Exhibit 4.1


 




 


 





PLIANT CORPORATION


 


13% Senior Subordinated Notes
due 2010


 


INDENTURE


 


Dated as of July 18, 2006


 


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


 


as Trustee


 


 




 




















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions and Incorporation by Reference

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
  Definitions.

  	
  1

  
	
  SECTION 1.02

  	
  Other Definitions.

  	
  22

  
	
  SECTION 1.03

  	
  Incorporation by Reference of Trust Indenture Act

  	
  23

  
	
  SECTION 1.04

  	
  Rules of Construction

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  
	
  The Securities

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01

  	
  Form and
  Dating

  	
  24

  
	
  SECTION 2.02

  	
  Execution and Authentication

  	
  24

  
	
  SECTION 2.03

  	
  Registrar and Paying Agent

  	
  25

  
	
  SECTION 2.04

  	
  Paying Agent to Hold Money in Trust

  	
  25

  
	
  SECTION 2.05

  	
  Holder Lists

  	
  26

  
	
  SECTION 2.06

  	
  Transfer and Exchange

  	
  26

  
	
  SECTION 2.07

  	
  Replacement Securities

  	
  27

  
	
  SECTION 2.08

  	
  Outstanding Securities

  	
  27

  
	
  SECTION 2.09

  	
  Temporary Securities

  	
  28

  
	
  SECTION 2.10

  	
  Cancellation

  	
  28

  
	
  SECTION 2.11

  	
  Defaulted Interest

  	
  28

  
	
  SECTION 2.12

  	
  CUSIP and ISIN Numbers

  	
  28

  
	
  SECTION 2.13

  	
  Issuance of Additional Securities As
  Payment of Interest

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
  Notices to Trustee

  	
  29

  
	
  SECTION 3.02

  	
  Selection of Securities To Be Redeemed

  	
  29

  
	
  SECTION 3.03

  	
  Notice of Redemption

  	
  30

  
	
  SECTION 3.04

  	
  Effect of Notice of Redemption

  	
  30

  
	
  SECTION 3.05

  	
  Deposit of Redemption Price

  	
  31

  
	
  SECTION 3.06

  	
  Securities Redeemed in Part

  	
  31

  
	
  SECTION 3.07

  	
  Call Option

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
  Payment of Securities

  	
  31

  



 


i

















 


	
  SECTION 4.02

  	
  SEC Reports

  	
  32

  
	
  SECTION 4.03

  	
  Limitation on Indebtedness

  	
  32

  
	
  SECTION 4.04

  	
  Limitation on Restricted Payments

  	
  36

  
	
  SECTION 4.05

  	
  Limitation on Restrictions on Distributions
  from Restricted Subsidiaries

  	
  39

  
	
  SECTION 4.06

  	
  Limitation on Sales of Assets and
  Subsidiary Stock

  	
  41

  
	
  SECTION 4.07

  	
  Limitation on Transactions with Affiliates

  	
  44

  
	
  SECTION 4.08

  	
  Change of Control

  	
  45

  
	
  SECTION 4.09

  	
  Compliance Certificate

  	
  46

  
	
  SECTION 4.10

  	
  Further Instruments and Acts

  	
  47

  
	
  SECTION 4.11

  	
  Future Note Guarantors

  	
  47

  
	
  SECTION 4.12

  	
  Limitation on Lines of Business

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  Successor Company

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
  When Company May Merge or Transfer
  Assets

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  Defaults and Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
  Events of Default

  	
  48

  
	
  SECTION 6.02

  	
  Acceleration

  	
  50

  
	
  SECTION 6.03

  	
  Other Remedies

  	
  51

  
	
  SECTION 6.04

  	
  Waiver of Past Defaults

  	
  51

  
	
  SECTION 6.05

  	
  Control by Majority

  	
  51

  
	
  SECTION 6.06

  	
  Limitation on Suits

  	
  51

  
	
  SECTION 6.07

  	
  Rights of Holders to Receive Payment

  	
  52

  
	
  SECTION 6.08

  	
  Collection Suit by Trustee

  	
  52

  
	
  SECTION 6.09

  	
  Trustee May File Proofs of Claim

  	
  52

  
	
  SECTION 6.10

  	
  Priorities

  	
  52

  
	
  SECTION 6.11

  	
  Undertaking for Costs

  	
  53

  
	
  SECTION 6.12

  	
  Waiver of Stay or Extension Laws

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
  Duties of Trustee

  	
  53

  
	
  SECTION 7.02

  	
  Rights of Trustee

  	
  54

  
	
  SECTION 7.03

  	
  Individual Rights of Trustee

  	
  55

  
	
  SECTION 7.04

  	
  Trustee’s Disclaimer

  	
  56

  
	
  SECTION 7.05

  	
  Notice of Defaults

  	
  56

  
	
  SECTION 7.06

  	
  Reports by Trustee to Holders

  	
  56

  
	
  SECTION 7.07

  	
  Compensation and Indemnity

  	
  56

  



 


ii

















 


	
  SECTION 7.08

  	
  Replacement of Trustee

  	
  57

  
	
  SECTION 7.09

  	
  Successor Trustee by Merger

  	
  58

  
	
  SECTION 7.10

  	
  Eligibility; Disqualification

  	
  58

  
	
  SECTION 7.11

  	
  Preferential Collection of Claims Against
  the Company

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  Discharge of Indenture; Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
  Discharge of Liability on Securities;
  Defeasance

  	
  59

  
	
  SECTION 8.02

  	
  Conditions to Defeasance

  	
  60

  
	
  SECTION 8.03

  	
  Application of Trust Money

  	
  61

  
	
  SECTION 8.04

  	
  Repayment to Company

  	
  61

  
	
  SECTION 8.05

  	
  Indemnity for Government Obligations

  	
  61

  
	
  SECTION 8.06

  	
  Reinstatement

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
  Without Consent of Holders

  	
  62

  
	
  SECTION 9.02

  	
  With Consent of Holders

  	
  62

  
	
  SECTION 9.03

  	
  Compliance with Trust Indenture Act

  	
  63

  
	
  SECTION 9.04

  	
  Revocation and Effect of Consents and
  Waivers

  	
  63

  
	
  SECTION 9.05

  	
  Notation on or Exchange of Securities

  	
  64

  
	
  SECTION 9.06

  	
  Trustee to Sign Amendments

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
  Agreement to Subordinate

  	
  64

  
	
  SECTION 10.02

  	
  Liquidation, Dissolution, Bankruptcy

  	
  65

  
	
  SECTION 10.03

  	
  Default on Designated Senior Indebtedness

  	
  65

  
	
  SECTION 10.04

  	
  Acceleration of Payment of Securities

  	
  66

  
	
  SECTION 10.05

  	
  When Distribution Must Be Paid Over

  	
  66

  
	
  SECTION 10.06

  	
  Subrogation

  	
  66

  
	
  SECTION 10.07

  	
  Relative Rights

  	
  66

  
	
  SECTION 10.08

  	
  Subordination May Not Be Impaired by
  Company

  	
  67

  
	
  SECTION 10.09

  	
  Rights of Trustee and Paying Agent

  	
  67

  
	
  SECTION 10.10

  	
  Distribution or Notice to Representative

  	
  67

  
	
  SECTION 10.11

  	
  Article 10 Not to Prevent Events of
  Default or Limit Right To Accelerate

  	
  67

  
	
  SECTION 10.12

  	
  Trust Monies Not Subordinated

  	
  67

  
	
  SECTION 10.13

  	
  Trustee Entitled to Rely

  	
  67

  
	
  SECTION 10.14

  	
  Trustee to Effectuate Subordination

  	
  68

  
	
  SECTION 10.15

  	
  Trustee Not Fiduciary for Holders of Senior
  Indebtedness

  	
  68

  



 


iii

















 


	
  SECTION 10.16

  	
  Reliance by Holders of Senior Indebtedness
  on Subordination Provisions

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  Note Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01

  	
  Note Guarantees

  	
  68

  
	
  SECTION 11.02

  	
  Limitation on Liability

  	
  71

  
	
  SECTION 11.03

  	
  Successors and Assigns

  	
  71

  
	
  SECTION 11.04

  	
  No Waiver

  	
  71

  
	
  SECTION 11.05

  	
  Modification

  	
  72

  
	
  SECTION 11.06

  	
  Execution of Supplemental Indenture for
  Future Note Guarantors

  	
  72

  
	
