**Exhibit 4.2**

 

 

 

INDENTURE

 

Dated as of October 31,2006

 

Among

 

MICHAELS STORES, INC.,

 

THE GUARANTORS NAMED ON THESIGNATURE PAGES HERETO

 

and

 

WELLS FARGO BANK, NATIONALASSOCIATION,

 

as Trustee

 

11 3/8% SENIOR SUBORDINATED NOTES DUE 2016

 

 

 

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CROSS-REFERENCE TABLE*

 
| **Trust  Indenture Act Section** | ** ** | **Indenture Section** | ** ** |
|----------------------------------|------------|-----------------------|------------|
| 310(a)(1)                        |       | 7.10                  |       |
| (a)(2)                           |       | 7.10                  |       |
| (a)(3)                           |       | N.A.                  |       |
| (a)(4)                           |       | N.A.                  |       |
| (a)(5)                           |       | 7.10                  |       |
| (b)                              |       | 7.03, 7.10            |       |
| (c)                              |       | N.A.                  |       |
| 311(a)                           |       | 7.11                  |       |
| (b)                              |       | 7.11                  |       |
| (c)                              |       | N.A.                  |       |
| 312(a)                           |       | 2.05                  |       |
| (b)                              |       | 7.06, 14.03           |       |
| (c)                              |       | 14.03                 |       |
| 313(a)                           |       | 2.05, 7.06            |       |
| (b)(1)                           |       | N.A.                  |       |
| (b)(2)                           |       | 7.06;7.07             |       |
| (c)                              |       | 7.06;14.02            |       |
| (d)                              |       | 7.06                  |       |
| 314(a)                           |       | 4.03;14.02;14.05      |       |
| (b)                              |       | N.A.                  |       |
| (c)(1)                           |       | 14.04                 |       |
| (c)(2)                           |       | 14.04                 |       |
| (c)(3)                           |       | N.A.                  |       |
| (d)                              |       | N.A.                  |       |
| (e)                              |       | 14.05                 |       |
| (f)                              |       | N.A.                  |       |
| 315(a)                           |       | 7.01                  |       |
| (b)                              |       | 7.05;14.02            |       |
| (c)                              |       | 7.01                  |       |
| (d)                              |       | 7.01                  |       |
| (e)                              |       | 6.14                  |       |
| 316(a)(last sentence)            |       | 2.09                  |       |
| (a)(1)(A)                        |       | 6.05                  |       |
| (a)(1)(B)                        |       | 6.04                  |       |
| (a)(2)                           |       | N.A                   |       |
| (b)                              |       | 6.07                  |       |
| (c)                              |       | 2.12;9.04             |       |
| 317(a)(1)                        |       | 6.08                  |       |
| (a)(2)                           |       | 6.12                  |       |
| (b)                              |       | 2.04                  |       |
| 318(a)                           |       | 14.01                 |       |
| (b)                              |       | N.A.                  |       |
| (c)                              |       | 14.01                 |       |

 

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N.A. means not applicable.

*  This Cross-Reference Table isnot part of this Indenture.

 

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TABLE OF CONTENTS

 

 
| ** **                                  | ** **                                              | **Page** |
|---------------------------------------------|---------------------------------------------------------|----------|
|                                        |                                                    |     |
| ARTICLE 1                              |
|                                        |                                                    |     |
| DEFINITIONS AND INCORPORATION BY  REFERENCE |
|                                        |                                                    |     |
| Section 1.01                           | Definitions                                             | 1        |
| Section 1.02                           | Other  Definitions                                      | 33       |
| Section 1.03                           | Incorporation  by Reference of Trust Indenture Act      | 34       |
| Section 1.04                           | Rules of  Construction                             | 34       |
| Section 1.05                           | Acts  of Holders                                        | 35       |
|                                        |                                                    |     |
| ARTICLE 2                              |
|                                        |                                                    |     |
| THE NOTES                                   |
|                                        |                                                    |     |
| Section 2.01                           | Form and  Dating; Terms                            | 36       |
| Section 2.02                           | Execution  and Authentication                           | 38       |
| Section 2.03                           | Registrar  and Paying Agent                             | 38       |
| Section 2.04                           | Paying  Agent To Hold Money in Trust                    | 38       |
| Section 2.05                           | Holder  Lists                                           | 39       |
| Section 2.06                           | Transfer  and Exchange                                  | 39       |
| Section 2.07                           | Replacement  Notes                                      | 50       |
| Section 2.08                           | Outstanding  Notes                                      | 51       |
| Section 2.09                           | Treasury  Notes                                         | 51       |
| Section 2.10                           | Temporary  Notes                                        | 51       |
| Section 2.11                           | Cancellation                                            | 51       |
| Section 2.12                           | Defaulted  Interest                                     | 52       |
| Section 2.13                           | CUSIP  Numbers                                          | 52       |
|                                        |                                                    |     |
| ARTICLE 3                              |
|                                        |                                                    |     |
| REDEMPTION                                  |
|                                        |                                                    |     |
| Section 3.01                           | Notices  to Trustee                                     | 52       |
| Section 3.02                           | Selection  of Notes To Be Redeemed or Purchased         | 53       |
| Section 3.03                           | Notice  of Redemption                                   | 53       |
| Section 3.04                           | Effect  of Notice of Redemption                         | 54       |
| Section 3.05                           | Deposit  of Redemption or Purchase Price                | 54       |
| Section 3.06                           | Notes  Redeemed or Purchased in Part                    | 55       |
| Section 3.07                           | Optional  Redemption                                    | 55       |
| Section 3.08                           | Mandatory  Redemption                                   | 56       |
| Section 3.09                           | Offers  To Repurchase by Application of Excess Proceeds | 56       |

 

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| ** **            | ** **                                                           | **Page** |
|-----------------------|----------------------------------------------------------------------|----------|
|                  |                                                                 |     |
| ARTICLE 4        |
|                  |                                                                 |     |
| COVENANTS             |
|                  |                                                                 |     |
| Section 4.01     | Payment  of Notes                                                    | 58       |
| Section 4.02     | Maintenance  of Office or Agency                                     | 58       |
| Section 4.03     | Reports  and Other Information                                       | 58       |
| Section 4.04     | Compliance  Certificate                                              | 60       |
| Section 4.05     | Taxes                                                                | 60       |
| Section 4.06     | Stay,  Extension and Usury Laws                                      | 60       |
| Section 4.07     | Limitation  on Restricted Payments                                   | 60       |
| Section 4.08     | Dividend  and Other Payment Restrictions                             |     |
|                  | Affecting Restricted Subsidiaries                                    | 68       |
| Section 4.09     | Limitation  on Incurrence of Indebtedness and                        |     |
|                  | Issuance of Disqualified Stock  and Preferred Stock                  | 69       |
| Section 4.10     | Asset  Sales                                                         | 75       |
| Section 4.11     | Transactions  with Affiliates                                        | 77       |
| Section 4.12     | Liens                                                                | 79       |
| Section 4.13     | Corporate  Existence                                                 | 79       |
| Section 4.14     | Offer  to Repurchase Upon Change of Control                          | 80       |
| Section 4.15     | Limitation  on Guarantees of Indebtedness by Restricted Subsidiaries | 82       |
| Section 4.16     | Discharge  and Suspension of Covenants                               | 82       |
| Section 4.17     | Limitation  on Layering                                              | 83       |
|                  |                                                                 |     |
| ARTICLE 5        |
|                  |                                                                 |     |
| SUCCESSORS            |
|                  |                                                                 |     |
| Section 5.01     | Merger,  Consolidation or Sale of All or Substantially All Assets    | 84       |
| Section 5.02     | Successor  Corporation Substituted                                   | 85       |
|                  |                                                                 |     |
| ARTICLE 6        |
|                  |                                                                 |     |
| DEFAULTS AND REMEDIES |
|                  |                                                                 |     |
| Section 6.01     | Events  of Default                                                   | 86       |
| Section 6.02     | Acceleration                                                         | 88       |
| Section 6.03     | Other  Remedies                                                      | 89       |
| Section 6.04     | Waiver  of Past Defaults                                             | 89       |
| Section 6.05     | Control  by Majority                                                 | 89       |
| Section 6.06     | Limitation  on Suits                                                 | 89       |
| Section 6.07     | Rights  of Holders of Notes To Receive Payment                       | 90       |
| Section 6.08     | Collection  Suit by Trustee                                          | 90       |
| Section 6.09     | Restoration  of Rights and Remedies                                  | 90       |
| Section 6.10     | Rights  and Remedies Cumulative                                      | 90       |
| Section 6.11     | Delay  or Omission Not Waiver                                        | 91       |
| Section 6.12     | Trustee  May File Proofs of Claim                               | 91       |
| Section 6.13     | Priorities                                                           | 91       |
| Section 6.14     | Undertaking  for Costs                                               | 92       |

 

ii

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| ** **                                | ** **                                                | **Page** |
|-------------------------------------------|-----------------------------------------------------------|----------|
|                                      |                                                      |     |
| ARTICLE 7                            |
|                                      |                                                      |     |
| TRUSTEE                                   |
|                                      |                                                      |     |
| Section 7.01                         | Duties  of Trustee                                        | 92       |
| Section 7.02                         | Rights  of Trustee                                        | 93       |
| Section 7.03                         | Individual  Rights of Trustee                             | 94       |
| 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                               | 95       |
| 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 Issuer         | 97       |
|                                      |                                                      |     |
| ARTICLE 8                            |
|                                      |                                                      |     |
| LEGAL DEFEASANCE AND COVENANT  DEFEASANCE |
|                                      |                                                      |     |
| Section 8.01                         | Option  To Effect Legal Defeasance or Covenant Defeasance | 97       |
| Section 8.02                         | Legal  Defeasance and Discharge                           | 97       |
| Section 8.03                         | Covenant  Defeasance                                      | 98       |
| Section 8.04                         | Conditions  to Legal or Covenant Defeasance               | 98       |
| Section 8.05                         | Deposited  Money and Government Securities                |     |
|                                      | To Be Held in Trust; Other  Miscellaneous Provisions      | 99       |
| Section 8.06                         | Repayment  to Issuer                                      | 100      |
| Section 8.07                         | Reinstatement                                             | 100      |
|                                      |                                                      |     |
| 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                         | 102      |
| Section 9.03                         | Compliance  with Trust Indenture Act                      | 103      |
| Section 9.04                         | Revocation  and Effect of Consents                        | 103      |
| Section 9.05                         | Notation  on or Exchange of Notes                         | 104      |
| Section 9.06                         | Trustee  To Sign Amendments, etc                          | 104      |
| Section 9.07                         | Payment  for Consent                                      | 104      |
|                                      |                                                      |     |
| ARTICLE 10                           |
|                                      |                                                      |     |
| SUBORDINATION                             |
|                                      |                                                      |     |
| Section 10.01                        | Agreement  To Subordinate                                 | 104      |
| Section 10.02                        | Liquidation,  Dissolution, Bankruptcy                     | 105      |
| Section 10.03                        | Default  on Senior Indebtedness of the Issuer             | 105      |
| Section 10.04                        | Acceleration  of Payment of Notes                         | 106      |
| Section 10.05                        | When  Distribution Must Be Paid Over                      | 107      |

 

iii

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| ** **                  | ** **                                                                             | **Page** |
|-----------------------------|----------------------------------------------------------------------------------------|----------|
|                        |                                                                                   |     |
| Section 10.06          | Subrogation                                                                            | 107      |
| Section 10.07          | Relative  Rights                                                                       | 107      |
| Section 10.08          | Subordination  May Not Be Impaired by Issuer                                      | 107      |
| Section 10.09          | Rights  of Trustee and Paying Agent                                                    | 107      |
| Section 10.10          | Distribution  or Notice to Representative                                              | 108      |
| Section 10.11          | Article 10  Not To Prevent Events of Default or Limit Right To Accelerate         | 108      |
| Section 10.12          | Trust  Moneys Not Subordinated                                                         | 108      |
| Section 10.13          | Trustee  Entitled To Rely                                                              | 108      |
| Section 10.14          | Trustee  To Effectuate Subordination                                                   | 109      |
| Section 10.15          | Trustee  Not Fiduciary for Holders of Senior Indebtedness of the Issuer                | 109      |
| Section 10.16          | Reliance  by Holders of Senior Indebtedness of the Issuer on Subordination Provisions  | 109      |
|                        |                                                                                   |     |
| ARTICLE 11             |
|                        |                                                                                   |     |
| GUARANTEES                  |
|                        |                                                                                   |     |
| Section 11.01          | Guarantee                                                                              | 110      |
| Section 11.02          | Limitation  on Guarantor Liability                                                     | 111      |
| Section 11.03          | Execution  and Delivery                                                                | 112      |
| Section 11.04          | Subrogation                                                                            | 112      |
| Section 11.05          | Benefits  Acknowledged                                                                 | 112      |
| Section 11.06          | Release  of Guarantees                                                                 | 113      |
|                        |                                                                                   |     |
| ARTICLE 12             |
|                        |                                                                                   |     |
| SUBORDINATION OF GUARANTEES |
|                        |                                                                                   |     |
| Section 12.01          | Agreement  To Subordinate                                                              | 113      |
| Section 12.02          | Liquidation,  Dissolution, Bankruptcy                                                  | 113      |
| Section 12.03          | Default  on Senior Indebtedness of a Guarantor                                         | 114      |
| Section 12.04          | Demand  for Payment                                                                    | 115      |
| Section 12.05          | When  Distribution Must Be Paid Over                                                   | 116      |
| Section 12.06          | Subrogation                                                                            | 116      |
| Section 12.07          | Relative  Rights                                                                       | 116      |
| Section 12.08          | Subordination  May Not Be Impaired by a Guarantor                                 | 116      |
| Section 12.09          | Rights  of Trustee and Paying Agent                                                    | 116      |
| Section 12.10          | Distribution  or Notice to Representative                                              | 117      |
| Section 12.11          | Article 12  Not To Prevent Events of Default or Limit Right To Demand Payment     | 117      |
| Section 12.12          | Trust  Moneys Not Subordinated                                                         | 117      |
| Section 12.13          | Trustee  Entitled To Rely                                                              | 117      |
| Section 12.14          | Trustee  To Effectuate Subordination                                                   | 118      |
| Section 12.15          | Trustee  Not Fiduciary for Holders of Senior Indebtedness of Guarantors                | 118      |
| Section 12.16          | Reliance  by Holders of Senior Indebtedness of a Guarantor on Subordination Provisions | 118      |

 

iv

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| ** **                 | ** **                                                     | **Page** |
|----------------------------|----------------------------------------------------------------|----------|
|                       |                                                           |     |
| ARTICLE 13            |
|                       |                                                           |     |
| SATISFACTION AND DISCHARGE |
|                       |                                                           |     |
| Section 13.01         | Satisfaction  and Discharge                                    | 119      |
| Section 13.02         | Application  of Trust Money                                    | 120      |
|                       |                                                           |     |
| ARTICLE 14            |
|                       |                                                           |     |
| MISCELLANEOUS              |
|                       |                                                           |     |
| Section 14.01         | Trust  Indenture Act Controls                                  | 120      |
| Section 14.02         | Notices                                                        | 121      |
| Section 14.03         | Communication  by Holders of Notes with Other Holders of Notes | 122      |
| Section 14.04         | Certificate  and Opinion as to Conditions Precedent            | 122      |
| Section 14.05         | Statements  Required in Certificate or Opinion                 | 122      |
| Section 14.06         | Rules by  Trustee and Agents                              | 123      |
| Section 14.07         | No  Personal Liability of Directors,                           |     |
|                       | Officers, Employees and  Stockholders                          | 123      |
| Section 14.08         | Governing  Law                                                 | 123      |
| Section 14.09         | Waiver  of Jury Trial                                          | 123      |
| Section 14.10         | Force  Majeure                                                 | 123      |
| Section 14.11         | No  Adverse Interpretation of Other Agreements                 | 123      |
| Section 14.12         | Successors                                                     | 123      |
| Section 14.13         | Severability                                                   | 124      |
| Section 14.14         | Counterpart Originals                                     | 124      |
| Section 14.15         | Table  of Contents, Headings, etc                              | 124      |
| Section 14.16         | Qualification  of Indenture                                    | 124      |

 

EXHIBITS

 
| Exhibit A | Form of Senior Subordinated Note                                         |
|----------------|-------------------------------------------------------------------------------|
| Exhibit B | Form of Certificate of Transfer                                          |
| Exhibit C | Form of Certificate of Exchange                                          |
| Exhibit D | Form of Supplemental Indenture to Be  Delivered by Subsequent Guarantors |

 

v

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INDENTURE,dated as of October 31, 2006, among Michaels Stores, Inc., a Delawarecorporation (“Michaels”), the Guarantors (as defined herein) listed onthe signature pages hereto and Wells Fargo Bank, National Association, asTrustee.

 

WITNESSETH

 

WHEREAS, Michaelshas duly authorized the creation of an issue of $400,000,000 aggregate principalamount of 11 3/8% Senior Subordinated Notes due 2016 (the “Initial Notes”);

 

WHEREAS, Michaelsand each of the Guarantors has duly authorized the execution and delivery ofthis Indenture.

 

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

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BYREFERENCE

 

Section 1.01                                Definitions.

 

“144AGlobal Note” means a Global Note substantially in the form of Exhibit Ahereto bearing the Global Note Legend and the Private Placement Legend and depositedwith or on behalf of, and registered in the name of, the Depositary or itsnominee that will be issued in a denomination equal to the outstanding principalamount of the Notes sold in reliance on Rule 144A.

 

“AcquiredIndebtedness” means, with respect to any specified Person,

 

(1)                                  Indebtednessof any other Person existing at the time such other Person is merged oramalgamated with or into or became a Restricted Subsidiary of such specifiedPerson, including Indebtedness incurred in connection with, or in contemplationof, such other Person merging or amalgamating with or into, or becoming a RestrictedSubsidiary of, such specified Person, and

 

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

 

“Additional Interest” means all additional interest then owingpursuant to the Registration Rights Agreement.

 

“AdditionalNotes” means additional Notes (other than the Initial Notes and other thanExchange Notes issued in exchange for such Initial Notes) issued from time totime under this Indenture in accordance with Sections 2.01 and 4.09 hereof.

 

“Affiliate”of any specified Person means any other Person directly or indirectlycontrolling or controlled by or under direct or indirect common control withsuch specified Person. For purposes of this definition, “control” (including,with correlative meanings, the terms “controlling,” “controlled by” and “undercommon control with”), as used with respect to any Person, shall mean thepossession, directly or indirectly, of the power to direct or cause the directionof the management or policies of such Person, whether through the ownership ofvoting securities, by agreement or otherwise.

 

----

 

“Agent”means any Registrar or Paying Agent.

 

“Applicable Premium” means, withrespect to any Note on any Redemption Date, the greater of:

 

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

 

(2)                                  theexcess, if any, of (a) the present value at such Redemption Date of (i) theredemption price of such Note at November 1, 2011 (such redemption pricebeing set forth in Section 3.07 hereof), plus (ii) all requiredinterest payments due on such Note through November 1, 2011 (excludingaccrued but unpaid interest to the Redemption Date), computed using a discountrate equal to the Treasury Rate as of such Redemption Date plus 50 basispoints; over (b) the then outstanding principal amount of such Note.

 

“ApplicableProcedures” means, with respect to any transfer or exchange of or for beneficialinterests in any Global Note, the rules and procedures of the Depositary, Euroclearand/or Clearstream that apply to such transfer or exchange.

 

“Asset Sale”means:

 

(1)                                  thesale, conveyance, transfer or other disposition, whether in a singletransaction or a series of related transactions, of property or assets(including by way of a Sale and Lease-Back Transaction) of the Issuer or any ofits Restricted Subsidiaries (each referred to in this definition as a “disposition”);or

 

(2)                                  theissuance or sale of Equity Interests of any Restricted Subsidiary, whether in asingle transaction or a series of related transactions (other thandirectors’ qualifying shares and shares issued to foreign nationals as requiredunder applicable law);

 

in each case,other than:

 

(a)                                  anydisposition of Cash Equivalents or Investment Grade Securities or obsolete orworn out property or equipment in the ordinary course of business or anydisposition of inventory or goods (or other assets) held for sale in theordinary course of business (it being understood that the sale of inventory orgoods (or other assets) in bulk in connection with the closing of any number ofretail locations in the ordinary course of business shall be considered a salein the ordinary course of business);

 

(b)                                 thedisposition of all or substantially all of the assets of the Issuer in a mannerpermitted pursuant to the provisions described under Section 5.01 hereof orany disposition that constitutes a Change of Control pursuant to this Indenture;

 

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

 

(d)                                 anydisposition of assets or issuance or sale of Equity Interests of any RestrictedSubsidiary in any transaction or series of transactions with an aggregatefair market value of less than $25.0 million;

 

2

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(e)                                  anydisposition of property or assets or issuance of securities by a RestrictedSubsidiary of the Issuer to the Issuer or by the Issuer or a RestrictedSubsidiary of the Issuer to another Restricted Subsidiary of the Issuer;

 

(f)                                    tothe extent allowable under Section 1031 of the Internal Revenue Code of1986, any exchange of like property (excluding any boot thereon) for use in aSimilar Business;

 

(g)                                 thelease, assignment, sublease, license or sublicense of any real or personal propertyin the ordinary course of business;

 

(h)                                 anyissuance or sale of Equity Interests in, or Indebtedness or other securitiesof, an Unrestricted Subsidiary;

 

(i)                                     foreclosureson or expropriations of assets;

 

(j)                                     salesof accounts receivable, or participations therein, in connection with anyReceivables Facility, or the disposition of an account receivable in connectionwith the collection or compromise thereof in the ordinary course of business;

 

(k)                                  the granting of a Lien that is permittedunder Section 4.12;

 

(l)                                     the issuance by a Restricted Subsidiaryof Preferred Stock or Disqualified Stock that is permitted by Section 4.09;and

 

(m)                               anyfinancing transaction with respect to property built or acquired by the Issueror any Restricted Subsidiary after the Issue Date, including Sale and Lease-BackTransactions and asset securitizations permitted by this Indenture.

 

“BankProducts” means any services or facilities on account of credit or debitcards, purchase cards or merchant services constituting a line of credit.

 

“BankruptcyLaw” means Title 11, U.S. Code or any similar federal or state law for therelief of debtors.

 

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

 

“CapitalStock” means:

 

(1)                                  inthe case of a corporation, shares in the capital of such corporation;

 

(2)                                  inthe case of an association or business entity, any and all shares, interests,participations, rights or other equivalents (however designated) of capitalstock;

 

(3)                                  inthe case of a partnership or limited liability company, partnership ormembership interests (whether general or limited); and

 

(4)                                  anyother interest or participation that confers on a Person the right to receive ashare of the profits and losses of, or distributions of assets of, the issuingPerson.

 

“Capitalized Lease Obligation”means, at the time any determination thereof is to be made, the amount of theliability in respect of a capital lease that would at such time be required tobe

 

3

----

 

capitalizedand reflected as a liability on a balance sheet (excluding the footnotesthereto) prepared in accordance with GAAP.

 

“CashEquivalents” means:

 

(1)                                  UnitedStates dollars and Canadian dollars;

 

(2)                                  (a)                                  euro,or any national currency of any participating member state of the EMU; or

 

(b)                                 in the case of anyForeign Subsidiary that is a Restricted Subsidiary, such local currencies heldby them from time to time in the ordinary course of business;

 

(3)                                  securitiesissued or directly and fully and unconditionally guaranteed or insured by theU.S. government or any agency or instrumentality thereof the securities ofwhich are unconditionally guaranteed as a full faith and credit obligation ofsuch government with maturities of 24 months or less from the date ofacquisition;

 

(4)                                  certificatesof deposit, time deposits and eurodollar time deposits with maturities of oneyear or less from the date of acquisition, bankers’ acceptances with maturitiesnot exceeding one year and overnight bank deposits, in each case with anycommercial bank having capital and surplus of not less than $250.0 millionin the case of U.S. banks and, in the case of any Foreign Subsidiary that is aRestricted Subsidiary, $100.0 million (or the U.S. dollar equivalent as of thedate of determination) in the case of non U.S. banks, and in each case in acurrency permitted under clause (1) or (2) above;

 

(5)                                  repurchaseobligations for underlying securities of the types described in clauses (3) and(4) entered into with any financial institution meeting the qualificationsspecified in clause (4) above, and in each case in a currency permittedunder clause (1) or (2) above;

 

(6)                                  commercialpaper rated at least P-2 by Moody’s or at least A-2 by S&P and in each casematuring within 24 months after the date of creation thereof, and in each casein a currency permitted under clause (1) or (2) above;

 

(7)                                  marketableshort-term money market and similar securities having a rating of at least P-2or A-2 from either Moody’s or S&P, respectively (or, if at any time neitherMoody’s nor S&P shall be rating such obligations, an equivalent rating fromanother Rating Agency) and in each case maturing within 24 months after thedate of creation thereof and in a currency permitted under clause (1) or (2) above;

 

(8)                                  readilymarketable direct obligations issued by any state, commonwealth or territory ofthe United States or any political subdivision or taxing authority thereofhaving an Investment Grade Rating from either Moody’s or S&P with maturitiesof 24 months or less from the date of acquisition;

 

(9)                                  Indebtednessor Preferred Stock issued by Persons with a rating of A or higher from S&Por A2 or higher from Moody’s with maturities of 24 months or less from thedate of acquisition and in each case in a currency permitted under clause (1) or(2) above;

 

(10)                            Investmentswith average maturities of 12 months or less from the date of acquisition inmoney market funds rated AAA- (or the equivalent thereof) or better by S&Por Aaa3

 

4

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(or the equivalent thereof) or better by Moody’s and in each case in acurrency permitted under clause (1) or (2) above;

 

(11)                            investmentfunds investing substantially all of their assets in securities of the typesdescribed in clauses (1) through (10) above; and

 

(12)                            creditcard receivables and debit card receivables so long as such are considered cashequivalents under GAAP and are so reflected on the Issuer’s balance sheet.

 

Notwithstandingthe foregoing, Cash Equivalents shall include amounts denominated in currenciesother than those set forth in clauses (1) and (2) above, provided that such amounts areconverted into any currency listed in clauses (1) and (2) aspromptly as practicable and in any event within ten Business Days following thereceipt of such amounts.

 

“CashManagement Services” means any of the following to the extent notconstituting a line of credit: ACH transactions, treasury and/or cashmanagement services, including, without limitation, controlled disbursementservices, foreign exchange facilities, deposit and other accounts and merchantservices.

 

“Change ofControl” means the occurrence of any of the following after the Issue Date:

 

(1)                                  thesale, lease or transfer, in one or a series of related transactions (otherthan by way of merger or consolidation), of all or substantially all of theassets of the Issuer and its Subsidiaries, taken as a whole, to any Personother than one or more Permitted Holders; or

 

(2)                                  the Issuer becomes aware of (by way of areport or any other filing pursuant to Section 13(d) of the ExchangeAct, proxy, vote, written notice or otherwise) the acquisition by (A) anyPerson (other than one or more Permitted Holders) or (B) Persons (otherthan one or more Permitted Holders) that are together (1) a group (withinthe meaning of Section 13(d)(3) or Section 14(d)(2) of theExchange Act, or any successor provision), or (2) are acting, for thepurpose of acquiring, holding or disposing of securities (within the meaning ofRule 13d-5(b)(1) under the Exchange Act), as a group, in a singletransaction or in a related series of transactions, by way of merger,consolidation or other business combination or purchase of beneficial ownership(within the meaning of Rule 13d-3 under the Exchange Act, or any successorprovision) of 50% or more of the total voting power of the Voting Stock of theIssuer or any of its direct or indirect parent companies holding directly orindirectly 100% of the total voting power of the Voting Stock of the Issuer.

 

“Clearstream”means Clearstream Banking, Société Anonyme.

 

“Consolidated Depreciation and AmortizationExpense” means with respect to any Person for any period, the totalamount of depreciation and amortization expense, including the amortization ofdeferred financing fees of such Person and its Restricted Subsidiaries for suchperiod on a consolidated basis and otherwise determined in accordance withGAAP.

 

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

 

(1)                                  consolidated interest expense of suchPerson and its Restricted Subsidiaries for such period, to the extent suchexpense was deducted (and not added back) in computing Consolidated Net Income(including (a) amortization of original issue discount resulting from theissuance

 

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of Indebtedness at less thanpar, (b) all commissions, discounts and other fees and charges owed withrespect to letters of credit or bankers acceptances, (c) non-cash interestpayments (but excluding any non-cash interest expense attributable to themovement in the mark to market valuation of Hedging Obligations or otherderivative instruments pursuant to GAAP), (d) the interest component ofCapitalized Lease Obligations, and (e) net payments, if any, made (lessnet payments, if any, received) pursuant to interest rate Hedging Obligationswith respect to Indebtedness, and excluding (v) penalties and interestrelated to taxes, (w) any Additional Interest with respect to the InitialNotes and any “additionalinterest” with respect to the Senior Notes or the Subordinated Discount Notes,(x) amortization of deferred financing fees, debt issuance costs, discountedliabilities, commissions, fees and expenses, (y) any expensing of bridge,commitment and other financing fees and (z) commissions, discounts, yield andother fees and charges (including any interest expense) related to anyReceivables Facility); plus (2) consolidated capitalized interestof such Person and its Restricted Subsidiaries for such period, whether paid oraccrued; less

 

(3)                                  interestincome for such period.

 

For purposesof this definition, interest on a Capitalized Lease Obligation shall be deemedto accrue at an interest rate reasonably determined by such Person to be therate of interest implicit in such Capitalized Lease Obligation in accordancewith GAAP.

 

For purposes of determining Consolidated Interest Expense for anyperiod ending prior to the first anniversary of the Issue Date, after giving proforma effect to the Transactions, Consolidated Interest Expense shall be $92.5million for the fiscal quarter ended January 28, 2006, $91.4 million forthe fiscal quarter ended April 29, 2006, and $92.5 million for the fiscalquarter ended July 29, 2006.

 

“ConsolidatedNet Income” means, with respect to any Person for any period, the aggregateof the Net Income, of such Person and its Restricted Subsidiaries for suchperiod, on a consolidated basis, and otherwise determined in accordance withGAAP; provided, however, that, withoutduplication,

 

(1)                                  any after-tax effect of extraordinary,non-recurring or unusual gains or losses (less all fees and expenses relatingthereto) or expenses, Transaction Expenses to the extent incurred on or priorto December 31, 2007, severance, relocation costs, costs related to thePerfect Store Initiative, Hybrid Distribution Network Costs, Public CompanyCosts, integration costs, pre-opening, opening, consolidation and closing costsfor facilities (including stores), signing, retention or completion bonuses,transition costs, costs incurred in connection with acquisitions after theIssue Date, restructuring costs, Specified Legal Expenses, and curtailments ormodifications to pension and post-retirement employee benefit plans shall beexcluded,

 

(2)                                  theNet Income for such period shall not include the cumulative effect of a changein accounting principles during such period,

 

(3)                                  anynet after-tax gains or losses on disposal of disposed, abandoned ordiscontinued operations shall be excluded,

 

(4)                                  anyafter-tax effect of gains or losses (less all fees and expenses relatingthereto) attributable to asset dispositions other than in the ordinary courseof business, as determined in good faith by the Issuer, shall be excluded,

 

(5)                                  theNet Income for such period of any Person that is not a Subsidiary, or is anUnrestricted Subsidiary, or that is accounted for by the equity method ofaccounting, shall be excluded; providedthat Consolidated Net Income of the Issuer shall be increased by the amount of

 

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dividends or distributions or other payments that are actually paid incash (or to the extent converted into cash) to the referent Person or aRestricted Subsidiary thereof in respect of such period, by such Person,

 

(6)                                  solelyfor the purpose of determining the amount available for Restricted Paymentsunder clause (3)(a) of Section 4.07(a) hereof, the NetIncome for such period of any Restricted Subsidiary (other than any Guarantor)shall be excluded to the extent that the declaration or payment of dividends orsimilar distributions by that Restricted Subsidiary of its Net Income is not atthe date of determination permitted without any prior governmental approval(which has not been obtained) or, directly or indirectly, by the operation ofthe terms of its charter or any agreement, instrument, judgment, decree, order,statute, rule, or governmental regulation applicable to that RestrictedSubsidiary or its stockholders, unless such restriction with respect to thepayment of dividends or similar distributions has been legally waived, provided that Consolidated NetIncome of the Issuer will be increased by the amount of dividends or otherdistributions or other payments actually paid in cash (or to the extentconverted into cash) to the Issuer or a Restricted Subsidiary thereof inrespect of such period, to the extent not already included therein,

 

(7)                                  effectsof adjustments (including the effects of such adjustments pushed down to theIssuer and its Restricted Subsidiaries) in the merchandise inventory, propertyand equipment, goodwill, intangible assets, deferred revenue and debt lineitems in such Person’s consolidated financial statements pursuant to GAAPresulting from the application of purchase accounting in relation to theTransactions or any consummated acquisition or the amortization or write-off ofany amounts thereof, net of taxes, shall be excluded,

 

(8)                                  anyafter-tax effect of income (loss) from the early extinguishment or conversion ofIndebtedness or Hedging Obligations or other derivative instruments shall beexcluded,

 

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

 

(10)                            anynon-cash compensation charge or expense, including any such charge or expensearising from the grant of stock appreciation or similar rights, stock options,restricted stock or other equity-incentive programs shall be excluded,

 

(11)                            anyfees and expenses incurred during such period, or any amortization thereof forsuch period, in connection with any acquisition, Investment, Asset Sale,issuance or repayment of Indebtedness, issuance of Equity Interests,refinancing transaction or amendment or modification of any debt instrument (ineach case, including any such transaction consummated prior to the Issue Dateand any such transaction undertaken but not completed) and any charges ornon-recurring merger costs incurred during such period as a result of any suchtransaction shall be excluded,

 

(12)                            accrualsand reserves that are established within twelve months after the Issue Datethat are so required to be established as a result of the Transactions in accordancewith GAAP shall be excluded,

 

(13)                            any net gain or loss resulting fromcurrency translation gains or losses related to currency remeasurements ofIndebtedness (including any net loss or gain resulting from hedge agreementsfor currency exchange risk) and any foreign currency translation gains orlosses shall be excluded, and

 

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(14)                            any unrealized net gains and lossesresulting from Hedging Obligations and the application of Statement ofFinancial Accounting Standards No. 133 shall be excluded.

 

In addition, to the extent not already included in the Net Income ofsuch Person and its Restricted Subsidiaries, notwithstanding anything to thecontrary in the foregoing, Consolidated Net Income shall include the amount ofproceeds received from business interruption insurance and reimbursements ofany expenses and charges that are covered by indemnification or otherreimbursement provisions in connection with any Permitted Investment or anysale, conveyance, transfer or other disposition of assets permitted under thisIndenture.

 

Notwithstandingthe foregoing, for the purpose of Section 4.07 hereof only (other thanclause (3)(d) of Section 4.07(a) hereof), there shall beexcluded from Consolidated Net Income any income arising from any sale or otherdisposition of Restricted Investments made by the Issuer and its RestrictedSubsidiaries, any repurchases and redemptions of Restricted Investments fromthe Issuer and its Restricted Subsidiaries, any repayments of loans andadvances which constitute Restricted Investments by the Issuer or any of itsRestricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary orany distribution or dividend from an Unrestricted Subsidiary, in each case onlyto the extent such amounts increase the amount of Restricted Payments permittedunder clause (3)(d) of Section 4.07(a) hereof.

 

“Contingent Obligations” means,with respect to any Person, any obligation of such Person guaranteeing anyleases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of anyother Person (the “primary obligor”)in any manner, whether directly or indirectly, including, without limitation,any obligation of such Person, whether or not contingent,

 

(1)                                  topurchase any such primary obligation or any property constituting direct orindirect security therefor,

 

(2)                                  toadvance or supply funds

 

(a)                                  forthe purchase or payment of any such primary obligation, or

 

(b)                                 tomaintain working capital or equity capital of the primary obligor or otherwise tomaintain the net worth or solvency of the primary obligor, or

 

(3)                                  topurchase property, securities or services primarily for the purpose of assuringthe owner of any such primary obligation of the ability of the primary obligorto make payment of such primary obligation against loss in respect thereof.

 

“CorporateTrust Office of the Trustee” shall be at the address of the Trustee specifiedin Section 14.02 hereof or such other address as to which the Trustee may givenotice to the Holders and the Issuer.

 

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

 

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

 

“DefinitiveNote” means a certificated Note registered in the name of the Holder thereofand issued in accordance with Section 2.06(c) hereof, substantiallyin the form of Exhibit A hereto, as the

 

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case may be,except that such Note shall not bear the Global Note Legend and shall not havethe “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

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

 

“Designated Non-cash Consideration”means the fair market value of non-cash consideration received by the Issuer ora Restricted Subsidiary in connection with an Asset Sale that is so designatedas Designated Non-cash Consideration pursuant to an Officer’s Certificate, settingforth the basis of such valuation, executed by the principal financial officerof the Issuer, less the amount of Cash Equivalents received in connection witha subsequent sale, redemption, repurchase of or collection or payment on, suchDesignated Non-cash Consideration.

 

“Designated Preferred Stock” meansPreferred Stock of the Issuer or any parent company thereof (in each case otherthan Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiaryor an employee stock ownership plan or trust established by the Issuer or anyof its Subsidiaries) and is so designated as Designated Preferred Stock,pursuant to an Officer’s Certificate executed by the principal financialofficer of the Issuer or the applicable parent company thereof, as the case may be,on the issuance date thereof, the cash proceeds of which are excluded from thecalculation set forth in clause (3) of Section 4.07(a) hereof.

 

“DesignatedSenior Indebtedness” means:

 

(1)                                  anyIndebtedness outstanding under the Senior Credit Facilities; and

 

(2)                                  anyother Senior Indebtedness permitted under this Indenture, the principal amountof which is $50.0 million or more and that has been specifically designatedby the Issuer as “Designated Senior Indebtedness” for purposes of thisIndenture in the instrument evidencing or governing such Senior Indebtedness.

 

 “Disqualified Stock” means, withrespect to any Person, any Capital Stock of such Person which, by its terms, orby the terms of any security into which it is convertible or for which it is putableor exchangeable, or upon the happening of any event, matures or is mandatorilyredeemable (other than solely as a result of a change of control or asset sale)pursuant to a sinking fund obligation or otherwise, or is redeemable at theoption of the holder thereof (other than solely as a result of a change of controlor asset sale), in whole or in part, in each case prior to the date 91 daysafter the earlier of the maturity date of the Notes or the date the Notes areno longer outstanding; provided, however, that if such CapitalStock is issued to any plan for the benefit of employees of the Issuer or itsSubsidiaries or by any such plan to such employees, such Capital Stock shallnot constitute Disqualified Stock solely because it may be required to berepurchased by the Issuer or its Subsidiaries in order to satisfy applicablestatutory or regulatory obligations.

 

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

 

(1)                                  increased(without duplication) by:

 

(a)                                  provisionfor taxes based on income or profits or capital, including, without limitation,state, franchise and similar taxes (such as the Pennsylvania capital tax

 

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and Texasmargin tax) and foreign withholding taxes of such Person paid or accrued duringsuch period deducted (and not added back) in computing Consolidated Net Income;*plus*

 

(b)                                 Fixed Charges of such Person for suchperiod plus bank fees and costs of surety bonds in connection with financingactivities plus amounts excluded from Consolidated Interest Expense as setforth in clauses (v), (w), (x), (y) and (z) in the definition thereof, to theextent the same were deducted (and not added back) in calculating suchConsolidated Net Income; *plus*

 

(c)                                  ConsolidatedDepreciation and Amortization Expense of such Person for such period to theextent the same was deducted (and not added back) in computing Consolidated NetIncome; *plus*

 

(d)                                 any expenses orcharges (other than depreciation or amortization expense) related to any EquityOffering, Permitted Investment, acquisition, disposition, recapitalization orthe incurrence of Indebtedness permitted to be incurred by this Indenture(including a refinancing thereof) (whether or not successful), including (i) suchfees, expenses or charges related to the offering of the Initial Notes, the Senior Notes, theSubordinated Discount Notes and the Senior Credit Facilities and (ii) anyamendment or other modification of the Initial Notes, the Senior Notes, theSubordinated Discount Notes and the Senior Credit Facilities, in each case,deducted (and not added back) in computing Consolidated Net Income; *plus*

 

(e)                                  the amount of anyrestructuring charge or reserve deducted (and not added back) in such period incomputing Consolidated Net Income; *plus*

 

(f)                                    any other non cashcharges, including (i) any write offs or write downs, (ii) equity-basedawards compensation expense, (iii) losses on sales, disposals orabandonment of, or any impairment charges or asset write off related to,intangible assets, long-lived assets and investments in debt and equitysecurities, (iv) all losses from investments recorded using the equitymethod, and (v) other non-cash charges, non-cash expenses or non-cashlosses reducing Consolidated Net Income for such period (provided that if anysuch non-cash charges represent an accrual or reserve for potential cash itemsin any future period, the cash payment in respect thereof in such future periodshall be subtracted from EBITDA to such extent, and excluding amortization of aprepaid cash item that was paid in a prior period); *plus*

 

(g)                                 the amount of anyminority interest expense consisting of Subsidiary income attributable tominority equity interests of third parties in any non-Wholly Owned Subsidiarydeducted (and not added back) in such period in calculating Consolidated NetIncome; *plus*

 

(h)                                 the amount ofmanagement, monitoring, consulting and advisory fees (including terminationfees) and related indemnities and expenses paid or accrued in such period tothe Investors or Highfields Capital to the extent otherwise permitted under Section 4.11hereof and deducted (and not added back) in such period in computing ConsolidatedNet Income; *plus*

 

(i)                                     theamount of net cost savings projected by the Issuer in good faith to be realizedas a result of specified actions taken during such period (calculated on a *pro*

 

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*forma*basis as though such cost savings had been realized on the first day of suchperiod), net of the amount of actual benefits realized during such period fromsuch actions; provided that (x) such cost savings are reasonablyidentifiable and factually supportable, (y) such actions are taken within36 months after the Issue Date and (z) the aggregate amount of costsavings added pursuant to this clause (i) shall not exceed $25.0million for any four consecutive quarter period (which adjustments may beincremental to *pro forma* adjustments madepursuant to the definition of “Fixed Charge Coverage Ratio”); *plus*

 

(j)                                     theamount of loss on sale of receivables and related assets to the ReceivablesSubsidiary in connection with a Receivables Facility; *plus*

 

(k)                                  any costs or expense incurred by the Issueror a Restricted Subsidiary pursuant to any management equity plan or stockoption plan or any other management or employee benefit plan or agreement orany stock subscription or shareholder agreement, to the extent that such costor expenses are funded with cash proceeds contributed to the capital of theIssuer or net cash proceeds of an issuance of Equity Interest of the Issuer(other than Disqualified Stock) solely to the extent that such net cashproceeds are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof;*plus*

 

(l)                                     anynet loss from disposed or discontinued operations; *plus*

 

(m)                               cashreceipts (or any netting arrangements resulting in reduced cash expenditures)not representing EBITDA or Net Income in any period to the extent non-cashgains relating to such income were deducted in the calculation of EBITDApursuant to clause (2) below for any previous period and not added back,

 

(2)                                  decreased(without duplication) by:

 

(a)                                  non-cashgains increasing Consolidated Net Income of such Person for such period,excluding any non-cash gains to the extent they represent the reversal of anaccrual or reserve for a potential cash item that reduced EBITDA in any priorperiod and any non-cash gains with respect to cash actually received in a priorperiod so long as such cash did not increase EBITDA in such prior period, *plus*

 

(b)                                 any net income from disposed ordiscontinued operations; and

 

(3)                                  increasedor decreased by (without duplication), as applicable, any adjustments resultingfrom the application of FASB Interpretation No. 45 (Guarantees).

 

For purposesof calculating EBITDA for any period, the impact of changes in estimate forinventory cost capitalization and the initial adoption of an accounting policyfor gift card breakage made in the fourth quarter of fiscal 2005 shall beexcluded.

 

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

 

“EquityInterests” means Capital Stock and all warrants, options or other rights toacquire Capital Stock, but excluding any debt security that is convertibleinto, or exchangeable for, Capital Stock.

 

“EquityOffering” means any public or private sale of common stock or PreferredStock of the Issuer or any of its direct or indirect parent companies(excluding Disqualified Stock), other than:

 

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(1)                                  publicofferings with respect to the Issuer’s or any direct or indirect parent company’scommon stock registered on Form S-8;

 

(2)                                  issuancesto any Subsidiary of the Issuer; and

 

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

 

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

 

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

 

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

 

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

 

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

 

“ExchangeOffer Registration Statement” has the meaning set forth in the RegistrationRights Agreement.

 

“Excluded Contribution” means netcash proceeds, marketable securities or Qualified Proceeds received by the Issuerfrom

 

(1)                                  contributionsto its common equity capital, and

 

(2)                                  thesale (other than to a Subsidiary of the Issuer or to any management equity planor stock option plan or any other management or employee benefit plan oragreement of the Issuer) of Capital Stock (other than Disqualified Stock andDesignated Preferred Stock) of the Issuer,

 

in each casedesignated as Excluded Contributions pursuant to an Officer’s Certificate executedby the principal financial officer of the Issuer on the date such capitalcontributions are made or the date such Equity Interests are sold, as the case may be,which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

 

“FixedCharge Coverage Ratio” means, with respect to any Person for any period,the ratio of EBITDA of such Person for such period to the Fixed Charges of suchPerson for such period. In the event that the Issuer or any RestrictedSubsidiary incurs, assumes, guarantees, redeems, retires or extinguishes anyIndebtedness (other than Indebtedness incurred or repaid under any revolvingcredit facility in the ordinary course of business for working capital purposes)or issues or redeems Disqualified Stock or Preferred Stock subsequent to thecommencement of the period for which the Fixed Charge Coverage Ratio is beingcalculated but prior to or simultaneously with the event for which thecalculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Coverage Ratio Calculation Date”),then the Fixed Charge Coverage Ratio shall be calculated giving *pro forma* effect to such incurrence,assumption, guarantee, redemption, retirement or extinguishment ofIndebtedness, or such issuance or redemption of Disqualified Stock or PreferredStock, as if the same had occurred at the beginning of the applicable four-quarterperiod.

 

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For purposesof making the computation referred to above, Investments, acquisitions,dispositions, amalgamations, mergers and consolidations (as determined inaccordance with GAAP) that have been made by the Issuer or any of itsRestricted Subsidiaries during the four-quarter reference period or subsequentto such reference period and on or prior to or simultaneously with the FixedCharge Coverage Ratio Calculation Date shall be calculated on a *pro forma* basis assuming that all suchInvestments, acquisitions, dispositions, amalgamations, mergers andconsolidations (and the change in any associated fixed charge obligations andthe change in EBITDA resulting therefrom) had occurred on the first day of thefour-quarter reference period. If since the beginning of such period any Personthat subsequently became a Restricted Subsidiary or was merged, amalgamated orconsolidated with or into the Issuer or any of its Restricted Subsidiariessince the beginning of such period shall have made any Investment, acquisition,disposition, amalgamation, merger or consolidation that would have requiredadjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shallbe calculated giving *pro forma*effect thereto for such period as if such Investment, acquisition, disposition,merger or consolidation had occurred at the beginning of the applicable four-quarterperiod.

 

For purposes of this definition, whenever *pro forma* effect is to be given to an Investment,acquisition, disposition, amalgamation, merger or consolidation (including theTransactions) and the amount of income or earnings relating thereto, the *pro forma* calculations shall be made ingood faith by a responsible financial or accounting officer of the Issuer (and may include,for the avoidance of doubt, cost savings and operating expense reductionsresulting from such Investment, acquisition, amalgamation, merger orconsolidation (including the Transactions) which is being given pro formaeffect that have been or are expected to be realized). If any Indebtednessbears a floating rate of interest and is being given *pro forma* effect, the interest on such Indebtedness shall becalculated as if the rate in effect on the Fixed Charge Coverage RatioCalculation Date had been the applicable rate for the entire period (takinginto account any Hedging Obligations applicable to such Indebtedness). Intereston a Capitalized Lease Obligation shall be deemed to accrue at an interest ratereasonably determined by a responsible financial or accounting officer of theIssuer to be the rate of interest implicit in such Capitalized Lease Obligationin accordance with GAAP. Interest on Indebtedness that may optionally bedetermined at an interest rate based upon a factor of a prime or similar rate,a eurocurrency interbank offered rate, or other rate, shall be deemed to havebeen based upon the rate actually chosen, or, if none, then based upon such optionalrate chosen as the Issuer may designate.

