the completion of the related Equity Offering.

 

  (6) MANDATORY REDEMPTION.

 

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

 

  (7) REPURCHASE AT THE OPTION OF HOLDER.

 

  (a) Upon the occurrence of a Change of Control, each Holder will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple of $1,000) of such Holder’s Notes at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), as and to the extent provided in the
Indenture. Not later than 30 days following the date the Company obtains actual
knowledge of any Change of Control, the Company shall mail notice to each Holder
with a copy to the Trustee setting forth the procedures governing the Change of
Control Offer as required by the Indenture.

 

  (b) Under the circumstances provided in Section 4.10 of the Indenture, the
Company will be required to purchase Notes tendered pursuant to an offer by the
Company to the Holders for the Notes (the “Offer”) at a purchase price of 100%
of their principal amount plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date) in accordance with the procedures set forth in
the Indenture and subject to the provisions of Section 4.10 of the Indenture.
Holders of Notes that are the subject of an offer to purchase will receive an
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect
Purchase” attached to the Notes.

 

  (8)

NOTICE OF REDEMPTION. Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of the Indenture. Notes in denominations larger than $1,000

 

A-4

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

 

may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed.

 

  (9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in fully registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes required by law or permitted by
the Indenture. The Company need not exchange or register the transfer of any
Note or portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, the Company need not transfer
or exchange any Note for a period of 15 days prior to a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.

 

  (10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.

 

  (11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes or the Subsidiary Guarantees may be amended or
supplemented with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding including Additional Notes, if
any, voting as a single class, and any existing Default or Event of Default or
compliance with any provision of the Indenture or the Notes or the Subsidiary
Guarantees may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding including Additional
Notes, if any, voting as a single class. Without the consent of any Holder of a
Note, the Indenture or the Notes or the Subsidiary Guarantees may be amended or
supplemented to cure any ambiguity, omission, defect or inconsistency, provide
for the assumption by a successor of the Company’s or a Subsidiary Guarantor’s
obligations to the Holders of the Notes and Subsidiary Guarantees in the case of
a merger or consolidation or sale, conveyance, transfer or lease of all or
substantially all of the Company’s or such Subsidiary Guarantor’s assets, as
applicable, provide for uncertificated Notes in addition to or in place of
certificated Notes (provided, however, that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code), add additional Guarantees with respect to the Notes, make, complete or
confirm any grant of Collateral permitted or required by the Indenture or any of
the Note Lien Security Documents, including adding any additional assets as
Collateral, or any release of Collateral in accordance with the Indenture or any
of the Note Lien Security Documents, add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power conferred upon the
Company, make any change that does not adversely affect the rights of any
Holder, subject to the provisions of the Indenture, conform the text of the
Indenture, the Subsidiary Guarantees or the Notes to any provision of the
“Description of Notes” section of the Offering Memorandum, to the extent that
such provision in that Description of Notes was intended to be a verbatim
recitation of a provision of the Indenture, the Subsidiary Guarantees or the
Notes, provide for the issuance of the Exchange Notes or Additional Notes, or
comply with any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.

 

  (12)

DEFAULTS AND REMEDIES. Events of Default include: (i) a default in any payment
of interest on any Note when due and payable continued for 30 days; (ii) a
default in the payment of principal of any Note when due and payable at its
Stated Maturity, upon required redemption or repurchase, upon declaration of
acceleration or otherwise; (iii) a default in the observance or performance of
any other covenant or agreement contained in the Indenture, which default

 

A-5

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

 