  SECTION 11.07

  	
  Non-Impairment

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
  Subordination of the Note Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01

  	
  Agreement To Subordinate

  	
  72

  
	
  SECTION 12.02

  	
  Liquidation, Dissolution, Bankruptcy

  	
  72

  
	
  SECTION 12.03

  	
  Default on Designated Senior Indebtedness
  of a Note Guarantor

  	
  73

  
	
  SECTION 12.04

  	
  Demand for Payment

  	
  74

  
	
  SECTION 12.05

  	
  When Distribution Must Be Paid Over

  	
  74

  
	
  SECTION 12.06

  	
  Subrogation

  	
  74

  
	
  SECTION 12.07

  	
  Relative Rights

  	
  74

  
	
  SECTION 12.08

  	
  Subordination May Not Be Impaired by a
  Note Guarantor

  	
  75

  
	
  SECTION 12.09

  	
  Rights of Trustee and Paying Agent

  	
  75

  
	
  SECTION 12.10

  	
  Distribution or Notice to Representative

  	
  75

  
	
  SECTION 12.11

  	
  Article 12 Not To Prevent Events of
  Default or Limit Right To Accelerate

  	
  75

  
	
  SECTION 12.12

  	
  Trustee Entitled To Rely

  	
  75

  
	
  SECTION 12.13

  	
  Trustee To Effectuate Subordination

  	
  76

  
	
  SECTION 12.14

  	
  Trustee Not Fiduciary for Holders of Senior
  Indebtedness of a Note Guarantor

  	
  76

  
	
  SECTION 12.15

  	
  Reliance by Holders of Senior Indebtedness
  of a Note Guarantor on Subordination Provisions

  	
  76

  
	
  SECTION 12.16

  	
  Defeasance

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01

  	
  Trust Indenture Act Controls

  	
  77

  
	
  SECTION 13.02

  	
  Notices

  	
  77

  
	
  SECTION 13.03

  	
  Communication by Holders with Other Holders

  	
  77

  
	
  SECTION 13.04

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
  78

  



 


iv

















 


	
  SECTION 13.05

  	
  Statements Required in Certificate or
  Opinion

  	
  78

  
	
  SECTION 13.06

  	
  When Securities Disregarded

  	
  78

  
	
  SECTION 13.07

  	
  Rules by Trustee, Paying Agent and
  Registrar

  	
  78

  
	
  SECTION 13.08

  	
  Legal Holidays

  	
  79

  
	
  SECTION 13.09

  	
  GOVERNING LAW

  	
  79

  
	
  SECTION 13.10

  	
  No Recourse Against Others

  	
  79

  
	
  SECTION 13.11

  	
  Successors

  	
  79

  
	
  SECTION 13.12

  	
  Multiple Originals

  	
  79

  
	
  SECTION 13.13

  	
  Table of Contents; Headings

  	
  79

  
	
  SECTION 13.14

  	
  Waiver of Jury Trial

  	
  79

  
	
  SECTION 13.15

  	
  Force Majeure

  	
  79

  



 


 


 


	
  Appendix A

  	
  -

  	
  Provisions Relating to Securities

  
	
  Exhibit A

  	
  -

  	
  Form of 13% Senior Subordinated Notes due 2010

  
	
  Exhibit B

  	
  -

  	
  Form of Supplemental Indenture

  



 


v

















 


Reconciliation and tie between Indenture, dated as of July 18,
2006, and the Trust Indenture Act of 1939, as amended.


 


	
  Trust Indenture Act of 1939 Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  6.10; 6.11; 6.12

  
	
   

  	
  (a)(2)

  	
   

  	
  6.12

  
	
   

  	
  (a)(3)

  	
   

  	
  TIA

  
	
   

  	
  (a)(4)

  	
   

  	
  Not applicable

  
	
   

  	
  (a)(5)

  	
   

  	
  TIA

  
	
   

  	
  (b)

  	
   

  	
  4.6; 6.4; 6.10; 6.12; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  311

  	
  (a)

  	
   

  	
  6.4; 6.16; TIA

  
	
   

  	
  (b)

  	
   

  	
  TIA

  
	
   

  	
  (c)

  	
   

  	
  Not applicable

  
	
   

  	
   

  	
   

  	
   

  
	
  312

  	
  (a)

  	
   

  	
  6.8

  
	
   

  	
  (b)

  	
   

  	
  1.16; TIA

  
	
   

  	
  (c)

  	
   

  	
  1.16; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  313

  	
  (a)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (b)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (c)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (d)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  314

  	
  (a)

  	
   

  	
  9.5; 9.7; TIA

  
	
   

  	
  (b)

  	
   

  	
  Not applicable

  
	
   

  	
  (c)(1)

  	
   

  	
  1.2; 4.1; 4.6; 5.7; 7.1; 9.5

  
	
   

  	
  (c)(2)

  	
   

  	
  1.2; 4.1; 4.6; 7.1; 9.5

  
	
   

  	
  (c)(3)

  	
   

  	
  Not applicable

  
	
   

  	
  (d)

  	
   

  	
  Not applicable

  
	
   

  	
  (e)

  	
   

  	
  9.8; TIA

  
	
   

  	
  (f)

  	
   

  	
  TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  315

  	
  (a)

  	
   

  	
  6.1; 6.3; TIA

  
	
   

  	
  (b)

  	
   

  	
  6.2

  
	
   

  	
  (c)

  	
   

  	
  TIA

  
	
   

  	
  (d)(1)

  	
   

  	
  TIA

  
	
   

  	
  (d)(2)

  	
   

  	
  6.1; TIA

  
	
   

  	
  (d)(3)

  	
   

  	
  6.1; TIA

  
	
   

  	
  (e)

  	
   

  	
  6.10; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  1.1

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  5.2; 5.8

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  5.7

  
	
   

  	
  (b)

  	
   

  	
  5.9; 5.10

  
	
   

  	
  (c)

  	
   

  	
  1.4; TIA

  



 


vi

















 


	
  Trust Indenture Act of 1939 Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  317

  	
  (a)(1)

  	
   

  	
  5.3; 6.3

  
	
   

  	
  (a)(2)

  	
   

  	
  5.4; 6.3

  
	
   

  	
  (b)

  	
   

  	
  6.3; 9.3

  
	
   

  	
   

  	
   

  	
   

  
	
  318

  	
  (a)

  	
   

  	
  1.11

  
	
   

  	
  (b)

  	
   

  	
  TIA

  
	
   

  	
  (c)

  	
   

  	
  1.11; TIA

  
	
   

  	
   

  	
   

  
	
  This reconciliation and tie Section does
  not constitute part of the indenture.

  	
   

  	
   

  



 


vii

















 


INDENTURE dated as of July 18, 2006,
among PLIANT CORPORATION, a Delaware corporation (the “Company”), PLIANT
CORPORATION INTERNATIONAL, a Utah corporation, PLIANT FILM PRODUCTS OF MEXICO, INC.,
a Utah corporation, PLIANT SOLUTIONS CORPORATION, a Utah corporation, PLIANT
PACKAGING OF CANADA, LLC, a Utah limited liability company, UNIPLAST HOLDINGS, INC.,
a Delaware corporation, UNIPLAST U.S., INC., a Delaware corporation, and
UNIPLAST INDUSTRIES CO., a Nova Scotia unlimited company (collectively, the “Note
Guarantors”) and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking
association, as trustee (the “Trustee”).


 


Each party agrees as follows for the benefit
of the other parties and for the equal and ratable benefit of the Holders of
the Company’s 13% Senior Subordinated Notes due 2010 issued on the date hereof
(the “Securities”). Except as otherwise provided herein, the Securities will be
limited to $35,000,000 in aggregate principal amount outstanding plus the
amount of any additional Securities issued in lieu of payment of interest in
cash in accordance with Section 2.13.


 


ARTICLE 1


 


Definitions
and Incorporation by Reference


 


SECTION 1.01                    Definitions.


 


“2000 Notes Closing Date” means May 31,
2000.


 


“2003 Notes” means the $250,000,000
aggregate principal amount of the Company’s 11 1/8% senior secured notes due
2009 issued under the 2003 Notes Indenture.