 

“FixedCharges” means, with respect to any Person for any period, the sum, withoutduplication, of:

 

(1)                                  ConsolidatedInterest Expense of such Person for such period;

 

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

 

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

 

“Foreign Subsidiary” means, withrespect to any Person, any Restricted Subsidiary of such Person that is notorganized or existing under the laws of the United States, any state thereof,the District of Columbia, or any territory thereof and any RestrictedSubsidiary of such Foreign Subsidiary.

 

“GAAP” meansgenerally accepted accounting principles in the United States which are ineffect on the Issue Date. For purposes of this Indenture, the term “consolidated” with respect toany Person means such Person consolidated with its Restricted Subsidiaries anddoes not include any Unrestricted Subsidiary.

 

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

 

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

 

“GovernmentSecurities” means securities that are:

 

(1)                                  directobligations of the United States of America for the timely payment of which itsfull faith and credit is pledged; or

 

(2)                                  obligationsof a Person controlled or supervised by and acting as an agency or instrumentalityof the United States of America the timely payment of which is unconditionallyguaranteed as a full faith and credit obligation by the United States ofAmerica,

 

which, ineither case, are not callable or redeemable at the option of the issuersthereof, and shall also include a depository receipt issued by a bank (asdefined in Section 3(a)(2) of the Securities Act), as custodian withrespect to any such Government Securities or a specific payment of principal ofor interest on any such Government Securities held by such custodian for theaccount of the holder of such depository receipt; provided that (except as required by law) such custodian isnot authorized to make any deduction from the amount payable to the holder ofsuch depository receipt from any amount received by the custodian in respect ofthe Government Securities or the specific payment of principal of or intereston the Government Securities evidenced by such depository receipt.

 

“guarantee” means a guarantee(other than by endorsement of negotiable instruments for collection in theordinary course of business), direct or indirect, in any manner (includingletters of credit and reimbursement agreements in respect thereof), of all orany part of any Indebtedness or other obligations.

 

“Guarantee”means the guarantee by any Guarantor of the Issuer’s Obligations under thisIndenture and the Notes.

 

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

 

“HedgingObligations” means, with respect to any Person, the obligations of suchPerson under any interest rate swap agreement, interest rate cap agreement,interest rate collar agreement, commodity swap agreement, commodity cap agreement,commodity collar agreement, foreign exchange contract, currency swap agreementor similar agreement providing for the transfer or mitigation of interest rate,commodity price or currency risks either generally or under specificcontingencies.

 

“Highfields Capital” means Highfields Capital I LP, HighfieldsCapital II LP and Highfields Capital III LP and each Affiliate thereof(excluding portfolio companies of any of the foregoing).

 

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

 

“Hybrid Distribution Network Costs” shall mean costs associatedwith the implementation of enhancements to the Issuer’s and its RestrictedSubsidiaries’ distribution network intended to increase the Issuer’s and itsRestricted Subsidiaries’ basic merchandise inventories that are shipped throughdistribution centers.

 

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

 

(1)                                  anyindebtedness (including principal and premium) of such Person, whether or notcontingent:

 

(a)                                  inrespect of borrowed money;

 

(b)                                 evidencedby bonds, notes, debentures or similar instruments or letters of credit orbankers’ acceptances (or, without duplication, reimbursement agreements in respectthereof);

 

(c)                                  representingthe balance deferred and unpaid of the purchase price of any property(including Capitalized Lease Obligations), except (i) any such balancethat constitutes an obligation in respect of a commercial letter of credit, atrade payable or similar obligation to a trade creditor, in each case accruedin the ordinary course of business and (ii) any earn-out obligations untilsuch obligation becomes a liability on the balance sheet of such Person inaccordance with GAAP and is notpaid after becoming due and payable; or

 

(d)                                 representingany Hedging Obligations;

 

if and to the extent that any of theforegoing Indebtedness (other than letters of credit (other than commercialletters of credit) and Hedging Obligations) would appear as a liability upon abalance sheet (excluding the footnotes thereto) of such Person prepared in accordancewith GAAP;

 

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

 

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

 

provided, however, thatnotwithstanding the foregoing, Indebtedness shall be deemed not to include (a) ContingentObligations incurred in the ordinary course of business or (b) obligationsunder or in respect of Receivables Facilities.

 

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

 

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

 

“IndirectParticipant” means a Person who holds a beneficial interest in a GlobalNote through a Participant.

 

“InitialNotes” is defined in the recitals hereto.

 

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“Initial Purchasers” meansDeutsche Bank Securities Inc., J.P. Morgan Securities Inc., Banc of AmericaSecurities LLC and Credit Suisse Securities (USA) LLC.

 

“InterestPayment Date” means May 1 and November 1 of each year to stated maturity.

 

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

 

“InvestmentGrade Securities” means:

 

(1)                                  securitiesissued or directly and fully guaranteed or insured by the United Statesgovernment or any agency or instrumentality thereof (other than Cash Equivalents);

 

(2)                                  debtsecurities or debt instruments with an Investment Grade Rating, but excludingany debt securities or instruments constituting loans or advances among theIssuer and its Subsidiaries;

 

(3)                                  investmentsin any fund that invests exclusively in investments of the type described inclauses (1) and (2) which fund may also hold immaterial amountsof cash pending investment or distribution; and

 

(4)                                   correspondinginstruments in countries other than the United States customarily utilized forhigh quality investments.

 

“Investments”means, with respect to any Person, all investments by such Person in otherPersons (including Affiliates) in the form of loans (includingguarantees), advances or capital contributions (excluding accounts receivable,credit card and debit card receivables, trade credit, advances to customers,commission, travel and similar advances to officers and employees, in each casemade in the ordinary course of business), purchases or other acquisitions forconsideration of Indebtedness, Equity Interests or other securities issued byany other Person and investments that are required by GAAP to be classified onthe balance sheet (excluding the footnotes) of the Issuer in the same manner asthe other investments included in this definition to the extent suchtransactions involve the transfer of cash or other property. For purposes ofthe definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

 

(1)                                  “Investments”shall include the portion (proportionate to the Issuer’s equity interest insuch Subsidiary) of the fair market value of the net assets of a Subsidiary ofthe Issuer at the time that such Subsidiary is designated an UnrestrictedSubsidiary; provided, however, that upon aredesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shallbe deemed to continue to have a permanent “Investment” in an UnrestrictedSubsidiary in an amount (if positive) equal to:

 

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

 

(b)                                 theportion (proportionate to the Issuer’s Equity Interest in such Subsidiary) ofthe fair market value of the net assets of such Subsidiary at the time of suchredesignation; and

 

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(2)                                   anyproperty transferred to or from an Unrestricted Subsidiary shall be valued atits fair market value at the time of such transfer, in each case as determinedin good faith by the Issuer.

 

“Investors” means Bain Capital, LLC and BlackstoneGroup Holdings L.L.C., each of their respective Affiliates and any investmentfunds advised or managed by any of the foregoing, but not including, however,any portfolio companies of any of the foregoing.

 

“Issue Date”means October 31, 2006.

 

“Issuer”means Michaels; provided that when used in the context of determiningthe fair market value of an asset or liability under this Indenture, “Issuer”shall be deemed to mean the board of directors of the Issuer when the fairmarket value is equal to or in excess of $100.0 million (unless otherwise expresslystated).

 

“IssuerOrder” means a written request or order signed on behalf of the Issuer byan Officer of the Issuer, who must be the principal executive officer, theprincipal financial officer, the treasurer or the principal accounting officerof the Issuer, and delivered to the Trustee.

 

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

 

“Letter ofTransmittal” means the letter of transmittal to be prepared by the Issuerand sent to all Holders of the Notes for use by such Holders in connection withthe Exchange Offer.

 

“Lien” means,with respect to any asset, any mortgage, lien (statutory or otherwise), pledge,hypothecation, charge, security interest, preference, priority or encumbranceof any kind in respect of such asset, whether or not filed, recorded orotherwise perfected under applicable law, including any conditional sale orother title retention agreement, any lease in the nature thereof, any option orother agreement to sell or give a security interest in and any filing of oragreement to give any financing statement under the Uniform CommercialCode (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemedto constitute a Lien.

 

“Michaels”is defined in the preamble hereto.

 

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

 

“Net Income”means, with respect to any Person, the net income (loss) of such Person,determined in accordance with GAAP and before any reduction in respect ofPreferred Stock dividends.

 

“NetProceeds” means the aggregate cash proceeds received by the Issuer or anyof its Restricted Subsidiaries in respect of any Asset Sale, including any cashreceived upon the sale or other disposition of any Designated Non-cashConsideration received in any Asset Sale, net of the direct costs relating tosuch Asset Sale and the sale or disposition of such Designated Non-cashConsideration, including legal, accounting and investment banking fees, andbrokerage and sales commissions, any relocation expenses incurred as a resultthereof, taxes paid or payable as a result thereof (after taking into accountany available tax credits or deductions and any tax sharing arrangements),amounts required to be applied to the repayment of principal, premium, if any,and interest on Senior Indebtedness required (other than required by clause (1) ofSection 4.10(b) hereof) to be paid as a result of such transactionand any deduction of appropriate amounts to be provided by the Issuer or any ofits Restricted Subsidiaries as a reserve

 

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in accordancewith GAAP against any liabilities associated with the asset disposed of in suchtransaction and retained by the Issuer or any of its Restricted Subsidiariesafter such sale or other disposition thereof, including pension and other post-employmentbenefit liabilities and liabilities related to environmental matters or againstany indemnification obligations associated with such transaction.

 

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

 

“Notes”means the Initial Notes and more particularly means any Note authenticated anddelivered under this Indenture. For all purposes of this Indenture, the term “Notes”shall also include any Additional Notes that may be issued under a supplementalindenture.

 

“Obligations”means any principal, interest (including any interest accruing subsequent tothe filing of a petition in bankruptcy, reorganization or similar proceeding atthe rate provided for in the documentation with respect thereto, whether or notsuch interest is an allowed claim under applicable state, federal or foreignlaw), penalties, fees, indemnifications, reimbursements (includingreimbursement obligations with respect to letters of credit and banker’sacceptances), damages and other liabilities, and guarantees of payment of suchprincipal, interest, penalties, fees, indemnifications, reimbursements, damagesand other liabilities, payable under the documentation governing anyIndebtedness.

 

“OfferingMemorandum” means the offering memorandum, dated October 25, 2006, relatingto the sale of the Initial Notes.

 

“Officer”means the Chairman of the Board, the Chief Executive Officer, the President,any Executive Vice President, Senior Vice President or Vice President, theTreasurer or the Secretary of the Issuer.

 

“Officer’sCertificate” means a certificate signed on behalf of the Issuer by anOfficer of the Issuer, who must be the principal executive officer, theprincipal financial officer, the treasurer or the principal accounting officerof the Issuer, that meets the requirements set forth in this Indenture.

 

“Opinion ofCounsel” means a written opinion from legal counsel. The counsel may bean employee of or counsel to the Issuer.

 

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

 

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

 

“Perfect Store Initiative” shall mean the initiative related tothe Issuer’s and its Restricted Subsidiaries’ store standardization andremodeling program, pursuant to which retail store layouts will be modifiedinto a configuration intended to enhance the customer in-store experience.

 

“Permitted Asset Swap” means the concurrent purchase and sale orexchange of Related Business Assets or a combination of Related Business Assetsand Cash Equivalents between the Issuer or any of its Restricted Subsidiariesand another Person; provided that any Net Proceeds received must beapplied in accordance with Section 4.10 hereof.

 

“PermittedHolders” means each of the Investors and members of management of theIssuer (or its direct parent) who are holders of Equity Interests of the Issuer(or any of its direct or indirect

 

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parentcompanies) on the Issue Date and any group (within the meaning of Section 13(d)(3) orSection 14(d)(2) of the Exchange Act or any successor provision) ofwhich any of the foregoing are members; provided that, in the case of such group and without givingeffect to the existence of such group or any other group, such Investors andmembers of management, collectively, have beneficial ownership of more than 50%of the total voting power of the Voting Stock of the Issuer or any of itsdirect or indirect parent companies. Any person or group whose acquisition ofbeneficial ownership (within the meaning of Rule 13d-3 under the ExchangeAct, or any successor provision) constitutes a Change of Control in respect ofwhich a Change of Control Offer is made in accordance with the requirements of Section 4.14(or would result in a Change of Control Offer in the absence of the waiver ofsuch requirement by Holders in accordance with Section 4.14 willthereafter, together with its Affiliates, constitute an additional PermittedHolder.

 

“PermittedInvestments” means:

 

(1)                                  anyInvestment in the Issuer or any of its Restricted Subsidiaries;

 

(2)                                  anyInvestment in cash and Cash Equivalents or Investment Grade Securities;

 

(3)                                  anyInvestment by the Issuer or any of its Restricted Subsidiaries in a Person thatis engaged in a Similar Business if as a result of such Investment:

 

(a)                                  suchPerson becomes a Restricted Subsidiary; or

 

(b)                                 suchPerson, in one transaction or a series of related transactions, is merged,amalgamated or consolidated with or into, or transfers or conveys substantiallyall of its assets to, or is liquidated into, the Issuer or a RestrictedSubsidiary,

 

and, in each case, anyInvestment held by such Person; provided that such Investment was notacquired by such Person in contemplation of such acquisition, merger, consolidationor transfer;

 

(4)                                  anyInvestment in securities or other assets not constituting cash, CashEquivalents or Investment Grade Securities and received in connection with anAsset Sale made pursuant to the provisions of Section 4.10(a) hereofor any other disposition of assets not constituting an Asset Sale;

 

(5)                                  anyInvestment existing on the Issue Date and any extension, modification,replacement or renewal of any such Investments existing on the Issue Date, butonly to the extent not involving additional advances, contributions or otherInvestments of cash or other assets or other increases thereof other than as aresult of the accrual or accretion of interest or original issue discount orthe issuance of pay-in-kind securities, in each case, pursuant to the terms ofsuch Investment as in effect on the Issue Date (or as subsequently amended orotherwise modified in a manner not disadvantageous to the Holders of the Notesin any material respect);

 

(6)                                  anyInvestment acquired by the Issuer or any of its Restricted Subsidiaries:

 

(a)                                  inexchange for any other Investment or accounts receivable held by the Issuer orany such Restricted Subsidiary in connection with or as a result of abankruptcy, workout, reorganization or recapitalization of the issuer of suchother Investment or accounts receivable; or

 

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(b)                                 asa result of a foreclosure by the Issuer or any of its Restricted Subsidiarieswith respect to any secured Investment or other transfer of title with respectto any secured Investment in default;

 

(7)                                  HedgingObligations permitted under clause (10) of Section 4.09(b) hereof;

 

(8)                                  anyInvestment in a Similar Business having an aggregate fair market value, takentogether with all other Investments made pursuant to this clause (8) thatare at that time outstanding, not to exceed $75.0 million (with the fair marketvalue of each Investment being measured at the time made and without givingeffect to subsequent changes in value);

 

(9)                                  Investmentsthe payment for which consists of Equity Interests (exclusive of DisqualifiedStock) of the Issuer, or any of its direct or indirect parent companies; provided, however, that such Equity Interests will not increasethe amount available for Restricted Payments under clause (3) of Section 4.07(a) hereof;

 

(10)                            guarantees (including Guarantees) ofIndebtedness of the Issuer or any Restricted Subsidiary permitted under Section 4.09hereof, performance guarantees and Contingent Obligations in the ordinarycourse of business and the creation of liens on the assets of the Issuer or anyof its Restricted Subsidiaries in compliance with Section 4.12 hereof;

 

(11)                            anytransaction to the extent it constitutes an Investment that is permitted andmade in accordance with the provisions of Section 4.11(b) hereof(except transactions described in clauses (2), (5) and (9) of Section 4.11(b) hereof);

 

(12)                            Investmentsconsisting of purchases and acquisitions of inventory, supplies, material orequipment;

 

(13)                            additionalInvestments having an aggregate fair market value, taken together with allother Investments made pursuant to this clause (13) that are at that timeoutstanding (without giving effect to the sale of an Unrestricted Subsidiary tothe extent the proceeds of such sale do not consist of, or have not beensubsequently sold or transferred for, cash or marketable securities), not toexceed $100.0 million (with the fair market value of each Investment beingmeasured at the time made and without giving effect to subsequent changes invalue);

 

(14)                            Investmentsrelating to a Receivables Subsidiary that, in the good faith determination ofthe Issuer are necessary or advisable to effect any Receivables Facility;

 

(15)                            advancesto, or guarantees of Indebtedness of, employees not in excess of$15.0 million outstanding at any one time, in the aggregate;

 

(16)                            loansand advances to officers, directors and employees for business-related travelexpenses, moving expenses and other similar expenses, in each case incurred inthe ordinary course of business or consistent with past practices or to fundsuch Person’s purchase of Equity Interests of the Issuer or any direct orindirect parent company thereof; and

 

(17)                            Investments consisting of licensing ofintellectual property pursuant to joint marketing arrangements with otherPersons.

 

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“PermittedJunior Securities” means:

 

(1)                                  EquityInterests in any direct or indirect parent of the Issuer; or

 

(2)                                  unsecureddebt securities that are subordinated to all Senior Indebtedness (and any debtsecurities issued in exchange for Senior Indebtedness) to substantially thesame extent as, or to a greater extent than, the Notes and the relatedGuarantees are subordinated to Senior Indebtedness under this Indenture andwhich do not mature or become subject to a mandatory redemption obligationprior to the final maturity of the Notes;

 

provided that the term “Permitted JuniorSecurities” shall not include any securities distributed pursuant to a plan ofreorganization if the Indebtedness under the Senior Credit Facilities istreated as part of the same class as the Notes for purposes of suchplan of reorganization; provided**further**that to the extent that any Senior Indebtedness of theIssuer or the Guarantors outstanding on the date of consummation of any suchplan of reorganization is not paid in full in cash on such date, the holders ofany such Senior Indebtedness not so paid in full in cash have consented to theterms of such plan of reorganization.

 

 “Permitted Liens” means, with respectto any Person:

 

(1)                                  pledges,deposits or security by such Person under workmen’s compensation laws,unemployment insurance , employers’ health tax and other social security lawsor similar legislation, or good faith deposits in connection with bids,tenders, contracts (other than for the payment of Indebtedness) or leases towhich such Person is a party, or deposits to secure public or statutoryobligations of such Person or deposits of cash or U.S. government bonds tosecure surety or appeal bonds to which such Person is a party, or deposits assecurity for contested taxes or import duties or for the payment of rent, ineach case incurred in the ordinary course of business;

 

(2)                                  Liensimposed by law, such as carriers’, warehousemen’s, materialmen’s, repairmen’s andmechanics’ Liens, in each case for sums not yet overdue for a period of morethan 30 days or being contested in good faith by appropriate actions or otherLiens arising out of judgments or awards against such Person with respect towhich such Person shall then be proceeding with an appeal or other proceedingsfor review if adequate reserves with respect thereto are maintained on thebooks of such Person in accordance with GAAP;

 

(3)                                  Liensfor taxes, assessments or other governmental charges not yet overdue for aperiod of more than 30 days or which are being contested in good faith byappropriate actions diligently conducted, if adequate reserves with respectthereto are maintained on the books of such Person in accordance with GAAP, or for property taxes on property thatthe Issuer or one of its Subsidiaries has determined to abandon if the solerecourse for such tax, assessment, charge, levy or claim is to such property;

 

(4)                                  Liens in favor of issuers ofperformance, surety, bid, indemnity, warranty, release, appeal or similar bondsor with respect to other regulatory requirements or letters of credit orbankers’ acceptances issued, and completion guarantees provided for, in eachcase pursuant to the request of and for the account of such Person in theordinary course of its business or consistent with past practice prior to theIssue Date;

 

(5)                                  minor survey exceptions, minorencumbrances, ground leases, easements or reservations of, or rights of othersfor, licenses, rights-of-way, servitudes, sewers, electric lines, drains,telegraph and telephone and cable television lines, gas and oil pipelines andother similar

 

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purposes, or zoning, buildingcodes or other restrictions (including, without limitation, minor defects orirregularities in title and similar encumbrances) as to the use of realproperties or Liens incidental, to the conduct of the business of such Personor to the ownership of its properties which were not incurred in connectionwith Indebtedness and which do not in the aggregate materially impair their usein the operation of the business of such Person;

 

(6)                                  Lienssecuring Indebtedness permitted to be incurred pursuant to clause (4), (12)(b),(18) or (19) of Section 4.09(b) hereof; provided that Lienssecuring Indebtedness permitted to be incurred pursuant to clause (18) of Section 4.09(b) hereofextend only to the assets of Foreign Subsidiaries and Liens securingIndebtedness permitted to be incurred pursuant to clause (19) of Section 4.09(b) hereofare solely on acquired property or the assets of the acquired entity, as thecase may be;

 

(7)                                  Liensexisting on the Issue Date;

 

(8)                                  Liensexisting on property or shares of stock of a Person at the time such Personbecomes a Subsidiary; provided, however, such Liens are notcreated or incurred in connection with, or in contemplation of, such otherPerson becoming such a Subsidiary; provided, further, however,that such Liens may not extend to any other property owned by the Issueror any of its Restricted Subsidiaries;

 

(9)                                  Liensexisting on property at the time the Issuer or a Restricted Subsidiary acquiredthe property, including any acquisition by means of a merger, amalgamation orconsolidation with or into the Issuer or any of its Restricted Subsidiaries; provided, however, that such Liens are not created or incurred inconnection with, or in contemplation of, such acquisition, merger, amalgamationor consolidation; provided, further, however,that the Liens may not extend to any other property owned by the Issuer orany of its Restricted Subsidiaries;

 

(10)                            Lienssecuring Indebtedness or other obligations of a Restricted Subsidiary owing tothe Issuer or another Restricted Subsidiary permitted to be incurred inaccordance with Section 4.09 hereof;

 

(11)                            Lienssecuring Hedging Obligations so long as the related Indebtedness is permittedto be incurred under this Indenture;

 

(12)                            Lienson specific items of inventory or other goods and proceeds of any Personsecuring such Person’s obligations in respect of bankers’ acceptances orletters of credit issued or created for the account of such Person tofacilitate the purchase, shipment or storage of such inventory or other goods;

 

(13)                            leases,subleases, licenses or sublicenses granted to others in the ordinary course ofbusiness which do not materially interfere with the ordinary conduct of thebusiness of the Issuer or any of its Restricted Subsidiaries and do not secureany Indebtedness;

 

(14)                            Liensarising from Uniform Commercial Code (or equivalent statutes) financingstatement filings regarding operating leases, consignments or accounts enteredinto by the Issuer and its Restricted Subsidiaries in the ordinary course ofbusiness;

 

(15)                            Liensin favor of the Issuer or any Guarantor;

 

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(16)                            Lienson equipment of the Issuer or any of its Restricted Subsidiaries granted in theordinary course of business to the Issuer’s clients;

 

(17)                            Lienson accounts receivable and related assets incurred in connection with a ReceivablesFacility;

 

(18)                            Liensto secure any refinancing, refunding, extension, renewal or replacement (orsuccessive refinancing, refunding, extensions, renewals or replacements) as awhole, or in part, of any Indebtedness secured by any Lien referred to in theforegoing clauses (6), (7), (8) and (9); provided, however,that (a) such new Lien shall be limited to all or part of the sameproperty that secured the original Lien (plus improvements on such property),and (b) the Indebtedness secured by such Lien at such time is notincreased to any amount greater than the sum of (i) the outstandingprincipal amount or, if greater, committed amount of the Indebtedness describedunder clauses (6), (7), (8) and (9) at the time the original Lienbecame a Permitted Lien under this Indenture, and (ii) an amount necessaryto pay any fees and expenses, including premiums, related to such refinancing,refunding, extension, renewal or replacement;

 

(19)                            depositsmade or other security provided to secure liabilities to insurance carriersunder insurance or self-insurance arrangements in the ordinary course ofbusiness;

 

(20)                            Lienssecuring judgments for the payment of money not constituting an Event ofDefault under clause (5) of Section 6.01(a) hereof so long as such Liens areadequately bonded and any appropriate legal proceedings that may have beenduly initiated for the review of such judgment have not been finally terminatedor the period within which such proceedings may be initiated has not expired;

 

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

 

(22)                            Liens (i) ofa collection bank arising under Section 4-210 of the Uniform CommercialCode on items in the course of collection, (ii) attaching to commoditytrading accounts or other commodity brokerage accounts incurred in the ordinarycourse of business, and (iii) in favor of banking institutions arising asa matter of law encumbering deposits (including the right of set-off) and whichare within the general parameters customary in the banking industry;

 

(23)                            Liensdeemed to exist in connection with Investments in repurchase agreements orother Cash Equivalents permitted under Section 4.09 hereof; provided that such Liens do not extend to anyassets other than those that are the subject of such repurchase agreement orother Cash Equivalent;

 

(24)                            Liensencumbering reasonable customary initial deposits and margin deposits andsimilar Liens attaching to commodity trading accounts or other brokerageaccounts incurred in the ordinary course of business and not for speculativepurposes;

 

(25)                            Liensthat are contractual rights of set-off (i) relating to the establishmentof depository relations with banks not given in connection with the issuance ofIndebtedness, (ii) relating to pooled deposit or sweep accounts of theIssuer or any of its Restricted Subsidiaries to permit satisfaction ofoverdraft or similar obligations incurred in the ordinary course of business ofthe Issuer and its Restricted Subsidiaries or (iii) relating to purchaseorders and other agreements

 

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entered into with customers of the Issuer or any of its RestrictedSubsidiaries in the ordinary course of business;

 

(26)                            Liens solely on any cash earnest moneydeposits made by the Issuer or any of its Restricted Subsidiaries in connectionwith any letter of intent or purchase agreement permitted under this Indenture;

 

(27)                            the rights reserved or vested in anyPerson by the terms of any lease, license, franchise, grant or permit held bythe Issuer or any of its Restricted Subsidiaries or by a statutory provision,to terminate any such lease, license, franchise, grant or permit, or to requireannual or periodic payments as a condition to the continuance thereof;

 

(28)                            restrictive covenants affecting the useto which real property may be put; provided, however, that the covenantsare complied with;

 

(29)                            security given to a public utility orany municipality or governmental authority when required by such utility orauthority in connection with the operations of that Person in the ordinarycourse of business;

 

(30)                            zoning by-laws and other land userestrictions, including, without limitation, site plan agreements, developmentagreements and contract zoning agreements;

 

(31)                            Liens arising out of conditional sale,title retention, consignment or similar arrangements for sale of goods enteredinto by the Issuer or any Restricted Subsidiary in the ordinary course ofbusiness;

 

(32)                            Liens arising from Personal PropertySecurity Act financing statement filings regarding leases entered into by theIssuer or any of its Restricted Subsidiaries in the ordinary course ofbusiness;

 

(33)                            rights of a supplier of unpaid goods tohave access to and repossess such goods under the Bankruptcy and Insolvency Act(Canada) and under the provisions in the legislation of Canadian provinces;

 

(34)                            the reservations, limitations, provisosand conditions, if any, expressed in any original grants from the crown underCanadian law and any statutory exceptions to title under Canadian law; and

 

(35)                            customary transfer restrictions andpurchase options in joint venture and similar agreements.

 

For purposesof this definition, the term “Indebtedness” shall be deemed to include intereston such Indebtedness.

 

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

 

“Preferred Stock” means any EquityInterest with preferential rights of payment of dividends or upon liquidation,dissolution, or winding up.

 

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“Proof ofClaim” shall mean a proof of claim or debt filed in accordance with andpursuant to any applicable provisions of the Bankruptcy Law, the Federal Rules ofBankruptcy Procedure and/or a final order of the U.S. bankruptcy court.

 

“ProperProof of Claim” shall mean, at any time, a Proof of Claim in an amount notless than the sum of the aggregate outstanding principal amount of the Notes atsuch time plus accrued but unpaid interest on the Notes at such time.

 

 “Public Company Costs”shall mean costs relating to compliance with the Sarbanes-Oxley Act of 2002, asamended, and other expenses arising out of or incidental to the Issuer’s statusas a public company, including costs, fees and expenses (including legal,accounting and other professional fees) relating to compliance with provisionsof the Securities Act and the Exchange Act, as applicable to companies withequity securities held by the public, the rules of national securitiesexchange companies with listed equity securities, directors’ compensation, feesand expense reimbursement, shareholder meetings and reports to shareholders,directors and officers’ insurance and other executive costs, legal and otherprofessional fees, and listing fees, in each case incurred or accrued prior tothe Issue Date and that will not continue to be incurred immediately after theIssue Date.

 

“PrivatePlacement Legend” means the legend set forth in Section 2.06(g)(i) hereofto be placed on all Notes issued under this Indenture, except where otherwise permittedby the provisions of this Indenture.

 

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

 

“Qualified Proceeds” means assetsthat are used or useful in, or Capital Stock of any Person engaged in, aSimilar Business; providedthat the fair market value of any such assets or Capital Stock shall be determinedby the Issuer in good faith.

 

“RatingAgencies” means Moody’s and S&P or if Moody’s or S&P or both shallnot make a rating on the Notes publicly available, a nationally recognizedstatistical rating agency or agencies, as the case may be, selected by theIssuer which shall be substituted for Moody’s or S&P or both, as the case may be.

 

“Receivables Facility” means anyof one or more receivables financing facilities as amended, supplemented,modified, extended, renewed, restated or refunded from time to time, theObligations of which are non-recourse (except for customary representations,warranties, covenants and indemnities made in connection with such facilities)to the Issuer or any of its Restricted Subsidiaries (other than a ReceivablesSubsidiary) pursuant to which the Issuer or any of its Restricted Subsidiariessells its accounts receivable to either (a) a Person that is not aRestricted Subsidiary or (b) a Receivables Subsidiary that in turn sellsits accounts receivable to a Person that is not a Restricted Subsidiary.

 

“Receivables Fees” means distributions or paymentsmade directly or by means of discounts with respect to any accounts receivableor participation interest therein issued or sold in connection with, and otherfees paid to a Person that is not a Restricted Subsidiary in connection with,any Receivables Facility.

 

“ReceivablesSubsidiary” means any Subsidiary formed for the purpose of, and that solelyengages only in one or more Receivables Facilities and other activitiesreasonably related thereto.

 

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“RecordDate” for the interest or Additional Interest, if any, payable on any applicableInterest Payment Date means the April 15 or October 15 (whether ornot a Business Day) next preceding such Interest Payment Date.

 

“RegistrationRights Agreement” means the Registration Rights Agreement related to theNotes dated as of the Issue Date, among the Issuer, the Guarantors and theInitial Purchasers, as such agreement may be amended, modified orsupplemented from time to time and, with respect to any Additional Notes, oneor more registration rights agreements between the Issuer and the other partiesthereto, as such agreement(s) may be amended, modified or supplementedfrom time to time, relating to rights given by the Issuer to the purchasers of AdditionalNotes to register such Additional Notes under the Securities Act.

 

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

 

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

 

“RegulationS Permanent Global Note” means a permanent Global Note in the form of Exhibit Abearing the Global Note Legend and the Private Placement Legend and depositedwith or on behalf of and registered in the name of the Depositary or itsnominee, issued in a denomination equal to the outstanding principal amount ofthe Regulation S Temporary Global Note upon expiration of the Restricted Period.

 

“RegulationS Temporary Global Note” means a temporary Global Note in the form of Exhibit Abearing the Global Note Legend, the Private Placement Legend and the RegulationS Temporary Global Note Legend and deposited with or on behalf of and registeredin the name of the Depositary or its nominee, issued in a denomination equal tothe outstanding principal amount of the Notes initially sold in reliance on Rule 903.

 

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

 

“Related Business Assets” meansassets (other than cash or Cash Equivalents) used or useful in a SimilarBusiness, provided thatany assets received by the Issuer or a Restricted Subsidiary in exchange forassets transferred by the Issuer or a Restricted Subsidiary shall not be deemedto be Related Business Assets if they consist of securities of a Person, unlessupon receipt of the securities of such Person, such Person would become a RestrictedSubsidiary.

 

“Representative” means anytrustee, agent or representative (if any) for an issue of Senior Indebtednessof the Issuer or any Guarantor.

 

“ResponsibleOfficer” means, when used with respect to the Trustee, any officer withinthe corporate trust department of the Trustee, including any vice president,assistant vice president, assistant treasurer, trust officer or any otherofficer of the Trustee who customarily performs functions similar to thoseperformed by the Persons who at the time shall be such officers, respectively,or to whom any corporate trust matter is referred because of such Person’sknowledge of and familiarity with the particular subject and who shall havedirect responsibility for the administration of this Indenture.

 

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

 

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

 

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

 

“RestrictedPeriod” means the 40-day distribution compliance period as defined in RegulationS.

 

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

 

“RevolvingCredit Facility” means the credit facility provided under the SeniorSecured Asset-Based Revolving Credit Agreement, to be entered into as of theIssue Date by and among the Issuer, the lenders party thereto in theircapacities as lenders thereunder and Bank of America, N.A., as AdministrativeAgent, including any notes, mortgages, guarantees, collateral documents,instruments and agreements executed in connection therewith, and anyamendments, supplements, modifications, extensions, replacements, renewals,restatements, refundings or refinancings thereof and any one or more indenturesor credit facilities or commercial paper facilities with banks or otherinstitutional lenders or investors that extend, replace, refund, refinance,renew or defease any part of the loans, notes, other credit facilities orcommitments thereunder, including any such replacement, refunding orrefinancing facility or indenture that increases the amount borrowablethereunder or alters the maturity thereof or adds Restricted Subsidiaries asadditional borrowers or guarantors thereunder and whether by the same or anyother agent, lender or group of lenders.

 

“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.

 

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

 

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

 

“SEC” means the U.S. Securitiesand Exchange Commission.

 

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

 

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

 

“SeniorCredit Facilities” means the Revolving Credit Facility and the Term LoanFacility.

 

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“SeniorIndebtedness” means:

 

(1)                                  allIndebtedness of the Issuer or any Guarantor outstanding under the Senior CreditFacilities or Senior Notes and related guarantees (including interest accruingon or after the filing of any petition in bankruptcy or any similar proceedingor for reorganization of the Issuer or any Guarantor (at the rate provided forin the documentation with respect thereto, regardless of whether or not a claimfor post-filing interest is allowed in such proceedings)), and any and allother fees, expense reimbursement obligations, indemnification amounts,penalties, and other amounts (whether existing on the Issue Date or thereaftercreated or incurred) and all obligations of the Issuer or any Guarantor toreimburse any bank or other Person in respect of amounts paid under letters ofcredit, acceptances or other similar instruments;

 

(2)                                  allHedging Obligations (and guarantees thereof) owing to a lender or any affiliateof a lender under any Senior Credit Facility (or a Person who was such a lenderor an affiliate at the time such Hedging Obligations were entered into);

 

(3)                                  anyother Indebtedness of the Issuer or any Guarantor permitted to be incurredunder the terms of this Indenture, unless the instrument under which suchIndebtedness is incurred expressly provides that it is on a parity with orsubordinated in right of payment to the Notes or any Guarantee; and

 

(4)                                  allObligations with respect to the items listed in the preceding clauses (1), (2) and(3);

 

provided,however, that Senior Indebtedness shall not include:

 

(a)                                  anyobligation of such Person to the Issuer or any of its Subsidiaries;

 

(b)                                 anyliability for federal, state, local or other taxes owed or owing by suchPerson;

 

(c)                                  anyaccounts payable or other liability to trade creditors arising in the ordinarycourse of business; provided that obligations incurred pursuant to theSenior Credit Facilities shall not be excluded pursuant to this clause (c);

 

(d)                                 anyIndebtedness or other Obligation of such Person which is subordinate or juniorin any respect to any other Indebtedness or other Obligation of such Person; or

 

(e)                                  thatportion of any Indebtedness which at the time of incurrence is incurred inviolation of this Indenture; provided, however that suchIndebtedness shall be deemed not to have been incurred in violation of thisIndenture for purposes of this clause if such Indebtedness consists ofDesignated Senior Indebtedness, and the holder(s) of such Indebtedness andtheir Representative shall have received a certificate from an officer of theIssuer to the effect that the incurrence of such Indebtedness does not (or, inthe case of a revolving credit facility thereunder, the incurrence of theentire committed amount thereof at the date on which the initial borrowingthereunder is made would not) violate the provisions of this Indenture.

 

“SeniorNotes” means the $750,000,000 aggregate principal amount of the Issuer’s 10%senior notes due 2014 issued on the Issue Date.

 

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“SeniorSubordinated Indebtedness” means:

 

(1)                                  withrespect to the Issuer, Indebtedness which ranks equal in right of payment tothe Notes issued by the Issuer; and

 

(2)                                  withrespect to any Guarantor, Indebtedness which ranks equal in right of payment tothe Guarantee of such entity of the Notes.

 

 “Shelf Registration Statement” meansthe Shelf Registration Statement as defined in the Registration RightsAgreement.

 

“SignificantSubsidiary” means any Restricted Subsidiary that would be a “significantsubsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,promulgated pursuant to the Securities Act, as such regulation is in effect onthe Issue Date.

 

“Similar Business” means anybusiness conducted or proposed to be conducted by the Issuer and its RestrictedSubsidiaries on the Issue Date or any business that is a reasonable extension,development or expansion of any of the foregoing or is similar, reasonablyrelated, incidental or ancillary thereto (including, forthe avoidance of doubt, any sourcing companies created in connection with anyof the foregoing).

 

“SpecifiedLegal Expenses” means all attorneys’ and experts’ fees and expenses and allother costs and expenses paid or payable in connection with investigating ordefending or preparing to investigate or defend any threatened, pending,completed or future claim, demand, action, suit, proceeding, inquiry orinvestigation (whether civil, criminal, administrative or investigative)arising out of or related to (i) the Issuer’s compensation practices(including option grants) prior to the Issue Date, (ii) any disclosure oralleged lack of disclosure on the part of the Issuer or any of itsdirectors or officers regarding the beneficial ownership of any securities ofthe Issuer prior to the Issue Date by any such director or officer (or anytrust established for the benefit of any such director or officer or any familymember thereof), (iii) any transaction prior to the Issue Date involvingany securities of the Issuer alleged to have been engaged in by any suchPerson, (iv) any alleged deficiencies in the Issuer’s financial reporting,internal control over financial reporting or disclosure controls prior to theIssue Date and procedures relating to any of the foregoing, and (v) anyalleged bad faith, breach of fiduciary duty or other act or omission on the part ofany director or officer of the Issuer relating to any of the foregoing,together in each case with all damages, losses, liabilities, judgments, fines,penalties and amounts paid in settlement arising out of or incurred inconnection with any of the foregoing (including all amounts paid to or onbehalf of other Persons in connection with any of the foregoing pursuant to anyindemnification agreements, arrangements or obligations).

 

“SponsorManagement Agreement” means the management agreements between certain ofthe management companies associated with the Investors and Highfields Capital,and the Issuer, as in effect on the Issue Date and as amended, supplemented,amended and restated, replaced or otherwise modified from time to time;provided, however, that the terms of any such amendment, supplement, amendmentand restatement or replacement agreement are not, taken as a whole, lessfavorable to the holders of the Notes in any material respect than the originalagreement in effect on the Issue Date.

 

“SubordinatedDiscount Notes” means the $469,449,000 aggregate principal amount atmaturity of the Issuer’s 13% subordinated discount notes due 2016 issued on theIssue Date.

 

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

 

(1)                                  anyIndebtedness of the Issuer which is by its terms subordinated in right ofpayment to the Notes, and

 

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

 

“Subsidiary”means, with respect to any Person:

 

(1)                                  anycorporation, association, or other business entity (other than a partnership,joint venture, limited liability company or similar entity) of which more than50% of the total voting power of shares of Capital Stock entitled (withoutregard to the occurrence of any contingency) to vote in the election ofdirectors, managers or trustees thereof is at the time of determination ownedor controlled, directly or indirectly, by such Person or one or more of theother Subsidiaries of that Person or a combination thereof or is consolidatedunder GAAP with such Person at such time; and

 

(2)                                  anypartnership, joint venture, limited liability company or similar entity ofwhich

 

(x)                                   morethan 50% of the capital accounts, distribution rights, total equity and votinginterests or general or limited partnership interests, as applicable, are ownedor controlled, directly or indirectly, by such Person or one or more of theother Subsidiaries of that Person or a combination thereof whether in the form ofmembership, general, special or limited partnership or otherwise, and

 

(y)                                  such Person or anyRestricted Subsidiary of such Person is a controlling general partner orotherwise controls such entity.

 

“Term Loan Facility” means the credit facility provided underthe Senior Secured Term Loan Agreement, to be entered into as of the Issue Dateby and among the Issuer, the lenders party thereto in their capacities aslenders thereunder and Deutsche Bank AG New York Branch, as AdministrativeAgent, including any notes, mortgages, guarantees, collateral documents,instruments and agreements executed in connection therewith, and anyamendments, supplements, modifications, extensions, replacements, renewals,restatements, refundings or refinancings thereof and any one or more indenturesor credit facilities or commercial paper facilities with banks or otherinstitutional lenders or investors that extend, replace, refund, refinance,renew or defease any part of the loans, notes, other credit facilities orcommitments thereunder, including any such replacement, refunding orrefinancing facility or indenture that increases the amount borrowablethereunder or alters the maturity thereof or adds Restricted Subsidiaries asadditional borrowers or guarantors thereunder and whether by the same or anyother agent, lender or group of lenders.

 

“Total Assets” means the totalassets of the Issuer and its Restricted Subsidiaries on a consolidated basis,as shown on the most recent balance sheet of the Issuer or such other Person asmay be expressly stated.

 

“Transaction Agreement” means the Agreement and Plan of Merger,dated as of June 30, 2006 among Bain Paste Mergerco, Inc., BlackstonePaste Mergerco, Inc., Bain Paste Finco, LLC, Blackstone Paste Finco, LLCand the Issuer, as the same may be amended prior to the Issue Date.

 

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“Transaction Expenses” means any fees or expenses incurred orpaid by the Issuer or any Restricted Subsidiary in connection with theTransactions, including payments to officers, employees and directors as changeof control payments, severance payments, special or retention bonuses andcharges for repurchase or rollover of, or modifications to, stock options.

 

“Transactions” means the transactions contemplated by theTransaction Agreement, the issuance of the Initial Notes, the Senior Notes andthe Subordinated Discount Notes and borrowings under the Senior Credit Facilitiesas in effect on the Issue Date.

 

“Treasury Rate” means, as of anyRedemption Date, the yield to maturity as of such Redemption Date of UnitedStates Treasury securities with a constant maturity (as compiled and publishedin the most recent Federal Reserve Statistical Release H.15 (519) that hasbecome publicly available at least two Business Days prior to the RedemptionDate (or, if such Statistical Release is no longer published, any publiclyavailable source of similar market data)) most nearly equal to the period fromthe Redemption Date to November 1, 2011; provided, however,that if the period from the Redemption Date to November 1, 2011 is lessthan one year, the weekly average yield on actually traded United StatesTreasury securities adjusted to a constant maturity of one year will be used.

 

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

 

“Trustee”means Wells Fargo Bank, National Association, as trustee, until a successorreplaces it in accordance with the applicable provisions of this Indenture andthereafter means the successor serving hereunder.

 

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

 

“UnrestrictedGlobal Note” means a permanent Global Note, substantially in the form ofExhibit A, that bears the Global Note Legend and that has the “Schedule ofExchanges of Interests in the Global Note” attached thereto, and that isdeposited with or on behalf of and registered in the name of the Depositary,representing Notes that do not bear the Private Placement Legend.

 

“UnrestrictedSubsidiary” means:

 

(1)                                  anySubsidiary of the Issuer which at the time of determination is an UnrestrictedSubsidiary (as designated by the Issuer, as provided below); and

 

(2)                                  anySubsidiary of an Unrestricted Subsidiary.

 

The Issuer may designateany Subsidiary of the Issuer (including any existing Subsidiary and any newlyacquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unlesssuch Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtednessof, or owns or holds any Lien on, any property of, the Issuer or any Subsidiaryof the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated);provided that

 

(1)                                  anyUnrestricted Subsidiary must be an entity of which the Equity Interestsentitled to cast at least a majority of the votes that may be cast by allEquity Interests having ordinary voting power for the election of directors orPersons performing a similar function are owned, directly or indirectly, by theIssuer;

 

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(2)                                  suchdesignation complies with Section 4.07 hereof; and

 

(3)                                  eachof:

 

(a)                                  theSubsidiary to be so designated; and

 

(b)                                 itsSubsidiaries

 

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

 

The Issuer may designateany Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately aftergiving effect to such designation, no Default shall have occurred and be continuingand either:

 

(1)                                  theIssuer could incur at least $1.00 of additional Indebtedness pursuant to theFixed Charge Coverage Ratio test described in Section 4.09(a) hereof;or

 

(2)                                  theFixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiarieswould be greater than such ratio for the Issuer and its Restricted Subsidiariesimmediately prior to such designation,

 

in each caseon a *pro forma* basis taking intoaccount such designation.

 

Any suchdesignation by the Issuer shall be notified by the Issuer to the Trustee bypromptly filing with the Trustee a copy of the resolution of the board ofdirectors of the Issuer or any committee thereof giving effect to suchdesignation and an Officer’s Certificate certifying that such designationcomplied with the foregoing provisions.

 

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

 

“VotingStock” of any Person as of any date means the Capital Stock of such Personthat is at the time entitled to vote in the election of the board of directorsof such Person.

 

“WeightedAverage Life to Maturity” means, when applied to any Indebtedness,Disqualified Stock or Preferred Stock, as the case may be, at any date,the quotient obtained by dividing:

 

(1)                                  thesum of the products of the number of years from the date of determination tothe date of each successive scheduled principal payment of such Indebtedness orredemption or similar payment with respect to such Disqualified Stock orPreferred Stock multiplied by the amount of such payment; by

 

(2)                                  thesum of all such payments.

 

“Wholly-OwnedSubsidiary” of any Person means a Subsidiary of such Person, 100% of theoutstanding Equity Interests of which (other than directors’ qualifying sharesand shares issued to foreign nationals as required under applicable law) shallat the time be owned by such Person or by one or more Wholly Owned Subsidiariesof such Person or by such Person and one or more Wholly-Owned Subsidiaries ofsuch Person.

 

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Section 1.02                                Other Definitions.

 
| **Term**                                      | ** ** | **Defined in  Section** | ** ** |
|-----------------------------------------------|------------|-------------------------|------------|
| “Acceptable Commitment”             |       | 4.10(b)                 |       |
| “Affiliate Transaction”             |       | 4.11(a)                 |       |
| “Asset Sale Offer”                  |       | 4.10(c)                 |       |
| “Authentication Order”              |       | 2.02                    |       |
| “Blockage Notice”                   |       | 10.03                   |       |
| “Change of Control Offer”           |       | 4.14(a)                 |       |
| “Change of Control Payment”         |       | 4.14(a)                 |       |
| “Change of Control Payment Date”    |       | 4.14(a)                 |       |
| “Covenant Defeasance”               |       | 8.03                    |       |
| “Covenant Suspension Event”         |       | 4.16(a)                 |       |
| “DTC”                               |       | 2.03                    |       |
| “Event of Default”                  |       | 6.01(a)                 |       |
| “Excess Proceeds”                   |       | 4.10(c)                 |       |
| “Guarantee Blockage Notice”         |       | 12.03                   |       |
| “Guarantee Payment Blockage Period” |       | 12.03                   |       |
| “Guarantor Non-Payment Default”     |       | 12.03                   |       |
| “Guarantor Payment Default”         |       | 12.03                   |       |
| “incur” or “incurrence”   |       | 4.09(a)                 |       |
| “Legal Defeasance”                  |       | 8.02                    |       |
| “Non-Payment Default”               |       | 10.03                   |       |
| “Note Register”                     |       | 2.03                    |       |
| “Offer Amount”                      |       | 3.09(b)                 |       |
| “Offer Period”                      |       | 3.09(b)                 |       |
| “Pari Passu Indebtedness”           |       | 4.10(c)                 |       |
| “pay its Guarantee”                 |       | 12.03                   |       |
| “pay the Notes”                     |       | 10.03                   |       |
| “Paying Agent”                      |       | 2.03                    |       |
| “Payment Blockage Period”           |       | 10.03                   |       |
| “Payment Default”                   |       | 10.03                   |       |
| “Purchase Date”                     |       | 3.09(b)                 |       |
| “Redemption Date”                   |       | 3.07(a)                 |       |
| “Refinancing Indebtedness”          |       | 4.09(b)                 |       |
| “Refunding Capital Stock”           |       | 4.07(b)                 |       |
| “Registrar”                         |       | 2.03                    |       |
| “Restricted Payments”               |       | 4.07(a)                 |       |
| “Reversion Date”                    |       | 4.16(b)                 |       |
| “Second Commitment”                 |       | 4.10(b)                 |       |
| “Successor Company”                 |       | 5.01(a)                 |       |
| “Successor Person”                  |       | 5.01(c)                 |       |
| “Suspended Covenants”               |       | 4.16(a)                 |       |
| “Suspension Period”                 |       | 4.16(b)                 |       |
| “Treasury Capital Stock”            |       | 4.07(b)                 |       |

 

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Section 1.03                                Incorporation byReference of Trust Indenture Act.