continues for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least 25% of the outstanding principal amount of
the Notes; (iv) the failure to pay at final stated maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal amount of
any Indebtedness of the Company or any Restricted Subsidiary (other than a
Receivables Entity) of the Company, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded, annulled
or otherwise cured within 20 days of receipt by the Company or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal amount
of such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final maturity or which
has been accelerated (in each case with respect to which the 20-day period
described above has elapsed), aggregates $20.0 million or more at any time;
(v) certain events of bankruptcy or insolvency with respect to the Company or a
Significant Subsidiary; (vi) certain judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) except as permitted by the
Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, denies or disaffirms in writing its obligations under its
Subsidiary Guarantee; and (viii) (A) except as permitted by the Indenture, any
Note Lien Security Document is held in to be unenforceable or invalid by a court
of competent jurisdiction or otherwise ceases for any reason to be fully
enforceable for a period of 30 days after notice thereof is delivered to the
Company by the Trustee or the holders of at least 25% in aggregate principal
amount of Notes then outstanding (subject to certain exceptions specified in the
Indenture), (B) any Note Lien purported to be granted under any Note Lien
Security Document on Collateral, individually or in the aggregate, having a Fair
Market Value in excess of $20.0 million ceases to be an enforceable and
perfected Priority Lien or Junior Lien, as and to the extent required by the
applicable Note Lien Security Documents, for a period of 30 days after notice
thereof is delivered to the Company by the Trustee or the holders of at least
25% in aggregate principal amount of Notes then outstanding; or (C) the Company
or any Subsidiary Guarantor, or any Person acting on behalf of any of them,
denies or disaffirms, in writing, any obligation of the Company or any
Subsidiary Guarantor set forth in or arising under any Note Lien Security
Document, except to the extent of any Note Lien purported to be granted
thereunder which purports to encumber Collateral that has been released in
accordance with the terms of the Indenture and the Note Lien Security Documents.
However, a default under clause (iii) above will not constitute an Event of
Default until the Trustee notifies the Company or the Holders of at least 25% in
principal amount of the outstanding Notes notify the Company and the Trustee of
the default and the Company or the relevant Subsidiary Guarantor, as applicable,
does not cure such default within the time specified in clause (iii) above after
receipt of such notice. If any Event of Default (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company) occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable immediately
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in 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 or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest or premium or Liquidated Damages, if any,) if it
determines that withholding notice is in their interest. The Holders of 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, rescind an
acceleration or waive any existing Default or Event of Default and its

 

A-6

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consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required, upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.

 

  (13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.

 

  (14) NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator
or stockholder of the Company or any Subsidiary Guarantor, as such, will have
any liability for any obligations of the Company or the Subsidiary Guarantors
under the Notes, the Indenture, the Subsidiary Guarantees or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Notes by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.

 

  (15) AUTHENTICATION. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

 

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

 

  (17) [ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes will have all the rights set forth in the Registration Rights Agreement
dated as of October 28, 2005, among Del Laboratories, Inc., a Delaware
Corporation, the Subsidiary Guarantors party thereto and the other parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes will have the rights set
forth in one or more registration rights agreements, if any, among the Company,
the Subsidiary Guarantors and the other parties thereto, relating to rights
given by the Company and the Subsidiary Guarantors to the purchasers of any
Additional Notes (collectively, the “Registration Rights Agreement”).]3

 

  (18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption, and reliance may be placed only on the other
identification numbers placed thereon.

 

  (19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND
BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEES
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT SUCH PRINCIPLES ARE NOT

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

3 Include for any Note other than an Exchange Note.

 

A-7

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MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

 

The Company will furnish to any Holder upon written request and without charge a
copy of the Indenture and/or the Registration Rights Agreement. Requests may be
made to:

 

Del Laboratories, Inc.

178 EAB Plaza

P.O. Box 9357

Uniondale, New York 11553

Attention: Chief Financial Officer

 

A-8

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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’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

       

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint     

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

 

Date:                         

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:                                                      

 

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

 

A-9

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OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

 

¨Section 4.10   ¨Section 4.15

 

If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:

 

$                        

 

Date:                         

 

Your Signature:     (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:    

 

Signature Guarantee*:                                                      

 

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

 

A-10

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

 

The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

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

   Amount of
decrease in
Principal Amount
of this Global
Note

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

   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
Custodian

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

                                                                                
                                                                        

 

* This schedule should be included only if the Note is issued in global form.

 

A-11

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EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Del Laboratories, Inc.

178 EAB Plaza P.O. Box 9357

Uniondale, New York 11553

 

Wells Fargo Bank, National Association

213 Court Street, Suite 703

Middletown, CT 06457

 

  Re: Senior Secured Floating Rate Notes due 2011

 

Reference is hereby made to the Indenture, dated as of October 28, 2005 among
Del Laboratories, Inc. (the “Company”), the Subsidiary Guarantors party thereto
and Wells Fargo Bank, National Association, as trustee (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 Restricted Definitive Note pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believes is
purchasing the beneficial interest or Definitive Note for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A, and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.

 

2. ¨ Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Note or a Restricted 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

 

B-1

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

the Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Restricted Definitive
Note and in the Indenture and the Securities Act.

 

3. ¨ Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Restricted Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

 

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;

 

or

 

(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof;

 

or

 

(c) ¨ such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;

 

or

 

(d) ¨ such Transfer is being effected to an Institutional Accredited Investor
and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the
Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and the
Transfer complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the Indenture
and (2) an opinion of counsel (which opinion and counsel are reasonably
satisfactory to the Company and the Trustee) provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and
in the Indenture and the Securities Act.

 

4. ¨ Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.