 


“2003 Notes Indenture” means the
indenture dated as of May 30, 2003, among the Company, the guarantors
named therein, and Wilmington Trust Company, as initial indenture trustee, and
succeeded by Wells Fargo Bank, National Association, as successor indenture
trustee, under which the 2003 Notes were issued, as amended, modified, or
supplemented from time to time.


 


“2004 Notes” means the 11.85%
(formerly 11 5/8%) senior secured notes due 2009 and the remaining 11.35%
(formerly 11 1/8%) senior secured notes due 2009, each issued under the 2004
Notes Indenture.


 


“2004 Notes Closing Date” means May 6,
2005.


 


“2004 Notes Indenture” means the
indenture dated as of February 17, 2004 (as amended and restated as of May 6,
2005 and further amended as of July 18, 2006), among the Company, the
guarantors named therein, and Wilmington Trust Company, as indenture trustee,
under which the 2004 Notes were issued, as amended, modified, or supplemented
from time to time.


 


“2004 Notes Original Issue Date” means
February 17, 2004.


 

















 


“Additional Assets” means (a) any
property or assets (other than Indebtedness and Capital Stock) to be used by
the Company or a Restricted Subsidiary in a Permitted Business or any
improvements to any property or assets that are used by the Company or a
Restricted Subsidiary in a Permitted Business; (b) Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary; or (c) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary; provided, however, that any such Restricted Subsidiary
described in clauses (b) or (c) above is primarily engaged in a
Permitted Business.


 


“Affiliate” of any specified Person
means any other Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing. For purposes of Sections 4.06 and 4.07 only, “Affiliate”
shall also mean any beneficial owner of shares representing 10% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company or of rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.


 


“Asset Disposition” means any sale,
lease (other than an operating lease entered into in the ordinary course of
business), transfer or other disposition (or series of related sales,
leases, transfers or dispositions) by the Company or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a “disposition”),
of (a) any shares of Capital Stock of a Restricted Subsidiary (other than
directors’ qualifying shares or shares required by applicable law to be held by
a Person other than the Company or a Restricted Subsidiary), (b) all or
substantially all the assets of any division or line of business of the Company
or any Restricted Subsidiary or (c) any other assets of the Company or any
Restricted Subsidiary outside of the ordinary course of business of the Company
or such Restricted Subsidiary (other than, in the case of (a), (b) and (c) above,
(i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly Owned Subsidiary, (ii) for
purposes of Section 4.06 only, the making of a Permitted Investment or a
disposition that constitutes a Restricted Payment permitted by Section 4.04,
(iii) sales of accounts receivable and related assets (including contract
rights) of the type specified in the definition of “Qualified Securitization
Transaction” to a Securitization Entity for the fair market value thereof, (iv) a
disposition of obsolete or worn out property or equipment or property or
equipment that is no longer used or useful in the conduct of business of the
Company and its Restricted Subsidiaries, (v) any other disposition of
assets with a fair market value, as conclusively determined by senior
management of the Company in good faith, of less than $1.0 million, (vi) sales
or grants of licenses to use the Company’s or any Restricted Subsidiary’s
patents, trade secrets, know-how and technology to the extent that such license
does not prohibit the licensor from using the patent, trade secret, know-how or
technology or require the licensor to pay any fees for such use, (vii) the
disposition of all or substantially all of the assets of the Company in
compliance with Section 5.01 and (viii) the disposition of any
Capital Stock or other ownership interest in or assets or property of an
Unrestricted Subsidiary.


 


2

















 


“Attributable Debt” in respect of a
Sale/Leaseback Transaction means, as at the time of determination, the present
value (discounted at the interest rate borne by the Securities, compounded
annually) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).


 


“Average Life” means, as of the date
of determination, with respect to any Indebtedness or Preferred Stock, the
quotient obtained by dividing (a) the sum of the products of the numbers
of years from the date of determination to the dates of each successive
scheduled principal payment of such Indebtedness or scheduled redemption or
similar payment with respect to such Preferred Stock multiplied by the amount
of such payment by (b) the sum of all such payments.


 


“Bank Indebtedness” means any and all
amounts payable under or in respect of the Credit Agreement and any Refinancing
Indebtedness with respect thereto, as amended from time to time, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees
and all other amounts payable thereunder or in respect thereof.


 


“Board of Directors” means the Board
of Directors of the Company or any committee thereof duly authorized to act on
behalf of the Board of Directors of the Company.


 


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


 


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


 


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


 


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


 


(a)                                  prior
to the first public offering of common stock of the Company, the Permitted
Holders cease to be the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of a majority in the
aggregate of the total voting power of the Voting Stock of the Company, whether
as a result of issuance of securities of the Company, any merger,
consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by any Permitted Holder or otherwise (for
purposes of this clause (a) and clause (b) below, the Permitted
Holders


 


3

















 


shall be deemed to beneficially own any
Voting Stock of an entity (the “specified entity”) held by any other entity
(the “parent entity”) so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent entity);


 


(b)                                 (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), other than one or more Permitted Holders, is or becomes the
beneficial owner (as defined in clause (a) above, except that for purposes
of this clause (b) a person (including a Permitted Holder) shall be deemed
to have “beneficial ownership” of all shares that any such person has the right
to acquire, whether such right is exercisable immediately, only after the
passage of time, upon the happening of any event or otherwise), directly or
indirectly, of more than 50% of the total voting power of the Voting Stock of
the Company and (ii) the Permitted Holders “beneficially own” (as defined
in clause (a) above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company than
such other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Board of Directors of the Company (for the purposes of this clause (b), such
other person shall be deemed to beneficially own any Voting Stock of a
specified entity held by a parent entity, if such other person is the
beneficial owner (as defined in this clause (b)), directly or indirectly, of
more than 50% of the voting power of the Voting Stock of such parent entity and
the Permitted Holders “beneficially own” (as defined in clause (a) above),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the Voting Stock of such parent entity and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of such parent entity);


 


(c)                                  during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any new
directors (i) selected in accordance with the Stockholders Agreement so
long as such agreement is in effect or otherwise nominated by the Permitted
Holders or (ii) whose election by the Board of Directors of the Company or
whose nomination for election by the stockholders of the Company was approved
by a vote of at least a majority of the members of the Board of Directors of
the Company, then still in office, who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved by the Board of Directors or in accordance with the Stockholders
Agreement or otherwise by the Permitted Holders) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office;


 


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


 


(e)                                  the
merger or consolidation of the Company with or into another Person or the
merger of another Person with or into the Company, or the sale of all or
substantially all the assets of the Company to another Person (other than a
Person that is controlled by


 


4

















 


the Permitted Holders), and, in the case of
any such merger or consolidation, the securities of the Company that are
outstanding immediately prior to such transaction and which represent 100% of
the aggregate voting power of the Voting Stock of the Company are changed into
or exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition to
any other consideration, securities of the surviving Person or transferee that
represent immediately after such transaction, at least a majority of the
aggregate voting power of the Voting Stock of the surviving Person or
transferee.


 


“Closing Date” means the date of this
Indenture.


 


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


 


“Commodity Agreement” means any
commodity futures contract, commodity option or other similar agreement or
arrangement entered into by the Company or any of its Subsidiaries designed to
protect the Company or any of its Subsidiaries against fluctuations in the
price of commodities actually at the time used in the ordinary course of
business of the Company or its Subsidiaries.


 


“Company” means the party named as
such in this Indenture until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the indenture securities.