 

Whenever thisIndenture refers to a provision of the Trust Indenture Act, the provision is incorporatedby reference in and made a part of this Indenture.

 

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

 

“indenturesecurities” means the Notes;

 

“indenturesecurity Holder” means a Holder of a Note;

 

“indenture tobe qualified” means this Indenture;

 

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

 

“obligor” on the Notes and the Guaranteesmeans the Issuer and the Guarantors, respectively, and any successor obligorupon the Notes and the Guarantees, respectively.

 

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

 

Section 1.04                                Rules ofConstruction.

 

Unless thecontext otherwise requires:

 

(a)                                  a term has themeaning assigned to it;

 

(b)                                 an accounting term nototherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)                                  “or” is notexclusive;

 

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

 

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

 

(f)                                    provisions apply tosuccessive events and transactions;

 

(g)                                 references to sectionsof, or rules under, the Securities Act shall be deemed to includesubstitute, replacement or successor sections or rules adopted by the SECfrom time to time;

 

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

 

### (i)                                     words used herein implying any gendershall apply to both genders;

###  

### (j)                                     the words “including,” “includes” andsimilar words shall be deemed to be followed by “without limitation”;

 

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### (k)                                  the principal amount of any non-interestbearing or other discount security at any date shall be the principal amount thereofthat would be shown on a balance sheet of the Issuer dated such date preparedin accordance with GAAP;

###  

### (l)                                     the principal amount of any PreferredStock shall be (i) the maximum liquidation value of such Preferred Stockor (ii) the maximum mandatory redemption or mandatory repurchase pricewith respect to such Preferred Stock, whichever is greater; and

###  

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

 

Section 1.05                                Acts of Holders.

 

### (a)                                  Anyrequest, demand, authorization, direction, notice, consent, waiver or otheraction provided by this Indenture to be given or taken by Holders may beembodied in and evidenced by one or more instruments of substantially similartenor signed by such Holders in person or by an agent duly appointed in writing.Except as herein otherwise expressly provided, such action shall becomeeffective when such instrument or instruments are delivered to the Trustee and,where it is hereby expressly required, to the Issuer. Proof of execution of anysuch instrument or of a writing appointing any such agent, or the holding byany Person of a Note, shall be sufficient for any purpose of this Indenture and(subject to Section 7.01) conclusive in favor of the Trustee and the Issuer,if made in the manner provided in this Section 1.05.

###  

### (b)                                 Thefact and date of the execution by any Person of any such instrument or writing may beproved by the affidavit of a witness of such execution or by the certificate ofany notary public or other officer authorized by law to take acknowledgments ofdeeds, certifying that the individual signing such instrument or writingacknowledged to him the execution thereof. Where such execution is by or onbehalf of any legal entity other than an individual, such certificate oraffidavit shall also constitute proof of the authority of the Person executingthe same. The fact and date of the execution of any such instrument or writing,or the authority of the Person executing the same, may also be proved inany other manner that the Trustee deems sufficient.

###  

### (c)                                  Theownership of Notes shall be proved by the Note Register.

###  

### (d)                                 Anyrequest, demand, authorization, direction, notice, consent, waiver or otheraction by the Holder of any Note shall bind every future Holder of the same Noteand the Holder of every Note issued upon the registration of transfer thereofor in exchange therefor or in lieu thereof, in respect of any action taken,suffered or omitted by the Trustee or the Issuer in reliance thereon, whetheror not notation of such action is made upon such Note.

###  

### (e)                                  TheIssuer may, in the circumstances permitted by the Trust Indenture Act, set arecord date for purposes of determining the identity of Holders entitled togive any request, demand, authorization, direction, notice, consent, waiver ortake any other act, or to vote or consent to any action by vote or consentauthorized or permitted to be given or taken by Holders. Unless otherwisespecified, if not set by the Issuer prior to the first solicitation of a Holdermade by any Person in respect of any such action, or in the case of any suchvote, prior to such vote, any such record date shall be the later of 30 daysprior to the first solicitation of such consent or the date of the most recentlist of Holders furnished to the Trustee prior to such solicitation.

 

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### (f)                                    Withoutlimiting the foregoing, a Holder entitled to take any action hereunder withregard to any particular Note may do so with regard to all or any part ofthe principal amount of such Note or by one or more duly appointed agents, eachof which may do so pursuant to such appointment with regard to all or any part ofsuch principal amount. Any notice given or action taken by a Holder or itsagents with regard to different parts of such principal amount pursuant to thisparagraph shall have the same effect as if given or taken by separate Holdersof each such different part.

###  

### (g)                                 Withoutlimiting the generality of the foregoing, a Holder, including DTC, that is theHolder of a Global Note, may make, give or take, by a proxy or proxiesduly appointed in writing, any request, demand, authorization, direction,notice, consent, waiver or other action provided in this Indenture to be made,given or taken by Holders, and any Person that is the Holder of a Global Note,including DTC, may provide its proxy or proxies to the beneficial ownersof interests in any such Global Note through such depositary’s standinginstructions and customary practices.

###  

### (h)                                 TheIssuer may fix a record date for the purpose of determining the Personswho are beneficial owners of interests in any Global Note held by DTC entitledunder the procedures of such depositary to make, give or take, by a proxy orproxies duly appointed in writing, any request, demand, authorization,direction, notice, consent, waiver or other action provided in this Indentureto be made, given or taken by Holders. If such a record date is fixed, theHolders on such record date or their duly appointed proxy or proxies, and onlysuch Persons, shall be entitled to make, give or take such request, demand,authorization, direction, notice, consent, waiver or other action, whether ornot such Holders remain Holders after such record date. No such request,demand, authorization, direction, notice, consent, waiver or other action shallbe valid or effective if made, given or taken more than 90 days after such recorddate.

###  

ARTICLE 2

 

THE NOTES

 

Section 2.01                                Form andDating; Terms.

 

### (a)                                  General.The Notes and the Trustee’s certificate of authentication shall besubstantially in the form of Exhibit A hereto. The Notes may havenotations, legends or endorsements required by law, stock exchange rules orusage. Each Note shall be dated the date of its authentication. The Notes shallbe in denominations of $1,000 and integral multiples of $1,000 in excess of$1,000.

###  

### (b)                                 GlobalNotes. Notes issued in global form shall be substantially in the form ofExhibit A attached hereto (including the Global Note Legend thereonand the “Schedule of Exchanges of Interests in the Global Note” attachedthereto). Notes issued in definitive form shall be substantially in the form ofExhibit A attached hereto (but without the Global Note Legendthereon and without the “Schedule of Exchanges of Interests in the GlobalNote” attached thereto). Each Global Note shall represent such of theoutstanding Notes as shall be specified in the “Schedule of Exchanges ofInterests in the Global Note” attached thereto and each shall provide that itshall represent up to the aggregate principal amount of Notes from time to timeendorsed thereon and that the aggregate principal amount of outstanding Notesrepresented thereby may from time to time be reduced or increased, as applicable,to reflect exchanges and redemptions. Any endorsement of a Global Note toreflect the amount of any increase or decrease in the aggregate principalamount of outstanding Notes represented thereby shall be made by the Trustee orthe Custodian, at the direction of the Trustee, in accordance with instructionsgiven by the Holder thereof as required by Section 2.06 hereof.

 

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### (c)                                  TemporaryGlobal Notes. Notes offered and sold in reliance on Regulation S shall beissued initially in the form of the Regulation S Temporary Global Note,which shall be deposited on behalf of the purchasers of the Notes representedthereby with the Trustee, as custodian for the Depositary, and registered inthe name of the Depositary or the nominee of the Depositary for the accounts ofdesignated agents holding on behalf of Euroclear or Clearstream, duly executedby the Issuer and authenticated by the Trustee as hereinafter provided. TheRestricted Period shall be terminated upon the receipt by the Trustee of:

###  

#### (i)                                     a writtencertificate from the Depositary, together with copies of certificates fromEuroclear and Clearstream certifying that they have received certification ofnon-United States beneficial ownership of 100% of the aggregate principalamount of the Regulation S Temporary Global Note (except to the extent of anybeneficial owners thereof who acquired an interest therein during theRestricted Period pursuant to another exemption from registration under theSecurities Act and who shall take delivery of a beneficial ownership interestin a 144A Global Note bearing a Private Placement Legend, all as contemplatedby Section 2.06(b) hereof); and

####  

#### (ii)                                  an Officer’sCertificate from the Issuer.

####  

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

 

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

###  

The terms andprovisions contained in the Notes shall constitute, and are hereby expresslymade, a part of this Indenture and the Issuer, the Guarantors and theTrustee, by their execution and delivery of this Indenture, expressly agree tosuch terms and provisions and to be bound thereby. However, to the extent anyprovision of any Note conflicts with the express provisions of this Indenture,the provisions of this Indenture shall govern and be controlling.

 

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

 

AdditionalNotes ranking *pari**passu*with the Initial Notes may be created and issued from time to time by theIssuer without notice to or consent of the Holders and shall be consolidatedwith and form a single class with the Initial Notes and shall havethe same terms as to status, redemption or otherwise as the Initial Notes; providedthat the Issuer’s ability to issue Additional Notes shall be subject to theIssuer’s compliance with Section 4.09 hereof. Any Additional Notes shallbe issued with the benefit of an indenture supplemental to this Indenture.

 

### (e)                                  Euroclearand Clearstream Procedures Applicable. The provisions of the “OperatingProcedures of the Euroclear System” and “Terms and Conditions Governing Use ofEuroclear” and the “General Terms and Conditions of Clearstream Banking” and “CustomerHandbook” of Clearstream

 

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### shall be applicable to transfersof beneficial interests in the Regulation S Temporary Global Note and theRegulation S Permanent Global Notes that are held by Participants throughEuroclear or Clearstream.

###  

Section 2.02                                Execution andAuthentication.

 

At least oneOfficer shall execute the Notes on behalf of the Issuer by manual or facsimilesignature.

 

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

 

A Note shallnot be entitled to any benefit under this Indenture or be valid or obligatoryfor any purpose until authenticated substantially in the form of Exhibit Aattached hereto by the manual or facsimile signature of the Trustee. Thesignature shall be conclusive evidence that the Note has been duly authenticatedand delivered under this Indenture.

 

On the IssueDate, the Trustee shall, upon receipt of an Issuer Order (an “AuthenticationOrder”), authenticate and deliver the Initial Notes. In addition, at anytime, from time to time, the Trustee shall upon an Authentication Order authenticateand deliver any Additional Notes and Exchange Notes for an aggregate principal amountspecified in such Authentication Order for such Additional Notes or ExchangeNotes issued hereunder.

 

The Trustee may appointan authenticating agent acceptable to the Issuer to authenticate Notes. Anauthenticating agent may authenticate Notes whenever the Trustee may doso. Each reference in this Indenture to authentication by the Trustee includesauthentication by such agent. An authenticating agent has the same rights as anAgent to deal with Holders or an Affiliate of the Issuer.

 

Section 2.03                                Registrar and PayingAgent.

 

The Issuershall maintain an office or agency in the Borough of Manhattan, City of NewYork, where Notes may be presented for registration of transfer or forexchange (“Registrar”) and an office or agency in the Borough ofManhattan, City of New York,  where Notesmay be presented for payment (“Paying Agent”). The Registrar shallkeep a register of the Notes (“Note Register”) and of their transfer andexchange. The Issuer may appoint one or more co-registrars and one or moreadditional paying agents. The term “Registrar” includes any co-registrar andthe term “Paying Agent” includes any additional paying agent. The Issuer may changeany Paying Agent or Registrar without prior notice to any Holder. The Issuer shallnotify the Trustee in writing of the name and address of any Agent not a partyto this Indenture. If the Issuer fails to appoint or maintain another entity asRegistrar or Paying Agent, the Trustee shall act as such. The Issuer or any ofits Subsidiaries may act as Paying Agent or Registrar.

 

The Issuerinitially appoints The Depository Trust Company (“DTC”) to act as Depositarywith respect to the Global Notes.

 

The Issuerinitially appoints the Trustee to act as the Paying Agent and Registrar for theNotes and to act as Custodian with respect to the Global Notes.

 

Section 2.04                                Paying Agent To HoldMoney in Trust.

 

The Issuershall require each Paying Agent other than the Trustee to agree in writing thatthe Paying Agent shall hold in trust for the benefit of Holders or the Trusteeall money held by the Paying Agent for the payment of principal, premium, ifany, or Additional Interest, if any, or interest on the

 

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Notes, andwill notify the Trustee of any default by the Issuer in making any suchpayment. While any such default continues, the Trustee may require aPaying Agent to pay all money held by it to the Trustee. The Issuer at any timemay require a Paying Agent to pay all money held by it to the Trustee. Uponpayment over to the Trustee, the Paying Agent (if other than the Issuer or aSubsidiary) shall have no further liability for the money. If the Issuer or aSubsidiary acts as Paying Agent, it shall segregate and hold in a separatetrust fund for the benefit of the Holders all money held by it as Paying Agent.Upon any bankruptcy or reorganization proceedings relating to the Issuer, theTrustee shall serve as Paying Agent for the Notes.

 

Section 2.05                                Holder Lists.

 

The Trusteeshall preserve in as current a form as is reasonably practicable the mostrecent list available to it of the names and addresses of all Holders and shallotherwise comply with Trust Indenture Act Section 312(a). If the Trustee isnot the Registrar, the Issuer shall furnish to the Trustee at least two BusinessDays before each Interest Payment Date and at such other times as the Trustee may requestin writing, a list in such form and as of such date as the Trustee may reasonablyrequire of the names and addresses of the Holders of Notes and the Issuer shallotherwise comply with Trust Indenture Act Section 312(a).

 

Section 2.06                                Transfer andExchange.

 

### (a)                                  Transferand Exchange of Global Notes. Except as otherwise set forth in this Section 2.06,a Global Note may be transferred, in whole and not in part, only to anothernominee of the Depositary or to a successor Depositary or a nominee of suchsuccessor Depositary. A beneficial interest in a Global Note may not be exchangedfor a Definitive Note unless (i) the Depositary (x) notifies the Issuerthat it is unwilling or unable to continue as Depositary for such Global Noteor (y) has ceased to be a clearing agency registered under the Exchange Act and,in either case, a successor Depositary is not appointed by the Issuer within120 days or (ii) there shall have occurred and be continuing a Defaultwith respect to the Notes. Upon the occurrence of any of the preceding eventsin (i) or (ii) above, Definitive Notes delivered in exchange for anyGlobal Note or beneficial interests therein will be registered in the names, andissued in any approved denominations, requested by or on behalf of theDepositary (in accordance with its customary procedures). Global Notes also may beexchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10hereof. 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 2.07or 2.10 hereof, shall be authenticated and delivered in the form of, andshall be, a Global Note, except for Definitive Notes issued subsequent to anyof the preceding events in (i) or (ii) above and pursuant to Section 2.06(c) hereof.A Global Note may not be exchanged for another Note other than as providedin this Section 2.06(a); provided, however, beneficialinterests in a Global Note may be transferred and exchanged as provided inSection 2.06(b), (c) or (f) hereof.

###  

### (b)                                 Transferand Exchange of Beneficial Interests in the Global Notes. The transfer andexchange of beneficial interests in the Global Notes shall be effected throughthe Depositary, in accordance with the provisions of this Indenture and theApplicable Procedures. Beneficial interests in the Restricted Global Notesshall be subject to restrictions on transfer comparable to those set forthherein to the extent required by the Securities Act. Transfers of beneficialinterests in the Global Notes also shall require compliance with eithersubparagraph (i) or (ii) below, as applicable, as well as one or moreof the other following subparagraphs, as applicable:

###  

#### (i)                                     Transfer ofBeneficial Interests in the Same Global Note. Beneficial interests in anyRestricted Global Note may be transferred to Persons who take deliverythereof in the form of a beneficial interest in the same Restricted GlobalNote in accordance with the transfer restrictions

 

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#### set forth in the Private Placement Legend; provided, however,that prior to the expiration of the Restricted Period, transfers of beneficial interestsin the Regulation S Temporary Global Note may not be made to a U.S. Personor for the account or benefit of a U.S. Person (other than an InitialPurchaser). Beneficial interests in any Unrestricted Global Note may betransferred to Persons who take delivery thereof in the form of abeneficial interest in an Unrestricted Global Note. No written orders orinstructions shall be required to be delivered to the Registrar to effect thetransfers described in this Section 2.06(b)(i).

####  

#### (ii)               All Other Transfers and Exchanges ofBeneficial Interests in Global Notes. In connection with all transfers andexchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of suchbeneficial interest must deliver to the Registrar either (A) (1) a writtenorder from a Participant or an Indirect Participant given to the Depositary inaccordance with the Applicable Procedures directing the Depositary to credit orcause to be credited a beneficial interest in another Global Note in an amountequal to the beneficial interest to be transferred or exchanged and (2) instructionsgiven in accordance with the Applicable Procedures containing informationregarding the Participant account to be credited with such increase or (B) (1) awritten order from a Participant or an Indirect Participant given to theDepositary in accordance with the Applicable Procedures directing theDepositary to cause to be issued a Definitive Note in an amount equal to thebeneficial interest to be transferred or exchanged and (2) instructionsgiven by the Depositary to the Registrar containing information regarding thePerson in whose name such Definitive Note shall be registered to effect thetransfer or exchange referred to in (1) above; provided that in noevent shall Definitive Notes be issued upon the transfer or exchange ofbeneficial interests in the Regulation S Temporary Global Note prior to (A) theexpiration of the Restricted Period and (B) the receipt by the Registrarof any certificates required pursuant to Rule 903. Upon consummation of anExchange Offer by the Issuer in accordance with Section 2.06(f) hereof,the requirements of this Section 2.06(b)(ii) shall be deemed to havebeen satisfied upon receipt by the Registrar of the instructions contained in theLetter of Transmittal delivered by the Holder of such beneficial interests inthe Restricted Global Notes. Upon satisfaction of all of the requirements fortransfer or exchange of beneficial interests in Global Notes contained in thisIndenture and the Notes or otherwise applicable under the Securities Act, theTrustee shall adjust the principal amount of the relevant Global Note(s)pursuant to Section 2.06(h) hereof.

####  

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

####  

##### (A)                              if the transferee willtake delivery in the form of a beneficial interest in the 144A GlobalNote, then the transferor must deliver a certificate in the form of Exhibit Bhereto, including the certifications in item (1) thereof; or

#####  

##### (B)                                if the transferee willtake delivery in the form of a beneficial interest in the Regulation SGlobal Note, then the transferor must deliver a certificate in the form ofExhibit B hereto, including the certifications in item (2) thereof.

#####  

#### (iv)           Transfer and Exchange of BeneficialInterests in a Restricted Global Note for Beneficial Interests in anUnrestricted Global Note. A beneficial interest in any Restricted GlobalNote may be exchanged by any holder thereof for a beneficial interest inan Unrestricted Global Note or transferred to a Person who takes deliverythereof in the form of a beneficial interest in an

 

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#### Unrestricted Global Note if the exchange or transfer complies with therequirements of Section 2.06(b)(ii) hereof and:

####  

##### (A)                              such exchange or transferis effected pursuant to the Exchange Offer in accordance with the RegistrationRights 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, certifiesin the applicable Letter of Transmittal that it is not (1) a ParticipatingBroker-Dealer, (2) a Person participating in the distribution of the ExchangeNotes or (3) a Person who is an affiliate (as defined in Rule 144) ofthe Issuer;

#####  

##### (B)                                such transfer iseffected pursuant to the Shelf Registration Statement in accordance with theRegistration Rights Agreement;

#####  

##### (C)                                such transfer iseffected by a Participating Broker-Dealer pursuant to the Exchange OfferRegistration Statement in accordance with the Registration Rights Agreement; or

#####  

##### (D)                               the Registrar receivesthe following:

#####  

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

######  

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

######  

and, in eachsuch case set forth in this subparagraph (D), if the Registrar so requests orif the Applicable Procedures so require, an Opinion of Counsel in form reasonablyacceptable to the Registrar to the effect that such exchange or transfer is in compliancewith the Securities Act and that the restrictions on transfer contained hereinand in the Private Placement Legend are no longer required in order to maintaincompliance with the Securities Act.

 

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

 

Beneficial interests in anUnrestricted Global Note cannot be exchanged for, or transferred to Persons whotake delivery thereof in the form of, a beneficial interest in a RestrictedGlobal Note.

 

### (c)                                  Transferor Exchange of Beneficial Interests for Definitive Notes.

###  

(i)                                     BeneficialInterests in Restricted Global Notes to Restricted Definitive Notes. If anyholder of a beneficial interest in a Restricted Global Note proposes toexchange such beneficial interest

 

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for a Restricted Definitive Note or totransfer such beneficial interest to a Person who takes delivery thereof in theform of a Restricted Definitive Note, then, upon the occurrence of any ofthe events in paragraph (i) or (ii) of Section 2.06(a) hereof and receipt by the Registrarof the following documentation:

 

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

 

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

 

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

 

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

 

(E)                                 if such beneficialinterest is being transferred to the Issuer or any of its RestrictedSubsidiaries, a certificate substantially in the form of Exhibit Bhereto, including the certifications in item (3)(b) thereof; or

 

(F)                                 if such beneficialinterest is being transferred pursuant to an effective registration statementunder the Securities Act, a certificate substantially in the form of Exhibit Bhereto, including the certifications in item (3)(c) thereof,

 

the Trusteeshall cause the aggregate principal amount of the applicable Global Note to bereduced accordingly pursuant to Section 2.06(h) hereof, and theIssuer shall execute and the Trustee shall authenticate and mail to the Persondesignated in the instructions a Definitive Note in the applicable principalamount. Any Definitive Note issued in exchange for a beneficial interest in aRestricted Global Note pursuant to this Section 2.06(c) shall be registeredin such name or names and in such authorized denomination or denominations asthe holder of such beneficial interest shall instruct the Registrar throughinstructions from the Depositary and the Participant or Indirect Participant. TheTrustee shall mail such Definitive Notes to the Persons in whose names suchNotes are so registered. Any Definitive Note issued in exchange for abeneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shallbear the Private Placement Legend and shall be subject to all restrictions ontransfer contained therein.

 

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

 

(iii)                               Beneficial Interestsin Restricted Global Notes to Unrestricted Definitive Notes. A holder of abeneficial interest in a Restricted Global Note may exchange suchbeneficial interest for an Unrestricted Definitive Note or may transfersuch beneficial interest to a Person who takes delivery

 

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thereof in the form of an UnrestrictedDefinitive Note only upon the occurrence of any of the events in subsection (i) or(ii) of Section 2.06(a) hereofand if:

 

(A)                              such exchange or transferis effected pursuant to the Exchange Offer in accordance with the RegistrationRights Agreement and the holder of such beneficial interest, in the case of an exchange,or the transferee, in the case of a transfer, certifies in the applicableLetter of Transmittal that it is not (1) a Participating Broker-Dealer, (2) aPerson participating in the distribution of the Exchange Notes or (3) aPerson who is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)                                such transfer iseffected pursuant to the Shelf Registration Statement in accordance with theRegistration Rights Agreement;

 

(C)                                such transfer iseffected by a Participating Broker-Dealer pursuant to the Exchange OfferRegistration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receives thefollowing:

 

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

 

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

 

and, in each such case set forth in this subparagraph (D), if the Registrarso requests or if the Applicable Procedures so require, an Opinion of Counselin form reasonably acceptable to the Registrar to the effect that suchexchange or transfer is in compliance with the Securities Act and that therestrictions on transfer contained herein and in the Private Placement Legendare no longer required in order to maintain compliance with the Securities Act.

 

(iv)                              Beneficial Interestsin Unrestricted Global Notes to Unrestricted Definitive Notes. If anyholder of a beneficial interest in an Unrestricted Global Note proposes to exchangesuch beneficial interest for a Definitive Note or to transfer such beneficialinterest to a Person who takes delivery thereof in the form of aDefinitive Note, then, upon the occurrence of any of the events in subsection (i) or(ii) of Section 2.06(a) hereofand satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,the Trustee shall cause the aggregate principal amount of the applicable GlobalNote to be reduced accordingly pursuant to Section 2.06(h) hereof,and the Issuer shall execute and the Trustee shall authenticate and mail to thePerson designated in the instructions a Definitive Note in the applicable principalamount. Any Definitive Note issued in exchange for a beneficial interest pursuantto this Section 2.06(c)(iv) shall be registered in such name or namesand in such authorized denomination or denominations as the holder of suchbeneficial interest shall instruct the Registrar through instructions from orthrough the Depositary and the Participant or Indirect Participant. The Trusteeshall mail such Definitive Notes to the Persons in whose names such Notes areso registered. Any Definitive Note issued in exchange for a beneficial interestpursuant to this Section 2.06(c)(iv) shall not bear the PrivatePlacement Legend.

 

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### (d)                                 Transferand Exchange of Definitive Notes for Beneficial Interests.

###  

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

 

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

 

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

 

(C)                                if such RestrictedDefinitive Note is being transferred to a Non-U.S. Person in an offshoretransaction in accordance with Rule 903 or Rule 904, a certificatesubstantially in the form of Exhibit B hereto, including thecertifications in item (2) thereof;

 

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

 

(E)                                 if such RestrictedDefinitive Note is being transferred to the Issuer or any of its RestrictedSubsidiaries, a certificate substantially in the form of Exhibit Bhereto, including the certifications in item (3)(b) thereof; or

 

(F)                                 if such RestrictedDefinitive Note is being transferred pursuant to an effective registrationstatement under the Securities Act, a certificate substantially in the form ofExhibit B hereto, including the certifications in item (3)(c) thereof,

 

the Trusteeshall cancel the Restricted Definitive Note, increase or cause to be increasedthe aggregate principal amount of, in the case of clause (A) above, the applicableRestricted Global Note, in the case of clause (B) above, the applicable144A Global Note, and in the case of clause (C) above, the applicableRegulation S Global Note.

 

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

 

(A)                              such exchange or transferis effected pursuant to the Exchange Offer in accordance with the RegistrationRights Agreement and the Holder, in the case of an exchange, or the transferee,in the case of a transfer, certifies in the applicable Letter of Transmittal thatit is not (1) a Participating Broker-Dealer, (2) a Personparticipating in the distribution of the Exchange Notes or (3) a Personwho is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)                                such transfer iseffected pursuant to the Shelf Registration Statement in accordance with theRegistration Rights Agreement;

 

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(C)                                such transfer iseffected by a Participating Broker-Dealer pursuant to the Exchange OfferRegistration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receivesthe following:

 

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

 

(2)                                  if the Holder of suchDefinitive Notes proposes to transfer such Notes to a Person who shall takedelivery thereof in the form of a beneficial interest in the UnrestrictedGlobal Note, a certificate from such Holder substantially in the form of Exhibit Bhereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (D), if the Registrarso requests or if the Applicable Procedures so require, an Opinion of Counselin form reasonably acceptable to the Registrar to the effect that suchexchange or transfer is in compliance with the Securities Act and that therestrictions on transfer contained herein and in the Private Placement Legendare no longer required in order to maintain compliance with the Securities Act.

 

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

 

(iii)                               UnrestrictedDefinitive Notes to Beneficial Interests in Unrestricted Global Notes. AHolder of an Unrestricted Definitive Note may exchange such Note for abeneficial interest in an Unrestricted Global Note or transfer such DefinitiveNotes to a Person who takes delivery thereof in the form of a beneficialinterest in an Unrestricted Global Note at any time. Upon receipt of a requestfor such an exchange or transfer, the Trustee shall cancel the applicableUnrestricted Definitive Note and increase or cause to be increased theaggregate principal amount of one of the Unrestricted Global Notes.

 

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

 

### (e)                                  Transferand Exchange of Definitive Notes for Definitive Notes. Upon request by aHolder of Definitive Notes and such Holder’s compliance with the provisions ofthis Section 2.06(e), the Registrar shall register the transfer or exchangeof Definitive Notes. Prior to such registration of transfer or exchange, therequesting Holder shall present or surrender to the Registrar the DefinitiveNotes duly endorsed or accompanied by a written instruction of transfer in form satisfactoryto the Registrar duly executed by such Holder or by its attorney, dulyauthorized in writing. In addition, the requesting Holder shall provide anyadditional certifications, documents and information, as applicable, requiredpursuant to the following provisions of this Section 2.06(e):

###  

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

 

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(A)                              if the transfer will bemade pursuant to a QIB in accordance with Rule 144A, then the transferormust deliver a certificate substantially in the form of Exhibit Bhereto, including the certifications in item (1) thereof;

 

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

 

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

 

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

 

(A)                              such exchange or transferis effected pursuant to the Exchange Offer in accordance with the RegistrationRights Agreement and the Holder, in the case of an exchange, or the transferee,in the case of a transfer, certifies in the applicable Letter of Transmittal thatit is not (1) a Participating Broker-Dealer, (2) a Personparticipating in the distribution of the Exchange Notes or (3) a Personwho is an affiliate (as defined in Rule 144) of the Issuer;

 

(B)                                any such transfer iseffected pursuant to the Shelf Registration Statement in accordance with theRegistration Rights Agreement;

 

(C)                                any such transfer iseffected by a Participating Broker-Dealer pursuant to the Exchange OfferRegistration Statement in accordance with the Registration Rights Agreement; or

 

(D)                               the Registrar receivesthe following:

 

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

 

(2)                                  if the Holder of suchRestricted Definitive Notes proposes to transfer such Notes to a Person whoshall take delivery thereof in the form of an Unrestricted DefinitiveNote, a certificate from such Holder substantially in the form of Exhibit Bhereto, including the certifications in item (4) thereof;

 

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

 

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

 

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### (f)                                    ExchangeOffer. Upon the occurrence of the Exchange Offer in accordance with theRegistration Rights Agreement, the Issuer shall issue and, upon receipt of anAuthentication Order in accordance with Section 2.02 hereof, the Trusteeshall authenticate (i) one or more Unrestricted Global Notes in an aggregateprincipal amount equal to the principal amount of the beneficial interests inthe Restricted Global Notes tendered for acceptance by Persons that certify in theapplicable Letters of Transmittal that (x) they are not Participating Broker-Dealers,(y) they are not participating in a distribution of the Exchange Notes and (z)they are not affiliates (as defined in Rule 144) of the Issuer, andaccepted for exchange in the Exchange Offer and (ii) Unrestricted DefinitiveNotes in an aggregate principal amount equal to the principal amount of the RestrictedDefinitive Notes tendered for acceptance by Persons that certify in theapplicable Letters of Transmittal that (x) they are not Participating Broker-Dealers,(y) they are not participating in a distribution of the Exchange Notes and (z)they are not affiliates (as defined in Rule 144) of the Issuer, andaccepted for exchange in the Exchange Offer. Concurrently with the issuance ofsuch Notes, the Trustee shall cause the aggregate principal amount of theapplicable Restricted Global Notes to be reduced accordingly, and the Issuershall execute and the Trustee shall authenticate and mail to the Personsdesignated by the Holders of Definitive Notes so accepted Unrestricted DefinitiveNotes in the applicable principal amount. Any Notes that remain outstandingafter the consummation of the Exchange Offer, and Exchange Notes issued inconnection with the Exchange Offer, shall be treated as a single class ofsecurities under this Indenture.

###  

### (g)                                 Legends.The following legends shall appear on the face of all Global Notes andDefinitive Notes issued under this Indenture unless specifically statedotherwise in the applicable provisions of this Indenture:

###  

#### (i)                                     PrivatePlacement Legend.

####  

(A)                              Except as permitted bysubparagraph (B) below, each Global Note and each Definitive Note (and allNotes issued in exchange therefor or substitution thereof) shall bear the legendin substantially the following form:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDERTHE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, ORFOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITSACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIEDINSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) ITIS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTIONIN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS ANACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDERTHE SECURITIES ACT (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL NOTWITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OROTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARYTHEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYERIN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THEUNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE ASIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND

 

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AGREEMENTS RELATING TO THE RESTRICTIONS ONTRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROMTHE TRUSTEE FOR THIS SECURITY), (D)OUTSIDE THE UNITED STATES IN AN OFFSHORETRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IFAVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHEREXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASEDUPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), OR (G) PURSUANT TOAN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREESTHAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICESUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OFTHIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IFTHE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TOSUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGALOPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TOCONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S.PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIESACT.”

 

(B)                                Notwithstanding theforegoing, any Global Note or Definitive Note issued pursuant to subparagraph(b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) ofthis Section 2.06 (and all Notes issued in exchange therefor orsubstitution thereof) shall not bear the Private Placement Legend.

 

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

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY(AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FORTHE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANYPERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCHNOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OFTHE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANTTO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BEDELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THEINDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSORDEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT ISEXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOTBE TRANSFERRED EXCEPT AS A WHOLE BY

 

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THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARYOR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THEDEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARYOR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTEDBY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATERSTREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUER OR ITS AGENT FOR REGISTRATIONOF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED INTHE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BYAN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OROTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNERHEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

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

 

“THE RIGHTS ATTACHING TO THIS REGULATION STEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGEFOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).”

 

### (h)                                 Cancellationand/or Adjustment of Global Notes. At such time as all beneficial interestsin a particular Global Note have been exchanged for Definitive Notes or aparticular Global Note has been redeemed, repurchased or canceled in whole andnot in part, each such Global Note shall be returned to or retained andcanceled by the Trustee in accordance with Section 2.11 hereof. At anytime prior to such cancellation, if any beneficial interest in a Global Note isexchanged for or transferred to a Person who will take delivery thereof in the form ofa beneficial interest in another Global Note or for Definitive Notes, theprincipal amount of Notes represented by such Global Note shall be reducedaccordingly and an endorsement shall be made on such Global Note by the Trusteeor 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 aPerson who will take delivery thereof in the form of a beneficial interestin another Global Note, such other Global Note shall be increased accordinglyand an endorsement shall be made on such Global Note by the Trustee or by the Depositaryat the direction of the Trustee to reflect such increase.

###  

### (i)                                     GeneralProvisions Relating to Transfers and Exchanges.

###  

(i)                                     To permitregistrations of transfers and exchanges, the Issuer shall execute and theTrustee shall authenticate Global Notes and Definitive Notes upon receipt of anAuthentication Order in accordance with Section 2.02 hereof or at the Registrar’srequest.

 

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

 

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(iii)                               Neither the Registrarnor the Issuer shall be required to register the transfer of or exchange anyNote selected for redemption in whole or in part, except the unredeemed portionof any Note being redeemed in part.

 

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

 

(v)                                 The Issuer shall notbe required (A) to issue, to register the transfer of or to exchange anyNotes during a period beginning at the opening of business 15 days before theday of any selection of Notes for redemption under Section 3.02 hereof andending at the close of business on the day of selection, (B) to registerthe transfer of or to exchange any Note so selected for redemption in whole orin 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 RecordDate and the next succeeding Interest Payment Date.

 

(vi)                              Prior to due presentmentfor the registration of a transfer of any Note, the Trustee, any Agent and theIssuer may deem and treat the Person in whose name any Note is registeredas the absolute owner of such Note for the purpose of receiving payment ofprincipal of (and premium, if any) and interest (including Additional Interest,if any) on such Notes and for all other purposes, and none of the Trustee, anyAgent or the Issuer shall be affected by notice to the contrary.

 

(vii)                           Upon surrender forregistration of transfer of any Note at the office or agency of the Issuerdesignated pursuant to Section 4.02hereof, the Issuer shall execute, and the Trustee shall authenticate andmail, in the name of the designated transferee or transferees, one or more replacementNotes of any authorized denomination or denominations of a like aggregateprincipal amount.

 

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

 

(ix)                                All certifications,certificates and Opinions of Counsel required to be submitted to the Registrarpursuant to this Section 2.06 to effect a registration of transfer orexchange may be submitted by facsimile.

 

Section 2.07                                ReplacementNotes.

 

If anymutilated Note is surrendered to the Trustee, the Registrar or the Issuer andthe Trustee receives evidence to their satisfaction of the ownership and destruction,loss or theft of any Note, the Issuer shall issue and the Trustee, upon receiptof an Authentication Order, shall authenticate a replacement Note if theTrustee’s requirements are met. If required by the Trustee or the Issuer, anindemnity bond must be supplied by the Holder that is sufficient in thejudgment of the Trustee and the Issuer to protect the Issuer, the Trustee, anyAgent and any authenticating agent from any loss that any of them may sufferif a Note is replaced. The Issuer may charge for its expenses in replacinga Note.

 

Everyreplacement Note is a contractual obligation of the Issuer and shall beentitled to all of the benefits of this Indenture equally and proportionately withall other Notes duly issued hereunder.

 

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Section 2.08                                OutstandingNotes.

 

The Notesoutstanding at any time are all the Notes authenticated by the Trustee exceptfor those canceled by it, those delivered to it for cancellation, thosereductions in the interest in a Global Note effected by the Trustee in accordancewith the provisions hereof, and those described in this Section 2.08 as notoutstanding. Except as set forth in Section 2.09 hereof, a Note does notcease to be outstanding because the Issuer or an Affiliate of the Issuer holdsthe Note.

 

If a Note isreplaced pursuant to Section 2.07 hereof, it ceases to be outstandingunless the Trustee receives proof satisfactory to it that the replaced Note isheld by a bona fide purchaser.

 

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

 

Section 2.09                                TreasuryNotes.

 

In determiningwhether the Holders of the required principal amount of Notes have concurred inany direction, waiver or consent, Notes owned by the Issuer, or by anyAffiliate of the Issuer, shall be considered as though not outstanding, exceptthat for the purposes of determining whether the Trustee shall be protected inrelying on any such direction, waiver or consent, only Notes that a ResponsibleOfficer of the Trustee knows are so owned shall be so disregarded. Notes soowned which have been pledged in good faith shall not be disregarded if thepledgee establishes to the satisfaction of the Trustee the pledgee’s right todeliver any such direction, waiver or consent with respect to the Notes andthat the pledgee is not the Issuer or any obligor upon the Notes or any Affiliateof the Issuer or of such other obligor.

 

Section 2.10                                TemporaryNotes.

 

Untilcertificates representing Notes are ready for delivery, the Issuer may prepareand the Trustee, upon receipt of an Authentication Order, shall authenticatetemporary Notes. Temporary Notes shall be substantially in the form ofcertificated Notes but may have variations that the Issuer considers appropriatefor temporary Notes and as shall be reasonably acceptable to the Trustee. Withoutunreasonable delay, the Issuer shall prepare and the Trustee shall authenticatedefinitive Notes in exchange for temporary Notes.

 

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

 

Section 2.11                                Cancellation.

 

The Issuer atany time may deliver Notes to the Trustee for cancellation. The Registrarand Paying Agent shall forward to the Trustee any Notes surrendered to them forregistration of transfer, exchange or payment. The Trustee or, at the directionof the Trustee, the Registrar or the Paying Agent and no one else shall cancelall Notes surrendered for registration of transfer, exchange, payment,replacement or cancellation and shall dispose of cancelled Notes (subject tothe record retention requirement

 

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of theExchange Act) in its customary manner. Certification of the disposal of all cancelledNotes shall be delivered to the Issuer upon its request therefor. The Issuer may notissue new Notes to replace Notes that it has paid or that have been deliveredto the Trustee for cancellation.

 

Section 2.12                                DefaultedInterest.

 

If the Issuerdefaults in a payment of interest on the Notes, it shall pay the defaultedinterest in any lawful manner plus, to the extent lawful, interest payable onthe defaulted interest to the Persons who are Holders on a subsequent specialrecord date, in each case at the rate provided in the Notes and in Section 4.01hereof. The Issuer shall notify the Trustee in writing of the amount ofdefaulted interest proposed to be paid on each Note and the date of theproposed payment, and at the same time the Issuer shall deposit with the Trusteean amount of money equal to the aggregate amount proposed to be paid in respectof such defaulted interest or shall make arrangements satisfactory to theTrustee for such deposit prior to the date of the proposed payment, such moneywhen deposited to be held in trust for the benefit of the Persons entitled tosuch defaulted interest as provided in this Section 2.12. The Trusteeshall fix or cause to be fixed each such special record date and payment date; providedthat no such special record date shall be less than 10 days prior to the relatedpayment date for such defaulted interest. The Trustee shall promptly notify theIssuer of such special record date. At least 15 days before the special recorddate, the Issuer (or, upon the written request of the Issuer, the Trustee inthe name and at the expense of the Issuer) shall mail or cause to be mailed,first-class postage prepaid, to each Holder a notice at his or her addressas it appears in the Note Register that states the special record date, therelated payment date and the amount of such interest to be paid.

 

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

 

Section 2.13                                CUSIPNumbers

 

The Issuer in issuingthe Notes may use CUSIP numbers (if then generally in use) and, if so, theTrustee shall use CUSIP numbers in notices of redemption as a convenience toHolders; *provided*, that any such notice may statethat no representation is made as to the correctness of such numbers either asprinted on the Notes or as contained in any notice of redemption and thatreliance may be placed only on the other identification numbers printed onthe Notes, and any such redemption shall not be affected by any defect in oromission of such numbers. The Issuer will as promptly as practicable notify theTrustee of any change in the CUSIP numbers.

 

ARTICLE 3

 

REDEMPTION

 

Section 3.01                                Noticesto Trustee.

 

If the Issuerelects to redeem Notes pursuant to Section 3.07 hereof, it shall furnishto the Trustee, at least 2 Business Days before notice of redemption isrequired to be mailed or caused to be mailed to Holders pursuant to Section 3.03hereof but not more than 60 days before a redemption date, an Officer’s Certificatesetting forth (i) the paragraph or subparagraph of such Notes and/or Section ofthis Indenture pursuant to which the redemption shall occur, (ii) the redemptiondate, (iii) the principal amount of the Notes to be redeemed and (iv) theredemption price.

 

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Section 3.02                                Selectionof Notes To Be Redeemed or Purchased.

 

If less thanall of the Notes are to be redeemed or purchased in an offer to purchase at anytime, the Trustee shall select the Notes to be redeemed or purchased (a) ifthe Notes are listed on any national securities exchange, in compliance withthe requirements of the principal national securities exchange on which theNotes are listed or (b) on a *pro rata* basis or,to the extent that selection on a *pro rata* basisis not practicable, by lot or by such other method the Trustee considers fairand appropriate. In the event of partial redemption or purchase by lot, theparticular Notes to be redeemed or purchased shall be selected, unlessotherwise provided herein, not less than 30 nor more than 60 days prior to theredemption date by the Trustee from the outstanding Notes not previously calledfor redemption or purchase.

 

The Trusteeshall promptly notify the Issuer in writing of the Notes selected forredemption or purchase and, in the case of any Note selected for partial redemptionor purchase, the principal amount thereof to be redeemed or purchased. Notesand portions of Notes selected shall be in amounts of $1,000 or whole multiplesof $1,000; no Notes of $1,000 or less can be redeemed in part, except that ifall of the Notes of a Holder are to be redeemed or purchased, the entireoutstanding 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 orpurchase also apply to portions of Notes called for redemption or purchase.

 

Section 3.03                                Noticeof Redemption.

 

Subject to Section 3.09hereof, the Issuer shall mail or cause to be mailed by first-class mail,postage prepaid, notices of redemption at least 30 days but not more than 60days before the redemption date to each Holder of Notes to be redeemed at suchHolder’s registered address or shall otherwise deliver on such timeframe suchnotice in accordance with the procedures of DTC, except that redemption noticesmay be mailed more than 60 days prior to a redemption date if the noticeis issued in connection with Article 8 or Article 13 hereof. Exceptas set forth in Section 3.07(b) hereof, notices of redemption may notbe conditional.

 

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

 

(a)                                  the redemption date;

 

(b)                                 the redemption price;

 

(c)                                  if any Note is to beredeemed in part only, the portion of the principal amount of that Notethat is to be redeemed and that, after the redemption date upon surrender ofsuch Note, a new Note or Notes in principal amount equal to the unredeemedportion of the original Note representing the same indebtedness to the extentnot redeemed will be issued in the name of the Holder of the Notes uponcancellation of the original Note;

 

(d)                                 the name and addressof the Paying Agent;

 

(e)                                  that Notes called forredemption must be surrendered to the Paying Agent to collect the redemptionprice;

 

(f)                                    that, unless theIssuer defaults in making such redemption payment, interest on Notes called forredemption ceases to accrue on and after the redemption date;

 

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

 

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

 

(i)                                     if in connectionwith a redemption pursuant to Section 3.07(b) hereof, any conditionto such redemption.

 

At the Issuer’srequest, the Trustee shall give the notice of redemption in the Issuer’s nameand at its expense; provided that the Issuer shall have delivered to theTrustee, at least 2 Business Days before notice of redemption is required to bemailed or caused to be mailed to Holders pursuant to this Section 3.03 (unlessa shorter notice shall be agreed to by the Trustee), an Officer’s Certificaterequesting that the Trustee give such notice and setting forth the informationto be stated in such notice as provided in the preceding paragraph.

 

Section 3.04                                Effectof Notice of Redemption.

 

Once notice ofredemption is mailed in accordance with Section 3.03 hereof, Notes calledfor redemption become irrevocably due and payable on the redemption date at theredemption price (except as provided for in Section 3.07(b) hereof). Thenotice, if mailed in a manner herein provided, shall be conclusively presumedto have been given, whether or not the Holder receives such notice. In anycase, failure to give such notice by mail or any defect in the notice to theHolder of any Note designated for redemption in whole or in part shall notaffect the validity of the proceedings for the redemption of any other Note. Subjectto Section 3.05 hereof, on and after the redemption date, interest ceasesto accrue on Notes or portions of Notes called for redemption.

 

Section 3.05                                Depositof Redemption or Purchase Price.

 

Prior to 10:00 a.m.(New York City time) on the redemption or purchase date, the Issuer shalldeposit with the Trustee or with the Paying Agent money sufficient to pay theredemption or purchase price of and accrued and unpaid interest (including AdditionalInterest, if any) on all Notes to be redeemed or purchased on that date. The Trusteeor the Paying Agent shall promptly return to the Issuer any money depositedwith the Trustee or the Paying Agent by the Issuer in excess of the amountsnecessary to pay the redemption price of, and accrued and unpaid interest on,all Notes to be redeemed or purchased.

 

If the Issuercomplies with the provisions of the preceding paragraph, on and after theredemption or purchase date, interest shall cease to accrue on the Notes or theportions of Notes called for redemption or purchase. If a Note is redeemed orpurchased on or after a Record Date but on or prior to the related InterestPayment Date, then any accrued and unpaid interest to the redemption orpurchase date shall be paid to the Person in whose name such Note wasregistered at the close of business on such Record Date. If any Note called forredemption or purchase shall not be so paid upon surrender for redemption orpurchase because of the failure of the Issuer to comply with the precedingparagraph, interest shall be paid on the unpaid principal, from the redemption orpurchase date until such principal is paid, and to the extent lawful on anyinterest accrued to the redemption or purchase date not paid on such unpaidprincipal, in each case at the rate provided in the Notes and in Section 4.01hereof.