 

(a) ¨ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement

 

B-2

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

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

 

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

 

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

 

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

 

 

[Insert Name of Transferor]

 

By:    

Name:

   

Title:

   

 

Dated:                         

 

B-3

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

ANNEX A TO CERTIFICATE OF TRANSFER

 

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

 

[CHECK ONE OF (a) OR (b)]

 

  (a) ¨     a beneficial interest in the:

 

  (i) ¨ 144A Global Note (CUSIP             ), or

 

  (ii) ¨ Regulation S Global Note (CUSIP             ), or

 

  (iii) ¨ IAI Global Note (CUSIP             ); or

 

  (b)    ¨ a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

  (a) ¨     a beneficial interest in the:

 

  (i) ¨ 144A Global Note (CUSIP             ), or

 

  (ii) ¨ Regulation S Global Note (CUSIP             ), or

 

  (iii) ¨ IAI Global Note (CUSIP             ); or

 

  (iv) ¨ Unrestricted Global Note (CUSIP             ); or

 

  (b) ¨     a Restricted Definitive Note; or

 

  (c) ¨     an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-4

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

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Del Laboratories, Inc.

178 EAB Plaza

P.O. Box 9357

Uniondale, New York 11553

 

Wells Fargo Bank, National Association

213 Court Street, Suite 703

Middletown, CT 06457

 

  Re: Senior Secured Floating Rate Notes due 2011

 

Reference is hereby made to the Indenture, dated as of October 28, 2005 among
Del Laboratories, Inc. (the “Company”), the Subsidiary Guarantors party thereto
and Wells Fargo Bank, National Association, as trustee (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 Securities Act of 1933, as amended (the
“Securities Act”), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note
to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Definitive Note is being acquired for
the Owner’s own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

(c) ¨ 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

 

C-1

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

accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

 

(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner’s Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes

 

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note
to Restricted Definitive Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive Note
with an equal principal amount, the Owner hereby certifies that the Restricted
Definitive Note is being acquired for the Owner’s own account without transfer.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

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

 

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

 

 

[Insert Name of Transferor]

 

By:    

Name:

   

Title:

   

 

Dated:                         

 

C-2

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EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

Del Laboratories, Inc.

178 EAB Plaza

P.O. Box 9357

Uniondale, New York 11553

 

Wells Fargo Bank, National Association

213 Court Street, Suite 703

Middletown, CT 06457

 

  Re: Senior Secured Floating Rate Notes due 2011

 

Reference is hereby made to the Indenture, dated as of October 28, 2005 among
Del Laboratories, Inc. (the “Company”), the Subsidiary Guarantors party thereto
and Wells Fargo Bank, National Association, as trustee (the “Trustee”).
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

 

In connection with our proposed purchase of $                 aggregate
principal amount of:

 

  (a) ¨     a beneficial interest in a Global Note, or

 

  (b) ¨     a Definitive Note,

 

we confirm that:

 

1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the “Securities Act”).

 

2. We understand that the offer and sale of the Notes have not been registered
under the Securities Act, and that the Notes and any interest therein may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a “qualified institutional buyer” (as defined
therein), (C) to an institutional “accredited investor” (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter and an opinion of counsel (which opinion and counsel are
reasonably satisfactory to the Company and the Trustee) to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

 

D-1

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

3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.

 

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.

 

5. We are acquiring the Notes or beneficial interest therein purchased by us for
our own account or for one or more accounts (each of which is an institutional
“accredited investor”) as to each of which we exercise sole investment
discretion.

 

You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

 

[Insert Name of Accredited Investor]

 

By:    

Name:

   

Title:

   

 

Dated:                         

 

D-2

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

EXHIBIT E

 

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS]

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of
                    , 200  , among                          (the “Guaranteeing
Subsidiary”), a Subsidiary of Del Laboratories, Inc. (or its permitted
successor), a Delaware corporation (the “Company”), the Company, the other
Subsidiary Guarantors (as defined in the Indenture referred to herein) and Wells
Fargo Bank, National Association, as trustee under the Indenture referred to
below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an
indenture (the “Indenture”), dated as of October 28, 2005 providing for the
issuance of Senior Secured Floating Rate Notes due 2011 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company’s Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

 

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture.

 

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide
an unconditional Guarantee on the terms and subject to the conditions set forth
in the Indenture including but not limited to Article 11 thereof.

 

4. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer,
employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.

 

5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

E-1

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

 

7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and
shall not affect the construction hereof.

 

8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are
made solely by the Guaranteeing Subsidiary and the Company.

 

E-2

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

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.

 

[GUARANTEEING SUBSIDIARY] By:    

Name:

   

Title:

   

[NAME OF COMPANY]

By:    

Name:

   

Title:

   

[EXISTING SUBSIDIARY GUARANTORS]

By:    

Name:

   

Title:

   

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

By:        

Authorized Signatory

 

E-3