 


“Consolidated Coverage Ratio” as of
any date of determination means the ratio of (a) the aggregate amount of
EBITDA for the period of the most recent four consecutive fiscal quarters for
which financial statements are publicly available ending prior to the date of
such determination to (b) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (i) if the Company or any
Restricted Subsidiary has Incurred any Indebtedness since the beginning of such
period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been Incurred on the
first day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(ii) if the Company or any Restricted Subsidiary has repaid, repurchased,
defeased or otherwise discharged any Indebtedness since the beginning of such
period or if any Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged (in each case other than Indebtedness Incurred under any
revolving credit facility unless such Indebtedness has been permanently repaid
and has not been replaced) on the date of the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated
Interest Expense for such period shall be calculated on a pro forma basis as if
such discharge had occurred on the first day of such period and as if the
Company or such Restricted Subsidiary has not earned the interest income
actually earned during such period in respect of cash or Temporary Cash
Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness,
(iii) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition in excess of $10.0 million
which constitutes all or substantially all of an operating unit of a


 


5

















 


business, the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Disposition for such period or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such period
and Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale), (iv) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary
or is merged with and into the Company) or an acquisition of assets, including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and (v) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or
any Investment or acquisition of assets that would have required an adjustment
pursuant to clause (iii) or (iv) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an Investment or acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. Any such
pro forma calculations may include operating expense reductions for such
period resulting from the acquisition which is being given pro forma effect
that (a) would be permitted pursuant to Article 11 of Regulation S-X
under the Securities Act or (b) have been realized or for which the steps
necessary for realization have been taken or are reasonably expected to be
taken within six months following any such acquisition, including, but not
limited to, the execution or termination of any contracts, the termination of
any personnel or the closing (or approval by the Board of Directors of any
closing) of any facility, as applicable, provided that, such adjustments are
set forth in an Officers’ Certificate signed by the Company’s chief financial
officer and another Officer which states (i) the amount of such adjustment
or adjustments, (ii) that such adjustment or adjustments are based on the
reasonable good faith beliefs of the officers executing such Officers’
Certificate at the time of such execution and (iii) that any related
Incurrence of Indebtedness is permitted pursuant to this Indenture. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement or Currency
Agreement


 


6

















 


applicable to such Indebtedness if such Interest Rate Agreement or
Currency Agreement has a remaining term as at the date of determination in
excess of 12 months).


 


“Consolidated Interest Expense” means,
for any period, the total interest expense of the Company and its Consolidated
Restricted Subsidiaries plus, to the extent Incurred by the Company and its
Restricted Subsidiaries in such period but not included in such interest
expense, (a) interest expense attributable to Capitalized Lease
Obligations and the interest expense attributable to operating leases
constituting part of a Sale/Leaseback Transaction, (b) amortization
of debt discount and debt issuance costs, (c) capitalized interest, (d) non-cash
interest expense, (e) commissions, discounts and other fees and charges
attributable to letters of credit and bankers’ acceptance financing, (f) interest
accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by the Company or any Restricted Subsidiary, (g) net
costs associated with Hedging Obligations (including amortization of fees),
provided, however, that if Hedging Obligations result in net benefits rather
than costs, such benefits shall be credited in determining Consolidated
Interest Expense unless, pursuant to GAAP, such net benefits are otherwise
reflected in Consolidated Net Income, (h) dividends and distributions
declared in respect of all Disqualified Stock of the Company and dividends and
distributions declared and paid in respect of all Preferred Stock of any of the
Subsidiaries of the Company that is not a Note Guarantor, to the extent held by
Persons other than the Company or a Wholly Owned Subsidiary, (i) interest
Incurred in connection with investments in discontinued operations and (j) the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust. Notwithstanding anything to the contrary
contained herein, commissions, discounts, yield and other fees and charges
Incurred in connection with any transaction pursuant to which the Company or
any Subsidiary of the Company may sell, convey or otherwise transfer or
grant a security interest in any accounts receivable or related assets shall be
included in Consolidated Interest Expense.


 


“Consolidated Net Income” means, for
any period, the net income (loss) of the Company and its Consolidated
Subsidiaries for such period; provided, however, that there shall not be
included in such Consolidated Net Income:


 


(a)                                  any
net income (loss) of any Person (other than the Company) if such Person is not
a Restricted Subsidiary, except that (i) subject to the limitations
contained in clauses (d), (e) and (f) below, the Company’s equity in
the net income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually distributed
by such Person during such period to the Company or a Restricted Subsidiary as
a dividend or other distribution (subject, in the case of a dividend or other
distribution made to a Restricted Subsidiary, to the limitations contained in
clause (c) below) and (ii) the Company’s equity in a net loss of any
such Person for such period shall be included in determining such Consolidated
Net Income to the extent such loss has been funded with cash from the Company
or a Restricted Subsidiary;


 


(b)                                 other
than for purposes of clauses (iv) and (v) of the definition of Consolidated
Coverage Ratio any net income (or loss) of any Person acquired by the


 


7

















 


Company or a Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;


 


(c)                                  any
net income (or loss) of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions or loans or intercompany advances by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (i) subject
to the limitations contained in clauses (d), (e) and (f) below, the
Company’s equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed, loaned or advanced by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary
as a dividend, distribution, loan or advance (subject, in the case of a
dividend, distribution, loan or advance made to another Restricted Subsidiary,
to the limitation contained in this clause) and (ii) the Company’s equity
in a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income;


 


(d)                                 any
gain (loss) realized upon the sale or other disposition of any asset of the
Company or its Consolidated Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the
ordinary course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person;


 


(e)                                  any
extraordinary gain or loss; and


 


(f)                                    the
cumulative effect of a change in accounting principles.


 


Notwithstanding the foregoing, for the purposes of Section 4.04
only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments
permitted under such Section pursuant to clause (a)(iv)(3)(F) thereof.


 


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


 


“Corporate Trust Office” means an
office of the Trustee at which at any time its corporate trust business shall
be administered, which office at the date hereof is located at 2 North LaSalle
Street, Suite 1020, Chicago, IL 60602, Attention: Corporate Trust
Administration, or such other address as the Trustee may designate from
time to time by notice to the Holders and the Issuer, or the principal
corporate trust office of any successor Trustee (or such other address as a
successor Trustee may designate from time to time by notice to the Holders
and the Company).


 


8

















 


“Credit Agreement” means collectively
that certain Working Capital Credit Agreement and Fixed Asset Credit Agreement,
each dated as of July 18, 2006, among the Company and certain of its
subsidiaries as borrowers, the lenders thereunder, Merrill Lynch Bank USA, as
Administrative Agent, and Merrill Lynch Commercial Finance Corp., as Sole Lead
Arranger and Book Manager, as each term is defined therein, together with
related documents thereto including any guarantee agreements and security
documents, as amended, modified, supplemented, restated, renewed, refunded,
replaced, restructured, repaid or refinanced from time to time (including any
agreement extending the maturity thereof or increasing the amount of available
borrowings thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) whether with the original agents
and lenders or otherwise and whether provided under the original credit
agreement or other credit agreements or otherwise.


 


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


 


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


 


“Designated Senior Indebtedness” of
the Company means (a) the Bank Indebtedness and (b) (i) Indebtedness
under the 2003 Notes Indenture, (ii) Indebtedness under the 2004 Notes
Indenture and (iii) any other Senior Indebtedness of the Company that, in
the case of clauses (i) — (iii) hereof, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date
of determination, the holders thereof are committed to lend up to, at least
$15.0 million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as “Designated Senior
Indebtedness” for purposes of this Indenture. “Designated Senior Indebtedness”
of a Note Guarantor has a correlative meaning.


 


“Disqualified Stock” means, with
respect to any Person, any Capital Stock of such Person which by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event (a) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (b) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock convertible or exchangeable solely
at the option of the Company or a Restricted Subsidiary, provided, that any
such conversion or exchange shall be deemed an issuance of Indebtedness or an
issuance of Disqualified Stock, as applicable) or (c) is redeemable at the
option of the holder thereof, in whole or in part, in the case of clauses (a), (b) and
(c), on or prior to 91 days after the Stated Maturity of the Securities;
provided, however, that only the portion of Capital Stock that so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such date will be deemed
Disqualified Stock; provided further, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock
upon the occurrence of an “asset sale” or “change of control” shall not
constitute Disqualified Stock if the “asset sale” or “change of control”
provisions applicable to such Capital Stock provide that such Person may not
repurchase or redeem such Capital Stock pursuant to


 


9

















 


such provisions unless such Person has first complied with the
provisions of Sections 4.06 and 4.08, as applicable; and provided further that
any class of Capital Stock of such Person that, by its terms, authorizes
such Person to satisfy in full its obligations with respect to payment of
dividends or upon maturity, redemption (pursuant to a sinking fund or
otherwise) or repurchase thereof or other payment obligations or otherwise by
delivery of Capital Stock that is not Disqualified Stock, and that is not
convertible, puttable or exchangeable for Disqualified Stock or Indebtedness,
shall not be deemed Disqualified Stock so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Capital Stock that
is not Disqualified Stock.


 


“Domestic Overdraft Facility” means an
overdraft line of credit in a maximum principal amount of $10.0 million at any
time outstanding.


 


“Domestic Subsidiary” means any
Restricted Subsidiary of the Company other than a Foreign Subsidiary.