 

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Section 3.06                                NotesRedeemed or Purchased in Part.

 

Upon surrenderof a Note that is redeemed or purchased in part, the Issuer shall issue and theTrustee shall authenticate for the Holder at the expense of the Issuer a newNote equal in principal amount to the unredeemed or unpurchased portion of theNote surrendered representing the same indebtedness to the extent not redeemedor purchased; provided that each new Note will be in a principal amountof $1,000 or an integral multiple of $1,000. It is understood that,notwithstanding anything in this Indenture to the contrary, only anAuthentication Order and not an Opinion of Counsel or Officer’s Certificate isrequired for the Trustee to authenticate such new Note.

 

Section 3.07                                OptionalRedemption.

 

(a)                                  Atany time prior to November 1, 2011, the Issuer may redeem all or a part ofthe Notes, upon not less than 30 nor more than 60 days’ prior notice mailed byfirst-class mail to the registered address of each Holder of Notes orotherwise delivered in accordance with the procedures of DTC, at a redemptionprice equal to 100% of the principal amount of the Notes redeemed plus theApplicable Premium as of, and accrued and unpaid interest and AdditionalInterest, if any, to the date of redemption (the “Redemption Date”), subject to the rights of Holders of recordon the relevant Record Date to receive interest due on the relevant Interest PaymentDate.

 

(b)                                 UntilNovember 1, 2009, the Issuer may, at its option, on one or more occasionsredeem up to 35% of the aggregate principal amount of Notes (including theaggregate principal amount of Notes issued after the Issue Date), upon noticeprovided as described in Section 3.03 hereof, at a redemption price equalto 111.375% of the aggregate principal amount thereof, plus accrued and unpaidinterest thereon and Additional Interest, if any, to the applicable RedemptionDate, subject to the right of Holders of record on the relevant Record Date toreceive interest due on the relevant Interest Payment Date, with the net cashproceeds of one or more Equity Offerings; provided that at least 50% of the sum of the aggregate principalamount of Notes originally issued under this Indenture and any Additional Notesthat are issued under this Indenture after the Issue Date remains outstandingimmediately after the occurrence of each such redemption; providedfurther that each such redemption occurs within 90 daysof the date of closing of each such Equity Offering. Notice of any redemptionupon any Equity Offering may be given prior to such redemption, and anysuch redemption or notice may, at the Issuer’s discretion, be subject to one ormore conditions precedent, including, but not limited to, completion of therelated Equity Offering.

 

(c)                                  Exceptpursuant to Sections 3.07(a) and (b), the Notes will not be redeemable atthe Issuer’s option before November 1, 2011.

 

(d)                                 Onand after November 1, 2011, the Issuer may redeem the Notes, in wholeor in part, at the redemption prices (expressed as percentages of principalamount of the Notes to be redeemed) set forth below, plus accrued and unpaidinterest thereon and Additional Interest, if any, to the applicable RedemptionDate, subject to the right of Holders of record on the relevant Record Date toreceive interest due on the relevant Interest Payment Date, if redeemed duringthe twelve-month period beginning on November 1 of each of the years indicatedbelow:

 
| **Year**            | ** ** | **Percentage** | ** ** |
|---------------------|------------|----------------|------------|
| 2011                |       | 105.688        | %          |
| 2012                |       | 103.792        | %          |
| 2013                |       | 101.896        | %          |
| 2014 and thereafter |       | 100.000        | %          |

 

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(e)                                  Anyredemption pursuant to this Section 3.07 shall be made pursuant to theprovisions of Sections 3.01 through 3.06 hereof.

 

Section 3.08                                MandatoryRedemption.

 

The Issuershall not be required to make mandatory redemption or sinking fund paymentswith respect to the Notes.

 

Section 3.09                                OffersTo Repurchase by Application of Excess Proceeds.

 

### (a)                                  Inthe event that, pursuant to Section 4.10 hereof, the Issuer shall berequired to commence an Asset Sale Offer, it shall follow the procedures specifiedbelow.

###  

### (b)                                 TheAsset Sale Offer shall remain open for a period of 20 Business Days followingits commencement and no longer, except to the extent that a longer period is requiredby applicable law (the “Offer Period”). No later than five Business Daysafter the termination of the Offer Period (the “Purchase Date”), theIssuer shall apply all Excess Proceeds (the “Offer Amount”) to thepurchase of Notes and, if required, Pari Passu Indebtedness (on a *pro rata* basis, if applicable), or, if less than the OfferAmount has been tendered, all Notes and Pari Passu Indebtedness tendered in responseto the Asset Sale Offer. Payment for any Notes so purchased shall be made inthe same manner as interest payments are made.

###  

### (c)                                  Ifthe Purchase Date is on or after a Record Date and on or before the relatedInterest Payment Date, any accrued and unpaid interest and Additional Interest,if any, up to but excluding the Purchase Date, shall be paid to the Person inwhose name a Note is registered at the close of business on such Record Date,and no additional interest shall be payable to Holders who tender Notespursuant to the Asset Sale Offer.

###  

### (d)                                 Uponthe commencement of an Asset Sale Offer, the Issuer shall send, by first-class mail,a notice to each of the Holders, with a copy to the Trustee. The notice shallcontain all instructions and materials necessary to enable such Holders totender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall bemade to all Holders and holders of Pari Passu Indebtedness. The notice, whichshall govern the terms of the Asset Sale Offer, shall state:

###  

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

####  

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

####  

#### (iii)                               that any Note nottendered or accepted for payment shall continue to accrue interest;

####  

#### (iv)                              that, unless the Issuerdefaults in making such payment, any Note accepted for payment pursuant to the AssetSale Offer shall cease to accrue interest after the Purchase Date;

####  

#### (v)                                 that Holders electingto have a Note purchased pursuant to an Asset Sale Offer may elect to haveNotes purchased in integral multiples of $1,000 only;

####  

#### (vi)                              that Holders electing tohave a Note purchased pursuant to any Asset Sale Offer shall be required tosurrender the Note, with the form entitled “Option of Holder to ElectPurchase”

 

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#### attached to the Note completed, or transfer such Note by book-entrytransfer, to the Issuer, the Depositary, if appointed by the Issuer, or aPaying Agent at the address specified in the notice at least three days beforethe Purchase Date;

####  

#### (vii)                           that Holders shall beentitled to withdraw their election if the Issuer, the Depositary or the PayingAgent, as the case may be, receives, not later than the expiration of theOffer Period, a telegram, facsimile transmission or letter setting forth thename of the Holder, the principal amount of the Note the Holder delivered forpurchase and a statement that such Holder is withdrawing his election to havesuch Note purchased;

####  

#### (viii)                        that, if the aggregateprincipal amount of Notes and Pari Passu Indebtedness surrendered by the holdersthereof exceeds the Offer Amount, the Trustee shall select the Notes and suchPari Passu Indebtedness to be purchased on a *pro rata*basis based on the accreted value or principal amount of the Notes or such PariPassu Indebtedness tendered (with such adjustments as may be deemedappropriate by the Trustee so that only Notes in denominations of $1,000, orintegral multiples thereof, shall be purchased); and

####  

#### (ix)                                that Holders whoseNotes were purchased only in part shall be issued new Notes equal inprincipal amount to the unpurchased portion of the Notes surrendered (ortransferred by book-entry transfer) representing the same indebtedness to theextent not repurchased.

####  

### (e)                                  Onor before the Purchase Date, the Issuer shall, to the extent lawful, (1) acceptfor payment, on a *pro rata* basis to the extentnecessary, the Offer Amount of Notes or portions thereof validly tenderedpursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered,all Notes tendered and (2) deliver or cause to be delivered to the Trusteethe Notes properly accepted together with an Officer’s Certificate stating theaggregate principal amount of Notes or portions thereof so tendered.

###  

### (f)                                    TheIssuer, the Depositary or the Paying Agent, as the case may be, shallpromptly mail or deliver to each tendering Holder an amount equal to thepurchase price of the Notes properly tendered by such Holder and accepted by theIssuer for purchase, and the Issuer shall promptly issue a new Note, and theTrustee, upon receipt of an Authentication Order, shall authenticate and mailor deliver (or cause to be transferred by book-entry) such new Note to suchHolder (it being understood that, notwithstanding anything in this Indenture tothe contrary, no Opinion of Counsel or Officer’s Certificate is required forthe Trustee to authenticate and mail or deliver such new Note) in a principalamount equal to any unpurchased portion of the Note surrendered representingthe same indebtedness to the extent not repurchased; provided that eachsuch new Note shall be in a principal amount of $1,000 or an integral multiplethereof. Any Note not so accepted shall be promptly mailed or delivered by theIssuer to the Holder thereof. The Issuer shall publicly announce the results ofthe Asset Sale Offer on or as soon as practicable after the Purchase Date.

###  

Other than asspecifically provided in this Section 3.09 or Section 4.10 hereof,any purchase pursuant to this Section 3.09 shall be made pursuant to the applicableprovisions of Sections 3.01 through 3.06 hereof.

 

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ARTICLE 4

 

COVENANTS

 

Section 4.01                                Paymentof Notes.

 

The Issuershall pay or cause to be paid the principal of, premium, if any, AdditionalInterest, if any, and interest on the Notes on the dates and in the mannerprovided in the Notes. Principal, premium, if any, Additional Interest, if any,and interest shall be considered paid on the date due if the Paying Agent, ifother than the Issuer or a Subsidiary, holds as of noon Eastern Time on the duedate money deposited by the Issuer in immediately available funds and designatedfor 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 nextsucceeding day that is a Business Day.

 

The Issuer shallpay all Additional Interest, if any, in the same manner on the dates and in theamounts set forth in the Registration Rights Agreement.

 

The Issuershall pay interest (including post-petition interest in any proceeding underany Bankruptcy Law) on overdue principal at the rate equal to the then applicableinterest rate on the Notes to the extent lawful; it shall pay interest(including post-petition interest in any proceeding under any Bankruptcy Law)on overdue installments of interest and Additional Interest (without regard toany applicable grace period) at the same rate to the extent lawful.

 

Section 4.02                                Maintenanceof Office or Agency.

 

The Issuershall maintain in the Borough of Manhattan in the City of New York an office oragency (which may be an office of the Trustee or an affiliate of theTrustee, Registrar or co-registrar) where Notes may be surrendered for registrationof transfer or for exchange or presented for payment and where notices and demandsto or upon the Issuer in respect of the Notes and this Indenture may beserved. The Issuer shall give prompt written notice to the Trustee of thelocation, and any change in the location, of such office or agency. If at anytime the Issuer shall fail to maintain any such required office or agency orshall fail to furnish the Trustee with the address thereof, such presentations,surrenders, notices and demands may be made or served at the CorporateTrust Office of the Trustee.

 

The Issuer may alsofrom time to time designate one or more other offices or agencies where theNotes may be presented or surrendered for any or all such purposes and may fromtime to time rescind such designations; provided that no suchdesignation or rescission shall in any manner relieve the Issuer of its obligationto maintain an office or agency in the Borough of Manhattan in the City of NewYork for such purposes. The Issuer shall give prompt written notice to theTrustee of any such designation or rescission and of any change in the locationof any such other office or agency.

 

The Issuerhereby initially designates the office of the Trustee located at 45 Broadway,12th Floor, New York, New York 10006, Attention:  Worldwide Securities Services, as one suchoffice or agency of the Issuer in accordance with Section 2.03 hereof.

 

Section 4.03                                Reportsand Other Information.

 

### (a)                                  Notwithstandingthat the Issuer may not be subject to the reporting requirements of Section 13or 15(d) of the Exchange Act or otherwise report on an annual andquarterly basis on forms provided for such annual and quarterly reportingpursuant to rules and regulations promulgated by the SEC, the Issuer shallfile with the SEC (and make available to the Trustee and Holders of the Notes

 

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### (without exhibits), withoutcost to any Holder, within 15 days after the Issuer files them with theSEC) from and after the Issue Date,

###  

(1)                                  within 90 daysafter the end of each fiscal year, annual reports on Form 10-K, or anysuccessor or comparable form, containing the information required to becontained therein, or required in such successor or comparable form;

 

(2)                                  within 45 days afterthe end of each of the first three fiscal quarters of each fiscal year,commencing with the first fiscal quarter of the fiscal year commencing February 4,2007, reports on Form 10-Q containing all quarterly information that wouldbe required to be contained in Form 10-Q, or any successor or comparableform;

 

(3)                                  promptly from time totime after the occurrence of an event required to be therein reported, suchother reports on Form 8-K, or any successor or comparable form; and

 

(4)                                  any otherinformation, documents and other reports which the Issuer would be required tofile with the SEC if it were subject to Section 13 or 15(d) of theExchange Act beginning on and after the Issue Date;

 

in each case,in a manner that complies in all material respects with the requirementsspecified in such form; providedthat the Issuer shall not be so obligated to file such reports with the SEC (i) ifthe SEC does not permit such filing or (ii) prior to the consummation ofan exchange offer or the effectiveness of a shelf registration statement asrequired by the Registration Rights Agreement, so long as if clause (i) or(ii) is applicable the Issuer makes available such information toprospective purchasers of Notes, in addition to providing such information tothe Trustee and the Holders of the Notes, in each case within 15 days after thetime the Issuer would be required to file such information with the SEC, if itwere subject to Sections 13 or 15(d) of the Exchange Act. To the extent any such information isnot so filed or furnished, as applicable, within the time periods specifiedabove and such information is subsequently filed or furnished, as applicable,the Issuer shall be deemed to have satisfied its obligations with respectthereto at such time and any Default with respect thereto shall be deemed tohave been cured; provided that such cure shall not otherwise affect therights of the Holders under Article 6 hereto if Holders of at least 25% inprincipal amount of the then total outstanding Notes have declared theprincipal, premium, if any, interest and any other monetary obligations on allthe then outstanding Notes to be due and payable immediately and suchdeclaration shall not have been rescinded or cancelled prior to such cure. Inaddition, to the extent not satisfied by the foregoing, for so long as anyNotes are outstanding, the Issuer shall furnish to Holders and to securitiesanalysts and prospective investors, upon their request, the informationrequired to be delivered pursuant to Rule 144A(d)(4) under theSecurities Act.

 

### (b)                                 Inthe event that any direct or indirect parent company of the Issuer becomes aguarantor of the Notes, the Issuer may satisfy its obligations under this Section 4.03with respect to financial information relating to the Issuer by furnishingfinancial information relating to such parent; provided that the same is accompanied by consolidatinginformation that explains in reasonable detail the differences between theinformation relating to such parent, on the one hand, and the informationrelating to the Issuer and its Restricted Subsidiaries on a standalone basis,on the other hand.

###  

### (c)                                  Notwithstandingthe foregoing, the requirements of this Section 4.03 shall be deemedsatisfied prior to the commencement of the Exchange Offer or the effectivenessof the Shelf Registration Statement by the filing with the SEC of the ExchangeOffer Registration Statement or Shelf Registration Statement or any otherfiling, and any amendments thereto, with such financial information thatsatisfies Regulation S-X of the Securities Act.

 

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### (d)                                 Deliveryof such reports, information and documents to the Trustee is for informationalpurposes only and the Trustee’s receipt of such shall not constituteconstructive notice of any information contained therein or determinable frominformation contained therein, including the Issuer’s compliance with any ofits covenants hereunder (as to which the Trustee is entitled to rely exclusivelyon Officer’s Certificates).

###  

Section 4.04                                ComplianceCertificate.

 

### (a)                                  TheIssuer and each Guarantor (to the extent that such Guarantor is so requiredunder the Trust Indenture Act) shall deliver to the Trustee, within 120 daysafter the end of each fiscal year ending after the Issue Date, a certificatefrom the principal executive officer, principal financial officer or principalaccounting officer stating that a review of the activities of the Issuer andits Restricted Subsidiaries during the preceding fiscal year has been madeunder the supervision of the signing Officer with a view to determining whetherthe Issuer has kept, observed, performed and fulfilled its obligations underthis Indenture, and further stating, as to such Officer signing such certificate,that to the best of his or her knowledge the Issuer has kept, observed,performed and fulfilled each and every condition and covenant contained in thisIndenture during such fiscal year and is not in default in the performance or observanceof any of the terms, provisions, covenants and conditions of this Indenture (or,if a Default shall have occurred, describing all such Defaults of which he orshe may have knowledge and what action the Issuer is taking or proposes totake with respect thereto).

###  

### (b)                                 Whenany Default has occurred and is continuing under this Indenture, or if theTrustee or the holder of any other evidence of Indebtedness of the Issuer orany Subsidiary gives any notice or takes any other action with respect to aclaimed Default, the Issuer shall promptly (which shall be no more than five (5) BusinessDays) deliver to the Trustee by registered or certified mail or by facsimiletransmission an Officer’s Certificate specifying such event and what action theIssuer proposes to take with respect thereto.

###  

Section 4.05                                Taxes.

 

The Issuershall pay or discharge, and shall cause each of its Restricted Subsidiaries topay or discharge, prior to delinquency, all material taxes, lawful assessments,and governmental levies except such as are contested in good faith and byappropriate actions or where the failure to effect such payment or discharge isnot adverse in any material respect to the Holders of the Notes.

 

Section 4.06                                Stay,Extension and Usury Laws.

 

The Issuer andeach of the Guarantors covenant (to the extent that they may lawfully doso) that they shall not at any time insist upon, plead, or in any mannerwhatsoever claim or take the benefit or advantage of, any stay, extension orusury law wherever enacted, now or at any time hereafter in force, that may affectthe covenants or the performance of this Indenture; and the Issuer and each ofthe Guarantors (to the extent that they may lawfully do so) herebyexpressly waive all benefit or advantage of any such law, and covenant (to theextent that they may lawfully do so) that they shall not, by resort to anysuch law, hinder, delay or impede the execution of any power herein granted tothe Trustee, but shall suffer and permit the execution of every such power asthough no such law has been enacted.

 

Section 4.07                                Limitationon Restricted Payments.

 

### (a)                                  TheIssuer shall not, and shall not permit any of its Restricted Subsidiaries to,directly or indirectly:

 

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(I)                                    declareor pay any dividend or make any payment having the effect thereof or anydistribution on account of the Issuer’s, or any of its Restricted Subsidiaries’Equity Interests, including any dividend or distribution payable in connectionwith any merger or consolidation other than:

 

(A)                              dividendsor distributions by the Issuer payable solely in Equity Interests (other thanDisqualified Stock) of the Issuer; or

 

(B)                                dividendsor distributions by a Restricted Subsidiary so long as, in the case of anydividend or distribution payable on or in respect of any class or series ofsecurities issued by a Restricted Subsidiary other than a Wholly-OwnedSubsidiary, the Issuer or a Restricted Subsidiary receives at least its *pro rata* share of such dividend or distribution inaccordance with its Equity Interests in such class or series ofsecurities;

 

(II)                                purchase,redeem, defease or otherwise acquire or retire for value any Equity Interestsof the Issuer or any direct or indirect parent of the Issuer, including inconnection with any merger or consolidation;

 

(III)                            makeany principal payment on, or redeem, repurchase, defease or otherwise acquireor retire for value, in each case prior to any scheduled repayment, sinkingfund payment or maturity, any Subordinated Indebtedness, other than:

 

(A)                              Indebtednesspermitted under clauses (7) and (8) of Section 4.09(b) hereof;or

 

(B)                                thepurchase, repurchase or other acquisition of Subordinated Indebtednesspurchased in anticipation of satisfying a sinking fund obligation, principalinstallment or final maturity, in each case due within one year of the date ofpurchase, repurchase or acquisition; or

 

(IV)                            makeany Restricted Investment

 

(all suchpayments and other actions set forth in clauses (I) through (IV) above beingcollectively referred to as “RestrictedPayments”), unless, at the time of such Restricted Payment:

 

(1)                                  noDefault shall have occurred and be continuing or would occur as a consequencethereof;

 

(2)                                  immediatelyafter giving effect to such transaction on a *pro forma*basis, the Issuer could incur $1.00 of additional Indebtedness under Section 4.09(a) hereof;and

 

(3)                                  suchRestricted Payment, together with the aggregate amount of all other RestrictedPayments made by the Issuer and its Restricted Subsidiaries after the IssueDate (including Restricted Payments permitted by clauses (1), (6)(c), (9) and(14) of Section 4.07(b) hereof, but excluding all other RestrictedPayments permitted by Section 4.07(b) hereof), is less than the sumof (without duplication):

 

(a)                                  50%of the Consolidated Net Income of the Issuer for the period (taken as oneaccounting period) beginning July 30, 2006 to the end of the Issuer’s mostrecently ended fiscal quarter for which internal financial statements areavailable at the time of

 

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suchRestricted Payment, or, in the case such Consolidated Net Income for suchperiod is a deficit, minus 100% of such deficit; *plus*

 

(b)                                 100% of the aggregatenet cash proceeds and the fair market value, as determined in good faith by theIssuer, of marketable securities or other property received by the Issuer sinceimmediately after the Issue Date (other than net cash proceeds to the extentsuch net cash proceeds have been used to incur Indebtedness, Disqualified Stockor Preferred Stock pursuant to clause (12)(a) of Section 4.09(b) hereof)from the issue or sale of:

 

(i)                                     (A) EquityInterests of the Issuer, including Treasury Capital Stock, but excluding cashproceeds and the fair market value, as determined in good faith by the Issuer,of marketable securities or other property received from the sale of:

 

(x)                                   EquityInterests to members of management, directors or consultants of the Issuer, anydirect or indirect parent company of the Issuer and the Issuer’s Subsidiariesafter the Issue Date to the extent such amounts have been applied to RestrictedPayments made in accordance with clause (4) of Section 4.07(b) hereof;and

 

(y)                                 DesignatedPreferred Stock; and

 

(B) to the extent such netcash proceeds are actually contributed to the Issuer, Equity Interests of theIssuer’s direct or indirect parent companies (excluding contributions of theproceeds from the sale of Designated Preferred Stock of such companies orcontributions to the extent such amounts have been applied to RestrictedPayments made in accordance with clause (4) of Section 4.07(b) hereof);or

 

(ii)                                  debtsecurities of the Issuer that have been converted into or exchanged for EquityInterests of the Issuer;

 

provided, however, that this clause (b) shallnot include the proceeds from (W) Refunding Capital Stock, (X) Equity Interestsor convertible debt securities of the Issuer sold to a Restricted Subsidiary,(Y) Disqualified Stock or debt securities that have been converted intoDisqualified Stock or (Z) Excluded Contributions; *plus*

 

(c)                                  100%of the aggregate amount of cash and the fair market value, as determined ingood faith by the Issuer, of marketable securities or other property contributedto the capital of the Issuer following the Issue Date other than (X) net cashproceeds to the extent such net cash proceeds have been used to incur Indebtednessor issue Disqualified Stock or Preferred Stock pursuant to clause (12)(a) ofSection 4.09(b) hereof), (Y) by a Restricted Subsidiary and (Z) fromany Excluded Contributions; *plus*

 

(d)                                 100% of the aggregateamount received in cash and the fair market value, as determined in good faithby the Issuer, of marketable securities or other property received by means of:

 

(i)                                     thesale or other disposition (other than to the Issuer or a Restricted Subsidiary)of Restricted Investments made by the Issuer or its Restricted

 

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Subsidiariesand repurchases and redemptions of such Restricted Investments from the Issueror its Restricted Subsidiaries and repayments of loans or advances, andreleases of guarantees, which constitute Restricted Investments by the Issueror its Restricted Subsidiaries, in each case after the Issue Date; or

 

(ii)                                  thesale (other than to the Issuer or a Restricted Subsidiary) of the stock of anUnrestricted Subsidiary or a distribution from an Unrestricted Subsidiary(other than in each case to the extent the Investment in such UnrestrictedSubsidiary was made by the Issuer or a Restricted Subsidiary pursuant toclause (7) of Section 4.07(b) hereof or to the extent suchInvestment constituted a Permitted Investment) or a dividend from anUnrestricted Subsidiary after the Issue Date; *plu*s

 

(e)                                  inthe case of the redesignation of an Unrestricted Subsidiary as a RestrictedSubsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiaryinto the Issuer or a Restricted Subsidiary or the transfer of all orsubstantially all of the assets of an Unrestricted Subsidiary to the Issuer ora Restricted Subsidiary after the Issue Date, the fair market value of theInvestment in such Unrestricted Subsidiary (or the assets transferred), asdetermined by the Issuer in good faith or, if such fair market value may exceed$125.0 million, in writing by an Independent Financial Advisor, at the time ofthe redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary orat the time of such merger, amalgamation, consolidation or transfer of assetsto the extent the Investment in such Unrestricted Subsidiary was made by theIssuer or a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b) hereofor to the extent such Investment constituted a Permitted Investment.

 

### (b)                                 Section 4.07(a) hereofshall not prohibit:

###  

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

 

(2)                                  (a) theredemption, repurchase, retirement or other acquisition of any Equity Interests(“Treasury Capital Stock”)of the Issuer or any Equity Interests of any direct or indirect parent companyof the Issuer or any Subordinated Indebtedness of the Issuer or a RestrictedSubsidiary, in exchange for, or out of the proceeds of, the substantiallyconcurrent sale or issuance (other than to a Restricted Subsidiary) of, EquityInterests of the Issuer or any direct or indirect parent company of the Issuerto the extent contributed to the Issuer (in each case, other than anyDisqualified Stock) (“Refunding Capital Stock”), (b) thedeclaration and payment of dividends on Treasury Capital Stock out of theproceeds of the substantially concurrent sale or issuance (other than to aSubsidiary of the Issuer or to an employee stock ownership plan or any trustestablished by the Issuer or any of its Subsidiaries) of Refunding CapitalStock, and (c) if immediately prior to the retirement of Treasury CapitalStock, the declaration and payment of dividends thereon was permitted underclause (6) of this Section 4.07(b), the declaration and payment ofdividends on the Refunding Capital Stock (other than Refunding Capital Stockthe proceeds of which were used to redeem, repurchase, retire or otherwiseacquire any Equity Interests of any direct or indirect parent company of theIssuer) in an aggregate amount per year no greater than the aggregate amount ofdividends per annum that were declarable and payable on such Treasury CapitalStock immediately prior to such retirement;

 

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

 

(a)                                  theprincipal amount (or accreted value, if applicable) of such new Indebtednessdoes not exceed the principal amount of (or accreted value, if applicable),plus any accrued and unpaid interest on, the Subordinated Indebtedness being soredeemed, repurchased, exchanged, acquired or retired for value, plus theamount of any premium required to be paid under the terms of the instrumentgoverning the Subordinated Indebtedness being so redeemed, repurchased,exchanged, acquired or retired and any reasonable fees and expenses incurred inconnection with such redemption, repurchase, exchange, acquisition orretirement and the issuance of such new Indebtedness;

 

(b)                                 suchnew Indebtedness is subordinated to the Notes or the applicable Guarantee atleast to the same extent as such Subordinated Indebtedness so repurchased,exchanged, redeemed, acquired or retired for value;

 

(c)                                  suchnew Indebtedness has a final scheduled maturity date equal to or later than thefinal scheduled maturity date of the Subordinated Indebtedness being soredeemed, repurchased, exchanged, acquired or retired; and

 

(d)                                 suchnew Indebtedness has a Weighted Average Life to Maturity equal to or greaterthan the remaining Weighted Average Life to Maturity of the SubordinatedIndebtedness being so redeemed, repurchased, exchanged, acquired or retired;

 

(4)                                  aRestricted Payment to pay for the repurchase, retirement or other acquisitionor retirement for value of Equity Interests (other than Disqualified Stock) ofthe Issuer or any of its direct or indirect parent companies held by anyfuture, present or former employee, director or consultant of the Issuer, anyof its Subsidiaries or any of its direct or indirect parent companies, or anyof their respective estates, spouses or former spouses pursuant to anymanagement equity plan or stock option plan or any other management or employeebenefit plan or agreement (including, for the avoidance of doubt, any principaland interest payable on any notes issued by the Issuer or any direct orindirect parent company in connection with any such repurchase, retirement orother acquisition or retirement); provided, however, that the aggregateRestricted Payments made under this clause (4) do not exceed in anycalendar year $15.0 million (which shall increase to $30.0 million subsequentto the consummation of an underwritten public Equity Offering by the Issuer orany direct or indirect parent company of the Issuer) with unused amounts in anycalendar year being carried over to succeeding calendar years subject to amaximum (without giving effect to the following proviso) of $30.0 million inany calendar year (which shall increase to $60.0 million subsequent to theconsummation of an underwritten public Equity Offering by the Issuer or anydirect or indirect parent company of the Issuer); provided further that suchamount in any calendar year may be increased by an amount not to exceed:

 

(a)                                  thecash proceeds from the sale of Equity Interests (other than Disqualified Stock)of the Issuer and, to the extent contributed to the Issuer, Equity Interests ofany of the Issuer’s direct or indirect parent companies, in each case tomembers of management, directors or consultants of the Issuer, any of itsSubsidiaries or any of its direct or indirect parent companies that occursafter the Issue Date, to the extent the cash proceeds from the sale of suchEquity Interests have not otherwise been applied to the payment of RestrictedPayments by virtue of clause (3) of Section 4.07(a) hereof,plus, in respect

 

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of any sale ofEquity Interests in connection with an exercise of stock options, an amountequal to the amount required to be withheld by the Issuer or any of its director indirect parent companies in connection with such exercise under applicablelaw to the extent such amount is repaid to the Issuer or its direct or indirectparent company, as applicable, constituted a Restricted Payment and has nototherwise been applied to the payment of Restricted Payments by virtue ofclause (3) of Section 4.07(a) hereof; *plus*

 

(b)                                 thecash proceeds of key man life insurance policies received by the Issuer or itsRestricted Subsidiaries after the Issue Date; *less*

 

(c)                                  theamount of any Restricted Payments previously made with the cash proceedsdescribed in clauses (a) and (b) of this clause (4);

 

and provided**furtherthat cancellation of Indebtedness owing to the Issuer from employees, directorsor consultants of the Issuer, any of the Issuer’s direct or indirect parentcompanies or any of the Issuer’s Restricted Subsidiaries in connection with arepurchase of Equity Interests of the Issuer or any of its direct or indirectparent companies will not be deemed to constitute a Restricted Payment forpurposes of this Section 4.07 or any other provision of this Indenture;

 

(5)                                  thedeclaration and payment of dividends to holders of any class or series ofDisqualified Stock of the Issuer or any of its Restricted Subsidiaries issuedin accordance with Section 4.09 hereof to the extent such dividends areincluded in the definition of “Fixed Charges”;

 

(6)                                  (a) thedeclaration and payment of dividends to holders of any class or series ofDesignated Preferred Stock (other than Disqualified Stock) issued by the Issuerafter the Issue Date;

 

(b)                                 thedeclaration and payment of dividends to a direct or indirect parent company ofthe Issuer, the proceeds of which will be used to fund the payment of dividendsto holders of any class or series of Designated Preferred Stock(other than Disqualified Stock) of such parent company issued after the IssueDate, provided that the amount of dividends paid pursuant to this clause(b) shall not exceed the aggregate amount of cash actually contributed tothe Issuer from the sale of such Designated Preferred Stock; or

 

(c)                                  thedeclaration and payment of dividends on Refunding Capital Stock that isPreferred Stock in excess of the dividends declarable and payable thereonpursuant to clause (2) of this Section 4.07(b);

 

provided, however, in the case of eachof (a), (b) and (c) of this clause (6), that for the most recentlyended four full fiscal quarters for which internal financial statements areavailable immediately preceding the date of issuance of such DesignatedPreferred Stock or the declaration of such dividends on Refunding Capital Stockthat is Preferred Stock, after giving effect to such issuance or declaration ona *pro forma* basis, the Issuer and itsRestricted Subsidiaries on a consolidated basis would have had a Fixed ChargeCoverage Ratio of at least 2.00 to 1.00;

 

(7)                                  Investmentsin Unrestricted Subsidiaries having an aggregate fair market value, takentogether with all other Investments made pursuant to this clause (7) thatare at the time outstanding, without giving effect to the sale of anUnrestricted Subsidiary to the extent the proceeds of such sale do not consistof, or have not been subsequently sold or transferred for, cash or marketablesecurities, not to exceed $75.0 million (with the fair market value of eachInvestment being measured at the time made and without giving effect to subsequentchanges in value);

 

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(8)                                  repurchasesof Equity Interests deemed to occur upon exercise of stock options or warrantsif such Equity Interests represent a portion of the exercise price of suchoptions or warrants;

 

(9)                                  thedeclaration and payment of dividends on the Issuer’s common stock (or thepayment of dividends to any direct or indirect parent entity to fund a paymentof dividends on such entity’s common stock), following the first publicoffering of the Issuer’s common stock or the common stock of any of its director indirect parent companies after the Issue Date, of up to 6% per annum of thenet cash proceeds received by or contributed to the Issuer in or from anypublic offering, other than public offerings with respect to the Issuer’scommon stock registered on Form S-8 and other than any public saleconstituting an Excluded Contribution;

 

(10)                            RestrictedPayments that are made with Excluded Contributions;

 

(11)                            otherRestricted Payments in an aggregate amount taken together with all otherRestricted Payments made pursuant to this clause (11) that are at the timeoutstanding (without giving effect to the sale of an Investment to the extentthe proceeds of such sale do not consist of, or have not been subsequently soldor transferred for, cash or marketable securities) not to exceed $75.0 million;

 

(12)                            distributionsor payments of Receivables Fees;

 

(13)                            anyRestricted Payment used to fund the Transactions and the fees and expensesrelated thereto or owed to Affiliates, in each case with respect to anyRestricted Payment to or owed to an Affiliate, to the extent permitted by Section 4.11hereof;

 

(14)                            therepurchase, redemption or other acquisition or retirement for value of anySubordinated Indebtedness pursuant to the provisions similar to those describedunder Sections 4.10 and Section 4.14 hereof; provided that all Notes tendered by Holders in connectionwith a Change of Control Offer or Asset Sale Offer, as applicable, have beenrepurchased, redeemed or acquired for value;

 

(15)                            thedeclaration and payment of dividends or distributions by the Issuer to, or themaking of loans to, any direct or indirect parent company in amounts requiredfor any direct or indirect parent companies to pay, in each case withoutduplication,

 

(a)                                  franchisetaxes and other fees, taxes and expenses required to maintain their corporateexistence;

 

(b)                                 federal,state and local income taxes, to the extent such income taxes are attributableto the income of the Issuer and its Restricted Subsidiaries and, to the extentof the amount actually received from its Unrestricted Subsidiaries, in amountsrequired to pay such taxes to the extent attributable to the income of suchUnrestricted Subsidiaries; *provided*that in each case the amount of such payments in any fiscal year does notexceed the excess (if any) of (A) the amount that the Issuer and itsRestricted Subsidiaries would be required to pay in respect of federal, stateand local income taxes for such fiscal year were the Issuer, its RestrictedSubsidiaries and its Unrestricted Subsidiaries (to the extent described above)to pay such taxes separately from any such parent company over (B) theaggregate federal, state and local income taxes paid by the Issuer and its RestrictedSubsidiaries;

 

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(c)                                  customarysalary, bonus and other benefits payable to officers and employees of anydirect or indirect parent company of the Issuer to the extent such salaries,bonuses and other benefits are attributable to the ownership or operation ofthe Issuer and its Restricted Subsidiaries;

 

(d)                                 generalcorporate operating and overhead costs and expenses of any direct or indirectparent company of the Issuer to the extent such costs and expenses areattributable to the ownership or operation of the Issuer and its RestrictedSubsidiaries; and

 

(e)                                  feesand expenses other than to Affiliates of the Issuer related to any unsuccessfulequity or debt offering of such parent company;

 

(16)                            thedistribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtednessowed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries(other than Unrestricted Subsidiaries, the primary assets of which are CashEquivalents);

 

(17)                            cashpayments in lieu of the issuance of fractional shares in connection with theexercise of warrants, options or other securities convertible into exchangeablefor Capital Stock of the Issuer or any direct or indirect parent company of theIssuer; provided, that any such cash payment shall not be for the purpose ofevading the limitation of this Section 4.07;

 

(18)                            thepayment of dividends and other distributions in an amount equal to anyreduction in taxes actually realized by the Issuer and its RestrictedSubsidiaries in the form of refunds or credits or from deductions whenapplied to offset income or gain as a direct result of (i) transactionfees and expenses, (ii) commitment and other financing fees or (iii) severance,change in control and other compensation expense incurred in connection withthe exercise, repurchase, rollover or payout of stock options or bonuses, ineach case in connection with the Transactions; and

 

(19)                            mandatoryredemptions of Subordinated Discount Notes (and exchange notes issued inrespect thereof) pursuant to the indenture governing the Subordinated DiscountNotes due to the existence of an AHYDO Amount (as defined in such indenture);

 

provided,however, that at the time of, and after giving effect to, anyRestricted Payment permitted under clauses (11), (16) and (18) of this Section 4.07(b),no Default shall have occurred and be continuing or would occur as a consequencethereof.

 

### (c)                                  TheIssuer shall not permit any Unrestricted Subsidiary to become a RestrictedSubsidiary except pursuant to the second to last sentence of the definition of “UnrestrictedSubsidiary.”  For purposes of designatingany Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investmentsby the Issuer and its Restricted Subsidiaries (except to the extent repaid) inthe Subsidiary so designated shall be deemed to be Investments in an amountdetermined as set forth in the last sentence of the definition of “Investments.”  Such designation shall be permitted only if aRestricted Payment in such amount would be permitted at such time, whetherpursuant to Section 4.07(a) hereof or under clause (7), (10), (11) or(16) of Section 4.07(b) hereof, or pursuant to the definition of “PermittedInvestments,” and if such Subsidiary otherwise meets the definition of anUnrestricted Subsidiary.

 

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Section 4.08                                Dividendand Other Payment Restrictions Affecting Restricted Subsidiaries.

 

### (a)                                  TheIssuer shall not, and shall not permit any of its Restricted Subsidiaries thatare not Guarantors to, directly or indirectly, create or otherwise cause orsuffer to exist or become effective any consensual encumbrance or consensualrestriction on the ability of any such Restricted Subsidiary to:

###  

(1)                                  (A)                              pay dividends or make anyother distributions to the Issuer or any of its Restricted Subsidiaries on itsCapital Stock or with respect to any other interest or participation in, ormeasured by, its profits, or

 

(B)                                payany Indebtedness owed to the Issuer or any of its Restricted Subsidiaries;

 

(2)                                  make loans oradvances to the Issuer or any of its Restricted Subsidiaries; or

 

(3)                                  sell, lease ortransfer any of its properties or assets to the Issuer or any of its RestrictedSubsidiaries.

 

### (b)                                 Therestrictions in Section 4.08(a) hereof shall not apply toencumbrances or restrictions existing under or by reason of:

###  

(1)                                  contractualencumbrances or restrictions in effect on the Issue Date, including pursuant tothe Senior Credit Facilities and the related documentation and the indenturegoverning the Senior Notes and the related documentation and the indenturegoverning the Subordinated Discount Notes and the related documentation;

 

(2)                                  this Indenture andthe Notes;

 

(3)                                  purchase money obligationsfor property acquired in the ordinary course of business that imposerestrictions of the nature discussed in clause (3) of Section 4.08(a) hereofon the property so acquired;

 

(4)                                  applicable law or anyapplicable rule, regulation or order;

 

(5)                                  any agreement orother instrument of a Person acquired by the Issuer or any of its RestrictedSubsidiaries in existence at the time of such acquisition (but not created incontemplation thereof), which encumbrance or restriction is not applicable toany Person, or the properties or assets of any Person, other than the Person soacquired and its Subsidiaries, or the property or assets of the Person soacquired and its Subsidiaries;

 

(6)                                  contracts for thesale of assets, including customary restrictions with respect to a Subsidiaryof the Issuer pursuant to an agreement that has been entered into for the saleor disposition of all or substantially all of the Capital Stock or assets ofsuch Subsidiary;

 

(7)                                  Secured Indebtednessotherwise permitted to be incurred pursuant to Section 4.09 hereof and Section 4.12hereof that limit the right of the debtor to dispose of the assets securingsuch Indebtedness;

 

(8)                                  restrictions on cashor other deposits or net worth imposed by customers under contracts enteredinto in the ordinary course of business;

 

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(9)                                  other Indebtedness,Disqualified Stock or Preferred Stock of Foreign Subsidiaries permitted to beincurred or issued subsequent to the Issue Date pursuant to the provisions of Section 4.09hereof;

 

(10)                            customary provisions in anyjoint venture agreement and other similar agreement relating solely to suchjoint venture;

 

(11)                            customary provisionscontained in leases, subleases, licenses or sublicenses and other agreements,in each case, entered into in the ordinary course of business;

 

(12)                            any encumbrances orrestrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereofimposed by any amendments, modifications, restatements, renewals, increases,supplements, refundings, replacements or refinancings of the contracts,instruments or obligations referred to in clauses (1) through (11) of thisSection 4.08(b); provided that such amendments, modifications,restatements, renewals, increases, supplements, refundings, replacements orrefinancings are, in the good faith judgment of the Issuer, no more restrictivein any material respect with respect to such encumbrances and otherrestrictions taken as a whole than those prior to such amendment, modification,restatement, renewal, increase, supplement, refunding, replacement orrefinancing;

 

(13)                            any other agreementgoverning Indebtedness entered into after the Issue Date that containsencumbrances and other restrictions that are, in the good faith judgment of theIssuer, no more restrictive in any material respect taken as a whole withrespect to any Restricted Subsidiary than those encumbrances and otherrestrictions that are in effect on the Issue Date with respect to thatRestricted Subsidiary pursuant to agreements in effect on the Issue Date; and

 

(14)                            restrictions created inconnection with any Receivables Facility that, in the good faith determinationof the Issuer are necessary or advisable to effect such Receivables Facility.

 

Section 4.09                                Limitationon Incurrence of Indebtedness and Issuance of Disqualified Stock and PreferredStock.

 

### (a)                                  TheIssuer shall not, and shall not permit any of its Restricted Subsidiaries to,directly or indirectly, create, incur, issue, assume, guarantee or otherwisebecome directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to anyIndebtedness (including Acquired Indebtedness) and the Issuer shall not issueany shares of Disqualified Stock and shall not permit any Restricted Subsidiaryto issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may incur Indebtedness(including Acquired Indebtedness) or issue shares of Disqualified Stock, andany of its Restricted Subsidiaries may incur Indebtedness (includingAcquired Indebtedness), issue shares of Disqualified Stock and issue shares ofPreferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis forthe Issuer and its Restricted Subsidiaries’ most recently ended four fiscalquarters for which internal financial statements are available immediatelypreceding the date on which such additional Indebtedness is incurred or suchDisqualified Stock or Preferred Stock is issued would have been at least 2.00to 1.00, determined on a *pro forma*basis (including a *pro forma*application of the net proceeds therefrom), as if the additional Indebtednesshad been incurred, or the Disqualified Stock or Preferred Stock had beenissued, as the case may be, and the application of the proceeds therefromhad occurred at the beginning of such four-quarter period; provided that theamount of Indebtedness (including Acquired Indebtedness), Disqualified Stockand Preferred Stock that may be incurred or issued, as applicable,pursuant to the foregoing by Restricted Subsidiaries that are not Guarantorsshall not exceed $150.0 million at any one time outstanding.