 


“EBITDA” for any period means the
Consolidated Net Income for such period, excluding the following to the extent
included in calculating such Consolidated Net Income: (a) income tax
expense of the Company and its Consolidated Restricted Subsidiaries, (b) Consolidated
Interest Expense, (c) depreciation expense of the Company and its
Consolidated Restricted Subsidiaries, (d) amortization expense of the
Company and its Consolidated Restricted Subsidiaries (but excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period), (e) other noncash charges of the Company and its
Consolidated Restricted Subsidiaries (excluding any such noncash charge to the
extent that it represents an accrual of or reserve for cash expenditures in any
future period), (f) income or loss from discontinued operations, (g) plant
closing costs (as defined by GAAP) and (h) noncash stock-based
compensation expense. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
noncash charges of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income (loss) of such Restricted Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended, loaned
or advanced to the Company by such Restricted Subsidiary without prior approval
of Persons other than the Board of Directors or holders of the Company’s
Capital Stock (that has not been obtained), pursuant to the terms of its charter
and all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.


 


“Equity Offering” means any public or
private sale of the common stock of the Company, other than any public offering
with respect to the Company’s common stock registered on Form S-8 or other
issuances upon exercise of options by employees of the Company or any of its
Restricted Subsidiaries.


 


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


 


“Excluded Contribution” means net cash
proceeds received by the Company from (a) contributions to its common
equity capital and (b) the sale (other than to a Subsidiary of the


 


10

















 


Company or to any Company or Subsidiary management equity plan or stock
option plan or any other management or employee benefit plan or agreement) of
Capital Stock (other than Disqualified Stock) of the Company, in each case
designated as Excluded Contributions pursuant to an Officers’ Certificate
executed on the date such capital contributions are made or the date such
Capital Stock is sold, as the case may be, which are excluded from the
calculation set forth in Section 4.04(a)(iv)(3).


 


“Existing Management Stockholders”
means each of Harold C. Bevis, R. David Corey and Joseph J. Kwederis.


 


“Foreign Subsidiary” means any
Restricted Subsidiary of the Company organized, and conducting its principal
operations, outside the United States of America.


 


“Foreign Subsidiary Asset Disposition”
means any direct or indirect sale, issuance, conveyance, transfer, lease,
assignment or other transfer for value by the Company or any of its Restricted
Subsidiaries (including any Sale/Leaseback Transaction) to any Person other
than the Company or a Restricted Subsidiary of the Company of the Capital Stock
of any Foreign Subsidiary or any of the property or assets of any Foreign
Subsidiary.


 


“GAAP” means generally accepted
accounting principles in the United States of America as in effect as of the
Closing Date, including those set forth in (a) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) statements and pronouncements of the
Financial Accounting Standards Board, (c) such other statements by such
other entities as are approved by a significant segment of the accounting
profession and (d) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC. All
ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP, unless expressly provided otherwise.


 


“Guarantee” means any obligation,
contingent or otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course
of business. The term “Guarantee” used as a verb has a corresponding meaning. The
term “Guarantor” shall mean any Person Guaranteeing any obligation.


 


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


 


11

















 


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


 


“Incur” means issue, assume,
Guarantee, incur or otherwise become liable for; provided, however, that any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary. The term “Incurrence” when used as a noun shall have a
correlative meaning.


 


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


 


(a)                                  the
principal of and premium (if any) in respect of indebtedness of such Person for
borrowed money;


 


(b)                                 the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;


 


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


 


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


 


(e)                                  all
Capitalized Lease Obligations and all Attributable Debt of such Person;


 


(f)                                    all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock or, with respect to any Subsidiary of such
Person that is not a Note Guarantor, any Preferred Stock (but excluding, in
each case, any accrued dividends);


 


(g)                                 all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; provided, however,
that the amount of Indebtedness of such Person shall be the lesser of (i) the
fair market value of such asset at such date of determination and (ii) the
amount of such Indebtedness of such other Persons;


 


(h)                                 to
the extent not otherwise included in this definition, the net obligations under
Hedging Obligations of such Person;


 


(i)                                     to
the extent not otherwise included, the amount then outstanding (i.e., advanced,
and received by, and available for use by, such Person) under any receivables
financing (as set forth in the books and records of such Person and confirmed
by the agent, trustee or other representative of the institution or group
providing such receivables financing); and


 


12

















 


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


 


Notwithstanding the foregoing, “Indebtedness” shall not include
unsecured indebtedness of the Company and its Restricted Subsidiaries Incurred
to finance insurance premiums in a principal amount not in excess of the
insurance premiums to be paid by the Company and its Restricted Subsidiaries
for a three-year period beginning on the date of Incurrence of any such
Indebtedness. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.


 


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


 


“Intangible Assets” means goodwill,
patents, trademarks and other intangibles as determined in accordance with
GAAP.


 


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


 


“Investment” in any Person means any
direct or indirect advance, loan (other than advances to customers in the
ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender) or other extension of credit (including by way of
Guarantee or similar arrangement) or capital contribution to (by means of any
transfer of cash or other property (excluding Capital Stock of the Company) to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of “Unrestricted
Subsidiary” and Section 4.04, (a) “Investment” shall include the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the fair market value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent “Investment” in an
Unrestricted Subsidiary in an amount (if positive) equal to (i) the
Company’s “Investment” in such Subsidiary at the time of such redesignation
less (ii) the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; (b) any property transferred to or from
an Unrestricted Subsidiary shall be valued at its fair market value at the time
of such transfer, in each case as determined in good faith by (x) the senior
management of the Company if the amount thereof is less than $2.0 million and
(y) the Board of Directors if in excess thereof; and (c) the amount of any
Investment shall be the original cost as of the date of determination of such
Investment plus the cost of all additional Investments by the Company or any of
its


 


13

















 


Restricted Subsidiaries, without any adjustments for increases or
decreases in value or write-ups, write-downs or write-offs with respect to such
Investments.


 


“Issue Date” means the date on which
the Securities are originally issued.


 


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


 


“Material Subsidiary” means, at any
date of determination, any Subsidiary of the Company that, together with its
Subsidiaries, (a) for the most recent fiscal year of the Company accounted
for more than 10.0% of the consolidated revenues of the Company or (b) as
of the end of such fiscal year, was the owner of 10.0% of the consolidated
assets of the Company, all as set forth on the most recently available
consolidated financial statement of the Company and its consolidated
Subsidiaries for such fiscal year prepared in conformity with GAAP.


 


“Net Available Cash” from an Asset
Disposition means cash payments received (including any cash payments received
by way of deferred payment of principal pursuant to a note or installment
receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding
any other consideration received in the form of assumption by the
acquiring Person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or received
in any other non-cash form) therefrom, in each case net of (a) all legal,
accounting, investment banking, title and recording tax expenses, commissions
and other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be paid or accrued as a liability under
GAAP, as a consequence of such Asset Disposition, (b) all payments made on
any Indebtedness which is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset Disposition, or by
applicable law be repaid out of the proceeds from such Asset Disposition, (c) all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset
Disposition, (d) the decrease in proceeds from Qualified Securitization
Transactions which results from such Asset Disposition and (e) appropriate
amounts to be provided by the seller as a reserve, in accordance with GAAP,
against any liabilities associated with the property or other assets disposed
of in such Asset Disposition and retained by the Company or any Restricted
Subsidiary after such Asset Disposition.


 


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


 


“Note Guarantee” means each Guarantee
of the obligations with respect to the Securities issued by a Person pursuant
to the terms of this Indenture.


 


“Note Guarantor” means any Person that
has issued a Note Guarantee.


 


14

















 


“Officer” means the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the President,
any Vice President, the Treasurer, the Secretary or any Assistant Secretary of
the Company.


 


“Officers’ Certificate” means a
certificate signed by two Officers.


 


“Opinion of Counsel” means a written
opinion from legal counsel. The counsel may be an employee of or counsel
to the Company.


 


“Permitted Business” means the design,
manufacture and/or marketing of films and flexible packaging products for food,
personal care, medical, retail, agricultural, industrial and other applications
or any businesses that are reasonably related, ancillary or complementary
thereto.


 


“Permitted Holders” means each of (i) J.P.
Morgan Partners, LLC and its Affiliates, (ii) Southwest Industrial Films,
LLC and its Affiliates, (iii) the Christena Karen H. Durham Trust, (iv) the
Existing Management Stockholders and their Related Parties and (v) any
Person acting in the capacity of an underwriter in connection with a public or
private offering of the Company’s Capital Stock


 


“Permitted Investment” means an Investment
by the Company or any Restricted Subsidiary in: (a) the Company, a
Restricted Subsidiary or a Person that will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that after
giving effect to such Investment the Company is still in compliance with Section 4.12;
(b) another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that after giving effect to such Investment the Company is
still in compliance with Section 4.12; (c) Temporary Cash
Investments; (d) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms
as the Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (e) payroll, travel and similar advances or loans to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the ordinary course of
business; (f) loans or advances to officers, directors, consultants or
employees made (A) in the ordinary course of business and not exceeding
$3.0 million in any year or (B) to fund purchases of stock under the
Company’s stock incentive plan and any similar plans or employment
arrangements; (g) Capital Stock, obligations or other securities received
in settlement of debts created in the ordinary course of business and owing to
the Company or any Restricted Subsidiary or in satisfaction of judgments or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor; (h) any Person to the extent such
Investment represents the non- cash portion of the consideration received for
an Asset Disposition that was made pursuant to and in compliance with Section 4.06;
(i) any Investment by the Company or a Restricted Subsidiary in a
Securitization Entity or any Investment by a Securitization Entity in any other
Person in connection with a Qualified Securitization Transaction; provided that
any Investment in a Securitization Entity is in the form of a purchase
money note or an equity interest; (j) Hedging Obligations entered into in the
ordinary course of business; (k) endorsements of negotiable


 


15

















 


instruments and documents in the ordinary course of business; (l)
assets or securities of a Person acquired by the Company or a Restricted
Subsidiary to the extent the consideration for such acquisition consists of
Capital Stock (other than Disqualified Stock) of the Company; (m) Investments
in existence on the Closing Date; (n) Investments of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
of the Company or at the time such Person merges or consolidates with the
Company or any of its Restricted Subsidiaries, in either case in compliance
with this Indenture, provided that such Investments were not made by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such merger or
consolidation; (o) Investments in Unrestricted Subsidiaries or joint ventures
not to exceed $30.0 million since the 2004 Notes Original Issue Date plus (A) the
aggregate net after-tax amount returned since the 2004 Notes Original Issue
Date to the Company or any Restricted Subsidiary in cash on or with respect to
any Investments made since the 2004 Notes Original Issue Date in Unrestricted
Subsidiaries and joint ventures whether through interest payments, principal
payments, dividends or other distributions or payments (including such
dividends, distributions or payments made concurrently with such Investment), (B) the
net after-tax cash proceeds received since the 2004 Notes Original Issue Date
by the Company or any Restricted Subsidiary from the disposition of all or any
portion of such Investments (other than to the Company or a Subsidiary of the
Company), and (C) upon redesignation since the 2004 Notes Original Issue
Date of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market
value of such Subsidiary, provided that any amounts included pursuant to the
foregoing clauses (A), (B) and (C) are excluded from the calculation
set forth in clause (a)(iv)(3) under Section 4.04; and (p) additional
Investments since the 2004 Notes Original Issue Date in an aggregate amount not
to exceed $15.0 million.


 


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


 


“Plan” means that certain Debtors’
Fourth Amended Joint Plan of Reorganization filed on behalf of the Company and
its subsidiaries with the United States Bankruptcy Court for the District of
Delaware on June 19, 2006.


 


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


 


“principal” of a Security means the
principal of the Security plus the premium, if any, payable on the Security
which is due or overdue or is to become due at the relevant time.


 


“Public Market” means any time after (a) an
Equity Offering has been consummated and (b) at least 15% of the total
issued and outstanding common stock of the Company has been distributed by
means of an effective registration statement under the Securities Act.


 


16

















 


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


 


“Qualified Stock” means any Capital
Stock that is not Disqualified Stock.


 


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


 


“Refinancing Indebtedness” means
Indebtedness that is Incurred to Refinance any Indebtedness of the Company or
any Restricted Subsidiary existing on the 2000 Notes Closing Date or not prohibited
by this Indenture (including Indebtedness of the Company or a Restricted
Subsidiary that Refinances Refinancing Indebtedness); provided, however, that: (a) the
Refinancing Indebtedness (if Refinancing any Indebtedness existing on the 2000
Notes Closing Date) has a Stated Maturity no earlier than the Stated Maturity
of the Indebtedness being Refinanced, (b) the Refinancing Indebtedness (if
Refinancing any Indebtedness existing on the 2000 Notes Closing Date) has an
Average Life at the time such Refinancing Indebtedness is Incurred that is
equal to or greater than the Average Life of the Indebtedness being refinanced,
(c) such Refinancing Indebtedness is Incurred in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
(whether in U.S. dollars or a foreign currency) that is equal to or less than
the aggregate principal amount (or if issued with original issue discount, the
aggregate accreted value) (in U.S. dollars or such foreign currency, as
applicable) then outstanding (plus, without duplication, accrued interest,
premium and defeasance costs required to be paid under the terms of the
Indebtedness being Refinanced and the fees, expenses, discounts, commissions
and other issuance costs incurred in connection with the Refinancing
Indebtedness) of the Indebtedness being Refinanced and (d) if the
Indebtedness being Refinanced is subordinated in right of payment to the
Securities or a Note Guarantee of a Note Guarantor, such Refinancing
Indebtedness is subordinated in right of payment to the Securities or the Note
Guarantee at least to the same extent as the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not
include:  (i) Indebtedness of a
Restricted Subsidiary that is not a Note Guarantor that Refinances Indebtedness
of the Company or (ii) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.


 


“Related Parties” means with respect
to a Person (a) that is a natural person (1) any spouse, parent or
lineal descendant (including adopted children) of such Person or (2) the


 


17

















 


estate of such Person during any period in which such estate holds
Capital Stock of the Company for the benefit of any person referred to in
clause (a)(1) and (b) any trust, corporation, partnership, limited
liability company or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially owning an interest of more than 50% of which
consist of such Person and/or such other Persons referred to in the immediately
preceding clause (a).


 


“Representative” means the trustee,
agent or representative (if any) for an issue of Senior Indebtedness.


 


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


 


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


 


“Sale/Leaseback Transaction” means an
arrangement relating to property now owned or hereafter acquired by the Company
or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or such Restricted
Subsidiary leases it from such Person, other than (a) leases between the
Company and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries or (b) any
arrangement whereby the transfer involves fixed or capital assets and is
consummated within 120 days after the date the Company or a Restricted
Subsidiary acquires or finishes construction of such fixed or capital assets.


 


“SEC” means the Securities and
Exchange Commission.


 


“Secured Indebtedness” means any
Indebtedness of the Company secured by a Lien. “Secured Indebtedness” of a Note
Guarantor has a correlative meaning.


 


“Securities” means the Securities
issued under this Indenture.


 


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


 


“Securitization Entity” means a Wholly
Owned Subsidiary of the Company (or another Person in which the Company or any
Subsidiary of the Company makes an Investment and to which the Company or any
Subsidiary of the Company transfers accounts receivable and related assets)
which engages in no activities other than in connection with the financing of
accounts receivable or equipment and which is designated by the Board of
Directors of the Company (as provided below) as a Securitization Entity (a) no
portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any Subsidiary of the Company
(excluding guarantees of obligations (other than the principal of, and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Company or any Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings or (iii) subjects
any property or asset of the Company or any Subsidiary of the Company, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to the Company or such Subsidiary than those that might be obtained
at the time from Persons that are not Affiliates of


 


18

















 


the Company, other than fees payable in the ordinary course of business
in connection with servicing receivables of such entity and (c) to which
neither the Company nor any Subsidiary of the Company has any obligation to
maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results. Any such designation by the Board
of Directors of the Company shall be evidenced to the Trustee, by filing with
the Trustee a certified copy of the resolution of the Board of Directors giving
effect to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing conditions.