 

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### (b)                                 Section 4.09(a) hereofshall not apply to:

###  

(1)                                  (x) Indebtednessincurred pursuant to the Revolving Credit Facility by the Issuer or anyRestricted Subsidiary; provided that immediately after giving effect toany such incurrence, the aggregate principal amount of all Indebtednessincurred under this clause (x) and then outstanding does not exceed the greaterof (A) $1,200.0 million *less* up to$150.0 million in the aggregate of all principal payments with respect to suchIndebtedness made following the Issue Date pursuant to clause (1) of Section 4.10(b) *less* the aggregate principal amount of outstandingobligations under or in respect of Receivables Facilities and (B) (i) 90.0%of the eligible credit card and debit card receivables of the Issuer and itsRestricted Subsidiaries plus (ii) 90.0% of the net appraised orderlyliquidation value of the eligible inventory of the Issuer and its RestrictedSubsidiaries and (y) Indebtedness incurred pursuant to the Term Loan Facilityby the Issuer or any Restricted Subsidiary; provided that after givingeffect to any such incurrence, the aggregate principal amount of allIndebtedness incurred under this clause (y) and then outstanding does notexceed $2,400.0 million *less* up to$250.0 million in the aggregate of all principal payments with respect to suchIndebtedness made following the Issue Date pursuant to clause (1) of Section 4.10(b);

 

(2)                                  the incurrence by theIssuer and any Guarantor of Indebtedness represented by (a) the Notes(including any Guarantee and including the Exchange Notes) (other than any AdditionalNotes), (b) the Senior Notes (including any guarantee thereof) andexchange notes issued in respect of the Senior Notes and any guarantee thereofand (c) the Subordinated Discount Notes (including any guarantee thereof)and exchange notes issued in respect of the Subordinated Discount Notes and anyguarantee thereof;

 

(3)                                  Indebtedness of theIssuer and its Restricted Subsidiaries in existence on the Issue Date (otherthan Indebtedness described in clauses (1) and (2) of this Section 4.09(b));

 

(4)                                  (i) Indebtedness(including Capitalized Lease Obligations) incurred or Disqualified Stock andPreferred Stock issued by the Issuer or any of its Restricted Subsidiaries, tofinance the purchase, lease or improvement of property (real or personal) orequipment that is used or useful in a Similar Business, whether through thedirect purchase of assets or the Capital Stock of any Person owning such assetsand (ii) any Indebtedness incurred or Disqualified Stock or PreferredStock issued to refund, refinance or replace any other Indebtedness incurred orDisqualified Stock or Preferred Stock issued pursuant to this clause (4);provided that the aggregate amount of Indebtedness incurred and DisqualifiedStock and Preferred Stock issued pursuant to clauses (i) and (ii) ofthis clause (4) does not exceed $125.0 million at any one time outstanding;

 

(5)                                  Indebtedness incurredby the Issuer or any of its Restricted Subsidiaries constituting reimbursementobligations with respect to letters of credit issued in the ordinary course ofbusiness, including letters of credit in respect of workers’ compensationclaims, health, disability or other employee benefits or property, casualty orliability insurance or self-insurance, or other Indebtedness with respect toreimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters ofcredit or the incurrence of such Indebtedness, such obligations are reimbursedwithin 30 days following such drawing or incurrence;

 

(6)                                  Indebtedness arising fromagreements of the Issuer or its Restricted Subsidiaries providing forindemnification, adjustment of purchase price or similar obligations, in eachcase, incurred or assumed in connection with the disposition of any business,assets or a Subsidiary, other than guarantees of Indebtedness incurred by anyPerson acquiring all or any portion of such

 

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business, assets or a Subsidiary for the purpose of financing suchacquisition; provided, however, that

 

(A)                              suchIndebtedness is not reflected on the balance sheet of the Issuer, or any of itsRestricted Subsidiaries prepared in accordance with GAAP (contingentobligations referred to in a footnote to financial statements and not otherwisereflected on the balance sheet will not be deemed to be reflected on suchbalance sheet for purposes of this clause (6)(A)); and

 

(B)                                themaximum assumable liability in respect of all such Indebtedness shall at notime exceed the gross proceeds including non-cash proceeds (the fair marketvalue of such non-cash proceeds being measured at the time received and withoutgiving effect to any subsequent changes in value) actually received by theIssuer and its Restricted Subsidiaries in connection with such disposition;

 

(7)                                  Indebtedness of theIssuer to a Restricted Subsidiary; providedthat any such Indebtedness owing to a Restricted Subsidiary that is not aGuarantor is expressly subordinated in right of payment to the Notes*;*providedfurther that any subsequentissuance or transfer of any Capital Stock or any other event which results inany Restricted Subsidiary ceasing to be a Restricted Subsidiary or any othersubsequent transfer of any such Indebtedness (except to the Issuer or anotherRestricted Subsidiary or any pledge of such Indebtedness constituting aPermitted Lien) shall be deemed, in each case, to be an incurrence of suchIndebtedness not permitted by this clause (7);

 

(8)                                  Indebtedness of aRestricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Guarantorincurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor,such Indebtedness is expressly subordinated in right of payment to theGuarantee of the Notes of such Guarantor; providedfurtherthat any subsequent issuance or transfer of any Capital Stock or any otherevent which results in any such Restricted Subsidiary ceasing to be aRestricted Subsidiary or any subsequent transfer of any such Indebtedness(except to the Issuer or another Restricted Subsidiary or any pledge of suchIndebtedness constituting a Permitted Lien) shall be deemed, in each case, tobe an incurrence of such Indebtedness not permitted by this clause (8);

 

(9)                                  shares of PreferredStock of a Restricted Subsidiary issued to the Issuer or another RestrictedSubsidiary, providedthat any subsequent issuance or transfer of any Capital Stock or any otherevent which results in any such Restricted Subsidiary ceasing to be aRestricted Subsidiary or any other subsequent transfer of any such shares ofPreferred Stock (except to the Issuer or another of its Restricted Subsidiariesor any pledge of such Capital Stock constituting a Permitted Lien) shall bedeemed in each case to be an issuance of such shares of Preferred Stock notpermitted by this clause (9);

 

(10)                            (x) Hedging Obligations(excluding Hedging Obligations entered into for speculative purposes) for thepurpose of limiting interest rate risk, exchange rate risk or commodity pricingrisk, and (y) Indebtedness in respect of Cash Management Services provided byany lender party to a Senior Credit Facility or any affiliate of such lender(or any Person that was a lender or an affiliate of a lender at the time theapplicable agreement pursuant to which such Cash Management Services areprovided was entered into);

 

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(11)                            obligations in respect ofperformance, bid, appeal and surety bonds and performance and completionguarantees or obligations in respect of letters of credit related theretoprovided by the Issuer or any of its Restricted Subsidiaries in the ordinary courseof business;

 

(12)                            (a) Indebtedness or DisqualifiedStock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock ofthe Issuer or any Restricted Subsidiary equal to 100.0% of the net cashproceeds received by the Issuer since immediately after the Issue Date from theissue or sale of Equity Interests of the Issuer or cash contributed to thecapital of the Issuer (in each case, other than proceeds of Disqualified Stockor sales of Equity Interests to the Issuer or any of its Subsidiaries) asdetermined in accordance with clauses (3)(b) and (3)(c) of Section 4.07(a) hereofto the extent such net cash proceeds or cash have not been applied pursuant tosuch clauses to make Restricted Payments or to make other Investments, paymentsor exchanges pursuant to Section 4.07(b) hereof or to make PermittedInvestments (other than Permitted Investments specified in clauses (1) and(3) of the definition thereof) and (b) Indebtedness or DisqualifiedStock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock ofthe Issuer or any Restricted Subsidiary not otherwise permitted hereunder in anaggregate principal amount or liquidation preference, which when aggregatedwith the principal amount and liquidation preference of all other Indebtedness,Disqualified Stock and Preferred Stock then outstanding and incurred pursuantto this clause (12)(b), does not at any one time outstanding exceed $125.0million (it being understood that any Indebtedness incurred or DisqualifiedStock or Preferred Stock issued pursuant to this clause (12)(b) shallcease to be deemed incurred or outstanding for purposes of this clause (12)(b) butshall be deemed incurred for the purposes of Section 4.09(a) hereof fromand after the first date on which the Issuer or such Restricted Subsidiarycould have incurred such Indebtedness, Disqualified Stock or Preferred Stockunder Section 4.09(a) hereof without reliance on this clause(12)(b));

 

(13)                            the incurrence by theIssuer or any Restricted Subsidiary of Indebtedness or issuance by the Issueror any Restricted Subsidiary of Disqualified Stock or Preferred Stock whichserves to refund or refinance any Indebtedness incurred or Disqualified Stockor Preferred Stock issued as permitted under Section 4.09(a) hereof andclauses (2), (3) and (12)(a) of this Section 4.09(b), thisclause (13) and clause (14) of this Section 4.09(b) or anyIndebtedness incurred or Disqualified Stock or Preferred Stock issued to sorefund or refinance such Indebtedness, Disqualified Stock or Preferred Stockincluding additional Indebtedness incurred or Disqualified Stock or PreferredStock issued to pay premiums (including tender premiums), defeasance costs andfees in connection therewith (the “RefinancingIndebtedness”) prior to its respective maturity; provided, however, that such RefinancingIndebtedness:

 

(A)                              hasa Weighted Average Life to Maturity at the time such Refinancing Indebtednessis incurred which is not less than the remaining Weighted Average Life toMaturity of the Indebtedness, Disqualified Stock or Preferred Stock beingrefunded or refinanced,

 

(B)                                tothe extent such Refinancing Indebtedness refinances (i) Indebtednesssubordinated or *pari passu* to theNotes or any Guarantee thereof, such Refinancing Indebtedness is subordinatedor *pari passu* to the Notes or theGuarantee at least to the same extent as the Indebtedness being refinanced orrefunded or (ii) Disqualified Stock or Preferred Stock, such RefinancingIndebtedness must be Disqualified Stock or Preferred Stock, respectively, and

 

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(C)                                shallnot include:

 

(i)                                     Indebtedness,Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is nota Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stockof the Issuer;

 

(ii)                                  Indebtedness,Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is nota Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stockof a Guarantor; or

 

(iii)                               Indebtedness,Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiarythat refinances Indebtedness, Disqualified Stock or Preferred Stock of anUnrestricted Subsidiary;

 

and providedfurther that subclause (A) ofthis clause (13) will not apply to any refunding or refinancing of anyIndebtedness outstanding under any Senior Indebtedness;

 

(14)                            Indebtedness, DisqualifiedStock or Preferred Stock of (x) the Issuer or a Restricted Subsidiary incurredor issuedto financean acquisition or (y) Persons that are acquired by the Issuer or any RestrictedSubsidiary or merged into or amalgamated or consolidated with the Issuer or aRestricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effectto such acquisition, merger, amalgamation or consolidation, either

 

(a)                                     the Issuer wouldbe permitted to incur at least $1.00 of additional Indebtedness pursuant to theFixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof,or

 

(b)                                    the Fixed ChargeCoverage Ratio of the Issuer and the Restricted Subsidiaries is greater thanimmediately prior to such acquisition, merger, amalgamation or consolidation;

 

(15)                            Indebtedness arising fromthe honoring by a bank or other financial institution of a check, draft orsimilar instrument drawn against insufficient funds in the ordinary course ofbusiness, provided thatsuch Indebtedness is extinguished within five Business Days of its incurrence;

 

(16)                            Indebtedness of the Issueror any of its Restricted Subsidiaries supported by a letter of credit issuedpursuant to a Senior Credit Facility, in a principal amount not in excess ofthe stated amount of such letter of credit;

 

(17)                            (a) any guarantee bythe Issuer or a Restricted Subsidiary of Indebtedness or other obligations ofany Restricted Subsidiary so long as the incurrence of such Indebtednessincurred by such Restricted Subsidiary is permitted under the terms of thisIndenture, or

 

(b)                                 anyguarantee by a Restricted Subsidiary of Indebtedness of the Issuer providedthat such guarantee is incurred in accordance with Section 4.15 hereof;

 

(18)                            Indebtedness of ForeignSubsidiaries of the Issuer incurred not to exceed together with any otherIndebtedness incurred under this clause (18) at any one time outstanding, thegreater of (x) $100.0 million and (y) 10.0% of the Total Assets of the ForeignSubsidiaries (it being understood that any Indebtedness incurred pursuant tothis clause (18) shall cease to be

 

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deemed incurred or outstanding for purposes of this clause (18) butshall be deemed incurred for the purposes of Section 4.09(a) hereof fromand after the first date on which the applicable Foreign Subsidiary could haveincurred such Indebtedness under Section 4.09(a) hereof without relianceon this clause (18));

 

(19)                            (i)  Indebtedness,Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred orissued to finance or assumed in connection with an acquisition and (ii) Indebtednessincurred to refund, refinance or replace any other Indebtedness, DisqualifiedStock and Preferred Stock permitted under this clause (19), in each case, in aprincipal amount not to exceed, together with all other Indebtedness,Disqualified Stock and/or Preferred Stock issued under this clause (19), $100.0million in the aggregate at any one time outstanding (it being understood thatany Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant tothis clause (19) shall cease to be deemed incurred or outstanding for purposesof this clause (19) but shall be deemed incurred for the purposes of Section 4.09(a) hereoffrom and after the first date on which such Restricted Subsidiary could haveincurred such Indebtedness or issued such Disqualified Stock or Preferred Stockunder Section 4.09(a) hereof without reliance on this clause (19));

 

(20)                            Indebtedness of the Issueror any of its Restricted Subsidiaries consisting of (i) the financing ofinsurance premiums or (ii) take-or-pay obligations contained in supplyarrangements, in each case incurred in the ordinary course of business; and

 

(21)                            Indebtedness consisting ofIndebtedness issued by the Issuer or any of its Restricted Subsidiaries tocurrent or former officers, directors, employees and consultants thereof, theirrespective estates, spouses or former spouses, in each case to finance thepurchase or redemption of Equity Interests of the Issuer or any direct orindirect parent company of the Issuer to the extent described in clause (4) ofSection 4.07(b) hereof.

 

### (c)                                  Forpurposes of determining compliance with this Section 4.09:

###  

(1)                                  in the event that anitem of Indebtedness, Disqualified Stock or Preferred Stock (or any portionthereof) meets the criteria of more than one of the categories of permittedIndebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through(21) of Section 4.09(b) hereof or is entitled to be incurred pursuantto Section 4.09(a) hereof, the Issuer, in its sole discretion, shallclassify or reclassify such item of Indebtedness, Disqualified Stock or PreferredStock (or any portion thereof) and shall only be required to include the amountand type of such Indebtedness, Disqualified Stock or Preferred Stock in one ofthe above clauses; provided that all Indebtedness outstanding under theSenior Credit Facilities on the Issue Date shall at all times be deemed to beoutstanding in reliance on clause (1) of Section 4.09(b) hereof;and

 

(2)                                  at the time ofincurrence, the Issuer shall be entitled to divide and classify an item ofIndebtedness in more than one of the types of Indebtedness described in Sections4.09(a) and 4.09(b) hereof.

 

Accrual ofinterest, the accretion of accreted value and the payment of interest in the form ofadditional Indebtedness, Disqualified Stock or Preferred Stock shall not bedeemed to be an incurrence of Indebtedness, Disqualified Stock or PreferredStock for purposes of this Section 4.09.

 

For purposesof determining compliance with any U.S. dollar-denominated restriction on theincurrence of Indebtedness, the U.S. dollar-equivalent principal amount ofIndebtedness denominated in a foreign currency shall be calculated based on therelevant currency exchange rate in effect on the date such Indebtedness wasincurred, in the case of term debt, or first committed, in the case ofrevolving

 

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credit debt; provided that if such Indebtednessis incurred to refinance other Indebtedness denominated in a foreign currency,and such refinancing would cause the applicable U.S. dollar denominated restrictionto be exceeded if calculated at the relevant currency exchange rate in effecton the date of such refinancing, such U.S. dollar-denominated restriction shallbe deemed not to have been exceeded so long as the principal amount of suchrefinancing Indebtedness does not exceed the principal amount of suchIndebtedness being refinanced.

 

The principalamount of any Indebtedness incurred to refinance other Indebtedness, ifincurred in a different currency from the Indebtedness being refinanced, shallbe calculated based on the currency exchange rate applicable to the currenciesin which such respective Indebtedness is denominated that is in effect on thedate of such refinancing.

 

Section 4.10                                          AssetSales.

 

### (a)                                  TheIssuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummatean Asset Sale, unless:

###  

(1)                                  theIssuer or such Restricted Subsidiary, as the case may be, receivesconsideration at the time of such Asset Sale at least equal to the fair marketvalue (as determined in good faith by the Issuer) of the assets sold orotherwise disposed of; and

 

(2)                                  exceptin the case of a Permitted Asset Swap, at least 75% of the considerationtherefor received by the Issuer or such Restricted Subsidiary, as the case may be,is in the form of Cash Equivalents; provided that the amount of:

 

(A)                              anyliabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recentbalance sheet or in the footnotes thereto) of the Issuer or such RestrictedSubsidiary, other than liabilities that are by their terms subordinated to theNotes, that are assumed by the transferee of any such assets and for which theIssuer and all of its Restricted Subsidiaries have been validly released by allcreditors in writing,

 

(B)                                anysecurities received by the Issuer or such Restricted Subsidiary from suchtransferee that are converted by the Issuer or such Restricted Subsidiary into CashEquivalents (to the extent of the Cash Equivalents received) within 180 daysfollowing the closing of such Asset Sale, and

 

(C)                                anyDesignated Non-cash Consideration received by the Issuer or such RestrictedSubsidiary in such Asset Sale having an aggregate fair market value, takentogether with all other Designated Non-cash Consideration received pursuant tothis clause (C) that is at that time outstanding, not to exceed 7.5%of Total Assets at the time of the receipt of such Designated Non-cashConsideration, with the fair market value of each item of Designated Non-cashConsideration being measured at the time received and without giving effect tosubsequent changes in value,

 

shall bedeemed to be Cash Equivalents for purposes of this provision and for no otherpurpose.

 

### (b)                                 Within450 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer orsuch Restricted Subsidiary, at its option, may apply the Net Proceeds fromsuch Asset Sale,

 

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(1)                                  topermanently reduce:

 

(A)                              Obligationsunder Senior Indebtedness, and to correspondingly reduce commitments withrespect thereto;

 

(B)                                Obligationsunder Senior Subordinated Indebtedness (and to correspondingly reducecommitments with respect thereto), provided that the Issuer shallequally and ratably reduce Obligations under the Notes as provided under Section 3.07hereof through open-market purchases (to the extent such purchases are at orabove 100% of the principal amount thereof) or by making an offer (inaccordance with the procedures set forth under Section 4.10(c) hereof)to all Holders to purchase their Notes at 100% of the principal amount thereof,plus the amount of accrued but unpaid interest, if any, and AdditionalInterest, if any, on the amount of Notes that would otherwise be prepaid; or

 

(C)                                Indebtednessof a Restricted Subsidiary that is not a Guarantor, other than Indebtednessowed to the Issuer or another Restricted Subsidiary;

 

(2)                                  tomake (A) an Investment in any one or more businesses, provided that such Investment inany business is in the form of the acquisition of Capital Stock andresults in the Issuer or another of its Restricted Subsidiaries, as the case may be,owning an amount of the Capital Stock of such business such that it constitutesa Restricted Subsidiary, (B) capital expenditures or (C) acquisitionsof other assets, in the case of each of (A), (B) and (C), used or usefulin a Similar Business; or

 

(3)                                  tomake an Investment in (A) any one or more businesses, provided that such Investment inany business is in the form of the acquisition of Capital Stock andresults in the Issuer or another of its Restricted Subsidiaries, as the case may be,owning an amount of the Capital Stock of such business such that it constitutesa Restricted Subsidiary, (B) properties or (C) other assets that, in thecase of each of (A), (B) and (C), replace the businesses, propertiesand/or assets that are the subject of such Asset Sale;

 

provided that, in the case of clauses (2) and (3) above, a bindingcommitment shall be treated as a permitted application of the Net Proceeds fromthe date of such commitment so long as the Issuer or such other RestrictedSubsidiary enters into such commitment with the good faith expectation thatsuch Net Proceeds shall be applied to satisfy such commitment within 180 daysof such commitment (an “AcceptableCommitment”) and, in the event any Acceptable Commitment is latercancelled or terminated for any reason before the Net Proceeds are applied inconnection therewith, the Issuer or such Restricted Subsidiary enters intoanother Acceptable Commitment (a “Second Commitment”) within180 days of such cancellation or termination; providedfurtherthat if any Second Commitment is later cancelled or terminated for any reasonbefore such Net Proceeds are applied, then such Net Proceeds shall constituteExcess Proceeds.

 

### (c)                                  AnyNet Proceeds from the Asset Sale that are not invested or applied as providedand within the time period set forth in Section 4.10(b) shall bedeemed to constitute “Excess Proceeds.” When the aggregate amount of ExcessProceeds exceeds $50.0 million, the Issuer shall make an offer to allHolders of the Notes and, if required by the terms of any Indebtedness that is *pari passu* with the Notes (“Pari Passu Indebtedness”), to theholders of such Pari Passu Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate principalamount of the Notes and such Pari Passu Indebtedness that is an integralmultiple of $1,000 that may be purchased out of the Excess Proceeds at anoffer price in cash in an amount equal to 100% of the principal amount thereof,plus accrued and unpaid interest and Additional Interest, if any, to the datefixed for the closing of such offer, in accordance with the

 

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### procedures set forth in thisIndenture. The Issuer shall commence an Asset Sale Offer with respect to ExcessProceeds within ten Business Days after the date that Excess Proceeds exceed $50.0 millionby mailing the notice required pursuant to the terms of this Indenture, with acopy to the Trustee or otherwise in accordance with the procedures of DTC.

###  

To the extentthat the aggregate amount of Notes and such Pari Passu Indebtedness tenderedpursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may useany remaining Excess Proceeds for general corporate purposes, subject to compliancewith this Indenture. If the aggregate principal amount of Notes and the PariPassu Indebtedness surrendered in an Asset Sale Offer exceeds the amount ofExcess Proceeds, the Trustee shall select the Notes and such Pari PassuIndebtedness to be purchased on a *pro rata* basisbased on the accreted value or principal amount of the Notes or such Pari PassuIndebtedness tendered in accordance with Section 3.09. Upon completion ofany such Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero(regardless of whether there are any remaining Excess Proceeds upon suchcompletion).

 

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

###  

### (e)                                  TheIssuer shall comply with the requirements of Rule 14e-1 under the ExchangeAct and any other securities laws and regulations thereunder to the extent suchlaws or regulations are applicable in connection with the repurchase of theNotes pursuant to an Asset Sale Offer. To the extent that the provisions of anysecurities laws or regulations conflict with the provisions of this Indenture,the Issuer shall comply with the applicable securities laws and regulations andshall not be deemed to have breached its obligations described in thisIndenture by virtue thereof.

###  

Section 4.11                                          Transactionswith Affiliates.

 

### (a)                                  TheIssuer shall not, and shall not permit any of its Restricted Subsidiaries to,make any payment to, or sell, lease, transfer or otherwise dispose of any ofits properties or assets to, or purchase any property or assets from, or enterinto or make or amend any transaction, contract, agreement, understanding,loan, advance or guarantee with, or for the benefit of, any Affiliate of theIssuer (each of the foregoing, an “AffiliateTransaction”) involving aggregate payments or consideration inexcess of $10.0 million, unless:

###  

(1)                                  such AffiliateTransaction is on terms that are not materially less favorable to the Issuer orits relevant Restricted Subsidiary than those that would have been obtained ina comparable transaction by the Issuer or such Restricted Subsidiary with anunrelated Person on an arm’s-length basis; and

 

(2)                                  the Issuer deliversto the Trustee with respect to any Affiliate Transaction or series ofrelated Affiliate Transactions involving aggregate payments or consideration inexcess of $30.0 million, a resolution adopted by the majority of the boardof directors of the Issuer approving such Affiliate Transaction and set forthin an Officer’s Certificate certifying that such Affiliate Transaction complieswith clause (1) of this Section 4.11(a).

 

### (b)                                 Section 4.11(a) hereofshall not apply to the following:

###  

(1)                                  transactions betweenor among the Issuer or any of its Restricted Subsidiaries;

 

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(2)                                  Restricted Paymentspermitted by Section 4.07 hereof and Investments constituting PermittedInvestments;

 

(3)                                  the payment ofmanagement, consulting, monitoring and advisory fees and termination fees andrelated indemnities and expenses pursuant to the Sponsor Management Agreementas in effect on the Issue Date;

 

(4)                                  the payment ofreasonable and customary fees and compensation paid to, and indemnities andreimbursements provided on behalf of, officers, directors, employees orconsultants of the Issuer, any of its direct or indirect parent companies orany of its Restricted Subsidiaries;

 

(5)                                  transactions in whichthe Issuer or any of its Restricted Subsidiaries, as the case may be,delivers to the Trustee a letter from an Independent Financial Advisor statingthat such transaction is fair to the Issuer or such Restricted Subsidiary froma financial point of view or stating that the terms are not materially lessfavorable to the Issuer or its relevant Restricted Subsidiary than those thatwould have been obtained in a comparable transaction by the Issuer or suchRestricted Subsidiary with an unrelated Person on an arm’s-length basis;

 

(6)                                  any agreement as ineffect as of the Issue Date, or any amendment thereto (so long as any suchamendment is not disadvantageous in any material respect to the Holders whentaken as a whole as compared to the applicable agreement as in effect on theIssue Date);

 

(7)                                  the existence of, orthe performance by the Issuer or any of its Restricted Subsidiaries of itsobligations under the terms of, any stockholders agreement (including anyregistration rights agreement or purchase agreement related thereto) to whichit is a party as of the Issue Date and any similar agreements which it may enterinto thereafter; provided, however, that the existenceof, or the performance by the Issuer or any of its Restricted Subsidiaries ofobligations under, any future amendment to any such existing agreement or anysimilar agreement entered into after the Issue Date shall only be permitted bythis clause (7) to the extent that the terms of any such amendment or newagreement are not otherwise disadvantageous in any material respect to theHolders when taken as a whole as compared to the original agreement in effecton the Issue Date;

 

(8)                                  the Transactions andthe payment of all fees and expenses related to the Transactions, includingTransaction Expenses, in each case as disclosed in the Offering Memorandum;

 

(9)                                  transactions withcustomers, clients, suppliers, or purchasers or sellers of goods or services,in each case in the ordinary course of business and otherwise in compliancewith the terms of this Indenture which are fair to the Issuer and itsRestricted Subsidiaries, in the reasonable determination of the board ofdirectors of the Issuer or the senior management thereof, or are on terms atleast as favorable as would reasonably have been obtained at such time from anunaffiliated party;

 

(10)                            the issuance of EquityInterests (other than Disqualified Stock) of the Issuer to any direct orindirect parent of the Issuer or to any Permitted Holder or to any director,officer, employee or consultant of the Issuer, any Subsidiary or any direct orindirect parent of the Issuer;

 

(11)                            sales of accountsreceivable, or participations therein, in connection with any ReceivablesFacility;

 

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(12)                            payments by the Issuer orany of its Restricted Subsidiaries to any of the Investors made for anyfinancial advisory, financing, underwriting or placement services or in respectof other investment banking activities, including, without limitation, inconnection with acquisitions or divestitures which payments are approved by amajority of the board of directors of the Issuer in good faith or are otherwisepermitted by this Indenture;

 

(13)                            payments or loans (orcancellation of loans) to employees or consultants of the Issuer, any of itsdirect or indirect parent companies or any of its Restricted Subsidiaries andemployment agreements, stock option plans and other similar arrangements withsuch employees or consultants which, in each case, are approved by the Issuerin good faith; and

 

(14)                            investments by theInvestors in securities of the Issuer or any of its Restricted Subsidiaries solong as (i) the investment is being offered generally to other investorson the same or more favorable terms and (ii) the investment constitutesless than 5% of the proposed or outstanding issue amount of such class ofsecurities.

 

Section 4.12                                          Liens.

 

The Issuer shallnot, and shall not permit any Guarantor to, directly or indirectly, create,incur, assume or suffer to exist any Lien (except Permitted Liens) that securesobligations under any Indebtedness (or any related guarantee) ranking *pari passu*with or subordinated to the Notes or any Guarantee,on any asset or property of the Issuer or any Guarantor, or any income orprofits therefrom, or assign or convey any right to receive income therefrom,unless:

 

(1)                                  inthe case of Liens securing Subordinated Indebtedness, the Notes and relatedGuarantees are secured by a Lien on such property, assets or proceeds that issenior in priority to such Liens; or

 

(2)                                   inall other cases, the Notes or the Guarantees are equally and ratably secured,except that the foregoing shall not apply to or restrict (a) Lienssecuring the Notes and the related Guarantees, (b) Liens securing SeniorIndebtedness of the Issuer or any Guarantor and (c) Liens securing both Indebtednesspermitted to be incurred under Senior Credit Facilities, including any letterof credit facility relating thereto, that was permitted by the terms of thisIndenture to be incurred and obligations of the Issuer or any Guarantor inrespect of any Bank Products or Cash Management Services provided by any lenderparty to any Senior Credit Facility or any affiliate of such lender (or anyPerson that was a lender or an affiliate of a lender at the time the applicableagreements pursuant to which such Bank Products or Cash Management Services areprovided were entered into).

 

Any Liencreated for the benefit of the Holders of the Notes pursuant to this Section 4.12shall be deemed automatically and unconditionally released and discharged uponthe release and discharge of each of the Liens described in clauses (1) and(2) of this Section 4.12.

 

Section 4.13                                          CorporateExistence.

 

Subject to Article 5hereof, the Issuer shall do or cause to be done all things necessary topreserve and keep in full force and effect its corporate existence, and thecorporate, partnership or other existence of each of its RestrictedSubsidiaries, in accordance with the respective organizational documents (asthe same may be amended from time to time) of the Issuer or any suchRestricted Subsidiary.

 

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Section 4.14                                          Offerto Repurchase Upon Change of Control.

 

### (a)                                  Ifa Change of Control occurs, unless the Issuer has previously or concurrentlymailed a redemption notice with respect to all the outstanding Notes asdescribed under Section 3.07 hereof, the Issuer shall make an offer topurchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at aprice in cash (the “Change ofControl Payment”) equal to 101% of the aggregate principal amountthereof plus accrued and unpaid interest and Additional Interest, if any, tothe date of purchase, subject to the right of Holders of record of the Notes onthe relevant Record Date to receive interest due on the relevant InterestPayment Date. Within 30 days following any Change of Control, the Issuer shallsend notice of such Change of Control Offer by first-class mail, with acopy to the Trustee, to each Holder of Notes to the address of such Holderappearing in the security register or otherwise in accordance with the proceduresof DTC, with the following information:

###  

(1)                                  that a Change ofControl Offer is being made pursuant to this Section 4.14 and that allNotes properly tendered pursuant to such Change of Control Offer will beaccepted for payment by the Issuer;

 

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

 

(3)                                  that any Note notproperly tendered will remain outstanding and continue to accrue interest;

 

(4)                                  that unless theIssuer defaults in the payment of the Change of Control Payment, all Notesaccepted for payment pursuant to the Change of Control Offer will cease toaccrue interest on the Change of Control Payment Date;

 

(5)                                  that Holders electingto have any Notes purchased pursuant to a Change of Control Offer will berequired to surrender such Notes, with the form entitled “Option of Holderto Elect Purchase” on the reverse of such Notes completed, to the paying agentspecified in the notice at the address specified in the notice prior to the closeof business on the third Business Day preceding the Change of Control PaymentDate;

 

(6)                                  that Holders shall beentitled to withdraw their tendered Notes and their election to require theIssuer to purchase such Notes, providedthat the paying agent receives, not later than the close of business on thesecond Business Day prior to the Change of Control Payment Date, a telegram,telex, facsimile transmission or letter setting forth the name of the Holder ofthe Notes, the principal amount of Notes tendered for purchase, and a statementthat such Holder is withdrawing its tendered Notes and its election to havesuch Notes purchased;

 

(7)                                  that if the Issuer isredeeming less than all of the Notes, the Holders of the remaining Notes willbe issued new Notes and such new Notes will be equal in principal amount to theunpurchased portion of the Notes surrendered. The unpurchased portion of theNotes must be equal to $1,000 or an integral multiple thereof; and

 

(8)                                  the otherinstructions, as determined by the Issuer, consistent with this Section 4.14,that a Holder must follow.

 

The notice, ifmailed in a manner herein provided, shall be conclusively presumed to have beengiven, whether or not the Holder receives such notice. If (a) the noticeis mailed in a manner

 

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herein providedand (b) any Holder fails to receive such notice or a Holder receives suchnotice but it is defective, such Holder’s failure to receive such notice orsuch defect shall not affect the validity of the proceedings for the purchaseof the Notes as to all other Holders that properly received such notice withoutdefect. The Issuer shall comply with the requirements of Rule 14e-1 underthe Exchange Act and any other securities laws and regulations thereunder tothe extent such laws or regulations are applicable in connection with therepurchase by the Issuer of Notes pursuant to a Change of Control Offer. To theextent that the provisions of any securities laws or regulations conflict withthe provisions of this Section 4.14, the Issuer shall comply with theapplicable securities laws and regulations and shall not be deemed to havebreached its obligations under this Section 4.14 by virtue thereof.

 

### (b)                                 Onthe Change of Control Payment Date, the Issuer shall, to the extent permittedby law,

###  

(1)                                  accept for paymentall Notes issued by it or portions thereof properly tendered pursuant to the Changeof Control Offer;

 

(2)                                  deposit with thePaying Agent an amount equal to the aggregate Change of Control Payment inrespect of all Notes or portions thereof so tendered; and

 

(3)                                  deliver, or cause tobe delivered, to the Trustee for cancellation the Notes so accepted togetherwith an Officer’s Certificate to the Trustee stating that such Notes orportions thereof have been tendered to and purchased by the Issuer.

 

### (c)                                  Inthe event a Change of Control occurs at a time when the Issuer is prohibited bythe terms of any Senior Indebtedness from purchasing Notes, then notwithstandinganything to the contrary in this Indenture, the Issuer (x) shall have 90 daysfollowing such Change of Control to mail the notice of a Change of ControlOffer to Holders and (y) shall undertake, within 90 days following such Changeof Control, to (1) repay in full all Obligations, and terminate allcommitments, under the Senior Credit Facilities and all other SeniorIndebtedness, the terms of which require repayment and/or termination ofcommitments upon a Change of Control or offer to repay in full all Obligations,and terminate all commitments, under the Senior Credit Facilities and all othersuch Senior Indebtedness and to repay the Obligations owed to (and terminateall commitments of) each lender which has accepted such offer or (2) obtainthe requisite consents under the agreements governing such Senior Indebtednessto permit the repurchase of the Notes.

###  

### (d)                                 TheIssuer shall first comply with Section 4.14(c) hereof before it shallbe required to repurchase Notes pursuant to the provisions of this Section 4.14.The Issuer’s failure to comply with Section 4.14(c) hereof may (withnotice and lapse of time) constitute an Event of Default described in clause (3) ofSection 6.01(a) hereof, but shall not constitute an Event of Defaultdescribed in clause (1), of Section 6.01(a) hereof.

###  

### (e)                                  TheIssuer shall not be required to make a Change of Control Offer following aChange of Control if a third party makes the Change of Control Offer in themanner, at the times and otherwise in compliance with the requirements setforth in this Section 4.14 applicable to a Change of Control Offer made bythe Issuer and purchases all Notes validly tendered and not withdrawn undersuch Change of Control Offer. Notwithstanding anything to the contrary herein,a Change of Control Offer may be made in advance of a Change of Control,conditional upon such Change of Control, if a definitive agreement is in placefor the Change of Control at the time of making of the Change of Control Offer.

###  

### (f)                                    Otherthan as specifically provided in this Section 4.14, any purchase pursuantto this Section 4.14 shall be made pursuant to the provisions of Sections3.02, 3.05 and 3.06 hereof.

 

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Section 4.15                                          Limitationon Guarantees of Indebtedness by Restricted Subsidiaries.

 

The Issuer shallnot permit any of its Wholly-Owned Subsidiaries that are RestrictedSubsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-OwnedSubsidiaries guarantee other capital markets debt securities), other than aGuarantor or a Foreign Subsidiary, to guarantee the payment of any Indebtednessof the Issuer or any other Guarantor unless:

 

(1)                                  suchRestricted Subsidiary within 30 days executes and delivers a supplementalindenture to this Indenture, the form of which is attached as Exhibit Dhereto, providing for a Guarantee by such Restricted Subsidiary, except thatwith respect to a guarantee of Indebtedness of the Issuer or any Guarantor:

 

(a)                                  ifthe Notes or such Guarantor’s Guarantee are subordinated in right of payment tosuch Indebtedness, the Guarantee under the supplemental indenture shall besubordinated to such Restricted Subsidiary’s guarantee with respect to suchIndebtedness substantially to the same extent as the Notes are subordinated tosuch Indebtedness; and

 

(b)                                 ifsuch Indebtedness is by its express terms subordinated in right of payment tothe Notes or such Guarantor’s Guarantee, any such guarantee by such RestrictedSubsidiary with respect to such Indebtedness shall be subordinated in right ofpayment to such Guarantee substantially to the same extent as such Indebtednessis subordinated to the Notes;

 

 (2)                               such RestrictedSubsidiary waives and shall not in any manner whatsoever claim or take thebenefit or advantage of, any rights of reimbursement, indemnity or subrogationor any other rights against the Issuer or any other Restricted Subsidiary as aresult of any payment by such Restricted Subsidiary under its Guarantee; and

 

(3)                                  suchRestricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to theeffect that:

 

(a)                                  suchGuarantee has been duly executed and authorized; and

 

(b)                                 suchGuarantee constitutes a valid, binding and enforceable obligation of suchRestricted Subsidiary, except insofar as enforcement thereof may belimited by bankruptcy, insolvency or similar laws (including, withoutlimitation, all laws relating to fraudulent transfers) and except insofar asenforcement thereof is subject to general principles of equity;

 

provided that this Section 4.15 shall notbe applicable to any guarantee of any Restricted Subsidiary that existed at thetime such Person became a Restricted Subsidiary and was not incurred inconnection with, or in contemplation of, such Person becoming a RestrictedSubsidiary.

 

The Issuer may elect,in its sole discretion, to cause any Subsidiary that is not otherwise requiredto be a Guarantor to become a Guarantor, in which case, such Subsidiary shallonly be required to comply with clauses (1) (other than with respect toany time period) and (2) of this Section 4.15.

 

Section 4.16                                          Dischargeand Suspension of Covenants.

 

### (a)                                  Duringany period of time that (i) the Notes have Investment Grade Ratings fromboth Rating Agencies and (ii) no Default has occurred and is continuingunder this Indenture (the occurrence

 

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### of the events described in theforegoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), theIssuer and the Restricted Subsidiaries shall not be subject to Section 4.07hereof, Section 4.08 hereof, Section 4.09 hereof, Section 4.10hereof, Section 4.11 hereof, Section 4.14 hereof, Section 4.15hereof, Section 4.17 hereof and clause (4) of Section 5.01(a) hereof(the “Suspended Covenants”).

###  

### (b)                                 Inthe event that the Issuer and the Restricted Subsidiaries are not subject tothe Suspended Covenants under this Indenture for any period of time as a resultof the foregoing, and on any subsequent date (the “Reversion Date”) (a) oneor both of the Rating Agencies withdraw their Investment Grade Rating ordowngrade the rating assigned to the Notes below an Investment Grade Rating or (b) theIssuer or any of its Affiliates enters into an agreement to effect atransaction that would result in a Change of Control and one or more of theRating Agencies indicate that if consummated, such transaction (alone ortogether with any related recapitalization or refinancing transactions) wouldcause such Rating Agency to withdraw its Investment Grade Rating or downgradethe ratings assigned to the Notes below an Investment Grade Rating, then theIssuer and the Restricted Subsidiaries shall thereafter again be subject to theSuspended Covenants under this Indenture with respect to future events. Theperiod beginning on the day of a Covenant Suspension Event and ending on aReversion Date is called a “Suspension Period”.

###  

### (c)                                  Oneach Reversion Date, all Indebtedness incurred, or Disqualified Stock or PreferredStock issued, during the Suspension Period will be deemed to have beenoutstanding on the Issue Date, so that it is classified as permitted under Section 4.09(b)(3) hereof.Calculations made after the Reversion Date of the amount available to be madeas Restricted Payments under Section 4.07 hereof will be made as though Section 4.07hereof had been in effect since the Issue Date and throughout the SuspensionPeriod. Accordingly, Restricted Payments made during the Suspension Period willreduce the amount available to be made as Restricted Payments under Section 4.07(a) hereof(but will not reduce any amounts available to be made as Restricted Paymentsunder Section 4.07(b) hereof). However, no Default or Event ofDefault will be deemed to have occurred on the Reversion Date (or thereafter)under any Suspended Covenant solely as a result of any actions taken by the Issueror its Restricted Subsidiaries, or events occurring, during the SuspensionPeriod. For purposes of Section 4.10 hereof, on the Reversion Date, theunutilized Excess Proceeds amount will be reset to zero.

###  

### (d)                                 TheIssuer shall deliver promptly to the Trustee an Officer’s Certificate notifyingit of any such occurrence under this Section 4.16.

###  

Section 4.17                                          Limitationon Layering.

 

The Issuershall not, and shall not permit any Guarantor to, directly or indirectly, incurany Indebtedness (including Acquired Indebtedness) that is subordinate in rightof payment to any Senior Indebtedness of the Issuer or such Guarantor, as thecase may be, unless such Indebtedness is either:

 

(a)                                  equalin right of payment with the Notes or such Guarantor’s Guarantee of the Notes,as the case may be; or

 

(b)                                 expresslysubordinated in right of payment to the Notes or such Guarantor’s Guarantee ofthe Notes, as the case may be.

 

For thepurposes of this Indenture, Indebtedness that is unsecured is not deemed to besubordinated or junior to Secured Indebtedness merely because it is unsecured,and Senior Indebtedness is not deemed to be subordinated or junior to any otherSenior Indebtedness merely because it has a junior priority with respect to thesame collateral.

 

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ARTICLE 5

 

SUCCESSORS

 

Section 5.01                                          Merger,Consolidation or Sale of All or Substantially All Assets.

 

### (a)                                  TheIssuershall not consolidateor merge with or into or wind up into (whether or not the Issuer is the survivingcorporation), or sell, assign, transfer, lease, convey or otherwise dispose ofall or substantially all of its properties or assets, in one or more relatedtransactions, to any Person unless:

###  

(1)                                  either:  (x) the Issuer is the surviving corporation;or (y) the Person formed by or surviving any such consolidation or merger (ifother than the Issuer) or to which such sale, assignment, transfer, lease,conveyance or other disposition will have been made is a corporation organizedor existing under the laws of the jurisdiction of organization of the Issuer orthe laws of the United States, any state thereof, the District of Columbia orany territory thereof (the Issuer or such Person, as the case may be,being herein called the “Successor Company”);

 

(2)                                  the SuccessorCompany, if other than the Issuer, expressly assumes all the obligations of theIssuer under the Notes pursuant to supplemental indentures or other documentsor instruments in form reasonably satisfactory to the Trustee;

 

(3)                                  immediately aftersuch transaction, no Default exists;

 

(4)                                  immediately aftergiving *pro forma* effect to such transaction andany related financing transactions, as if such transactions had occurred at thebeginning of the applicable four-quarter period,

 

(A)                              theSuccessor Company would be permitted to incur at least $1.00 of additionalIndebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof,or

 

(B)                                theFixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiarieswould be greater than the Fixed Charge Coverage Ratio for the Issuer and itsRestricted Subsidiaries immediately prior to such transaction;

 

(5)                                  each Guarantor,unless it is the other party to the transactions described above, in which caseSection 5.01(c)(1)(B) hereof shall apply, shall have by supplementalindenture confirmed that its Guarantee shall apply to such Person’s obligationsunder this Indenture, the Notes and the Registration Rights Agreement; and

 

(6)                                  the Issuer shall havedelivered to the Trustee an Officer’s Certificate and an Opinion of Counsel,each stating that such consolidation, merger or transfer and such supplementalindentures, if any, comply with this Indenture.

 

### (b)                                 TheSuccessor Company shall succeed to, and be substituted for the Issuer, as thecase may be, under this Indenture, the Guarantees and the Notes, asapplicable. Clauses (3), (4), (5) and (6) of Section 5.01(a) hereofshall not apply to the merger contemplated by the Transaction Agreement. Notwithstandingclauses (3) and (4) of Section 5.01(a) hereof,

###  

(x)                                   anyRestricted Subsidiary may consolidate with or merge into or transfer allor part of its properties and assets to the Issuer, and

 

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(y)                                 theIssuer may merge with an Affiliate of the Issuer, as the case may be,solely for the purpose of reincorporating the Issuer in a State of the UnitedStates so long as the amount of Indebtedness of the Issuer and its RestrictedSubsidiaries is not increased thereby.

 

### (c)                                  NoGuarantor shall, and the Issuer shall not permit any Guarantor to, consolidateor merge with or into or wind up into (whether or not the Issuer or Guarantoris the surviving corporation), or sell, assign, transfer, lease, convey orotherwise dispose of all or substantially all of its properties or assets, inone or more related transactions, to any Person unless:

###  

(1)                                  (A) suchGuarantor is the surviving corporation or the Person formed by or surviving anysuch consolidation or merger (if other than such Guarantor) or to which suchsale, assignment, transfer, lease, conveyance or other disposition will havebeen made is a corporation organized or existing under the laws of thejurisdiction of organization of such Guarantor (including, for the avoidance ofdoubt, with respect to any Guarantor organized under the laws of Canada or aprovince or territory thereof, any other province or territory of Canada), asthe case may be, or the laws of the United States, any state thereof, theDistrict of Columbia or any territory thereof (such Guarantor or such Person,as the case may be, being herein called the “Successor Person”);

 

(B)                                theSuccessor Person, if other than such Guarantor, expressly assumes all the obligationsof such Guarantor under this Indenture and such Guarantor’s related Guaranteepursuant to supplemental indentures or other documents or instruments in form reasonablysatisfactory to the Trustee;

 

(C)                                immediatelyafter such transaction, no Default exists; and

 

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

 

(2)                                  thetransaction is made in compliance with clauses (1) and (2) of Section 4.10(a) hereof.

 

### (d)                                 Subjectto certain limitations described in this Indenture, the Successor Person shallsucceed to, and be substituted for, such Guarantor under this Indenture andsuch Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may mergeinto or with or wind up into or transfer all or part of its properties andassets to another Guarantor or the Issuer.

###  

Section 5.02                                          SuccessorCorporation Substituted.

 

Upon anyconsolidation or merger, or any sale, assignment, transfer, lease, conveyanceor other disposition of all or substantially all of the assets of the Issuer inaccordance with Section 5.01 hereof, the successor corporation formed bysuch consolidation or into or with which the Issuer is merged or to which suchsale, assignment, transfer, lease, conveyance or other disposition is made shallsucceed to, and be substituted for (so that from and after the date of suchconsolidation, merger, sale, lease, conveyance or other disposition, the provisionsof this Indenture referring to the Issuer shall refer instead to the successorcorporation and not to the Issuer), and may exercise every right and powerof the Issuer under this Indenture with the same effect as if such successorPerson had been named as the Issuer herein; provided that the predecessorIssuer shall not be relieved from the obligation to pay the principal of andinterest and Additional Interest, if any, on the Notes except in the case of asale, assignment, transfer,

 

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lease, conveyanceor other disposition of all of the Issuer’s assets that meets the requirementsof Section 5.01 hereof.

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

Section 6.01                                          Eventsof Default.

 

### (a)                                  An“Event of Default” wherever used herein, means any one of the followingevents (whatever the reason for such Event of Default and whether it shall bevoluntary or involuntary or be effected by operation of law or pursuant to anyjudgment, decree or order of any court or any order, rule or regulation ofany administrative or governmental body):

###  

(1)                                  default in paymentwhen due and payable, upon redemption, acceleration or otherwise, of principalof, or premium, if any, on the Notes (whether or not prohibited by the subordinationprovisions of this Indenture);

 

(2)                                  default for 30 daysor more in the payment when due of interest or Additional Interest on or withrespect to the Notes (whether or not prohibited by the subordination provisionsof this Indenture);

 

(3)                                  failure by the Issueror any Guarantor for 60 days after receipt of written notice given by theTrustee or the Holders of not less than 25% in principal amount of the Notes tocomply with any of its obligations, covenants or agreements (other than adefault referred to in clauses (1) and (2) above) contained in thisIndenture or the Notes (whether or not prohibited by the subordinationprovisions of this Indenture);

 

(4)                                  default under anymortgage, indenture or instrument under which there is issued or by which thereis secured or evidenced any Indebtedness for money borrowed by the Issuer orany of its Restricted Subsidiaries or the payment of which is guaranteed by theIssuer or any of its Restricted Subsidiaries, other than Indebtedness owed tothe Issuer or a Restricted Subsidiary, whether such Indebtedness or guaranteenow exists or is created after the issuance of the Notes, if both:

 

(a)                                  suchdefault either results from the failure to pay any principal of suchIndebtedness at its stated final maturity (after giving effect to anyapplicable grace periods) or relates to an obligation other than the obligationto pay principal of any such Indebtedness at its stated final maturity andresults in the holder or holders of such Indebtedness causing such Indebtednessto become due prior to its stated maturity; and

 

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

 

(5)                                  failure by the Issuer or any SignificantSubsidiary, or any group of Restricted Subsidiaries that, taken together (as ofthe latest audited consolidated financial statements for the Issuer), wouldconstitute a Significant Subsidiary, to pay final judgments aggregating inexcess of $50.0 million, which final judgments remain unpaid,undischarged and unstayed for a period of

 

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more than 60 days after such judgment becomes final, and in the eventsuch judgment is covered by insurance, an enforcement proceeding has beencommenced by any creditor upon such judgment or decree which is not promptly stayed;

 

(6)                                  the Issuer or any ofits Restricted Subsidiaries that is a Significant Subsidiary or any group ofRestricted Subsidiaries that, taken together (as of the latest auditedconsolidated  financial statements forthe Issuer), would constitute a Significant Subsidiary, pursuant to or within themeaning of any Bankruptcy Law:

 

(i)                                     commencesproceedings to be adjudicated bankrupt or insolvent;

 

(ii)                                  consentsto the institution of bankruptcy or insolvency proceedings against it, or thefiling by it of a petition or answer or consent seeking reorganization orrelief under applicable Bankruptcy Law;

 

(iii)                               consentsto the appointment of a receiver, liquidator, assignee, trustee, sequestratoror other similar official of it or for all or substantially all of itsproperty;

 

(iv)                              makesa general assignment for the benefit of its creditors; or

 

(v)                                 generallyis not paying its debts as they become due;

 

(7)                                  a court of competentjurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                     isfor relief against the Issuer or any of its Restricted Subsidiaries that is aSignificant Subsidiary or any group of Restricted Subsidiaries that, takentogether, would constitute a Significant Subsidiary, in a proceeding in which theIssuer or any such Restricted Subsidiaries, that is a Significant Subsidiary orany group of Restricted Subsidiaries that, taken together (as of the latestaudited consolidated financial statements for the Issuer), would constitute aSignificant Subsidiary, is to be adjudicated bankrupt or insolvent;

 

(ii)                                  appointsa receiver, liquidator, assignee, trustee, sequestrator or other similarofficial of the Issuer or any of its Restricted Subsidiaries that is aSignificant Subsidiary or any group of Restricted Subsidiaries that, taken together(as of the latest audited consolidated  financialstatements for the Issuer), would constitute a Significant Subsidiary, or forall or substantially all of the property of the Issuer or any of its RestrictedSubsidiaries that is a Significant Subsidiary or any group of RestrictedSubsidiaries that, taken together (as of the latest audited consolidated financialstatements for the Issuer), would constitute a Significant Subsidiary; or

 

(iii)                               ordersthe liquidation of the Issuer or any of its Restricted Subsidiaries that is aSignificant Subsidiary or any group of Restricted Subsidiaries that, takentogether (as of the latest audited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary;

 

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

 

(8)                                  the Guarantee of any SignificantSubsidiary, or any group of Restricted Subsidiaries that, taken together (as ofthe latest audited consolidated financial statements for the Issuer),

 

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would constitute a SignificantSubsidiary, shall for any reason cease to be in full force and effect or anyresponsible officer of any Guarantor that is a Significant Subsidiary, or anygroup of Restricted Subsidiaries that, taken together (as of the latest auditedconsolidated financial statements for the Issuer), would constitute aSignificant Subsidiary, as the case may be, denies that it has any furtherliability under its or their Guarantee(s) or gives notice to such effect, otherthan by reason of the termination of this Indenture or the release of any suchGuarantee in accordance with this Indenture.

 

### (b)                                 Inthe event of any Event of Default specified in clause (4) of Section 6.01(a) hereof,such Event of Default and all consequences thereof (excluding any resultingpayment default, other than as a result of acceleration of the Notes) shall beannulled, waived and rescinded, automatically and without any action by theTrustee or the Holders, if within 20 days after such Event of Default arose:

###  

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

 

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

 

(3)                                  the default that isthe basis for such Event of Default has been cured.

 

Section 6.02                                          Acceleration.

 

If any Event of Default (other than an Event of Default specified inclause (6) or (7) of Section 6.01(a) hereof with respect tothe Issuer) occurs and is continuing under this Indenture, the Trustee or theHolders of at least 25% in principal amount of the then total outstanding Notesmay declare the principal, premium, if any, interest and any othermonetary obligations on all the then outstanding Notes to be due and payableimmediately; provided, however, that so long as any Indebtednesspermitted to be incurred under this Indenture as part of the Senior CreditFacilities shall be outstanding, no such acceleration shall be effective untilthe earlier of:

 

(1) accelerationof any such Indebtedness under the Senior Credit Facilities; or

 

### (2) five Business Days after the givingof written notice of such acceleration to the Issuer and the Representative undereach of the Senior Credit Facilities.

###  

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

 

Notwithstandingthe foregoing, in the case of an Event of Default arising under clause (6) or(7) of Section 6.01(a) hereof with respect to the Issuer, alloutstanding Notes shall be due and payable immediately without further actionor notice.

 

The Holders ofa majority in aggregate principal amount of the then outstanding Notes by writtennotice to the Trustee may on behalf of all of the Holders rescind an accelerationand its consequences:

 

(1)                                  ifthe rescission would not conflict with any judgment or decree;

 

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(2)                                  ifall existing Events of Default have been cured, waived, annulled or rescindedexcept nonpayment of principal interest, Additional Interest, if any, orpremium that has become due solely because of the acceleration;

 

(3)                                  tothe extent the payment of such interest is lawful, interest on overdue installmentsof interest and overdue principal, which has become due otherwise than by suchdeclaration of acceleration, has been paid; and

 

### (4)                                  if the Issuer haspaid the Trustee its reasonable compensation and reimbursed the Trustee for itsexpenses, disbursements and advances.

###  

Section 6.03                                          OtherRemedies.

 

If an Event ofDefault occurs and is continuing, the Trustee may pursue any availableremedy to collect the payment of principal, premium, if any, and interest onthe Notes or to enforce the performance of any provision of the Notes or thisIndenture.

 

The Trustee may maintaina proceeding even if it does not possess any of the Notes or does not produceany of them in the proceeding. A delay or omission by the Trustee or any Holderof a Note in exercising any right or remedy accruing upon an Event of Defaultshall not impair the right or remedy or constitute a waiver of or acquiescencein the Event of Default. All remedies are cumulative to the extent permitted bylaw.

 

Section 6.04                                          Waiverof Past Defaults.

 

Holders of notless than a majority in aggregate principal amount of the then outstandingNotes by notice to the Trustee may on behalf of the Holders of all of theNotes waive any existing Default and its consequences hereunder, except acontinuing Default in the payment of the principal of, premium, if any, AdditionalInterest, if any, or interest on, any Note held by a non-consenting Holder (includingin connection with an Asset Sale Offer or a Change of Control Offer); provided,subject to Section 6.02 hereof, that the Holders of a majority inaggregate principal amount of the then outstanding Notes may rescind anacceleration and its consequences, including any related payment default thatresulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event ofDefault arising therefrom shall be deemed to have been cured for every purposeof this Indenture; but no such waiver shall extend to any subsequent or otherDefault or impair any right consequent thereto.

 

Section 6.05                                          Controlby Majority.

 

Holders of amajority in principal amount of the then total outstanding Notes may directthe time, method and place of conducting any proceeding for any remedyavailable to the Trustee or of exercising any trust or power conferred on theTrustee. The Trustee, however, may refuse to follow any direction that conflictswith law or this Indenture or that the Trustee determines is unduly prejudicialto the rights of any other Holder of a Note or that would involve the Trusteein personal liability.

 

Section 6.06                                          Limitationon Suits.

 

Subject to Section 6.07 hereof, no Holder of a Note may pursueany remedy with respect to this Indenture or the Notes unless:

 

(1)                                  such Holder haspreviously given the Trustee notice that an Event of Default is continuing;

 

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

 

(3)                                  Holders of the Noteshave offered the Trustee security or indemnity reasonably satisfactory to it againstany loss, liability or expense;

 

(4)                                  the Trustee has notcomplied with such request within 60 days after the receipt thereof and theoffer of security or indemnity; and

 

(5)                                  Holders of a majorityin principal amount of the total outstanding Notes have not given the Trustee adirection inconsistent with such request within such 60-day period.

 

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

 

Section 6.07                                          Rightsof Holders of Notes To Receive Payment.

 

Notwithstandingany other provision of this Indenture, the right of any Holder of a Note toreceive payment of principal, premium, if any, and Additional Interest, if any,and interest on the Note, on or after the respective due dates expressed in theNote (including in connection with an Asset Sale Offer or a Change of ControlOffer), or to bring suit for the enforcement of any such payment on or aftersuch respective dates, shall not be impaired or affected without the consent ofsuch Holder.

 

Section 6.08                                          CollectionSuit by Trustee.

 

If an Event ofDefault specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, theTrustee is authorized to recover judgment in its own name and as trustee of anexpress trust against the Issuer for the whole amount of principal of, premium,if any, and Additional Interest, if any, and interest remaining unpaid on theNotes and interest on overdue principal and, to the extent lawful, interest andsuch further amount as shall be sufficient to cover the costs and expenses ofcollection, including the reasonable compensation, expenses, disbursements andadvances of the Trustee, its agents and counsel.

 

Section 6.09                                          Restorationof Rights and Remedies.

 

If the Trusteeor any Holder has instituted any proceeding to enforce any right or remedyunder this Indenture and such proceeding has been discontinued or abandoned forany reason, or has been determined adversely to the Trustee or to such Holder,then and in every such case, subject to any determination in such proceedings, theIssuer, the Trustee and the Holders shall be restored severally and respectivelyto their former positions hereunder and thereafter all rights and remedies ofthe Trustee and the Holders shall continue as though no such proceeding hasbeen instituted.

 

Section 6.10                                          Rightsand Remedies Cumulative.

 

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

 

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Section 6.11                                          Delayor Omission Not Waiver.

 

No delay oromission of the Trustee or of any Holder of any Note to exercise any right orremedy accruing upon any Event of Default shall impair any such right or remedyor constitute a waiver of any such Event of Default or an acquiescence therein.Every right and remedy given by this Article or by law to the Trustee orto the Holders may be exercised from time to time, and as often as may bedeemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.12                                          TrusteeMay File Proofs of Claim.

 

The Trustee isauthorized to file such proofs of claim and other papers or documents as may benecessary or advisable in order to have the claims of the Trustee (includingany claim for the reasonable compensation, expenses, disbursements and advancesof the Trustee, its agents and counsel) and the Holders of the Notes allowed inany judicial proceedings relative to the Issuer (or any other obligor upon theNotes including the Guarantors), its creditors or its property and shall beentitled and empowered to participate as a member in any official committee ofcreditors appointed in such matter and to collect, receive and distribute anymoney or other property payable or deliverable on any such claims and anycustodian in any such judicial proceeding is hereby authorized by each Holderto make such payments to the Trustee, and in the event that the Trustee shallconsent to the making of such payments directly to the Holders, to pay to theTrustee any amount due to it for the reasonable compensation, expenses, disbursementsand advances of the Trustee, its agents and counsel, and any other amounts duethe Trustee under Section 7.07 hereof. To the extent that the payment ofany such compensation, expenses, disbursements and advances of the Trustee, itsagents and counsel, and any other amounts due the Trustee under Section 7.07hereof 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 propertiesthat the Holders may be entitled to receive in such proceeding whether inliquidation or under any plan of reorganization or arrangement or otherwise. Nothingherein contained shall be deemed to authorize the Trustee to authorize orconsent 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 anyHolder, or to authorize the Trustee to vote in respect of the claim of anyHolder in any such proceeding.

 

Section 6.13                                          Priorities.

 

If the Trusteecollects any money pursuant to this Article 6, it shall pay out the moneyin the following order:

 

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

####  

#### (ii)                                  to holders of SeniorIndebtedness of the Issuer and, if such money or property has been collectedfrom a Guarantor, to holders of Senior Indebtedness of such Guarantor, in eachcase to the extent required by Article 10 and/or Article 12 hereof,as applicable;

####  

#### (iii)                               to Holders of Notes foramounts due and unpaid on the Notes for principal, premium, if any, and AdditionalInterest, if any, and interest, ratably, without preference or priority of anykind, according to the amounts due and payable on the Notes for principal,premium, if any, and Additional Interest, if any, and interest, respectively;and

 

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#### (iv)                              to the Issuer or to suchparty as a court of competent jurisdiction shall direct including a Guarantor,if applicable.

####  

The Trustee may fixa record date and payment date for any payment to Holders of Notes pursuant tothis Section 6.13.

 

Section 6.14                                          Undertakingfor Costs.

 

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

 

ARTICLE 7

 

TRUSTEE

 

Section 7.01                                          Dutiesof Trustee.

 

### (a)                                  Ifan Event of Default has occurred and is continuing, the Trustee shall exercisesuch of the rights and powers vested in it by this Indenture, and use the samedegree of care and skill in its exercise, as a prudent person would exercise oruse under the circumstances in the conduct of such person’s own affairs.

###  

### (b)                                 Exceptduring the continuance of an Event of Default:

###  

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

####  

#### (ii)                                  in the absence of badfaith on its part, the Trustee may conclusively rely, as to the truth ofthe statements and the correctness of the opinions expressed therein, uponcertificates or opinions furnished to the Trustee and conforming to therequirements of this Indenture. However, in the case of any such certificatesor opinions which by any provision hereof are specifically required to befurnished to the Trustee, the Trustee shall examine the certificates andopinions to determine whether or not they conform to the requirements ofthis Indenture (but need not confirm or investigate the accuracy ofmathematical calculations or other facts stated therein).

####  

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

###  

#### (i)                                     this paragraph (c) doesnot limit the effect of paragraph (b) of this Section 7.01;

####  

#### (ii)                                  the Trustee shall notbe liable for any error of judgment made in good faith by a ResponsibleOfficer, unless it is proved in a court of competent jurisdiction that theTrustee was negligent in ascertaining the pertinent facts; and

 

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

####  

### (d)                                 Whetheror not therein expressly so provided, every provision of this Indenture that inany way relates to the Trustee is subject to this Section 7.01.

###  

### (e)                                  TheTrustee shall be under no obligation to exercise any of its rights or powersunder this Indenture at the request or direction of any of the Holders of theNotes unless the Holders have offered to the Trustee indemnity or security reasonablysatisfactory to it against any loss, liability or expense.

###  

### (f)                                    TheTrustee shall not be liable for interest on any money received by it except asthe Trustee may agree in writing with the Issuer. Money held in trust bythe Trustee need not be segregated from other funds except to the extentrequired by law.

###  

Section 7.02                                          Rightsof Trustee.

 

### (a)                                  TheTrustee may conclusively rely upon any document believed by it to begenuine and to have been signed or presented by the proper Person. The Trusteeneed not investigate any fact or matter stated in the document, but the Trustee,in its discretion, may make such further inquiry or investigation into suchfacts or matters as it may see fit, and, if the Trustee shall determine tomake such further inquiry or investigation, it shall be entitled to examine thebooks, records and premises of the Issuer, personally or by agent or attorney atthe sole cost of the Issuer and shall incur no liability or additional liabilityof any kind by reason of such inquiry or investigation.

###  

### (b)                                 Beforethe Trustee acts or refrains from acting, it may require an Officer’sCertificate or an Opinion of Counsel or both. The Trustee shall not be liablefor any action it takes or omits to take in good faith in reliance on such Officer’sCertificate or Opinion of Counsel. The Trustee may consult with counsel ofits selection and the advice of such counsel or any Opinion of Counsel shall befull and complete authorization and protection from liability in respect of anyaction taken, suffered or omitted by it hereunder in good faith and in reliancethereon.

###  

### (c)                                  TheTrustee may act through its attorneys and agents and shall not be responsiblefor the misconduct or negligence of any agent or attorney appointed with duecare.

###  

### (d)                                 TheTrustee shall not be liable for any action it takes or omits to take in goodfaith that it believes to be authorized or within the rights or powersconferred upon it by this Indenture.

###  

### (e)                                  Unlessotherwise specifically provided in this Indenture, any demand, request,direction or notice from the Issuer shall be sufficient if signed by an Officerof the Issuer.

###  

### (f)                                    Noneof the provisions of this Indenture shall require the Trustee to expend or riskits own funds or otherwise to incur any liability, financial or otherwise, inthe performance of any of its duties hereunder, or in the exercise of any ofits rights or powers if it shall have reasonable grounds for believing thatrepayment of such funds or indemnity satisfactory to it against such risk orliability is not assured to it.

###  

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

 

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### (h)                                 Inno event shall the Trustee be responsible or liable for special, indirect, orconsequential loss or damage of any kind whatsoever (including, but not limitedto, loss of profit) irrespective of whether the Trustee has been advised of thelikelihood of such loss or damage and regardless of the form of action.

###  

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

###  

### (j)                                     Inthe event the Issuer is required to pay Additional Interest, the Issuer willprovide written notice to the Trustee of the Issuer’s obligation to payAdditional Interest no later than 15 days prior to the next Interest Payment Date,which notice shall set forth the amount of the Additional Interest to be paidby the Issuer. The Trustee shall not at any time be under any duty orresponsibility to any Holders to determine whether the Additional Interest ispayable and the amount thereof.

###  

Section 7.03                                          IndividualRights of Trustee.

 

The Trustee inits individual or any other capacity may become the owner or pledgee ofNotes and may otherwise deal with the Issuer or any Affiliate of theIssuer with the same rights it would have if it were not Trustee. However, in theevent that the Trustee acquires any conflicting interest it must eliminate suchconflict within 90 days, apply to the SEC for permission to continue as trusteeor resign. Any Agent may do the same with like rights and duties. The Trusteeis also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04                                          Trustee’sDisclaimer.

 

The Trusteeshall not be responsible for and makes no representation as to the validity oradequacy of this Indenture or the Notes, it shall not be accountable for theIssuer’s use of the proceeds from the Notes or any money paid to the Issuer orupon the Issuer’s direction under any provision of this Indenture, it shall notbe responsible for the use or application of any money received by any PayingAgent other than the Trustee, and it shall not be responsible for any statementor recital herein or any statement in the Notes or any other document inconnection with the sale of the Notes or pursuant to this Indenture other thanits certificate of authentication.

 

Section 7.05                                          Noticeof Defaults.

 

If a Defaultoccurs and is continuing and if it is known to the Trustee, the Trustee shallmail to Holders of Notes a notice of the Default within 90 days after it occurs.Except in the case of a Default relating to the payment of principal, premium,if any, or interest on any Note, the Trustee may withhold from the Holdersnotice of any continuing Default if and so long as a committee of itsResponsible Officers in good faith determines that withholding the notice is inthe interests of the Holders of the Notes.

 

Section 7.06                                          Reportsby Trustee to Holders of the Notes.

 

Within 60 daysafter each May 15, beginning with the May 15 following the date ofthis Indenture, and for so long as Notes remain outstanding, the Trustee shallmail to the Holders of the Notes a brief report dated as of such reporting datethat complies with Trust Indenture Act Section 313(a) (but if noevent described in Trust Indenture Act Section 313(a) has occurredwithin the twelve months preceding the reporting date, no report need betransmitted). The Trustee also shall comply with Trust Indenture

 

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Act Section 313(b)(2).The Trustee shall also transmit by mail all reports as required by TrustIndenture Act Section 313(c).

 

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

 

Section 7.07                                          Compensationand Indemnity.

 

The Issuershall pay to the Trustee from time to time such compensation for its acceptanceof this Indenture and services hereunder as the parties shall agree in writingfrom time to time. The Trustee’s compensation shall not be limited by any lawon compensation of a trustee of an express trust. The Issuer shall reimbursethe Trustee promptly upon request for all reasonable disbursements, advancesand expenses incurred or made by it in addition to the compensation for itsservices. Such expenses shall include the reasonable compensation,disbursements and expenses of the Trustee’s agents and counsel.

 

The Issuer andthe Guarantors, jointly and severally, shall indemnify the Trustee for, andhold the Trustee harmless against, any and all loss, damage, claims, liabilityor expense (including attorneys’ fees) incurred by it in connection with theacceptance or administration of this trust and the performance of its dutieshereunder (including the costs and expenses of enforcing this Indenture againstthe Issuer or any of the Guarantors (including this Section 7.07) ordefending itself against any claim whether asserted by any Holder, the Issueror any Guarantor, or liability in connective with the acceptance, exercise orperformance of any of its powers or duties hereunder). The Trustee shall notifythe Issuer promptly of any claim for which it may seek indemnity. Failureby the Trustee to so notify the Issuer shall not relieve the Issuer of itsobligations hereunder. The Issuer shall defend the claim and the Trustee may haveseparate counsel and the Issuer shall pay the fees and expenses of such counsel.The Issuer need not reimburse any expense or indemnify against any loss,liability or expense incurred by the Trustee through the Trustee’s own willfulmisconduct, negligence or bad faith.

 

Theobligations of the Issuer under this Section 7.07 shall survive the satisfactionand discharge of this Indenture or the earlier resignation or removal of theTrustee.

 

To secure the paymentobligations of the Issuer and the Guarantors in this Section 7.07, theTrustee shall have a Lien prior to the Notes on all money or property held orcollected by the Trustee, except that held in trust to pay principal andinterest on particular Notes. Such Lien shall survive the satisfaction and dischargeof this Indenture.

 

When theTrustee incurs expenses or renders services after an Event of Default specifiedin Section 6.01(a)(6) or (7) hereof occurs, the expenses and thecompensation for the services (including the fees and expenses of its agentsand counsel) are intended to constitute expenses of administration under any BankruptcyLaw.

 

The Trusteeshall comply with the provisions of Trust Indenture Act Section 313(b)(2) tothe extent applicable.

 

Section 7.08                                          Replacementof Trustee.

 

A resignationor removal of the Trustee and appointment of a successor Trustee shall becomeeffective only upon the successor Trustee’s acceptance of appointment asprovided in this Section 7.08. The Trustee may resign in writing atany time and be discharged from the trust hereby created by so

 

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notifying theIssuer. The Holders of a majority in principal amount of the then outstandingNotes may remove the Trustee by so notifying the Trustee and the Issuer inwriting. The Issuer may remove the Trustee if:

 

(a)                                  the Trustee fails tocomply with Section 7.10 hereof;

 

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

 

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

 

(d)                                 the Trustee becomesincapable of acting.

 

If the Trusteeresigns or is removed or if a vacancy exists in the office of Trustee for anyreason, the Issuer shall promptly appoint a successor Trustee. Within one yearafter the successor Trustee takes office, the Holders of a majority in principalamount of the then outstanding Notes may appoint a successor Trustee to replacethe successor Trustee appointed by the Issuer.

 

If a successorTrustee does not take office within 60 days after the retiring Trustee resignsor is removed, the retiring Trustee (at the Issuer’s expense), the Issuer orthe Holders of at least 10% in principal amount of the then outstanding Notes may petitionany court of competent jurisdiction for the appointment of a successor Trustee.

 

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

 

A successor Trusteeshall deliver a written acceptance of its appointment to the retiring Trusteeand to the Issuer. Thereupon, the resignation or removal of the retiringTrustee shall become effective, and the successor Trustee shall have all therights, powers and duties of the Trustee under this Indenture. The successorTrustee shall mail a notice of its succession to Holders. The retiring Trusteeshall promptly transfer all property held by it as Trustee to the successorTrustee; provided all sums owing to the Trustee hereunder have been paidand subject to the Lien provided for in Section 7.07 hereof. Notwithstandingreplacement of the Trustee pursuant to this Section 7.08, the Issuer’sobligations under Section 7.07 hereof shall continue for the benefit ofthe retiring Trustee.

 

Section 7.09                                          SuccessorTrustee by Merger, etc.

 

If the Trusteeconsolidates, merges or converts into, or transfers all or substantially all ofits corporate trust business to, another corporation, the successor corporationwithout any further act shall be the successor Trustee.

 

Section 7.10                                          Eligibility;Disqualification.

 

There shall atall times be a Trustee hereunder that is a corporation organized and doingbusiness under the laws of the United States of America or of any state thereofthat is authorized under such laws to exercise corporate trustee power, that issubject to supervision or examination by federal or state authorities and thathas a combined capital and surplus of at least $50,000,000 as set forth in itsmost recent published annual report of condition.

 

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

 

Section 7.11                                          PreferentialCollection of Claims Against Issuer.

 

The Trustee issubject to Trust Indenture Act Section 311(a), excluding any creditor relationshiplisted in Trust Indenture Act Section 311(b). A Trustee who has resignedor been removed shall be subject to Trust Indenture Act Section 311(a) tothe extent indicated therein.

 

ARTICLE 8

 

LEGAL DEFEASANCE AND COVENANTDEFEASANCE

 

Section 8.01                                          OptionTo Effect Legal Defeasance or Covenant Defeasance.

 

The Issuermay, at its option and at any time, elect to have either Section 8.02 or8.03 hereof applied to all outstanding Notes upon compliance with theconditions set forth below in this Article 8.

 

Section 8.02                                          LegalDefeasance and Discharge.

 

Upon theIssuer’s exercise under Section 8.01 hereof of the option applicable tothis Section 8.02, the Issuer and the Guarantors shall, subject to thesatisfaction of the conditions set forth in Section 8.04 hereof, be deemedto have been discharged from their obligations with respect to all outstandingNotes and Guarantees on the date the conditions set forth below are satisfied (“LegalDefeasance”). For this purpose, Legal Defeasance means that the Issuershall be deemed to have paid and discharged the entire Indebtedness representedby the outstanding Notes, which shall thereafter be deemed to be “outstanding”only for the purposes of Section 8.05 hereof and the other Sections ofthis Indenture referred to in (a) and (b) below, and to have satisfiedall its other obligations under such Notes and this Indenture including that ofthe Guarantors (and the Trustee, on demand of and at the expense of the Issuer,shall execute proper instruments acknowledging the same), except for thefollowing provisions which shall survive until otherwise terminated ordischarged hereunder:

 

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

 

(b)                                 the Issuer’sobligations with respect to Notes concerning issuing temporary Notes,registration of such Notes, mutilated, destroyed, lost or stolen Notes and themaintenance of an office or agency for payment and money for security paymentsheld in trust;

 

(c)                                  the rights, powers,trusts, duties and immunities of the Trustee, and the Issuer’s obligations inconnection therewith; and

 

(d)                                 this Section 8.02.

 

Subject tocompliance with this Article 8, the Issuer may exercise its optionunder this Section 8.02 notwithstanding the prior exercise of its option underSection 8.03 hereof.

 

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Section 8.03                                          CovenantDefeasance.

 

Upon theIssuer’s exercise under Section 8.01 hereof of the option applicable tothis Section 8.03, the Issuer and the Guarantors shall, subject to thesatisfaction of the conditions set forth in Section 8.04 hereof, be releasedfrom their obligations under the covenants contained in Sections 4.03, 4.04, 4.05,4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.17 hereof and clauses(4) and (5) of Section 5.01(a), Sections 5.01(c) and 5.01(d) hereofwith respect to the outstanding Notes on and after the date the conditions setforth in Section 8.04 hereof are satisfied (“Covenant Defeasance”),and the Notes shall thereafter be deemed not “outstanding” for the purposes ofany direction, waiver, consent or declaration or act of Holders (and theconsequences of any thereof) in connection with such covenants, but shallcontinue to be deemed “outstanding” for all other purposes hereunder (it beingunderstood that such Notes shall not be deemed outstanding for accounting purposes).For this purpose, Covenant Defeasance means that, with respect to theoutstanding Notes, the Issuer may omit to comply with and shall have noliability in respect of any term, condition or limitation set forth in any suchcovenant, whether directly or indirectly, by reason of any reference elsewhereherein to any such covenant or by reason of any reference in any such covenantto any other provision herein or in any other document and such omission tocomply shall not constitute a Default or an Event of Default under Section 6.01hereof, but, except as specified above, the remainder of this Indenture andsuch Notes shall be unaffected thereby. In addition, upon the Issuer’s exerciseunder Section 8.01 hereof of the option applicable to this Section 8.03hereof, subject to the satisfaction of the conditions set forth in Section 8.04hereof, Sections 6.01(a)(3), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect toRestricted Subsidiaries subject thereto), 6.01(a)(7) (solely with respectto Restricted Subsidiaries subject thereto) and 6.01(a)(8) hereof shallnot constitute Events of Default.

 

Section 8.04                                          Conditionsto Legal or Covenant Defeasance.

 

In order toexercise either Legal Defeasance or Covenant Defeasance with respect to theNotes:

 

(1)                                  the Issuer mustirrevocably deposit with the Trustee, in trust, for the benefit of the Holdersof the Notes, cash in U.S. dollars, Government Securities, or a combinationthereof, in such amounts as will be sufficient, in the opinion of a nationallyrecognized firm of independent public accountants, to pay the principal of,premium, if any, and interest due on the Notes on the stated maturity date oron the redemption date, as the case may be, of such principal, premium, ifany, or interest on such Notes and the Issuer must specify whether such Notesare being defeased to maturity or to a particular redemption date;

 

(2)                                  in the case of LegalDefeasance, the Issuer shall have delivered to the Trustee an Opinion ofCounsel reasonably acceptable to the Trustee confirming that, subject tocustomary assumptions and exclusions,

 

(a)                                  theIssuer has received from, or there has been published by, the United StatesInternal Revenue Service a ruling, or

 

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

 

in either case to the effect that, and based thereon such Opinion ofCounsel shall confirm that, subject to customary assumptions and exclusions,the Holders of the Notes will not recognize income, gain or loss for U.S.federal income tax purposes, as applicable, as a result of such LegalDefeasance and will be subject to U.S. federal income tax on the same amounts,in the same

 

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manner and at the same times as would have been the case if such LegalDefeasance had not occurred;

 

(3)                                  in the case ofCovenant Defeasance, the Issuer shall have delivered to the Trustee an Opinionof Counsel reasonably acceptable to the Trustee confirming that, subject tocustomary assumptions and exclusions, the Holders of the Notes will notrecognize income, gain or loss for U.S. federal income tax purposes as a resultof such Covenant Defeasance and will be subject to such tax on the sameamounts, in the same manner and at the same times as would have been the caseif such Covenant Defeasance had not occurred;

 

(4)                                  no Default (other than that resultingfrom borrowing funds to be applied to make such deposit and any similar andsimultaneous deposit relating to other Indebtedness including the Senior Notesand the Subordinated Discount Notes, and in each case the granting of Liens inconnection therewith) shall have occurred and be continuing on the date of suchdeposit;

 

(5)                                  such Legal Defeasance or CovenantDefeasance shall not result in a breach or violation of, or constitute adefault under the Senior Credit Facilities, the Senior Notes or the indenturepursuant to which the Senior Notes are issued, the Subordinated Discount Notesor the indenture pursuant to which the Subordinated Discount Notes are issuedor any other material agreement or instrument (other than this Indenture) towhich the Issuer or any Guarantor is a party or by which the Issuer or anyGuarantor is bound  (other than that resultingfrom any borrowing of funds to be applied to make the deposit required toeffect such Legal Defeasance or Covenant Defeasance and any similar andsimultaneous deposit relating to other Indebtedness, including the Senior Notesand the Subordinated Discount Notes, and the granting of Liens in connectiontherewith);

 

(6)                                  the Issuer shall havedelivered to the Trustee an Opinion of Counsel to the effect that, as of thedate of such opinion and subject to customary assumptions and exclusions followingthe deposit, the trust funds will not be subject to the effect of Section 547of Title 11 of the United States Code;

 

(7)                                  the Issuer shall havedelivered to the Trustee an Officer’s Certificate stating that the deposit wasnot made by the Issuer with the intent of defeating, hindering, delaying ordefrauding any creditors of the Issuer or any Guarantor or others; and

 

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

 

Section 8.05                                          DepositedMoney and Government Securities To Be Held in Trust; Other MiscellaneousProvisions.

 

Subject to Section 8.06hereof, all money and Government Securities (including the proceeds thereof)deposited with the Trustee (or other qualifying trustee, collectively for purposesof this Section 8.05, the “Trustee”) pursuant to Section 8.04hereof in respect of the outstanding Notes shall be held in trust and appliedby the Trustee, in accordance with the provisions of such Notes and thisIndenture, to the payment, either directly or through any Paying Agent(including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine,to the Holders of such Notes of all sums due and to become due thereon inrespect of principal, premium and Additional Interest, if any, and interest,but such money need not be segregated from other funds except to the extentrequired by law. Money and Government

 

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Securities soheld in trust are not subject to Article 10 or Article 12 hereof,except as contemplated by Section 10.12 or Section 12.12, as the casemay be.

 

The Issuershall pay and indemnify the Trustee against any tax, fee or other chargeimposed on or assessed against the cash or Government Securities depositedpursuant to Section 8.04 hereof or the principal and interest received inrespect thereof other than any such tax, fee or other charge which by law isfor the account of the Holders of the outstanding Notes.

 

Anything inthis Article 8 to the contrary notwithstanding, the Trustee shall deliveror pay to the Issuer from time to time upon the request of the Issuer any moneyor Government Securities held by it as provided in Section 8.04 hereofwhich, in the opinion of a nationally recognized firm of independent publicaccountants expressed in a written certification thereof delivered to theTrustee (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 depositedto effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06                                          Repaymentto Issuer.

 

Any moneydeposited with the Trustee or any Paying Agent, or then held by the Issuer, intrust for the payment of the principal of, premium and Additional Interest, ifany, or interest on any Note and remaining unclaimed for two years after suchprincipal, and premium and Additional Interest, if any, or interest has becomedue and payable shall be paid to the Issuer on its request or (if then held by theIssuer) shall be discharged from such trust; and the Holder of such Note shallthereafter look only to the Issuer for payment thereof, and all liability ofthe Trustee or such Paying Agent with respect to such trust money, and allliability of the Issuer as trustee thereof, shall thereupon cease.

 

Section 8.07                                          Reinstatement.

 

If the Trusteeor Paying Agent is unable to apply any United States dollars or GovernmentSecurities 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 authorityenjoining, restraining or otherwise prohibiting such application, then theIssuer’s obligations under this Indenture and the Notes shall be revived andreinstated as though no deposit had occurred pursuant to Section 8.02 or8.03 hereof until such time as the Trustee or Paying Agent is permitted toapply all such money in accordance with Section 8.02 or 8.03 hereof, asthe case may be; provided that, if the Issuer makes any payment of principalof, premium and Additional Interest, if any, or interest on any Note followingthe reinstatement of its obligations, the Issuer shall be subrogated to therights of the Holders of such Notes to receive such payment from the money heldby the Trustee or Paying Agent.

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT ANDWAIVER

 

Section 9.01                                          WithoutConsent of Holders of Notes.

 

NotwithstandingSection 9.02 hereof, the Issuer, any Guarantor (with respect to aGuarantee to which it is party or this Indenture) and the Trustee may amendor supplement this Indenture and any Guarantee or Notes without the consent ofany Holder:

 

(1)                                  to cure anyambiguity, omission, mistake, defect or inconsistency;

 

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(2)                                  to provide foruncertificated Notes of such series in addition to or in place of certificatedNotes;

 

(3)                                  to comply with Section 5.01hereof;

 

(4)                                  to provide for theassumption of the Issuer’s or any Guarantor’s obligations to the Holders in atransaction that complies with this Indenture;

 

(5)                                  to make any changethat would provide any additional rights or benefits to the Holders or thatdoes not adversely affect the legal rights under this Indenture of any suchHolder;

 

(6)                                  to add covenants forthe benefit of the Holders or to surrender any right or power conferred uponthe Issuer or any Guarantor;

 

(7)                                  to comply withrequirements of the SEC in order to effect or maintain the qualification of thisIndenture under the Trust Indenture Act;

 

(8)                                  to evidence andprovide for the acceptance and appointment under this Indenture of a successorTrustee thereunder pursuant to the requirements thereof;

 

(9)                                  to provide for theissuance of exchange notes or private exchange notes, which are identical to exchangenotes except that they are not freely transferable;

 

(10)                            to add a Guarantor under thisIndenture;

 

(11)                            to conform the text ofthis Indenture, Guarantees or the Notes to any provision of the “Description ofSenior Subordinated Notes” section of the Offering Memorandum to theextent that such provision in such “Description of Senior Subordinated Notes” section wasintended to be a verbatim recitation of a provision of this Indenture,Guarantee or Notes; or

 

(12)                            to make any amendment tothe provisions of this Indenture relating to the transfer and legending ofNotes as permitted by this Indenture, including, without limitation tofacilitate the issuance and administration of the Notes; provided, however, that (i) compliancewith this Indenture as so amended would not result in Notes being transferredin violation of the Securities Act or any applicable securities law and (ii) suchamendment does not materially and adversely affect the rights of Holders totransfer Notes.

 

Upon therequest of the Issuer accompanied by a resolution of its board of directors authorizingthe execution of any such amended or supplemental indenture, and upon receiptby the Trustee of the documents described in Section 7.02 hereof, theTrustee shall join with the Issuer and the Guarantors in the execution of anyamended or supplemental indenture authorized or permitted by the terms of thisIndenture and to make any further appropriate agreements and stipulations that may betherein contained, but the Trustee shall not be obligated to enter into suchamended or supplemental indenture that affects its own rights, duties orimmunities under this Indenture or otherwise. Notwithstanding the foregoing, noOpinion of Counsel shall be required in connection with the addition of a Guarantorunder this Indenture upon execution and delivery by such Guarantor and theTrustee of a supplemental indenture to this Indenture, the form of whichis attached as Exhibit D hereto, and delivery of an Officer’sCertificate.

 

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Section 9.02                                          WithConsent of Holders of Notes.

 

Except asprovided below in this Section 9.02, the Issuer and the Trustee may amendor supplement this Indenture, the Notes and the Guarantees with the consent ofthe Holders of at least a majority in principal amount of the Notes (including AdditionalNotes, if any) then outstanding voting as a single class (including,without limitation, consents obtained in connection with a tender offer orexchange offer for, or purchase of, the Notes), and, subject to Sections 6.04and 6.07 hereof, any existing Default or Event of Default (other than a Defaultor Event of Default in the payment of the principal of, premium and AdditionalInterest, if any, or interest on the Notes, except a payment default resultingfrom an acceleration that has been rescinded) or compliance with any provisionof this Indenture, the Guarantees or the Notes may be waived with theconsent of the Holders of a majority in principal amount of the thenoutstanding Notes (including Additional Notes, if any) voting as a single class (includingconsents obtained in connection with a tender offer or exchange offer for, orpurchase of, the Notes). Section 2.08 hereof and Section 2.09 hereofshall determine which Notes are considered to be “outstanding” for the purposesof this Section 9.02.

 

Upon therequest of the Issuer accompanied by a resolution of its board of directors authorizingthe execution of any such amended or supplemental indenture, and upon thefiling with the Trustee of evidence satisfactory to the Trustee of the consentof the Holders of Notes as aforesaid, and upon receipt by the Trustee of thedocuments described in Section 7.02 hereof, the Trustee shall join with theIssuer in the execution of such amended or supplemental indenture unless suchamended or supplemental indenture directly affects the Trustee’s own rights, dutiesor immunities under this Indenture or otherwise, in which case the Trustee may inits discretion, but shall not be obligated to, enter into such amended orsupplemental indenture.

 

It shall notbe necessary for the consent of the Holders of Notes under this Section 9.02to approve the particular form of any proposed amendment or waiver, but itshall be sufficient if such consent approves the substance thereof.

 

After anamendment, supplement or waiver under this Section 9.02 becomes effective,the Issuer shall mail to the Holders of Notes affected thereby a notice brieflydescribing the amendment, supplement or waiver. Any failure of the Issuer tomail such notice, or any defect therein, shall not, however, in any way impairor affect the validity of any such amended or supplemental indenture or waiver.

 

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

 

(1)                                  reduce the principalamount of such Notes whose Holders must consent to an amendment, supplement orwaiver;

 

(2)                                  reduce the principalof or change the fixed final maturity of any such Note or alter or waive theprovisions with respect to the redemption of such Notes (other than provisionsrelating to Section 3.09, Section 4.10 and Section 4.14 hereofto the extent that any such amendment or waiver does not have the effect ofreducing the principal of or changing the fixed final maturity of any such Noteor altering or waiving the provisions with respect to the redemption of suchNotes);

 

(3)                                  reduce the rate of orchange the time for payment of interest on any Note;

 

(4)                                  waive a Default inthe payment of principal of or premium, if any, or interest on the Notes,except a rescission of acceleration of the Notes by the Holders of at least amajority in

 

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aggregate principal amount of the Notes and a waiver of the paymentdefault that resulted from such acceleration, or in respect of a covenant orprovision contained in this Indenture or any Guarantee which cannot be amendedor modified without the consent of all affected Holders;

 

(5)                                  make any Note payablein money other than that stated therein;

 

(6)                                  make any change inthe provisions of this Indenture relating to waivers of past Defaults or therights of Holders to receive payments of principal of or premium, if any, orinterest on the Notes;

 

(7)                                  make any change tothis paragraph of this Section 9.02;

 

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

 

(9)                                  make any change to Article 10,Article 12 or any other of the subordination provisions of this Indenture(or the component definitions used therein) that would adversely affect theHolders; or

 

(10)                            except as expresslypermitted by this Indenture, modify the Guarantees of any SignificantSubsidiary, or any group of Restricted Subsidiaries that, taken together (as ofthe latest audited consolidated financial statements for the Issuer), wouldconstitute a Significant Subsidiary, in any manner adverse to the Holders ofthe Notes.

 

Notwithstandinganything in this Indenture to the contrary, no amendment to or waiver of thesubordination provisions of this Indenture (or the component definitions used therein)may be made without the consent of the holders of a majority of theIndebtedness in respect of the Senior Credit Facilities of the Issuer and theGuarantors (or their Representative(s)).

 

Section 9.03                                          Compliancewith Trust Indenture Act.

 

Everyamendment or supplement to this Indenture or the Notes shall be set forth in anamended or supplemental indenture that complies with the Trust Indenture Act asthen in effect.

 

Section 9.04                                          Revocationand Effect of Consents.

 

Until anamendment, supplement or waiver becomes effective, a consent to it by a Holderof a Note is a continuing consent by the Holder of a Note and every subsequentHolder of a Note or portion of a Note that evidences the same debt as theconsenting 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 revokethe consent as to its Note if the Trustee receives written notice of revocationbefore the date the waiver, supplement or amendment becomes effective. Anamendment, supplement or waiver becomes effective in accordance with its termsand thereafter binds every Holder.

 

The Issuermay, but shall not be obligated to, fix a record date for the purpose of determiningthe Holders entitled to consent to any amendment, supplement, or waiver. If arecord date is fixed, then, notwithstanding the preceding paragraph, thosePersons who were Holders at such record date (or their duly designatedproxies), and only such Persons, shall be entitled to consent to suchamendment, supplement, or waiver or to revoke any consent previously given,whether or not such Persons continue to

 

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be Holdersafter such record date. No such consent shall be valid or effective for morethan 120 days after such record date unless the consent of the requisite numberof Holders has been obtained.

 

Section 9.05                                          Notationon or Exchange of Notes.

 

The Trustee may placean appropriate notation about an amendment, supplement or waiver on any Notethereafter authenticated. The Issuer in exchange for all Notes may issueand the Trustee shall, upon receipt of an Authentication Order, authenticatenew Notes that reflect the amendment, supplement or waiver.

 

Failure tomake the appropriate notation or issue a new Note shall not affect the validityand effect of such amendment, supplement or waiver.

 

Section 9.06                                          TrusteeTo Sign Amendments, etc.

 

The Trusteeshall sign any amendment, supplement or waiver authorized pursuant to this Article 9if the amendment or supplement does not adversely affect the rights, duties,liabilities or immunities of the Trustee. The Issuer may not sign anamendment, supplement or waiver until the board of directors approves it. Inexecuting any amendment, supplement or waiver, the Trustee shall be providedwith and (subject to Section 7.01 hereof) shall be fully protected inrelying upon, in addition to the documents required by Section 14.04hereof, an Officer’s Certificate and an Opinion of Counsel stating that theexecution of such amended or supplemental indenture is authorized or permittedby this Indenture and that such amendment, supplement or waiver is the legal,valid and binding obligation of the Issuer and any Guarantors party thereto,enforceable against them in accordance with its terms, subject to customaryexceptions, and complies with the provisions hereof (including Section 9.03).Notwithstanding the foregoing, no Opinion of Counsel will be required for theTrustee to execute any amendment or supplement adding a new Guarantor underthis Indenture.

 

Section 9.07                                          Paymentfor Consent.

 

The Issuershall not, and shall not permit any of its Subsidiaries to, directly orindirectly, pay or cause to be paid any consideration, whether by way ofinterest, fee or otherwise, to or for the benefit of any Holder for or as aninducement to any consent, waiver or amendment of any of the terms orprovisions of this Indenture or the Notes unless such consideration is offeredto all Holders and is paid to all Holders that so consent, waive or agree toamend in the time frame set forth in the solicitation documents relating tosuch consent, waiver or agreement.

 

ARTICLE 10

 

SUBORDINATION

 

Section 10.01                          Agreement To Subordinate.

 

The Issueragrees, and each Holder by accepting a Note agrees, that the payment of allObligations owing in respect of the Notes is subordinated in right of payment,to the extent and in the manner provided in this Article 10, to the priorpayment in full in cash of all existing and future Senior Indebtedness of theIssuer and that the subordination is for the benefit of and enforceable by theholders of such Senior Indebtedness. The Notes shall in all respects rank *pari passu* in right of payment with all existing and futureSenior Subordinated Indebtedness of the Issuer, and will be senior in right ofpayment to all existing and future Subordinated Indebtedness of the Issuer; andonly Indebtedness of the Issuer that

 

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is SeniorIndebtedness shall rank senior to the Notes in accordance with the provisionsset forth herein. All provisions of this Article 10 shall be subject to Section 10.12.

 

Section 10.02                          Liquidation, Dissolution,Bankruptcy.

 

Upon anypayment or distribution of the assets of the Issuer to creditors upon a totalor partial liquidation or a total or partial dissolution of the Issuer or in areorganization, insolvency or bankruptcy of or similar proceeding relating tothe Issuer or its property:

 

(i)                                     theholders of Senior Indebtedness of the Issuer shall be entitled to receivepayment in full in cash of such Senior Indebtedness before Holders shall beentitled to receive any payment or distribution of any kind or character withrespect to any Obligations on, or relating to, the Notes; and

 

(ii)                                  untilthe Senior Indebtedness of the Issuer is paid in full in cash, any payment ordistribution to which Holders would be entitled but for the subordinationprovisions of this Article 10 shall be made to holders of such SeniorIndebtedness as their interests may appear, except that Holders may receivePermitted Junior Securities.

 

####                                                                                                 Tothe extent any payment of Senior Indebtedness of the Issuer (whether by or onbehalf of the Issuer, as proceeds of security or enforcement of any right ofsetoff or otherwise) is declared to be fraudulent or preferential, set aside orrequired to be paid to any receiver, trustee in bankruptcy, liquidatingtrustee, agent or other similar Person under any bankruptcy, insolvency,receivership, fraudulent conveyance or similar law, then, if such payment isrecovered by, or paid over to, such receiver, trustee in bankruptcy,liquidating trustee, agent or similar Person, the Senior Indebtedness of theIssuer or part thereof originally intended to be satisfied shall be deemedto be reinstated and outstanding as if such payment had not occurred. It isfurther agreed that any diminution (whether pursuant to court decree orotherwise, including without limitation for any of the reasons described in thepreceding sentence) of the Issuer’s obligation to make any distribution orpayment pursuant to any Senior Indebtedness of the Issuer, except to the extentsuch diminution occurs by reason of the repayment (which has not been disgorgedor returned) of such Senior Indebtedness of the Issuer in cash, shall have noforce or effect for purposes of the subordination provisions contained in Article 10,with any turnover of payments as otherwise calculated pursuant to this Article 10to be made as if no such diminution had occurred. The Issuer shall promptlygive written notice to the Trustee of any such dissolution, winding-up,liquidation, or reorganization of the Issuer; provided that any delay orfailure to give such notice shall have no effect on the subordinationprovisions contained in this Article 10.

####  

Section 10.03                          Default on SeniorIndebtedness of the Issuer.

 

The Issuershall not pay principal of, premium, if any, or interest on the Notes (or payany other Obligations relating to the Notes, including Additional Interest,fees, costs, expenses, indemnities and rescission or damage claims) or make anydeposit pursuant to Article 8 or Article 13 hereof and may notpurchase, redeem or otherwise retire or acquire for cash or property any Notes(collectively, “pay the Notes”) (except in the form of PermittedJunior Securities (other than Disqualified Stock)) if either of the followingoccurs (a “Payment Default”):

 

(i)                                     anyObligation on any Designated Senior Indebtedness of the Issuer is not paid infull in cash when due; or

 

(ii)                                  anyother default on Designated Senior Indebtedness of the Issuer occurs and thematurity of such Designated Senior Indebtedness is accelerated in accordancewith its terms;

 

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unless, ineither case, the Payment Default has been cured or waived and any suchacceleration has been rescinded or such Designated Senior Indebtedness has beenpaid in full in cash; provided, however, that the Issuer shall beentitled to pay the Notes without regard to the foregoing if the Issuer and theTrustee receive written notice approving such payment from the Representativesof all Designated Senior Indebtedness with respect to which the Payment Defaulthas occurred and is continuing.

 

During thecontinuance of any default (other than a Payment Default) (a “Non-PaymentDefault”) with respect to any Designated Senior Indebtedness of the Issuerpursuant to which the maturity thereof may be accelerated without furthernotice (except such notice as may be required to effect such acceleration)or the expiration of any applicable grace periods, the Issuer shall not pay theNotes (except in the form of Permitted Junior Securities (other thanDisqualified Stock)) for a period (a “Payment Blockage Period”)commencing upon the receipt by the Trustee (with a copy to the Issuer) ofwritten notice (a “Blockage Notice”) of such Non-Payment Default fromthe Representative of such Designated Senior Indebtedness specifying anelection to effect a Payment Blockage Period and ending 179 daysthereafter. The Payment Blockage Period shall end earlier if such PaymentBlockage Period is terminated (i) by written notice to the Trustee and theIssuer from the Person or Persons who gave such Blockage Notice; (ii) becausethe default giving rise to such Blockage Notice is cured, waived or otherwiseno longer continuing; or (iii) because such Designated Senior Indebtednesshas been discharged or repaid in full in cash.

 

Notwithstandingthe provisions described in the immediately preceding paragraph (but subject tothe provisions contained in the first paragraph of this Section 10.03 and Section 10.02hereof), unless the holders of such Designated Senior Indebtedness or theRepresentative of such Designated Senior Indebtedness shall have acceleratedthe maturity of such Designated Senior Indebtedness or a Payment Default hasoccurred and is continuing, the Issuer shall be permitted  to resume paying the Notes after the end ofsuch Payment Blockage Period. The Notes shall not be subject to more than onePayment Blockage Period in any consecutive 360-day period irrespective of thenumber of Non-Payment Defaults with respect to Designated Senior Indebtednessduring such period; providedthat if any Blockage Notice is delivered to the Trustee by or on behalf of theholders of Designated Senior Indebtedness of the Issuer (other than the holdersof Indebtedness under the Senior Credit Facilities), a Representative ofholders of Indebtedness under the Senior Credit Facilities may in theaggregate give one other Blockage Notice within such period. However, in noevent shall the total number of days during which any Payment Blockage Periodor Periods on the Notes is in effect exceed 179 days in the aggregate duringany consecutive 360-day period, and there must be at least 181 days during anyconsecutive 360-day period during which no Payment Blockage Period is in effect.Notwithstanding the foregoing, however, no Non-Payment Default that existed orwas continuing on the date of commencement of any Payment Blockage Period withrespect to any Designated Senior Indebtedness and that was the basis for theinitiation of such Payment Blockage Period shall be, or be made, the basis fora subsequent Payment Blockage Period by the Representative of such DesignatedSenior Indebtedness unless such default shall have been waived for a period ofnot less than 90 consecutive days (it being acknowledged that any subsequent action,or any breach of any financial covenants during the period after the date ofdelivery of such initial Blockage Notice, that, in either case, would give riseto a Non-Payment Default pursuant to any provisions under which a Non-PaymentDefault previously existed or was continuing shall constitute a new Non-PaymentDefault for this purpose).