 


“Senior Indebtedness” of the Company
or any Note Guarantor, as the case may be, means the principal of, premium
(if any) and accrued and unpaid interest on (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization of the
Company or any Note Guarantor, as applicable, regardless of whether or not a
claim for post-filing interest is allowed in such proceedings), and fees and
all other amounts owing in respect of, Bank Indebtedness, Indebtedness under
the 2003 Notes Indenture, Indebtedness under the 2004 Notes Indenture and all
other Indebtedness of the Company or any Note Guarantor, as applicable, whether
outstanding on the Closing Date or thereafter Incurred, unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not superior in right of
payment to the Securities or such Note Guarantor’s Note Guarantee, provided,
however, that Senior Indebtedness shall not include:  (a) any obligation of the Company to any
Subsidiary of the Company or of any Note Guarantor to the Company or any other
Subsidiary of the Company, (b) any liability for Federal, state, local or
other taxes owed or owing by the Company or any Note Guarantor, (c) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including Guarantees thereof or instruments evidencing such
liabilities), (d) except with respect to any Indebtedness Incurred
pursuant to the Credit Agreement, any Indebtedness or obligation of the Company
or any Note Guarantor (and any accrued and unpaid interest in respect thereof)
that by its terms is subordinate or junior in right of payment to any other
Indebtedness or obligation of the Company or such Note Guarantor, as
applicable, including any Senior Subordinated Indebtedness and any Subordinated
Obligations, (e) any obligations with respect to any Capital Stock or (f) any
Indebtedness Incurred in violation of this Indenture, unless such Indebtedness
was Incurred based on an Officers’ Certificate of the Company (delivered in
good faith after reasonable investigation) to the effect that the Incurrence of
such Indebtedness did not violate the provisions of this Indenture.


 


“Senior Subordinated Indebtedness” of
the Company means the Securities and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank pari passu with the
Securities in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company which is not
Senior Indebtedness. “Senior Subordinated Indebtedness” of a Note Guarantor has
a correlative meaning.


 


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


 


19

















 


“Standard Securitization Undertakings”
means representations, warranties, covenants and indemnities entered into by
the Company or any Subsidiary of the Company which are reasonably customary in
an accounts receivable securitization transaction.


 


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


 


“Stockholders Agreement” means the
Stockholders Agreement among the Company and the holders of the Company’s
Capital Stock party thereto, as in effect at the Closing Date and as amended
from time to time, so long as the Permitted Holders own a majority of the
Capital Stock subject to such agreement.


 


“Subordinated Obligation” means any
Indebtedness of the Company (whether outstanding on the Closing Date or
thereafter Incurred) that is subordinate or junior in right of payment to the
Securities pursuant to a written agreement. “Subordinated Obligation” of a Note
Guarantor has a correlative meaning.


 


“Subsidiary” of any Person means any
corporation, association, partnership, limited liability company or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, representatives, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (a) such Person, (b) such
Person and one or more Subsidiaries of such Person or (c) one or more
Subsidiaries of such Person.


 


“Tangible Assets” means Total Assets
less Intangible Assets.


 


“Temporary Cash Investments” means any
of the following: (a) any investment in direct obligations of the United
States of America or any agency or instrumentality thereof or obligations Guaranteed
or insured by the United States of America or any agency or instrumentality
thereof, (b) investments in checking accounts, savings accounts, time
deposit accounts, certificates of deposit, bankers’ acceptances and money
market deposits maturing within 360 days of the date of acquisition thereof
issued by a bank or trust company that is organized under the laws of the
United States of America, any state thereof or any foreign country recognized
by the United States of America having capital, surplus and undivided profits
aggregating in excess of $250,000,000 (or the foreign currency equivalent
thereof) and whose long-term debt is rated “A” (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act), (c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) above entered into with a bank meeting
the qualifications described in clause (b) above, (d) investments in
commercial paper, maturing not more than 270 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or
any foreign country


 


20

















 


recognized by the United States of America with a rating at the time as
of which any investment therein is made of “P-1” (or higher) according to Moody’s
Investors Service, Inc. or “A-1” (or higher) according to Standard and
Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. (“S&P”),
(e) investments in securities with maturities of six months or less from
the date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States of America, or by any political subdivision
or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s
Investors Service, Inc. and (f) investments in money market funds
that invest substantially all of their assets in securities of the types
described in clauses (a) through (e) above.


 


“TIA” means the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Closing Date.


 


“Total Assets” means the total
consolidated assets of the Company and its Restricted Subsidiaries, as shown on
the most recent balance sheet of the Company.


 


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


 


“Trustee” means the party named as
such in this Indenture until a successor replaces it and, thereafter, means the
successor.


 


“Trust Officer” means, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant treasurer, trust officer
or any other officer of the Trustee who customarily performs functions similar
to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such
person’s knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Indenture.


 


“Uniform Commercial Code” means
the New York Uniform Commercial Code as in effect from time to time.


 


“Unrestricted Subsidiary” means (a) Pliant
Investment, Inc. and any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (b) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock in or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (i) the Subsidiary to be so designated at the time of
designation has total Consolidated assets of $1,000 or less or (ii) if
such Subsidiary has Consolidated assets greater than $1,000, then such
designation would be permitted under Section 4.04. The Board of Directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,


 


21

















 


however, that immediately after giving effect to such designation (a) the
Company could Incur $1.00 of additional Indebtedness under Section 4.03(a) and
(b) no Default shall have occurred and be continuing. Any such designation
of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by the
Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the resolution of the Board of Directors giving effect to
such designation and an Officers’ Certificate certifying that such designation
complied with the foregoing provisions.


 


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


 


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


 


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


 


SECTION 1.02                    Other
Definitions.


 


	
  Defined in Term

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.07(a)

  
	
  “Appendix”

  	
   

  	
  Preamble

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “Call Option”

  	
   

  	
  3.07

  
	
  “Change of Control Offer”

  	
   

  	
  4.08(b)

  
	
  “covenant defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Definitive Securities”

  	
   

  	
  Appendix A

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Global Securities”

  	
   

  	
  Appendix A

  
	
  “Guarantee Blockage Notice”

  	
   

  	
  12.03

  
	
  “Guarantee Payment Blockage Period”

  	
   

  	
  12.03

  
	
  “Guaranteed Obligations”

  	
   

  	
  11.01

  
	
  “incorporated provision”.

  	
   

  	
  13.01

  
	
  “legal defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Legal Holiday”

  	
   

  	
  13.08

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Offer”

  	
   

  	
  4.06(b)

  
	
  “Offer Amount”

  	
   

  	
  4.06(c)(ii)

  



 


22

















 


	
  “Offer Period”

  	
   

  	
  4.06(c)(ii)

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “pay the Securities”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Period”.

  	
   

  	
  10.03

  
	
  “protected purchaser”

  	
   

  	
  2.07

  
	
  “Purchase Date”

  	
   

  	
  4.06(c)(i)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted Payment”.

  	
   

  	
  4.04(a)

  
	
  “Securities Custodian”

  	
   

  	
  Appendix A

  
	
  “Successor Company”

  	
   

  	
  5.01(a)

  



 


SECTION 1.03                    Incorporation
by Reference of Trust Indenture Act. This Indenture is subject to the
mandatory provisions of
the TIA, which are incorporated by reference in and made a part of this
Indenture. The following TIA terms have the following meanings:


 


“Commission” means the SEC.


 


“indenture securities” means the
Securities and the Note Guarantees.


 


“indenture security holder” means a
Holder.


 


“indenture to be qualified” means this
Indenture.


 


“indenture trustee” or “institutional
trustee” means the Trustee.


 


“obligor” on the indenture securities
means the Company, the Note Guarantors and any other obligor on the indenture
securities.


 


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


 


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


 


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


 


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


 


(c)                                  “or” is not
exclusive;


 


(d)                                 “including” means
including without limitation;


 


(e)                                  words in the singular
include the plural and words in the plural include the singular;


 


23

















 


(f)                                    unsecured Indebtedness
shall not be deemed to be subordinate or junior to Secured Indebtedness merely
by virtue of its nature as unsecured indebtedness;


 


(g)                                 the principal amount
of any noninterest bearing or other discount security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with GAAP; and


 


(h)                                 the principal amount
of any Preferred Stock shall be (i) the maximum liquidation value of such
Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price (not including, in either case, any redemption or repurchase
premium) with respect to such Preferred Stock, whichever is greater.