 

Section 10.04                          Acceleration of Payment ofNotes.

 

If payment ofthe Notes is accelerated because of an Event of Default, the Issuer shallpromptly notify the holders of the Designated Senior Indebtedness of the Issueror the Representative of such Designated Senior Indebtedness of theacceleration; provided that any failure to give such notice

 

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shall have noeffect whatsoever on the provisions of this Article 10. So long as thereshall remain outstanding any Senior Indebtedness under the Senior CreditFacilities, a Blockage Notice may be given only by the respectiveRepresentatives thereunder unless otherwise agreed to in writing by therequisite lenders named therein. If any Designated Senior Indebtedness of theIssuer is outstanding, the Issuer may not pay the Notes until fiveBusiness Days after the Representatives of all such Designated SeniorIndebtedness receive notice of such acceleration and, thereafter, may paythe Notes only if this Indenture otherwise permits payment at that time.

 

Section 10.05                          When Distribution Must BePaid Over.

 

If adistribution is made to Holders that, due to this Article 10, should nothave been made to them, such Holders are required to hold it in trust for theholders of Senior Indebtedness of the Issuer and pay it over to them as theirinterests may appear.

 

Section 10.06                          Subrogation.

 

After allSenior Indebtedness of the Issuer is paid in full in cash and until the Notesare paid in full, Holders shall be subrogated to the rights of holders of suchSenior Indebtedness to receive distributions applicable to such SeniorIndebtedness. A distribution made under this Article 10 to holders of suchSenior Indebtedness which otherwise would have been made to Holders is not, asbetween the Issuer and Holders, a payment by the Issuer on such Senior Indebtedness.

 

Section 10.07                          Relative Rights.

 

This Article 10defines the relative rights of Holders and holders of Senior Indebtedness ofthe Issuer. Nothing in this Indenture shall:

 

(i)                                     impair,as between the Issuer and Holders, the obligation of the Issuer, which isabsolute and unconditional, to pay principal of and interest on the Notes in accordancewith their terms;

 

(ii)                                  preventthe Trustee or any Holder from exercising its available remedies upon aDefault, subject to the rights of holders of Senior Indebtedness of the Issuerto receive payments or distributions otherwise payable to Holders and suchother rights of such holders of Senior Indebtedness as set forth herein; or

 

(iii)                               affectthe relative rights of Holders and creditors of the Issuer other than theirrights in relation to holders of Senior Indebtedness.

 

Section 10.08                          Subordination May NotBe Impaired by Issuer.

 

No right ofany holder of Senior Indebtedness of the Issuer to enforce the subordination ofthe Indebtedness evidenced by the Notes shall be impaired by any act or failureto act by the Issuer or by its failure to comply with this Indenture.

 

Section 10.09                          Rights of Trustee andPaying Agent.

 

NotwithstandingSection 10.03 hereof, the Trustee or any Paying Agent may continue tomake payments on the Notes and shall not be charged with knowledge of theexistence of facts that would prohibit the making of any payments unless aResponsible Officer of the Trustee receives notice satisfactory to him thatpayments may not be made under this Article 10; provided thatnotwithstanding the foregoing,

 

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thesubordination of the Obligations under the Notes to Senior Indebtedness of theIssuer shall not be affected and the Holders receiving any payments incontravention of Section 10.02 and/or 10.03 (and such respective payments)shall otherwise be subject to the provisions of this Article 10. TheIssuer, the Registrar, the Paying Agent, a Representative or a holder of SeniorIndebtedness of the Issuer shall be entitled to give the notice; provided,however, that, if an issue of Senior Indebtedness of the Issuer has aRepresentative, only the Representative shall be entitled to give the notice.

 

The Trustee inits individual or any other capacity shall be entitled to hold Senior Indebtednessof the Issuer with the same rights it would have if it were not Trustee. TheRegistrar and the Paying Agent shall be entitled to do the same with likerights. The Trustee shall be entitled to all the rights set forth in this Article 10with respect to any Senior Indebtedness of the Issuer which may at anytime be held by it, to the same extent as any other holder of such SeniorIndebtedness; and nothing in Article 7 shall deprive the Trustee of any ofits rights as such holder. Nothing in this Article 10 shall apply toclaims of, or payments to, the Trustee under or pursuant to Section 7.07hereof or any other Section of this Indenture.

 

Section 10.10                          Distribution or Notice toRepresentative.

 

Whenever adistribution is to be made or a notice given to holders of Senior Indebtednessof the Issuer, the distribution may be made and the notice given to theirRepresentative (if any).

 

Section 10.11                          Article 10 Not ToPrevent Events of Default or Limit Right To Accelerate.

 

The failure tomake a payment pursuant to the Notes by reason of any provision in this Article 10shall not be construed as preventing the occurrence of a Default. Nothing inthis Article 10 shall have any effect on the right of the Holders or theTrustee to accelerate the maturity of the Notes.

 

Section 10.12                          Trust Moneys NotSubordinated.

 

Notwithstandinganything contained herein to the contrary, payments from money or the proceedsof Government Securities held in trust by the Trustee for the payment ofprincipal of and interest on the Notes pursuant to Article 8 or Article 13hereof shall not be subordinated to the prior payment of any SeniorIndebtedness of the Issuer or subject to the restrictions set forth in this Article 10,and none of the Holders shall be obligated to pay over any such amount to theIssuer or any holder of Senior Indebtedness of the Issuer or any other creditorof the Issuer, provided that the subordination provisions of this Article 10were not violated at the time the applicable amounts were deposited in trustpursuant to Article 8 or Article 13 hereof, as the case may be,and such deposit was otherwise made in accordance with Article 8 or Article 13hereof.

 

Section 10.13                          TrusteeEntitled To Rely.

 

Upon anypayment or distribution pursuant to this Article 10, the Trustee and theHolders shall be entitled to rely (a) upon any order or decree of a courtof competent jurisdiction in which any proceedings of the nature referred to inSection 10.02 hereof are pending, (b) upon a certificate of the liquidatingtrustee or agent or other Person making such payment or distribution to theTrustee or to the Holders or (c) upon the Representatives of SeniorIndebtedness of the Issuer for the purpose of ascertaining the Persons entitledto participate in such payment or distribution, the holders of such SeniorIndebtedness and other Indebtedness of the Issuer, the amount thereof or payablethereon, the amount or amounts paid or distributed thereon and all other factspertinent thereto or to this Article 10. In the event that the Trusteedetermines, in good faith, that evidence is required with respect to the rightof any Person as a holder of Senior Indebtedness of the Issuer to participatein any payment or distribution pursuant to

 

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this Article 10,the Trustee shall be entitled to request such Person to furnish evidence to thereasonable satisfaction of the Trustee as to the amount of such SeniorIndebtedness held by such Person, the extent to which such Person is entitledto participate in such payment or distribution and other facts pertinent to therights of such Person under this Article 10, and, if such evidence is notfurnished, the Trustee shall be entitled to defer any payment to such Personpending judicial determination as to the right of such Person to receive suchpayment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable toall actions or omissions of actions by the Trustee pursuant to this Article 10.

 

Section 10.14                          TrusteeTo Effectuate Subordination.

 

A Holder byits acceptance of a Note agrees to be bound by this Article 10 andauthorizes and expressly directs the Trustee, on its behalf, to take suchaction as may be necessary or appropriate to effectuate the subordinationbetween the Holders and the holders of Senior Indebtedness of the Issuer as providedin this Article 10 and appoints the Trustee as its attorney-in-fact forsuch purpose.

 

If the Trusteedoes not file a Proper Proof of Claim in any proceeding prior to 15 days beforethe expiration of the time to file a Proof of Claim in such proceeding, thenthe holders of Designated Senior Indebtedness of the Issuer (or theirRepresentative) are hereby authorized to have the right to file and are (or is)hereby authorized to file, in the name of the Trustee, a Proof of Claim for andon behalf of the Holders; provided that (i) if the holders of theDesignated Senior Indebtedness of the Issuer (or their Representative) file anyProof of Claim as contemplated above and the Trustee shall subsequently file aProper Proof of Claim in such proceeding before the expiration of the time tofile a Proof of Claim in such proceeding, such subsequent Proper Proof of Claimfiled by the Trustee shall supersede any such Proof of Claim theretofore filedby the holders of the Designated Senior Indebtedness of the Issuer (or theirRepresentative), and such Proof of Claim theretofore filed by the holders ofthe Designated Senior Indebtedness of the Issuer (or their Representative)shall thereupon deemed to be withdrawn, and (ii) the foregoing provisionsof this paragraph shall not be construed to authorize the holders of theDesignated Senior Indebtedness (or their Representative) to authorize orconsent to or accept or adopt on behalf of any Holder any plan ofreorganization, arrangement, adjustment or composition affecting the Notes, orto authorize the holders of the Designated Senior Indebtedness (or theirRepresentative) to vote in respect of the claim of any Holder in any suchproceeding. This paragraph is intended solely to permit the holders ofDesignated Senior Indebtedness of the Issuer to preserve their “turnover right”pursuant to the applicable subordination provisions in this Article 10 incircumstances where a Proper Proof of Claim has not been filed by the Trusteebefore the expiration of the time to file a Proof of Claim in a bankruptcyproceeding, and nothing herein shall impair the rights of the Trustee under Section 6.13and 7.07.

 

Section 10.15                          TrusteeNot Fiduciary for Holders of Senior Indebtedness of the Issuer.

 

The Trusteeshall not be deemed to owe any fiduciary duty to the holders of SeniorIndebtedness of the Issuer and shall not be liable to any such holders if itshall mistakenly pay over or distribute to Holders or the Issuer or any otherPerson, money or assets to which any holders of Senior Indebtedness of theIssuer shall be entitled by virtue of this Article 10 or otherwise.

 

Section 10.16                          Relianceby Holders of Senior Indebtedness of the Issuer on Subordination Provisions.

 

Each Holder byaccepting a Note acknowledges and agrees that the subordination provisions ofthis Article 10 are, and are intended to be, an inducement and aconsideration to each holder of any Senior Indebtedness of the Issuer, whethersuch Senior Indebtedness was created or acquired before or after the issuanceof the Notes, to acquire and continue to hold, or to continue to hold, suchSenior Indebtedness and such holder of such Senior Indebtedness shall be deemedconclusively to have relied on

 

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suchsubordination provisions in acquiring and continuing to hold, or in continuingto hold, such Senior Indebtedness.

 

Without in anyway limiting the generality of the foregoing paragraph, the holders of SeniorIndebtedness of the Issuer may, at any time and from time to time, without theconsent of or notice to the Trustee or the Holders, without incurringresponsibility to the Trustee or the Holders and without impairing or releasingthe subordination provided in this Article 10 or the obligations hereunderof the Holders to the holders of the Senior Indebtedness of the Issuer, do anyone or more of the following:  (i) change the manner, place orterms of payment or extend the time of payment of, or renew or alter, SeniorIndebtedness of the Issuer, or otherwise amend or supplement in any mannerSenior Indebtedness of the Issuer, or any instrument evidencing the same or anyagreement under which Senior Indebtedness of the Issuer is outstanding; (ii) sell,exchange, release or otherwise deal with any property pledged, mortgaged orotherwise securing Senior Indebtedness of the Issuer; (iii) release anyPerson liable in any manner for the payment or collection of SeniorIndebtedness of the Issuer; and (iv) exercise or refrain from exercisingany rights against the Issuer and any other Person.

 

ARTICLE 11

 

GUARANTEES

 

Section 11.01                                    Guarantee.

 

Subject tothis Article 11, each of the Guarantors hereby, jointly and severally,unconditionally guarantees, subject to Article 12, to each Holder of aNote authenticated and delivered by the Trustee and to the Trustee and itssuccessors and assigns, irrespective of the validity and enforceability of thisIndenture, the Notes or the obligations of the Issuer hereunder or thereunder,that: (a) the principal of, and interest, premium and Additional Interest,if any, on the Notes shall be promptly paid in full when due, whether atmaturity, by acceleration, redemption or otherwise, and interest on the overdueprincipal of and interest on the Notes, if any, if lawful, and all other Obligationsof the Issuer to the Holders or the Trustee hereunder or thereunder shall bepromptly paid in full or performed, all in accordance with the terms hereof andthereof; and (b) in case of any extension of time of payment or renewal ofany Notes or any of such other obligations, that same shall be promptly paid infull when due or performed in accordance with the terms of the extension orrenewal, whether at stated maturity, by acceleration or otherwise. Failing paymentwhen due of any amount so guaranteed or any performance so guaranteed forwhatever reason, the Guarantors shall be jointly and severally obligated to paythe same immediately. Each Guarantor agrees that this is a guarantee of paymentand not a guarantee of collection.

 

The Guarantorshereby agree that their obligations hereunder shall be unconditional,irrespective of the validity, regularity or enforceability of the Notes or thisIndenture, the absence of any action to enforce the same, any waiver or consentby any Holder of the Notes with respect to any provisions hereof or thereof,the recovery of any judgment against the Issuer, any action to enforce the sameor any other circumstance which might otherwise constitute a legal or equitabledischarge or defense of a guarantor. Each Guarantor hereby waives diligence,presentment, demand of payment, filing of claims with a court in the event ofinsolvency or bankruptcy of the Issuer, any right to require a proceeding firstagainst the Issuer, protest, notice and all demands whatsoever and covenantsthat this Guarantee shall not be discharged except by complete performance ofthe obligations contained in the Notes and this Indenture.

 

Each Guarantoralso agrees to pay any and all costs and expenses (including reasonableattorneys’ fees) incurred by the Trustee or any Holder in enforcing any rightsunder this Section 11.01.

 

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If any Holderor the Trustee is required by any court or otherwise to return to the Issuer,the Guarantors or any custodian, trustee, liquidator or other similar officialacting in relation to either the Issuer or the Guarantors, any amount paideither to the Trustee or such Holder, this Guarantee, to the extent theretoforedischarged, shall be reinstated in full force and effect.

 

Each Guarantoragrees that it shall not be entitled to any right of subrogation in relation tothe Holders in respect of any obligations guaranteed hereby until payment infull of all obligations guaranteed hereby. Each Guarantor further agrees that,as between the Guarantors, on the one hand, and the Holders and the Trustee, onthe other hand, (x) the maturity of the obligations guaranteed hereby may beaccelerated as provided in Article 6 hereof for the purposes of this Guarantee,notwithstanding any stay, injunction or other prohibition preventing such accelerationin respect of the obligations guaranteed hereby, and (y) in the event of any declarationof acceleration of such obligations as provided in Article 6 hereof, suchobligations (whether or not due and payable) shall forthwith become due andpayable by the Guarantors for the purpose of this Guarantee. The Guarantorsshall have the right to seek contribution from any non-paying Guarantor so longas the exercise of such right does not impair the rights of the Holders underthe Guarantees.

 

Each Guaranteeshall remain in full force and effect and continue to be effective should anypetition be filed by or against the Issuer for liquidation, reorganization,should the Issuer become insolvent or make an assignment for the benefit ofcreditors or should a receiver or trustee be appointed for all or anysignificant part of the Issuer’s assets, and shall, to the fullest extentpermitted by law, continue to be effective or be reinstated, as the case may be,if at any time payment and performance of the Notes are, pursuant to applicablelaw, rescinded or reduced in amount, or must otherwise be restored or returnedby any obligee on the Notes or Guarantees, whether as a “voidable preference,” “fraudulenttransfer” or otherwise, all as though such payment or performance had not beenmade. In the event that any payment or any part thereof, is rescinded,reduced, restored or returned, the Notes shall, to the fullest extent permittedby law, be reinstated and deemed reduced only by such amount paid and not sorescinded, reduced, restored or returned.

 

In case anyprovision of any Guarantee shall be invalid, illegal or unenforceable, thevalidity, legality, and enforceability of the remaining provisions shall not inany way be affected or impaired thereby.

 

The Guaranteeissued by any Guarantor shall be a general unsecured senior subordinated obligationof such Guarantor and shall be subordinated in right of payment to all existingand future Senior Indebtedness of such Guarantor, if any.

 

Each paymentto be made by a Guarantor in respect of its Guarantee shall be made withoutset-off, counterclaim, reduction or diminution of any kind or nature.

 

Theobligations of each Guarantor to the Holders and to the Trustee pursuant to theGuarantee of such Guarantor and this Indenture are expressly subordinate andsubject in right of payment to the prior payment in full of all SeniorIndebtedness of such Guarantor, to the extent and in the manner provided in Article 12.

 

Section 11.02                                    Limitationon Guarantor Liability.

 

EachGuarantor, and by its acceptance of Notes, each Holder, hereby confirms that itis the intention of all such parties that the Guarantee of such Guarantor notconstitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,the Uniform Fraudulent Conveyance Act, the Uniform FraudulentTransfer Act or any similar federal or state law to the extent applicable toany Guarantee. To

 

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effectuate theforegoing intention, the Trustee, the Holders and the Guarantors herebyirrevocably agree that the obligations of each Guarantor shall be limited tothe maximum amount as will, after giving effect to such maximum amount and allother contingent and fixed liabilities of such Guarantor (including, withoutlimitation, all Senior Indebtedness of such Guarantor) that are relevant undersuch laws and after giving effect to any collections from, rights to receivecontribution from or payments made by or on behalf of any other Guarantor inrespect of the obligations of such other Guarantor under this Article 11,result in the obligations of such Guarantor under its Guarantee notconstituting a fraudulent conveyance or fraudulent transfer under applicable law.Each Guarantor that makes a payment under its Guarantee shall be entitled uponpayment in full of all guaranteed obligations under this Indenture to acontribution from each other Guarantor in an amount equal to such otherGuarantor’s *pro rata* portion of such payment basedon the respective net assets of all the Guarantors at the time of such paymentdetermined in accordance with GAAP.

 

Section 11.03                                    Executionand Delivery.

 

To evidenceits Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that this Indenture shallbe executed on behalf of such Guarantor by its President, one of its Vice Presidentsor one of its Assistant Vice Presidents.

 

Each Guarantorhereby agrees that its Guarantee set forth in Section 11.01 hereof shall remain in full force andeffect notwithstanding the absence of the endorsement of any notation of suchGuarantee on the Notes.

 

If an Officerwhose signature is on this Indenture no longer holds that office at the timethe Trustee authenticates the Note, the Guarantee shall be valid nevertheless.

 

The deliveryof any Note by the Trustee, after the authentication thereof hereunder, shallconstitute due delivery of the Guarantee set forth in this Indenture on behalfof the Guarantors.

 

If required bySection 4.15 hereof, the Issuer shall cause any newly created or acquiredRestricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 11, tothe extent applicable.

 

Section 11.04                                    Subrogation.

 

Each Guarantorshall be subrogated to all rights of Holders of Notes against the Issuer inrespect of any amounts paid by any Guarantor pursuant to the provisions of Section 11.01 hereof; provided that, if anEvent of Default has occurred and is continuing, no Guarantor shall be entitledto enforce or receive any payments arising out of, or based upon, such right ofsubrogation until all amounts then due and payable by the Issuer under thisIndenture or the Notes shall have been paid in full.

 

Section 11.05                                    BenefitsAcknowledged.

 

Each Guarantoracknowledges that it will receive direct and indirect benefits from thefinancing arrangements contemplated by this Indenture and that the guaranteeand waivers made by it pursuant to its Guarantee are knowingly made incontemplation of such benefits.

 

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Section 11.06                                    Releaseof Guarantees.

 

A Guarantee bya Guarantor shall be automatically and unconditionally released and discharged,and no further action by such Guarantor, the Issuer or the Trustee is requiredfor the release of such Guarantor’s Guarantee, upon:

 

(1)                                  (A) any sale, exchange, disposition or transfer (by merger or otherwise) of (x) theCapital Stock of such Guarantor, after which the applicable Guarantor is nolonger a Restricted Subsidiary, or (y) all or substantially all the assets ofsuch Guarantor which sale, exchange, disposition or transfer in each case ismade in compliance with Sections 4.10(a)(1) and (2);

 

(B)                                therelease or discharge of the guarantee by such Guarantor of the Senior CreditFacilities or the guarantee which resulted in the creation of such Guarantee,except a discharge or release by or as a result of payment under suchguarantee;

 

(C)                                theproper designation of any Restricted Subsidiary that is a Guarantor as an UnrestrictedSubsidiary; or

 

(D)                               theIssuer exercising Legal Defeasance or Covenant Defeasance in accordance with Article 8hereof or the Issuer’s obligations under this Indenture being discharged inaccordance with the terms of this Indenture; and

 

### (2)                                   the Issuerdelivering to the Trustee an Officer’s Certificate and an Opinion of Counsel,each stating that all conditions precedent provided for in this Indenturerelating to such transaction have been complied with.

###  

ARTICLE 12

 

SUBORDINATION OF GUARANTEES

 

Section 12.01                                    AgreementTo Subordinate.

 

Each Guarantoragrees, and each Holder by accepting a Note agrees, that the Obligations ofsuch Guarantor under its Guarantee are subordinated in right of payment, to theextent and in the manner provided in this Article 12, to the prior paymentin full in cash of all existing and future Senior Indebtedness of suchGuarantor and that the subordination is for the benefit of and enforceable bythe holders of such Senior Indebtedness. A Guarantor’s Obligations under itsGuarantee shall in all respects rank *pari passu* inright of payment with all existing and future Senior Subordinated Indebtednessof such Guarantor, and will be senior in right of payment to all existing andfuture Subordinated Indebtedness of such Guarantor; and only Indebtedness of suchGuarantor that is Senior Indebtedness shall rank senior to the Obligations ofsuch Guarantor under its Guarantee in accordance with the provisions set forthherein. All provisions of this Article 12 shall be subject to Section 12.12.

 

Section 12.02                                    Liquidation,Dissolution, Bankruptcy.

 

Upon anypayment or distribution of the assets of a Guarantor to creditors upon a totalor partial liquidation or a total or partial dissolution of such Guarantor orin a reorganization, insolvency or bankruptcy of or similar proceeding relatingto such Guarantor or its property:

 

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(i)                                     theholders of Senior Indebtedness of such Guarantor shall be entitled to receivepayment in full in cash of such Senior Indebtedness before Holders shall beentitled to receive any payment or distribution of any kind or character withrespect to any Obligations on, or relating to, such Guarantor’s Guarantee; and

 

(ii)                                  untilthe Senior Indebtedness of such Guarantor is paid in full in cash, any paymentor distribution to which Holders would be entitled but for the subordinationprovisions of this Article 12 shall be made to holders of such SeniorIndebtedness as their interests may appear, except that Holders may receivePermitted Junior Securities.

 

#### To the extent any payment ofSenior Indebtedness of any Guarantor (whether by or on behalf of such Guarantor,as proceeds of security or enforcement of any right of setoff or otherwise) isdeclared to be fraudulent or preferential, set aside or required to be paid toany receiver, trustee in bankruptcy, liquidating trustee, agent or othersimilar Person under any bankruptcy, insolvency, receivership, fraudulentconveyance or similar law, then, if such payment is recovered by, or paid overto, such receiver, trustee in bankruptcy, liquidating trustee, agent or similarPerson, the Senior Indebtedness of such Guarantor or part thereoforiginally intended to be satisfied shall be deemed to be reinstated andoutstanding as if such payment had not occurred. It is further agreed that anydiminution (whether pursuant to court decree or otherwise, including withoutlimitation for any of the reasons described in the preceding sentence) of anyGuarantor’s obligation to make any distribution or payment pursuant to anySenior Indebtedness of such Guarantor, except to the extent such diminutionoccurs by reason of the repayment (which has not been disgorged or returned) ofsuch Senior Indebtedness of such Guarantor in cash, shall have no force oreffect for purposes of the subordination provisions contained in Article 12,with any turnover of payments as otherwise calculated pursuant to this Article 12to be made as if no such diminution had occurred. The Issuer shall promptlygive written notice to the Trustee of any such dissolution, winding-up,liquidation, or reorganization of any Guarantor, provided that any delay orfailure to give such notice shall have no effect on the subordinationprovisions contained in this Article 12.

####  

Section 12.03                                    Defaulton Senior Indebtedness of a Guarantor.

 

A Guarantorshall not make any payment pursuant to its Guarantee (or pay any otherObligations relating to its Guarantee, including Additional Interest, fees,costs, expenses, indemnities and rescission or damage claims) and may notpurchase, redeem or otherwise retire or acquire for cash or property any Notes(collectively, “pay its Guarantee”) (except in the form ofPermitted Junior Securities (other than Disqualified Stock)) if either of thefollowing occurs (a “Guarantor Payment Default”):

 

(i)                                     anyObligation on any Designated Senior Indebtedness of such Guarantor is not paidin full in cash when due; or

 

(ii)                                  anyother default on Designated Senior Indebtedness of such Guarantor occurs andthe maturity of such Designated Senior Indebtedness is accelerated inaccordance with its terms;

 

unless, ineither case, the Guarantor Payment Default has been cured or waived and anysuch acceleration has been rescinded or such Designated Senior Indebtedness hasbeen paid in full in cash; provided, however, that such Guarantorshall be entitled to pay its Guarantee without regard to the foregoing if suchGuarantor and the Trustee receive written notice approving such payment fromthe Representatives of all Designated Senior Indebtedness with respect to whichthe Guarantor Payment Default has occurred and is continuing.

 

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During thecontinuance of any default (other than a Guarantor Payment Default) (a “GuarantorNon-Payment Default”) with respect to any Designated Senior Indebtedness ofa Guarantor pursuant to which the maturity thereof may be acceleratedwithout further notice (except such notice as may be required to effectsuch acceleration) or the expiration of any applicable grace periods, suchGuarantor shall not pay its Guarantee (except in the form of PermittedJunior Securities (other than Disqualified Stock)) for a period (a “GuaranteePayment Blockage Period”) commencing upon the receipt by the Trustee (witha copy to such Guarantor and the Issuer) of written notice (a “GuaranteeBlockage Notice”) of such Guarantor Non-Payment Default from theRepresentative of such Designated Senior Indebtedness specifying an election toeffect a Guarantee Payment Blockage Period and ending 179 days thereafter.The Guarantee Payment Blockage Period shall end earlier if such GuaranteePayment Blockage Period is terminated (i) by written notice to theTrustee, the relevant Guarantor and the Issuer from the Person or Persons whogave such Guarantee Blockage Notice; (ii) because the default giving riseto such Guarantee Blockage Notice is cured, waived or otherwise no longercontinuing; or (iii) because such Designated Senior Indebtedness has beendischarged or repaid in full in cash.

 

Notwithstandingthe provisions described in the immediately preceding paragraph (but subject tothe provisions contained in the first paragraph of this Section 12.03 and Section 12.02hereof), unless the holders of such Designated Senior Indebtedness or theRepresentative of such Designated Senior Indebtedness shall have acceleratedthe maturity of such Designated Senior Indebtedness or a Guarantor PaymentDefault has occurred and is continuing, the relevant Guarantor shall bepermitted to resume paying its Guarantee after the end of such GuaranteePayment Blockage Period. Each Guarantee shall not be subject to more than oneGuarantee Payment Blockage Period in any consecutive 360-day period irrespectiveof the number of Non-Payment Defaults with respect to Designated Senior Indebtednessduring such period; providedthat if any Guarantee Blockage Notice is delivered to the Trustee by or onbehalf of the holders of Designated Senior Indebtedness of such Guarantor(other than the holders of Indebtedness under the Senior Credit Facilities), aRepresentative of holders of Indebtedness under the Senior Credit Facilities may inthe aggregate give one other Guarantee Blockage Notice within such period. However,in no event shall the total number of days during which any Guarantee PaymentBlockage Period or Periods on a Guarantee is in effect exceed 179 days in theaggregate during any consecutive 360-day period, and there must be at least 181days during any consecutive 360-day period during which no Guarantee PaymentBlockage Period is in effect. Notwithstanding the foregoing, however, no GuarantorNon-Payment Default that existed or was continuing on the date of commencementof any Guarantee Payment Blockage Period with respect to any Designated SeniorIndebtedness and that was the basis for the initiation of such Guarantee PaymentBlockage Period shall be, or be made, the basis for a subsequent Guarantee PaymentBlockage Period by the Representative of such Designated Senior Indebtednessunless such default shall have been waived for a period of not less than 90 consecutivedays (it being acknowledged that any subsequent action, or any breach of anyfinancial covenants during the period after the date of delivery of suchinitial Guarantee Blockage Notice, that, in either case, would give rise to a GuarantorNon-Payment Default pursuant to any provisions under which a GuarantorNon-Payment Default previously existed or was continuing shall constitute a newGuarantor Non-Payment Default for this purpose).

 

Section 12.04                                    Demandfor Payment.

 

If payment ofthe Notes is accelerated because of an Event of Default and a demand forpayment is made on a Guarantor pursuant to Article 11 hereof, the Issueror such Guarantor shall promptly notify the holders of the Designated SeniorIndebtedness of such Guarantor or the Representative of such Designated SeniorIndebtedness of such demand; provided that any failure to give suchnotice shall have no effect whatsoever on the provisions of this Article 12.So long as there shall remain outstanding any Senior Indebtedness under theSenior Credit Facilities and the relevant Guarantor is a guarantor thereof, a GuaranteeBlockage Notice may be given only by the respective Representatives thereunder

 

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unless otherwiseagreed to in writing by the requisite lenders named therein. If any DesignatedSenior Indebtedness of a Guarantor is outstanding, such Guarantor may notpay its Guarantee until five Business Days after the Representatives of allsuch Designated Senior Indebtedness receive notice of such acceleration and,thereafter, may pay its Guarantee only if this Indenture otherwise permitspayment at that time.

 

Section 12.05                                    WhenDistribution Must Be Paid Over.

 

If adistribution is made to Holders that, due to this Article 12, should nothave been made to them, such Holders are required to hold it in trust for theholders of Senior Indebtedness of the relevant Guarantor and pay it over tothem as their interests may appear.

 

Section 12.06                                    Subrogation.

 

After allSenior Indebtedness of a Guarantor is paid in full in cash and until the Notesare paid in full, Holders shall be subrogated to the rights of holders of suchSenior Indebtedness to receive distributions applicable to such SeniorIndebtedness. A distribution made under this Article 12 to holders of suchSenior Indebtedness which otherwise would have been made to Holders is not, asbetween the relevant Guarantor and Holders, a payment by such Guarantor on suchSenior Indebtedness.

 

Section 12.07                                    RelativeRights.

 

This Article 12defines the relative rights of Holders and holders of Senior Indebtedness of aGuarantor. Nothing in this Indenture shall:

 

(i)                                     impair,as between such Guarantor and Holders, the obligation of such Guarantor, whichis absolute and unconditional, to make payments under its Guarantee inaccordance with its terms;

 

(ii)                                  preventthe Trustee or any Holder from exercising its available remedies upon a defaultby such Guarantor under its obligations with respect to its Guarantee, subject tothe rights of holders of Senior Indebtedness of such Guarantor to receivepayments or distributions otherwise payable to Holders and such other rights ofsuch holders of Senior Indebtedness as set forth herein; or

 

(iii)                               affectthe relative rights of Holders and creditors of such Guarantor other than theirrights in relation to holders of Senior Indebtedness.

 

Section 12.08                                    SubordinationMay Not Be Impaired by a Guarantor.

 

No right ofany holder of Senior Indebtedness of a Guarantor to enforce the subordinationof the Obligations of such Guarantor under its Guarantee shall be impaired byany act or failure to act by such Guarantor or by its failure to comply withthis Indenture.

 

Section 12.09                                    Rightsof Trustee and Paying Agent.

 

NotwithstandingSection 12.03 hereof, the Trustee or any Paying Agent may continue tomake payments on the Notes and shall not be charged with knowledge of theexistence of facts that would prohibit the making of any payments unless aResponsible Officer of the Trustee receives notice satisfactory to him thatpayments may not be made under this Article 12; providedhoweverthat notwithstanding the foregoing, the subordination of the Guarantees toSenior Indebtedness of the Guarantors shall not be 

 

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affected andthe Holders receiving any payments in contravention of Section 12.02and/or 12.03 (and such respective payments) shall otherwise be subject to theprovisions of this Article 12. A Guarantor, the Registrar, the PayingAgent, a Representative or a holder of Senior Indebtedness of such Guarantorshall be entitled to give the notice; provided, however, that, ifan issue of Senior Indebtedness of such Guarantor has a Representative, onlythe Representative shall be entitled to give the notice.

 

The Trustee inits individual or any other capacity shall be entitled to hold SeniorIndebtedness of a Guarantor with the same rights it would have if it were notTrustee. The Registrar and the Paying Agent shall be entitled to do the samewith like rights. The Trustee shall be entitled to all the rights set forth inthis Article 12 with respect to any Senior Indebtedness of a Guarantorwhich may at any time be held by it, to the same extent as any otherholder of such Senior Indebtedness; and nothing in Article 7 shall deprivethe Trustee of any of its rights as such holder. Nothing in this Article 12shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07hereof or any other Section of this Indenture.

 

Section 12.10                                    Distributionor Notice to Representative.

 

Whenever adistribution is to be made or a notice given to holders of Senior Indebtednessof a Guarantor, the distribution may be made and the notice given to theirRepresentative (if any).

 

Section 12.11                                    Article 12Not To Prevent Events of Default or Limit Right To Demand Payment.

 

The failure ofa Guarantor to make a payment pursuant its Guarantee by reason of any provisionin this Article 12 shall not be construed as preventing the occurrence ofa default by such Guarantor under its Guarantee. Nothing in this Article 12shall have any effect on the right of the Holders or the Trustee to make ademand for payment on a Guarantor pursuant to Article 11 hereof.

 

Section 12.12                          Trust Moneys NotSubordinated.

 

Notwithstandinganything contained herein to the contrary, payments from money or the proceedsof  Government Securities held in trust by the Trustee for the payment ofprincipal of and interest on the Notes pursuant to Article 8 or Article 13hereof shall not be subordinated to the prior payment of any SeniorIndebtedness of any Guarantor or subject to the restrictions set forth in this Article 12,and none of the Holders shall be obligated to pay over any such amount to suchGuarantor or any holder of Senior Indebtedness of such Guarantor or any othercreditor of such Guarantor, provided that the subordination provisionsof this Article 12 were not violated at the time the applicable amountswere deposited in trust pursuant to Article 8 or Article 13 hereof,as the case may be, and such deposit was otherwise made in accordance withArticle 8 or Article 13 hereof.

 

Section 12.13                                    TrusteeEntitled To Rely.

 

Upon anypayment or distribution pursuant to this Article 12, the Trustee and theHolders shall be entitled to rely (a) upon any order or decree of a courtof competent jurisdiction in which any proceedings of the nature referred to inSection 12.02 hereof are pending, (b) upon a certificate of the liquidatingtrustee or agent or other Person making such payment or distribution to theTrustee or to the Holders or (c) upon the Representatives of SeniorIndebtedness of a Guarantor for the purpose of ascertaining the Personsentitled to participate in such payment or distribution, the holders of suchSenior Indebtedness and other Indebtedness of such Guarantor, the amountthereof or payable thereon, the amount or amounts paid or distributed thereonand all other facts pertinent thereto or to this Article 12. In the eventthat the Trustee determines, in good faith, that evidence is required withrespect to the right of any

 

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Person as aholder of Senior Indebtedness of a Guarantor to participate in any payment ordistribution pursuant to this Article 12, the Trustee shall be entitled torequest such Person to furnish evidence to the reasonable satisfaction of theTrustee as to the amount of such Senior Indebtedness held by such Person, theextent to which such Person is entitled to participate in such payment or distributionand other facts pertinent to the rights of such Person under this Article 12,and, if such evidence is not furnished, the Trustee shall be entitled to deferany payment to such Person pending judicial determination as to the right ofsuch Person to receive such payment. The provisions of Sections 7.01 and 7.02hereof shall be applicable to all actions or omissions of actions by theTrustee pursuant to this Article 12.

 

Section 12.14                                    TrusteeTo Effectuate Subordination.

 

A Holder byits acceptance of a Note agrees to be bound by this Article 12 andauthorizes and expressly directs the Trustee, on its behalf, to take suchaction as may be necessary or appropriate to effectuate the subordinationbetween the Holders and the holders of Senior Indebtedness of a Guarantor asprovided in this Article 12 and appoints the Trustee as its attorney-in-factfor such purpose.

 

If the Trusteedoes not file a Proper Proof of Claim in any proceeding prior to 15 days beforethe expiration of the time to file a Proof of Claim in such proceeding, thenthe holders of Designated Senior Indebtedness of any Guarantor (or theirRepresentative) are hereby authorized to have the right to file and are (or is)hereby authorized to file, in the name of the Trustee, a Proof of Claim for andon behalf of the Holders; provided that (i) if the holders of theDesignated Senior Indebtedness of such Guarantor (or their Representative) fileany Proof of Claim as contemplated above and the Trustee shall subsequentlyfile a Proper Proof of Claim in such proceeding before the expiration of thetime to file a Proof of Claim in such proceeding, such subsequent Proper Proofof Claim filed by the Trustee shall supersede any such Proof of Claimtheretofore filed by the holders of the Designated Senior Indebtedness of suchGuarantor (or their Representative), and such Proof of Claim theretofore filedby the holders of the Designated Senior Indebtedness of such Guarantor (ortheir Representative) shall thereupon deemed to be withdrawn, and (ii) theforegoing provisions of this paragraph shall not be construed to authorize theholders of the Designated Senior Indebtedness (or their Representative) toauthorize or consent to or accept or adopt on behalf of any Holder any plan ofreorganization, arrangement, adjustment or composition affecting the Notes, orto authorize the holders of the Designated Senior Indebtedness (or theirRepresentative) to vote in respect of the claim of any Holder in any suchproceeding. This paragraph is intended solely to permit the holders ofDesignated Senior Indebtedness of any Guarantor to preserve their “turnoverright” pursuant to the applicable subordination provisions in this Article 12in circumstances where a Proper Proof of Claim has not been filed by theTrustee before the expiration of the time to file a Proof of Claim in abankruptcy proceeding, and nothing herein shall impair the rights of theTrustee under Section 6.13 and 7.07.

 

Section 12.15                                    TrusteeNot Fiduciary for Holders of Senior Indebtedness of Guarantors.

 

The Trusteeshall not be deemed to owe any fiduciary duty to the holders of Senior Indebtednessof a Guarantor and shall not be liable to any such holders if it shallmistakenly pay over or distribute to Holders or such Guarantor or any otherPerson, money or assets to which any holders of Senior Indebtedness of suchGuarantor shall be entitled by virtue of this Article 12 or otherwise.

 

Section 12.16                          Relianceby Holders of Senior Indebtedness of a Guarantor on Subordination Provisions.

 

Each Holder byaccepting a Note acknowledges and agrees that the subordination provisions inthis Article 12 are, and are intended to be, an inducement and aconsideration to each holder of any Senior Indebtedness of a Guarantor, whethersuch Senior Indebtedness was created or acquired before

 

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or after theissuance of the Notes, to acquire and continue to hold, or to continue to hold,such Senior Indebtedness and such holder of such Senior Indebtedness shall bedeemed conclusively to have relied on such subordination provisions inacquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

Without in anyway limiting the generality of the foregoing paragraph, the holders of SeniorIndebtedness of a Guarantor may, at any time and from time to time, without theconsent of or notice to the Trustee or the Holders, without incurringresponsibility to the Trustee or the Holders and without impairing or releasingthe subordination provided in this Article 12 or the obligations hereunderof the Holders to the holders of the Senior Indebtedness of such Guarantor, doany one or more of the following:  (i) change the manner, placeor terms of payment or extend the time of payment of, or renew or alter, SeniorIndebtedness of such Guarantor, or otherwise amend or supplement in any mannerSenior Indebtedness of such Guarantor, or any instrument evidencing the same orany agreement under which Senior Indebtedness of such Guarantor is outstanding;(ii) sell, exchange, release or otherwise deal with any property pledged,mortgaged or otherwise securing Senior Indebtedness of such Guarantor; (iii) releaseany Person liable in any manner for the payment or collection of SeniorIndebtedness of such Guarantor; and (iv) exercise or refrain fromexercising any rights against such Guarantor and any other Person.

 

ARTICLE 13

 

SATISFACTION AND DISCHARGE

 

Section 13.01                                    Satisfactionand Discharge.

 

This Indentureshall be discharged and shall cease to be of further effect as to all Notes,when either:

 

(1)                                  allNotes theretofore authenticated and delivered, except lost, stolen or destroyedNotes which have been replaced or paid and Notes for whose payment money hastheretofore been deposited in trust, have been delivered to the Trustee for cancellation;or

 

(2)                                  (A) all Notes not theretofore delivered to the Trustee for cancellation have becomedue and payable by reason of the making of a notice of redemption or otherwise,shall become due and payable within one year or are to be called for redemptionwithin one year under arrangements satisfactory to the Trustee for the givingof notice of redemption by the Trustee in the name, and at the expense, of theIssuer and the Issuer or any Guarantor have irrevocably deposited or caused tobe deposited with the Trustee as trust funds in trust solely for the benefit ofthe Holders of the Notes, cash in U.S. dollars, Government Securities, or acombination thereof, in such amounts as will be sufficient withoutconsideration of any reinvestment of interest to pay and discharge the entire indebtednesson the Notes not theretofore delivered to the Trustee for cancellation forprincipal, premium, if any, and accrued interest to the date of maturity orredemption;

 

(B)                                noDefault (other than that resulting from borrowing funds to be applied to makesuch deposit and any similar and simultaneous deposit relating to otherIndebtedness, including the Senior Notes and the Subordinated Discount Notes,and the granting of Liens in connection therewith) with respect to thisIndenture or the Notes shall have occurred and be continuing on the date ofsuch deposit or shall occur as a result of such deposit and such deposit willnot result in a breach or violation of, or constitute a default under theSenior Credit Facilities, Senior Notes (or the indenture under which the SeniorNotes are issued), Subordinated Discount Notes (or the indenture under whichthe Subordinated Discount Notes are issued) or any other material agreement

 

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or instrument (other than this Indenture) to which the Issuer or anyGuarantor is a party or by which the Issuer or any Guarantor is bound (otherthan that resulting from any borrowing of funds to be applied to make suchdeposit and any similar and simultaneous deposit relating to otherIndebtedness, including the Senior Notes and the Subordinated Discount Notes,and the granting of Liens in connection therewith);

 

(C)                                theIssuer has paid or caused to be paid all sums payable by it under this Indenture;and

 

(D)                               theIssuer has delivered irrevocable instructions to the Trustee to apply thedeposited money toward the payment of the Notes at maturity or the redemptiondate, as the case may be.

 

In addition,the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel tothe Trustee stating that all conditions precedent to satisfaction and dischargehave been satisfied.

 

Notwithstandingthe satisfaction and discharge of this Indenture, if money shall have beendeposited with the Trustee pursuant to subclause (A) of clause (2) ofthis Section 13.01, the provisions of Section 13.02 and Section 8.06hereof shall survive such satisfaction and discharge.

 

Section 13.02                                    Applicationof Trust Money.

 

Subject to theprovisions of Section 8.06 hereof, all money deposited with the Trusteepursuant to Section 13.01 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 Issuer acting as itsown Paying Agent) as the Trustee may determine, to the Persons entitledthereto, of the principal (and premium and Additional Interest, if any) andinterest for whose payment such money has been deposited with the Trustee; butsuch money need not be segregated from other funds except to the extent requiredby law.

 

If the Trusteeor Paying Agent is unable to apply any money or Government Securities inaccordance with Section 13.01 hereof by reason of any legal proceeding or byreason of any order or judgment of any court or governmental authorityenjoining, restraining or otherwise prohibiting such application, the Issuer’sand any Guarantor’s obligations under this Indenture and the Notes shall berevived and reinstated as though no deposit had occurred pursuant to Section 13.01hereof; provided that if the Issuer has made any payment of principalof, premium and Additional Interest, if any, or interest on any Notes becauseof the reinstatement of its obligations, the Issuer shall be subrogated to therights of the Holders of such Notes to receive such payment from the money orGovernment Securities held by the Trustee or Paying Agent.

 

ARTICLE 14

 

MISCELLANEOUS

 

Section 14.01                                    TrustIndenture Act Controls.

 

If anyprovision of this Indenture limits, qualifies or conflicts with the dutiesimposed by Trust Indenture Act Section 318(c), the imposed duties shallcontrol.

 

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Section 14.02                                    Notices.

 

Any notice orcommunication by the Issuer, any Guarantor or the Trustee to the others is dulygiven if in writing and delivered in person or mailed by first-class mail(registered or certified, return receipt requested), fax or overnight aircourier guaranteeing next day delivery, to the others’ address:

 

If to theIssuer and/or any Guarantor:

 

c/o MichaelsStores, Inc. 8000 Bent Branch DriveIrving, TX 75063Attention: General Counsel

 

with a copy to:

 

Ropes & Gray LLPOne International Place

Boston, MA 02110

Attention: Byung W. Choi, Esq.

 

Telephone:            (617)951-7000

Facsimile:                                            (617) 951-7050

 

If to theTrustee:

 

WellsFargo Bank, National Association1445 Ross Avenue - 2nd FloorDallas, Texas 75202-2812                          Fax No.: 214-777-4086 

Attention:                 Patrick GiordanoCorporate Trust Services

 

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

 

All noticesand communications (other than those sent to Holders) shall be deemed to havebeen duly given: at the time delivered by hand, if personally delivered; five calendardays after being deposited in the mail, postage prepaid, if mailed by first-class mail;when receipt acknowledged, if faxed; and the next Business Day after timelydelivery to the courier, if sent by overnight air courier guaranteeing next daydelivery; and,subject to compliance with the Trust Indenture Act, on the first date on whichpublication is made, if given by publication; provided that anynotice or communication delivered to the Trustee shall be deemed effective uponactual receipt thereof.

 

Any notice orcommunication to a Holder shall be mailed by first-class mail, certifiedor registered, return receipt requested, or by overnight air courier guaranteeingnext day delivery to its address shown on the register kept by the Registrar. Anynotice or communication shall also be so mailed to any Person described in TrustIndenture Act Section 313(c), to the extent required by the TrustIndenture Act. Failure to mail a notice or communication to a Holder or anydefect in it shall not affect its sufficiency with respect to other Holders.

 

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If a notice orcommunication is mailed or otherwise delivered in the manner provided abovewithin  the time prescribed, it is dulygiven, whether or not the addressee receives it.

 

If the Issuermails a notice or communication to Holders, it shall mail a copy to the Trusteeand each Agent at the same time.

 

Section 14.03                                    Communicationby Holders of Notes with Other Holders of Notes.

 

Holders may communicatepursuant to Trust Indenture Act Section 312(b) with other Holders withrespect to their rights under this Indenture or the Notes. The Issuer, the Trustee,the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

 

Section 14.04                                    Certificateand Opinion as to Conditions Precedent.

 

Upon anyrequest or application by the Issuer or any of the Guarantors to the Trustee totake any action under this Indenture, the Issuer or such Guarantor, as the casemay be, shall furnish to the Trustee:

 

(a)                                  An Officer’s Certificatein form and substance reasonably satisfactory to the Trustee (which shallinclude the statements set forth in Section 14.05 hereof) stating that, inthe opinion of the signers, all conditions precedent and covenants, if any, providedfor in this Indenture relating to the proposed action have been satisfied; and

 

(b)                                 An Opinion of Counselin form and substance reasonably satisfactory to the Trustee (which shallinclude the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all suchconditions precedent and covenants have been satisfied.

 

Section 14.05                                    StatementsRequired in Certificate or Opinion.

 

Eachcertificate or opinion with respect to compliance with a condition or covenantprovided for in this Indenture (other than a certificate provided pursuant to Section 4.04hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the provisionsof Trust Indenture Act Section 314(e) and shall include:

 

(a)                                  a statement that thePerson making such certificate or opinion has read such covenant or condition;

 

(b)                                 a brief statement asto the nature and scope of the examination or investigation upon which thestatements or opinions contained in such certificate or opinion are based;

 

(c)                                  a statement that, inthe opinion of such Person, he or she has made such examination or investigationas is necessary to enable him to express an informed opinion as to whether ornot such covenant or condition has been complied with (and, in the case of anOpinion of Counsel, may be limited to reliance on an Officer’s Certificateas to matters of fact); and

 

(d)                                 a statement as towhether or not, in the opinion of such Person, such condition or covenant hasbeen complied with; *provided, however*, that with respect to matters of fact anOpinion of Counsel may rely on an Officer’s Certificate or certificates ofpublic officials.

 

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Section 14.06                                    Rules byTrustee and Agents.

 

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

 

Section 14.07                                    NoPersonal Liability of Directors, Officers, Employees and Stockholders.

 

No past,present or future director, officer, employee, incorporator, member, partner orstockholder of the Issuer or any Guarantor or any of their direct or indirect parentcompanies shall have any liability for any obligations of the Issuer or theGuarantors under the Notes, the Guarantees or this Indenture or for any claimbased on, in respect of, or by reason of such obligations or their creation. EachHolder by accepting Notes waives and releases all such liability. The waiverand release are part of the consideration for issuance of the Notes.

 

Section 14.08                                    GoverningLaw.

 

THISINDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED INACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 14.09                                    Waiverof Jury Trial.

 

EACH OF THE ISSUER,THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGALPROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THETRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.10                                    ForceMajeure.

 

In no eventshall the Trustee be responsible or liable for any failure or delay in theperformance of its obligations under this Indenture arising out of or causedby, directly or indirectly, forces beyond its reasonable control, includingwithout limitation strikes, work stoppages, accidents, acts of war or terrorism,civil or military disturbances, nuclear or natural catastrophes or acts of God,and interruptions, loss or malfunctions of utilities, communications orcomputer (software or hardware) services.

 

Section 14.11                                    NoAdverse Interpretation of Other Agreements.

 

This Indenturemay not be used to interpret any other indenture, loan or debt agreementof the Issuer or its Restricted Subsidiaries or of any other Person. Any suchindenture, loan or debt agreement may not be used to interpret thisIndenture.

 

Section 14.12                                    Successors.

 

All agreementsof the Issuer in this Indenture and the Notes shall bind its successors. Allagreements of the Trustee in this Indenture shall bind its successors. Allagreements of each Guarantor in this Indenture shall bind its successors,except as otherwise provided in Section 11.06 hereof.

 

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Section 14.13                                    Severability.

 

In case anyprovision in this Indenture or in the Notes shall be invalid, illegal or unenforceable,the validity, legality and enforceability of the remaining provisions shall notin any way be affected or impaired thereby.

 

Section 14.14                                    Counterpart Originals.

 

The parties may signany number of copies of this Indenture. Each signed copy shall be an original,but all of them together represent the same agreement. This Indenture may beexecuted in multiple counterparts which, when taken together, shall constituteone instrument.

 

Section 14.15                                    Tableof Contents, Headings, etc.

 

The Table ofContents, Cross-Reference Table and headings of the Articles and Sections ofthis Indenture have been inserted for convenience of reference only, are not tobe considered a part of this Indenture and shall in no way modify orrestrict any of the terms or provisions hereof.

 

Section 14.16                                    Qualificationof Indenture.

 

The Issuer andthe Guarantors shall qualify this Indenture under the Trust Indenture Act inaccordance with the terms and conditions of the Registration Rights Agreementand shall pay all reasonable costs and expenses (including attorneys’ fees andexpenses for the Issuer, the Guarantors and the Trustee) incurred in connectiontherewith, including, but not limited to, costs and expenses of qualificationof this Indenture and the Notes and printing this Indenture and the Notes. TheTrustee shall be entitled to receive from the Issuer and the Guarantors anysuch Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonablyrequest in connection with any such qualification of this Indenture under the TrustIndenture Act.

 

[Signatures on following page]

 

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|   | MICHAELS STORES, INC. |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        |  /s/ Lisa K. Klinger |
|   |                       | Name: | Lisa K. Klinger |
|   |                       | Title: | Vice President – Treasurer and  Investor Relations |

 

Signature Page to SeniorSubordinated Indenture

 

----

 
|   | AARON BROTHERS, INC.

MICHAELS FINANCE COMPANY, INC.

MICHAELS STORES PROCUREMENT

     COMPANY, INC.

MICHAELS OF CANADA, ULC

MICHAELS STORES CARD SERVICES, LLC  ARTISTREE, INC. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                   |
|   | By:                                                                                                                                                                                                                    |  /s/ Lisa K. Klinger |
|   |                                                                                                                                                                                                                   | Name: | Lisa K. Klinger |
|   |                                                                                                                                                                                                                   | Title: | Vice President and Treasurer |

 

Signature Page to SeniorSubordinated Indenture

 

----

 
|   | WELLS  FARGO BANK, NATIONAL ASSOCIATION,  as Trustee |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 |
|   | By:                                                  |  /s/ Frank McDonald |
|   |                                                 | Name: | Frank McDonald |
|   |                                                 | Title: | Vice President |

 

Signature Page to SeniorSubordinated Indenture

 

----

 

EXHIBIT A

 

[Face of Note]

 

[Insert theGlobal Note Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert thePrivate Placement Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert theRegulation S Temporary Global Note Legend, if applicable pursuant to theprovisions of the Indenture]

 

A-1

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CUSIP  [                    ]

ISIN  [                    ](1)

 

[[RULE 144A][REGULATION S] GLOBAL NOTErepresenting up to$                 ]

11 3/8% Senior Subordinated Notes due 2016

 

| No. |   | [$                     ] |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------|

 

MICHAELS STORES, INC.

 

promises topay to CEDE & CO. or registered assigns, the principal sum [set forthon the Schedule of Exchanges of Interests in the Global Note attachedhereto] [of                                                 United States Dollars] on November 1, 2016.

 

Interest PaymentDates:  May 1 and November 1

 

Record Dates:  April 15 and October 15

 

 

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(1)                                  Rule 144ANote CUSIP:  594087AK4

Rule 144A Note ISIN:  US594087AK46

Regulation S Note CUSIP:  U59329AB5

Regulation S Note ISIN:  USU59329AB59

Exchange Note CUSIP:  594087AM0

Exchange Note ISIN:  US594087AM02

 

A-2

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IN WITNESSHEREOF, the Issuer has caused this instrument to be duly executed.

 

Dated: [      ], 2006

 
|   | MICHAELS STORES, INC. |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        |   |
|   |                       | Name: |
|   |                       | Title: |

 

A-3

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

 
|   | WELLS FARGO BANK, NATIONAL  ASSOCIATION,  as Trustee |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 |
|   | By:                                                  |   |   |
|   |                                                 | Authorized  Signatory |   |
|   |                                                 |   |

 

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[Back of Senior Subordinated Note]

 

11 3/8% Senior Subordinated Notes due 2016

 

Capitalizedterms used herein shall have the meanings assigned to them in the Indenturereferred to below unless otherwise indicated.

 

1.                                       INTEREST.Michaels Stores, Inc., a Delaware corporation, promises to pay interest onthe principal amount of this Note at 11 3/8% per annum from October 31,2006(2) until maturity and shall pay the Additional Interest, if any,payable pursuant to the Registration Rights Agreement referred to below. TheIssuer will pay interest and Additional Interest, if any, semi-annually in arrearson May 1 and November 1 of each year, or if any such day is not aBusiness Day, on the next succeeding Business Day (each, an “InterestPayment Date”). Interest on the Notes will accrue from the most recent dateto which interest has been paid or, if no interest has been paid, from the dateof issuance; provided that the first Interest Payment Date shall be May 1,2007. The Issuer will pay interest (including post-petition interest in anyproceeding under any Bankruptcy Law) on overdue principal and premium, if any,from time to time on demand at the interest rate on the Notes; it shall payinterest (including post-petition interest in any proceeding under anyBankruptcy Law) on overdue installments of interest and Additional Interest, ifany, (without regard to any applicable grace periods) from time to time ondemand at the interest rate on the Notes. Interest will be computed on thebasis of a 360-day year comprised of twelve 30-day months.

 

2.                                       METHODOF PAYMENT. The Issuer will pay interest on the Notes and Additional Interest,if any, to the Persons who are registered Holders of Notes at the close of businesson the April 15 or October 15 (whether or not a Business Day), as thecase may be, next preceding the Interest Payment Date, even if such Notesare 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 defaultedinterest. Payment of interest and Additional Interest, if any, may be madeby check mailed to the Holders at their addresses set forth in the register ofHolders, provided that payment by wire transfer of immediately availablefunds will be required with respect to principal of and interest, premium and AdditionalInterest, if any, on, all Global Notes and all other Notes the Holders of whichshall have provided wire transfer instructions to the Issuer or the PayingAgent. Such payment shall be in such coin or currency of the United States ofAmerica as at the time of payment is legal tender for payment of public andprivate debts.

 

3.                                       PAYINGAGENT AND REGISTRAR. Initially, Wells Fargo Bank, National Association, theTrustee under the Indenture, will act as Paying Agent and Registrar. The Issuermay change any Paying Agent or Registrar without notice to the Holders. TheIssuer or any of its Subsidiaries may act in any such capacity.

 

4.                                       INDENTURE.The Issuer issued the Notes under an Indenture, dated as of October 31, 2006 (the “Indenture”), among Michaels Stores, Inc.,the Guarantors named therein and the Trustee. This Note is one of a dulyauthorized issue of notes of the Issuer designated as its 11 3/8% SeniorSubordinated Notes due 2016. The Issuer shall be entitled to issue Additional Notespursuant to Section 2.01 and 4.09 of the Indenture. The terms of the Notesinclude those stated in the Indenture and

 

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(2)                                  Withrespect to the Initial Notes.

 

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those made part ofthe Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TrustIndenture Act”). The Notes are subject to all such terms, and Holders arereferred to the Indenture and such Act for a statement of such terms. To theextent any provision of this Note conflicts with the express provisions of theIndenture, the provisions of the Indenture shall govern and be controlling.

 

5.                                       OPTIONALREDEMPTION.

 

(a)                                  Exceptas described below under clauses 5(b) and 5(c) hereof, the Notes willnot be redeemable at the Issuer’s option before November 1, 2011.

 

(b)                                 Atany time prior to November 1, 2011, the Issuer may redeem all or a part ofthe Notes, upon not less than 30 nor more than 60 days’ prior notice mailed byfirst-class mail to the registered address of each Holder of Notes orotherwise delivered in accordance with the procedures of DTC, at a redemptionprice equal to 100% of the principal amount of the Notes redeemed plus theApplicable Premium as of, and accrued and unpaid interest and AdditionalInterest, if any, to the date of redemption (the “Redemption Date”), subject to the rights of Holders of recordon the relevant Record Date to receive interest due on the relevant Interest PaymentDate.

 

(c)                                  UntilNovember 1, 2009, the Issuer may, at its option, on one or more occasionsredeem up to 35% of the aggregate principal amount of Notes (including theaggregate principal amount of Notes issued after the Issue Date) at aredemption price equal to 111.375% of the aggregate principal amount thereof,plus accrued and unpaid interest thereon and Additional Interest, if any, tothe applicable Redemption Date, subject to the right of Holders of record onthe relevant Record Date to receive interest due on the relevant InterestPayment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 50% of thesum of the aggregate principal amount of Notes originally issued under theIndenture and any Additional Notes that are issued under the Indenture afterthe Issue Date remains outstanding immediately after the occurrence of each suchredemption; providedfurther that each suchredemption occurs within 90 days of the date of closing of each such EquityOffering. Notice of any redemption upon any Equity Offering may be givenprior to such redemption, and any such redemption or notice may, at the Issuer’sdiscretion, be subject to one or more conditions precedent, including, but notlimited to, completion of the related Equity Offering.

 

(d)                                 Onand after November 1, 2011, the Issuer may redeem the Notes, in wholeor in part, at the redemption prices (expressed as percentages of principalamount of the Notes to be redeemed) set forth below, plus accrued and unpaidinterest thereon and Additional Interest, if any, to the applicable RedemptionDate, subject to the right of Holders of record on the relevant Record Date toreceive interest due on the relevant Interest Payment Date, if redeemed duringthe twelve-month period beginning on November 1 of each of the yearsindicated below:

 
| **Year**            | ** ** | **Percentage** | ** ** |
|---------------------|------------|----------------|------------|
|                |       |           |       |
| 2011                |       | 105.688        | %          |
| 2012                |       | 103.792        | %          |
| 2013                |       | 101.896        | %          |
| 2014 and thereafter |       | 100.000        | %          |

 

(e)                                  Anyredemption pursuant to this paragraph 5 shall be made pursuant to theprovisions of Sections 3.01 through 3.06 of the Indenture.

 

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6.                                       MANDATORYREDEMPTION. The Issuer shall not be required to make mandatory redemption orsinking fund payments with respect to the Notes.

 

7.                                       NOTICEOF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemptionwill be mailed by first-class mail at least 30 days but not more than 60days before the redemption date (except that redemption notices may be mailedmore than 60 days prior to a redemption date if the notice is issued in connectionwith Article 8 or Article 13 of the Indenture) to each Holder whose Notesare to be redeemed at its registered address. Notes in denominations largerthan $1,000 may be redeemed in part but only in whole multiples of $1,000,unless all of the Notes held by a Holder are to be redeemed. On and after theredemption date interest ceases to accrue on Notes or portions thereof calledfor redemption.

 

8.                                       OFFERSTO REPURCHASE.

 

(a)                                  Uponthe occurrence of a Change of Control, the Issuer shall make an offer (a “Changeof Control Offer”) to each Holder to repurchase all or any part (equalto $1,000 or an integral multiple thereof) of each Holder’s Notes at a purchaseprice equal to 101% of the aggregate principal amount thereof plus accrued andunpaid interest and Additional Interest thereon, if any, to the date of purchase(the “Change of Control Payment”). The Change of Control Offer shall be madein accordance with Section 4.14 of the Indenture.

 

(b)                                 Ifthe Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within10 Business Days of each date that Excess Proceeds exceed $50.0 million, theIssuer shall commence, an offer to all Holders of the Notes and, if required bythe terms of any Indebtedness that is *paripassu* with the Notes (“PariPassu Indebtedness”), to the holders of such Pari Passu Indebtedness(an “Asset Sale Offer”),to purchase the maximum principal amount of Notes (including any AdditionalNotes) and such other Pari Passu Indebtedness that may be purchased out ofthe Excess Proceeds at an offer price in cash in an amount equal to 100% of theprincipal amount thereof plus accrued and unpaid interest and AdditionalInterest thereon, if any, to the date fixed for the closing of such offer, inaccordance with the procedures set forth in the Indenture. To the extent thatthe aggregate amount of Notes (including any Additional Notes) and such PariPassu Indebtedness tendered pursuant to an Asset Sale Offer is less than theExcess Proceeds, the Issuer may use any remaining Excess Proceeds forgeneral corporate purposes, subject to other covenants contained in theIndenture. If the aggregate principal amount of Notes and the Pari PassuIndebtedness surrendered by such holders thereof exceeds the amount of ExcessProceeds, the Trustee shall select the Notes and such Pari Passu Indebtednessto be purchased on a *pro rata* basisbased on the accreted value or principal amount of the Notes or such Pari PassuIndebtedness tendered. Upon completion of any such Asset Sale Offer, the amountof Excess Proceeds shall be reset at zero. Holders of Notes that are the subjectof an offer to purchase will receive an Asset Sale Offer from the Issuer priorto any related purchase date and may elect to have such Notes purchased bycompleting the form entitled “Option of Holder to Elect Purchase” attachedto the Notes.

 

9.                                       DENOMINATIONS,TRANSFER, EXCHANGE. The Notes are in registered form without coupons indenominations of $1,000 and integral multiples of $1,000. The transfer of Notesmay be registered and Notes may be exchanged as provided in theIndenture. The Registrar and the Trustee may require a Holder, among otherthings, to furnish appropriate endorsements and transfer documents and theIssuer may require a Holder to pay any taxes and fees required by law or permittedby the Indenture. The Issuer need not exchange or register the transfer of anyNote or portion of a Note selected for redemption, except for the unredeemedportion of any Note being redeemed in part. Also, the Issuer need not exchangeor register the transfer of any Notes for a period of 15 days before a selectionof Notes to be redeemed.

 

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10.                                 SUBORDINATION.The Notes and the Guarantees are subordinated to Senior Indebtedness of theIssuer and the Guarantors on the terms and subject to the conditions set forthin the Indenture. To the extent provided in the Indenture, Senior Indebtednessmust be paid before the Notes and Guarantees may be paid. The Issueragrees, and each Holder by accepting a Note agrees, to the subordinationprovisions contained in the Indenture and authorizes the Trustee to give themeffect and appoints the Trustee as attorney-in-fact for such purpose.

 

11.                                 PERSONSDEEMED OWNERS. The registered Holder of a Note may be treated as its ownerfor all purposes.

 

12.                                 AMENDMENT,SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may beamended or supplemented as provided in the Indenture.

 

13.                                 DEFAULTSAND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01of the Indenture. If any Event of Default occurs and is continuing, the Trusteeor the Holders of at least 25% in principal amount of the then outstanding Notesmay declare the principal, premium, if any, interest and any othermonetary obligations on all the then outstanding Notes to be due and payableimmediately; provided, however, that so long as any Indebtednesspermitted to be incurred under the Indenture as part of the Senior CreditFacilities shall be outstanding, no such acceleration shall be effective untilthe earlier of: (1) acceleration of any such Indebtedness under the SeniorCredit Facilities; or (2) five Business Days after the giving of writtennotice of such acceleration to the Issuer and the Representative under each of theSenior Credit Facilities. Notwithstanding the foregoing, in the case of anEvent of Default arising from certain events of bankruptcy or insolvency, alloutstanding Notes will become due and payable immediately without furtheraction or notice. Holders may not enforce the Indenture, the Notes or the Guaranteesexcept as provided in the Indenture. Subject to certain limitations, Holders ofa majority in aggregate principal amount of the then outstanding Notes may directthe Trustee in its exercise of any trust or power. The Trustee may withholdfrom Holders of the Notes notice of any continuing Default (except a Defaultrelating to the payment of principal, premium, if any, Additional Interest, ifany, or interest) if it determines that withholding notice is in their interest.The Holders of a majority in aggregate principal amount of the Notes thenoutstanding by notice to the Trustee may on behalf of the Holders of allof the Notes waive any existing Default or and its consequences under theIndenture except a continuing Default in payment of the principal of, premium,if any, Additional Interest, if any, or interest on, any of the Notes held by anon-consenting Holder. The Issuer and each Guarantor (to the extent that suchGuarantor is so required under the Trust Indenture Act) is required to deliverto the Trustee annually a statement regarding compliance with the Indenture,and the Issuer is required within five (5) Business Days after becomingaware of any Default, to deliver to the Trustee a statement specifying such Defaultand what action the Issuer proposes to take with respect thereto.

 

14.                                 AUTHENTICATION.This Note shall not be entitled to any benefit under the Indenture or be validor obligatory for any purpose until authenticated by the manual signature ofthe Trustee.

 

15.                                 ADDITIONALRIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. Inaddition to the rights provided to Holders of Notes under the Indenture,Holders of Restricted Global Notes and Restricted Definitive Notes shall haveall the rights set forth in the Registration Rights Agreement, dated as of October 31,2006, among Michaels Stores, Inc., the Guarantors named therein and the otherparties named on the signature pages thereof (the “Registration RightsAgreement”), including the right to receive Additional Interest (as definedin the Registration Rights Agreement).

 

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16.                                 GOVERNINGLAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THEINDENTURE, THE NOTES AND THE GUARANTEES.

 

17.                                 CUSIPNUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform SecurityIdentification Procedures, the Issuer has caused CUSIP numbers to be printed onthe Notes and the Trustee may use CUSIP numbers in notices of redemptionas a convenience to Holders. No representation is made as to the accuracy ofsuch numbers either as printed on the Notes or as contained in any notice ofredemption and reliance may be placed only on the other identification numbersplaced thereon.

 

The Issuerwill furnish to any Holder upon written request and without charge a copy ofthe Indenture and/or the Registration Rights Agreement. Requests may bemade to the Issuer at the following address:

 

8000 BentBranch DriveIrving, TX 75063Attention: General Counsel

 

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ASSIGNMENT FORM

 

To assign thisNote, fill in the form below:

 

(I) or (we)assign and transfer this Note to:  _______________________________________________________________________

(Insert assignee’ legal name)

 

 

 

(Insert assignee’s soc. sec. ortax 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 Issuer. The agent may substituteanother to act for him.

 
| Date:                 |            |                                  |   |
|-----------------------|-----------------|---------------------------------------|--------|
|                  |            |
|                  | Your Signature: |                                  |
|                  |            | (Sign exactly as your name appears on |
|                  |            | the face of this Note)                |
|                  |            |
|                  |            |
| Signature Guarantee*: |            |                                  |
|                       |                 |                                       |        |  |  |

 

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

 

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OPTION OF HOLDER TO ELECTPURCHASE

 

If you want toelect to have this Note purchased by the Issuer pursuant to Section 4.10or 4.14 of the Indenture, check the appropriate box below:

 

[   ] Section 4.10            [   ]Section 4.14

 

If you want toelect to have only part of this Note purchased by the Issuer pursuant to Section 4.10or Section 4.14 of the Indenture, state the amount you elect to have purchased:

 

$                    

 

 
| Date:                 |                    |                                  |   |
|-----------------------|-------------------------|---------------------------------------|--------|
|                  |                    |
|                  | Your Signature:         |                                  |   |
|                  |                    | (Sign exactly as your name appears on |
|                  |                    | the face of this Note)                |
|                  | Tax Identification No.: |                                  |   |
|                  |                    |
|                  |                    |
| Signature Guarantee*: |                    |                                  |
|                       |                         |                                       |        |  |  |  |  |

 

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

 

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SCHEDULE OF EXCHANGES OFINTERESTS IN THE GLOBAL NOTE*

 

The initialoutstanding principal amount of this Global Note is $                 .The following exchanges of a part of this Global Note for an interest inanother Global Note or for a Definitive Note, or exchanges of a part ofanother Global or Definitive Note for an interest in this Global Note, havebeen made:

 
| **Date of  Exchange** | ** ** | **Amount of  decrease  in Principal  Amount** | ** ** | **Amount of increase  in Principal  Amount of this  Global Note** | ** ** | **Principal Amount  of  this Global Note  following such  decrease or  increase** | ** ** | **Signature of  authorized officer  of Trustee or   Note Custodian** | ** ** |
|-----------------------|------------|-----------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|----------------------------------------------------------------------|------------|
|                  |       |                                          |       |                                                              |       |                                                                              |       |                                                                 |       |
|                  |       |                                          |       |                                                              |       |                                                                              |       |                                                                 |       |
|                  |       |                                          |       |                                                              |       |                                                                              |       |                                                                 |       |

 

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*This schedule should be included only if the Note is issued inglobal form.

 

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EXHIBIT B

 

FORM OF CERTIFICATE OFTRANSFER

 

MichaelsStores, Inc. 8000 Bent Branch DriveIrving, TX 75063Attention: General Counsel

 

Wells Fargo Bank, NationalAssociation1445 Ross Avenue - 2nd FloorDallas, Texas 75202-2812                          Fax No.: 214-777-4086 

Attention:       Patrick GiordanoCorporate Trust Services

 

Re:  11 3/8% Senior Subordinated Notes due 2016

 

Reference ishereby made to the Indenture, dated as of October 31, 2006 (the “Indenture”),among Michaels Stores, Inc., the Guarantors named therein and the Trustee.Capitalized terms used but not defined herein shall have the meanings given tothem in the Indenture.

 

                        (the “Transferor”) owns and proposes to transfer the Note[s] or interestin 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. Inconnection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.                                       [  ] CHECK IF TRANSFEREE WILL TAKE DELIVERYOF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANTTO RULE 144A. The Transfer is being effected pursuant to and in accordancewith Rule 144A under the United States Securities Act of 1933, as amended(the “Securities Act”), and, accordingly, the Transferor hereby furthercertifies that the beneficial interest or Definitive Note is being transferredto a Person that the Transferor reasonably believes is purchasing thebeneficial interest or Definitive Note for its own account, or for one or moreaccounts with respect to which such Person exercises sole investmentdiscretion, and such Person and each such account is a “qualified institutionalbuyer” within the meaning of Rule 144A in a transaction meeting therequirements of Rule 144A and such Transfer is in compliance with anyapplicable blue sky securities laws of any state of the United States.

 

2.                                       [  ] CHECK IF TRANSFEREE WILL TAKE DELIVERYOF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANTTO REGULATION S. The Transfer is being effected pursuant to and in accordancewith Rule 903 or Rule 904 under the Securities Act and, accordingly,the Transferor hereby further certifies that (i) the Transfer is not beingmade to a person in the United States and (x) at the time the buy order wasoriginated, the Transferee was outside the United States or such Transferor andany Person acting on its behalf reasonably believed and believes that theTransferee was outside the United States or (y) the transaction was executedin, on or through the facilities of a designated offshore securities market andneither such Transferor nor any Person acting on its behalf knows that thetransaction was prearranged with a buyer in the United States, (ii) nodirected selling efforts have been made in contravention of the requirements ofRule 903(b)

 

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or Rule 904(b) ofRegulation S under the Securities Act (iii) the transaction is not part ofa plan or scheme to evade the registration requirements of the Securities Actand (iv) if the proposed transfer is being made prior to the expiration ofthe Restricted Period, the transfer is not being made to a U.S. Person or forthe account or benefit of a U.S. Person (other than an Initial Purchaser). Uponconsummation of the proposed transfer in accordance with the terms of the Indenture,the transferred beneficial interest or Definitive Note will be subject to the restrictionson Transfer enumerated in the Indenture and the Securities Act.

 

3.                                       [  ] CHECK AND COMPLETE IF TRANSFEREE WILLTAKE DELIVERY OF A BENEFICIAL INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANYPROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. TheTransfer is being effected in compliance with the transfer restrictionsapplicable to beneficial interests in Restricted Global Notes and RestrictedDefinitive Notes and pursuant to and in accordance with the Securities Act andany applicable blue sky securities laws of any state of the United States, andaccordingly the Transferor hereby further certifies that (check one):

 

(a)                                  [  ] such Transfer is being effected pursuantto and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)                                 [  ] such Transfer is being effected to theIssuer or a subsidiary thereof;

 

or

 

(c)                                  [  ] such Transfer is being effected pursuantto an effective registration statement under the Securities Act and incompliance with the prospectus delivery requirements of the Securities Act.

 

4.                                       [  ] CHECK IF TRANSFEREE WILL TAKE DELIVERYOF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVENOTE.

 

(a)                                  [  ] CHECK IF TRANSFER IS PURSUANT TO RULE 144.(i) The Transfer is being effected pursuant to and in accordance with Rule 144under the Securities Act and in compliance with the transfer restrictionscontained in the Indenture and any applicable blue sky securities laws of anystate of the United States and (ii) the restrictions on transfer containedin the Indenture and the Private Placement Legend are not required in order tomaintain compliance with the Securities Act. Upon consummation of the proposedTransfer in accordance with the terms of the Indenture, the transferred beneficialinterest or Definitive Note will no longer be subject to the restrictions ontransfer enumerated in the Private Placement Legend printed on the RestrictedGlobal Notes, on Restricted Definitive Notes and in the Indenture.

 

(b)                                 [  ] CHECK IF TRANSFER IS PURSUANT TOREGULATION S. (i) The Transfer is being effected pursuant to and inaccordance with Rule 903 or Rule 904 under the Securities Act and incompliance with the transfer restrictions contained in the Indenture and anyapplicable blue sky securities laws of any state of the United States and (ii) therestrictions on transfer contained in the Indenture and the Private PlacementLegend are not required in order to maintain compliance with the Securities Act.Upon consummation of the proposed Transfer in accordance with the terms of theIndenture, the transferred beneficial interest or Definitive Note will nolonger be subject to the restrictions on transfer enumerated in the PrivatePlacement Legend printed on the Restricted Global Notes, on RestrictedDefinitive Notes and in the Indenture.

 

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

 

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Thiscertificate and the statements contained herein are made for your benefit andthe benefit of the Issuer.

 
|   | [Insert Name of Transferor] |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |   |
|   |                        | Name: |
|   |                        | Title: |
|   |                        |   |
| Dated: |                        |   |   |   |
|        |                             |  |  |  |

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1.                                       TheTransferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)                                  [  ]a beneficial interest in the:

 

(i)                                     [  ]144A Global Note (CUSIP 594087AK4, or

 

(ii)                                  [  ]Regulation S Global Note (CUSIP U59329AB5, or

 

(b)                                 [  ]a Restricted Definitive Note.

 

2.                                       Afterthe Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)                                  [  ]a beneficial interest in the:

 

(i)                                     [  ]144A Global Note (CUSIP 594087AK4, or

 

(ii)                                  [  ]Regulation S Global Note (CUSIP U59329AB5, or

 

(iii)                               [  ]Unrestricted Global Note (CUSIP 594087AM0; or

 

(b)                                 [  ]a Restricted Definitive Note; or

 

(c)                                  [  ]an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

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EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

MichaelsStores, Inc. 8000 Bent Branch DriveIrving, TX 75063Attention: General Counsel

 

Wells Fargo Bank, NationalAssociation1445 Ross Avenue - 2nd FloorDallas, Texas 75202-2812Fax No.: 214-777-4086 Attention:   Patrick Giordano

                                                               Corporate Trust Services

 

Re:  11 3/8% Senior Subordinated Notes due 2016

 

Reference ishereby made to the Indenture, dated as of October 31, 2006 (the “Indenture”),among Michaels Stores, Inc., the Guarantors named therein and the Trustee.Capitalized terms used but not defined herein shall have the meanings given tothem in the Indenture.

 

           (the “Owner”) owns and proposes to exchange the Note[s] or interest insuch Note[s] specified herein, in the principal amount of $                 in such Note[s] or interests (the “Exchange”). In connection with theExchange, the Owner hereby certifies that:

 

1)                                      EXCHANGEOF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBALNOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTEDGLOBAL NOTE

 

a)                                      [  ] CHECK IF EXCHANGE IS FROM BENEFICIALINTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBALNOTE. In connection with the Exchange of the Owner’s beneficial interest in aRestricted Global Note for a beneficial interest in an Unrestricted Global Notein an equal principal amount, the Owner hereby certifies (i) thebeneficial interest is being acquired for the Owner’s own account withouttransfer, (ii) such Exchange has been effected in compliance with thetransfer restrictions applicable to the Global Notes and pursuant to and inaccordance with the United States Securities Act of 1933, as amended (the “SecuritiesAct”), (iii) the restrictions on transfer contained in the Indentureand the Private Placement Legend are not required in order to maintain compliancewith the Securities Act and (iv) the beneficial interest in anUnrestricted Global Note is being acquired in compliance with any applicableblue sky securities laws of any state of the United States.

 

b)                                     [  ] CHECK IF EXCHANGE IS FROM BENEFICIALINTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. Inconnection with the Exchange of the Owner’s beneficial interest in a RestrictedGlobal Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) theDefinitive Note is being acquired for the Owner’s own account without transfer,(ii) such Exchange has been effected in compliance with the transferrestrictions applicable to the Restricted Global Notes and pursuant to and inaccordance with the Securities Act, (iii) the restrictions on transfercontained in the Indenture and the

 

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Private Placement Legend are not required in order to maintain compliancewith the Securities Act and (iv) the Definitive Note is being acquired incompliance with any applicable blue sky securities laws of any state of theUnited States.

 

c)                                      [  ] CHECK IF EXCHANGE IS FROM RESTRICTEDDEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. Inconnection with the Owner’s Exchange of a Restricted Definitive Note for abeneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) thebeneficial interest is being acquired for the Owner’s own account without transfer,(ii) such Exchange has been effected in compliance with the transferrestrictions applicable to Restricted Definitive Notes and pursuant to and inaccordance with the Securities Act, (iii) the restrictions on transfercontained in the Indenture and the Private Placement Legend are not required inorder to maintain compliance with the Securities Act and (iv) thebeneficial interest is being acquired in compliance with any applicable bluesky securities laws of any state of the United States.

 

d)                                     [  ] CHECK IF EXCHANGE IS FROM RESTRICTEDDEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’sExchange of a Restricted Definitive Note for an Unrestricted Definitive Note, theOwner hereby certifies (i) the Unrestricted Definitive Note is beingacquired for the Owner’s own account without transfer, (ii) such Exchangehas been effected in compliance with the transfer restrictions applicable toRestricted Definitive Notes and pursuant to and in accordance with theSecurities Act, (iii) the restrictions on transfer contained in theIndenture and the Private Placement Legend are not required in order tomaintain compliance with the Securities Act and (iv) the UnrestrictedDefinitive Note is being acquired in compliance with any applicable blue skysecurities laws of any state of the United States.

 

2)                                      EXCHANGEOF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBALNOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTEDGLOBAL NOTES

 

a)                                      [  ] CHECK IF EXCHANGE IS FROM BENEFICIALINTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. Inconnection with the Exchange of the Owner’s beneficial interest in a RestrictedGlobal Note for a Restricted Definitive Note with an equal principal amount, theOwner hereby certifies that the Restricted Definitive Note is being acquiredfor the Owner’s own account without transfer. Upon consummation of the proposedExchange in accordance with the terms of the Indenture, the RestrictedDefinitive Note issued will continue to be subject to the restrictions ontransfer enumerated in the Private Placement Legend printed on the RestrictedDefinitive Note and in the Indenture and the Securities Act.

 

b)                                     [  ] CHECK IF EXCHANGE IS FROM RESTRICTEDDEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. Inconnection with the Exchange of the Owner’s Restricted Definitive Note for a beneficialinterest in the [CHECK ONE]  [   ] 144A Global Note  [   ]Regulation S Global Note, with an equal principal amount, the Owner herebycertifies (i) the beneficial interest is being acquired for the Owner’sown account without transfer and (ii) such Exchange has been effected incompliance with the transfer restrictions applicable to the Restricted GlobalNotes and pursuant to and in accordance with the Securities Act, and incompliance with any applicable blue sky securities laws of any state of theUnited States. Upon consummation of the proposed Exchange in accordance withthe terms of the Indenture, the beneficial interest issued will be subject tothe restrictions on transfer enumerated in

 

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the Private Placement Legend printed on the relevant Restricted GlobalNote and in the Indenture and the Securities Act.

 

This certificateand the statements contained herein are made for your benefit and the benefitof the Issuer and are dated                                    .

 
|   | [Insert Name of Transferor] |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |   |   |
|   |                        | Name: |
|   |                        | Title: |
|   |                        |   |
| Dated: |                        |   |   |   |
|        |                             |  |  |  |  |

 

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EXHIBIT D

 

[FORM OF SUPPLEMENTAL INDENTURETO BE DELIVERED BY SUBSEQUENT GUARANTORS]

 

SupplementalIndenture (this “Supplemental Indenture”), dated as of           ,among                   (the “Guaranteeing Subsidiary”), a subsidiary of Michaels Stores, Inc.,a Delaware Corporation (the “Issuer”), and Wells Fargo Bank, NationalAssociation, as trustee (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, eachof Michaels Stores, Inc. and the Guarantors (as defined in the Indenturereferred to below) has heretofore executed and delivered to the Trustee anindenture (the “Indenture”), dated as of October 31, 2006,providing for the issuance of an unlimited aggregate principal amount of 11 3/8%Senior Subordinated Notes due 2016 (the “Notes”);

 

WHEREAS, theIndenture provides that under certain circumstances the Guaranteeing Subsidiaryshall execute and deliver to the Trustee a supplemental indenture pursuant towhich the Guaranteeing Subsidiary shall unconditionally guarantee all of theIssuer’s Obligations under the Notes and the Indenture on the terms andconditions set forth herein and under the Indenture (the “Guarantee”);and

 

WHEREAS,pursuant to Section 9.01 of the Indenture, the Trustee is authorized toexecute and deliver this Supplemental Indenture.

 

NOW THEREFORE,in consideration of the foregoing and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the parties mutuallycovenant and agree for the equal and ratable benefit of the Holders of theNotes as follows:

 

(1)                                  CapitalizedTerms. Capitalized terms used herein without definition shall have themeanings assigned to them in the Indenture.

 

(2)                                  Agreementto Guarantee. The Guaranteeing Subsidiary hereby agrees as follows:

 

(a)                                  Alongwith all Guarantors named in the Indenture, to jointly and severallyunconditionally guarantee to each Holder of a Note authenticated and deliveredby the Trustee and to the Trustee and its successors and assigns, irrespectiveof the validity and enforceability of the Indenture, the Notes or theobligations of the Issuer hereunder or thereunder, that:

 

                                                 (i)                                     theprincipal of and interest, premium and Additional Interest, if any, on theNotes will be promptly paid in full when due, whether at maturity, by acceleration,redemption or otherwise, and interest on the overdue principal of and intereston the Notes, if any, if lawful, and all other obligations of the Issuer to theHolders or the Trustee hereunder or thereunder will be promptly paid in full orperformed, all in accordance with the terms hereof and thereof; and

 

                                                 (ii)                                  incase of any extension of time of payment or renewal of any Notes or any of suchother obligations, that same will be promptly paid in full when due or performedin accordance with the terms of the extension or renewal, whether at statedmaturity, by acceleration or otherwise. Failing payment when due of any amountso guaranteed or any performance so guaranteed for whatever reason, theGuarantors and the Guaranteeing

 

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Subsidiary shallbe jointly and severally obligated to pay the same immediately. This is aguarantee of payment and not a guarantee of collection.

 

(b)                                 Theobligations hereunder shall be unconditional, irrespective of the validity,regularity or enforceability of the Notes or the Indenture, the absence of anyaction to enforce the same, any waiver or consent by any Holder of the Noteswith respect to any provisions hereof or thereof, the recovery of any judgmentagainst the Issuer, any action to enforce the same or any other circumstancewhich might otherwise constitute a legal or equitable discharge or defense of aguarantor.

 

(c)                                  Thefollowing is hereby waived:  diligence,presentment, demand of payment, filing of claims with a court in the event ofinsolvency or bankruptcy of the Issuer, any right to require a proceeding firstagainst the Issuer, protest, notice and all demands whatsoever.

 

(d)                                 ThisGuarantee shall not be discharged except by complete performance of the obligationscontained in the Notes, the Indenture and this Supplemental Indenture, and theGuaranteeing Subsidiary accepts all obligations of a Guarantor under theIndenture.

 

(e)                                  Ifany Holder or the Trustee is required by any court or otherwise to return to theIssuer, the Guarantors (including the Guaranteeing Subsidiary), or anycustodian, trustee, liquidator or other similar official acting in relation toeither the Issuer or the Guarantors, any amount paid either to the Trustee orsuch Holder, this Guarantee, to the extent theretofore discharged, shall be reinstatedin full force and effect.

 

(f)                                    TheGuaranteeing Subsidiary shall not be entitled to any right of subrogation inrelation to the Holders in respect of any obligations guaranteed hereby until paymentin full of all obligations guaranteed hereby.

 

(g)                                 Asbetween the Guaranteeing Subsidiary, on the one hand, and the Holders and theTrustee, on the other hand, (x) the maturity of the obligations guaranteedhereby may be accelerated as provided in Article 6 of the Indenture forthe purposes of this Guarantee, notwithstanding any stay, injunction or otherprohibition preventing such acceleration in respect of the obligationsguaranteed hereby, and (y) in the event of any declaration of acceleration ofsuch obligations as provided in Article 6 of the Indenture, such obligations(whether or not due and payable) shall forthwith become due and payable by theGuaranteeing Subsidiary for the purpose of this Guarantee.

 

(h)                                 TheGuaranteeing Subsidiary shall have the right to seek contribution from anynon-paying Guarantor so long as the exercise of such right does not impair therights of the Holders under this Guarantee.

 

(i)                                     Pursuantto Section 11.02 of the Indenture, after giving effect to all othercontingent and fixed liabilities that are relevant under any applicable Bankruptcyor fraudulent conveyance laws, and after giving effect to any collections from,rights to receive contribution from or payments made by or on behalf of anyother Guarantor in respect of the obligations of such other Guarantor under Article 11of the Indenture, this new Guarantee shall be limited to the maximum amountpermissible such that the obligations of such Guaranteeing Subsidiary underthis Guarantee will not constitute a fraudulent transfer or conveyance.

 

(j)                                     ThisGuarantee shall remain in full force and effect and continue to be effectiveshould any petition be filed by or against the Issuer for liquidation,reorganization, should the Issuer

 

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become insolvent or make an assignment for the benefit of creditors orshould a receiver or trustee be appointed for all or any significant part ofthe Issuer’s assets, and shall, to the fullest extent permitted by law,continue to be effective or be reinstated, as the case may be, if at anytime payment and performance of the Notes are, pursuant to applicable law,rescinded or reduced in amount, or must otherwise be restored or returned byany obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulenttransfer” or otherwise, all as though such payment or performance had not beenmade. In the event that any payment or any part thereof, is rescinded,reduced, restored or returned, the Note shall, to the fullest extent permittedby law, be reinstated and deemed reduced only by such amount paid and not sorescinded, reduced, restored or returned.

 

(k)                                  Incase any provision of this Guarantee shall be invalid, illegal orunenforceable, the validity, legality, and enforceability of the remainingprovisions shall not in any way be affected or impaired thereby.

 

(l)                                     ThisGuarantee shall be a general unsecured senior subordinated obligation of suchGuaranteeing Subsidiary in accordance with Article 12 of the Indenture.

 

(m)                               Eachpayment to be made by the Guaranteeing Subsidiary in respect of this Guaranteeshall be made without set-off, counterclaim, reduction or diminution of anykind or nature.

 

(3)                                  Executionand Delivery. The Guaranteeing Subsidiary agrees that the Guarantee shallremain in full force and effect notwithstanding the absence of the endorsementof any notation of such Guarantee on the Notes.

 

(4)                                  Merger,Consolidation or Sale of All or Substantially All Assets.

 

(a)                                  TheGuaranteeing Subsidiary may not consolidate or merge with or into or windup into (whether or not the Issuer or Guaranteeing Subsidiary is the survivingcorporation), or sell, assign, transfer, lease, convey or otherwise dispose ofall or substantially all of its properties or assets, in one or more relatedtransactions, to any Person unless:

 

(i)                                     (A) theGuaranteeing Subsidiary is the surviving corporation or the Person formed by orsurviving any such consolidation or merger (if other than the GuaranteeingSubsidiary) or to which such sale, assignment, transfer, lease, conveyance orother disposition will have been made is a corporation organized or existingunder the laws of the jurisdiction of organization of the GuaranteeingSubsidiary, as the case may be, or the laws of the United States, anystate thereof, the District of Columbia, or any territory thereof (theGuaranteeing Subsidiary or such Person, as the case may be, being hereincalled the “Successor Person”);

 

(B)                                theSuccessor Person, if other than the Guaranteeing Subsidiary, expressly assumesall the obligations of the Guaranteeing Subsidiary under the Indenture and theGuaranteeing Subsidiary’s related Guarantee pursuant to supplemental indenturesor other documents or instruments in form reasonably satisfactory to theTrustee;

 

(C)                                immediatelyafter such transaction, no Default exists; and

 

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

 

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(ii)                                  thetransaction is made in compliance with Sections 4.10(a)(1) and (2) ofthe Indenture;

 

(b)                                 Subjectto certain limitations described in the Indenture, the Successor Person willsucceed to, and be substituted for, the Guaranteeing Subsidiary under theIndenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding theforegoing, the Guaranteeing Subsidiary may merge into or transfer all or part ofits properties and assets to another Guarantor or the Issuer.

 

(5)                                  Releases.

 

The Guaranteeof the Guaranteeing Subsidiary shall be automatically and unconditionallyreleased and discharged, and no further action by the Guaranteeing Subsidiary,the Issuer or the Trustee is required for the release of the GuaranteeingSubsidiary’s Guarantee, upon:

 

(1)                                  (A) any sale, exchange, disposition or transfer (by merger or otherwise) of (x) theCapital Stock of the Guaranteeing Subsidiary, after which the GuaranteeingSubsidiary is no longer a Restricted Subsidiary, or (y) all or substantiallyall the assets of the Guaranteeing Subsidiary which sale, exchange, dispositionor transfer in each case is made in compliance with Sections 4.10(a)(1) and(2) of the Indenture;

 

(B)                                therelease or discharge of the guarantee by the Guaranteeing Subsidiary of theSenior Credit Facilities or the guarantee which resulted in the creation of theGuarantee, except a discharge or release by or as a result of payment undersuch guarantee;

 

(C)                                theproper designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary;or

 

(D)                               theIssuer exercising Legal Defeasance or Covenant Defeasance in accordance with Article 8of the Indenture or the Issuer’s obligations under the Indenture being dischargedin accordance with the terms of the Indenture; and

 

(2)                                  theIssuer delivering to the Trustee an Officer’s Certificate and an Opinion ofCounsel, each stating that all conditions precedent provided for in theIndenture relating to such transaction have been complied with.

 

(6)                                  NoRecourse Against Others. No past, present or future director, officer, employee,incorporator, member, partner or stockholder of the Guaranteeing Subsidiary orany of its direct or indirect parent companies shall have any liability for anyobligations of the Issuer or the Guarantors (including the GuaranteeingSubsidiary) under the Notes, any Guarantees, the Indenture or this SupplementalIndenture or for any claim based on, in respect of, or by reason of, suchobligations or their creation. Each Holder by accepting Notes waives andreleases all such liability. The waiver and release are part of theconsideration for issuance of the Notes.

 

(7)                                  GoverningLaw. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCEWITH THE LAWS OF THE STATE OF NEW YORK.

 

(8)                                  Counterparts.The parties may sign any number of copies of this Supplemental Indenture. Eachsigned copy shall be an original, but all of them together represent the sameagreement.

 

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(9)                                  Effectof Headings. The Section headings herein are for convenience only andshall not affect the construction hereof.

 

(10)                            TheTrustee. The Trustee shall not be responsible in any manner whatsoever foror in respect of the validity or sufficiency of this Supplemental Indenture orfor or in respect of the recitals contained herein, all of which recitals aremade solely by the Guaranteeing Subsidiary.

 

(11)                            Subrogation.The Guaranteeing Subsidiary shall be subrogated to all rights of Holders ofNotes against the Issuer in respect of any amounts paid by the GuaranteeingSubsidiary pursuant to the provisions of Section 2 hereof and Section 11.01of the Indenture; provided that, if an Event of Default has occurred andis continuing, the Guaranteeing Subsidiary shall not be entitled to enforce orreceive any payments arising out of, or based upon, such right of subrogationuntil all amounts then due and payable by the Issuer under the Indenture or theNotes shall have been paid in full.

 

(12)                            BenefitsAcknowledged. The Guaranteeing Subsidiary’s Guarantee is subject to theterms and conditions set forth in the Indenture. The Guaranteeing Subsidiaryacknowledges that it will receive direct and indirect benefits from thefinancing arrangements contemplated by the Indenture and this SupplementalIndenture and that the guarantee and waivers made by it pursuant to this Guaranteeare knowingly made in contemplation of such benefits.

 

(13)                            Successors.All agreements of the Guaranteeing Subsidiary in this Supplemental Indentureshall bind its Successors, except as otherwise provided in Section 2(k)hereof or elsewhere in this Supplemental Indenture. All agreements of theTrustee in this Supplemental Indenture shall bind its successors.

 

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IN WITNESSWHEREOF, the parties hereto have caused this Supplemental Indenture to be dulyexecuted, all as of the date first above written.

 
|   | [GUARANTEEING SUBSIDIARY]                                   |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |   |
|   |                                                        | Name: |
|   |                                                        | Title: |
|   |                                                        |   |
|   |                                                        |   |
|   | WELLS FARGO BANK, NATIONAL  ASSOCIATION,    as Trustee |
|   |                                                        |
|   |                                                        |
|   | By:                                                         |   |   |
|   |                                                        | Name: |
|   |                                                        | Title: |

 

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