 


ARTICLE 2


 


The Securities


 


SECTION 2.01                    Form and
Dating. Provisions relating to the Securities are set forth in the
Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The
Securities and the Trustee’s certificate of authentication shall each be
substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company or any Note Guarantor is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall
be dated the date of its authentication. The Securities shall be issuable only
in registered form without interest coupons and only in denominations of
$1,000 and integral multiples thereof; provided, that the aggregate principal
amount of the Securities issued on the date of original issuance shall not
exceed $35,000,000 and shall be issued pro rata to the holders of claims (as
defined in Section 101(5) of title 11 of the United States Code)
arising under or evidenced by the previously existing 13% Senior Subordinated
Notes due 2010 being relinquished pursuant to the Plan, rounding down such pro
rata amount to the nearest $1,000 or integral multiple thereof; provided
further that additional Securities issued as payment of interest on the
Securities in accordance with Section 2.13 shall be issued in
denominations of $1.00 and integral multiples of $1.00, rounding down such
interest payment to the nearest $1.00 or integral multiple thereof.


 


The Securities issued on the Issue Date and
any additional Securities issued in lieu of payment of interest in cash in
accordance with Section 2.13 shall be treated as a single class of
Securities issued under this Indenture.


 


SECTION 2.02                    Execution
and Authentication. Two Officers shall sign the Securities for the Company
by manual or facsimile
signature.


 


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


 


A Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture.


 


24






 













 


The Trustee
shall authenticate and make available for delivery Securities as set forth in
the Appendix.


 


The Trustee
may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Securities.  Any such
appointment shall be evidenced by an instrument signed by a Trust Officer, a
copy of which shall be furnished to the Company.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so.  Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.


 


SECTION 2.03                    Registrar
and Paying Agent.  (a)  The Company shall maintain an office or
agency where Securities
may be presented for registration of transfer or for exchange (the “Registrar”)
and an office or agency where Securities may be presented for payment (the
“Paying Agent”).  The Registrar shall
keep a register of the Securities and of their transfer and exchange.  The Company may have one or more
co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent, and the term “Registrar” includes any
co-registrars.  The Company initially
appoints the Trustee as (i) Registrar and Paying Agent in connection with the
Securities and (ii) the Securities Custodian with respect to the Global
Securities.


 


(b)                                 The Company shall
enter into an appropriate agency agreement with any Registrar or Paying Agent
not a party to this Indenture, which shall incorporate the terms of the
TIA.  The agreement shall implement the
provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the
name and address of any such agent.  If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.07.  The Company or any of
its domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.


 


(c)                                  The Company may
remove any Registrar or Paying Agent upon written notice to such Registrar or
Paying Agent and to the Trustee; provided, however, that no such removal shall
become effective until (i) acceptance of an appointment by a successor as
evidenced by an appropriate agreement entered into by the Company and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (ii) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance
with clause (i) above.  The Registrar or
Paying Agent may resign at any time upon written notice to the Company and the
Trustee.


 


SECTION 2.04                    Paying
Agent to Hold Money in Trust.  Prior
to each due date of the principal of and interest on any Security, the Company
shall deposit with the Paying Agent (or if the Company or a Wholly Owned
Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due.  The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
and interest on the Securities, and shall notify the Trustee of any default by
the Company in making any such payment. 
If the Company or a Subsidiary of the Company acts as


 


25

















 


Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund.  The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent.  Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.


 


SECTION 2.05                    Holder Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders.  If the
Trustee is not the Registrar, the Company shall furnish, or cause the Registrar
to furnish, to the Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.


 


SECTION 2.06                    Transfer
and Exchange.  The Securities shall
be issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer and in compliance with the Appendix.  When a Security is presented to the Registrar
with a request to register a transfer, the Registrar shall register the
transfer as requested if its requirements therefor are met.  When Securities are presented to the
Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. 
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar’s
request.  The Company may require payment
of a sum sufficient to pay all taxes, assessments or other governmental charges
in connection with any transfer or exchange pursuant to this Section.  The Company shall not be required to make and
the Registrar need not register transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed.


 


Prior to the
due presentation for registration of transfer of any Security, the Company, the
Note Guarantors, the Trustee, the Paying Agent, and the Registrar may deem and
treat the Person in whose name a Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of and
(subject to paragraph 2 of the Securities) interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, any Note Guarantor, the Trustee, the Paying Agent, or
the Registrar shall be affected by notice to the contrary.


 


Any Holder of
a Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interest in such Global Security may be effected only
through a book-entry system maintained by (a) the Holder of such Global
Security (or its agent) or (b) any Holder of a beneficial interest in such
Global Security, and that ownership of a beneficial interest in such Global
Security shall be required to be reflected in a book entry.


 


All Securities
issued upon any transfer or exchange pursuant to the terms of this Indenture
shall evidence the same debt and shall be entitled to the same benefits under
this Indenture as the Securities surrendered upon such transfer or exchange.


 


26

















 


The Trustee
shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Depositary Participants or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.


 


SECTION 2.07                    Replacement
Securities.  If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(a) satisfies the Company or the Trustee within a reasonable time after such
Holder has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or the Trustee prior to the Security
being acquired by a protected purchaser as defined in Section 8-303 of the
Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other
reasonable requirements of the Trustee. 
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee to protect the
Company, the Trustee, the Paying Agent and the Registrar from any loss that any
of them may suffer if a Security is replaced. 
The Company and the Trustee may charge the Holder for their expenses in
replacing a Security.  In the event any
such mutilated, lost, destroyed or wrongfully taken Security has become or is
about to become due and payable, the Company in its discretion may pay such
Security instead of issuing a new Security in replacement thereof.


 


Every
replacement Security is an additional obligation of the Company.


 


The provisions
of this Section 2.07 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, lost, destroyed or wrongfully taken Securities.


 


SECTION 2.08                    Outstanding
Securities.  Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding.  Subject
to Section 13.06, a Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.


 


If a Security
is replaced pursuant to Section 2.07, it ceases to be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced
Security is held by a protected purchaser.


 


If the Paying
Agent segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and the Paying Agent
is not prohibited from paying such money to


 


27

















 


the Holders on that date
pursuant to the terms of this Indenture, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.


 


SECTION 2.09                    Temporary
Securities.  In the event that Definitive
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in
the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Definitive Securities and deliver them in exchange for
temporary Securities upon surrender of such temporary Securities at the office
or agency of the Company, without charge to the Holder.


 


SECTION 2.10                    Cancellation.  The Company at any time may deliver
Securities to the Trustee for cancellation. 
The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and shall dispose of canceled Securities in accordance with its
customary procedures or deliver canceled Securities to the Company pursuant to
written direction by an Officer.  The
Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.  The Trustee shall not authenticate Securities
in place of canceled Securities other than pursuant to the terms of this
Indenture.


 


SECTION 2.11                    Defaulted
Interest.  If the Company defaults in
a payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner.  The Company may pay the
defaulted interest to the Persons who are Holders on a subsequent special
record date.  The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each Holder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.


 


SECTION 2.12                    CUSIP and
ISIN Numbers.  The Company in issuing
the Securities may use “CUSIP” and “ISIN” numbers (if then generally in
use) and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee
of any change in the CUSIP number.


 


SECTION 2.13                    Issuance of
Additional Securities As Payment of Interest.  For the first two semi-annual interest payment dates occurring
after the Issue Date, the Company shall be entitled to issue additional
Securities under this Indenture as payment of interest on the Securities, which
shall have identical terms as the underlying securities. The Securities issued
on the Issue Date and any additional Securities issued as payment of interest
on the Securities shall be treated as a single class for all purposes under
this Indenture.  Any additional
Securities so


 


28

















 


issued shall be dated the
applicable interest payment date, shall bear interest from and after such date,
and shall be governed by, and be subject to the terms of the Indenture and
shall have the same rights and benefits as the Securities issued on the Issue
Date.


 


With respect
to any such Securities, on or before each such interest payment date, the
Company shall deliver to the Trustee and the Paying Agent (i) with respect to
Securities that are in global form, an order to increase the principal amount
of the global Securities by the amount required to pay such interest (or, if
requested by the Trustee or the Holder of the global Securities, to
authenticate a new global Security executed by the Company with such increased
principal amounts) or (ii) with respect to Securities that are in definitive
form, definitive additional Securities in the amount required to pay such
interest and an order to authenticate and deliver such additional Securities to
the record Holder of the definitive Securities. 
Any such Securities shall, after being executed and authenticated
pursuant to Section 2.02, be (i) deposited into the account specified by the
Holder or Holders thereof as of the relevant record date if the Securities are
held in global form or otherwise according to the procedures of the depositary
or (ii) mailed to the person entitled thereto as shown on the register for the
Securities as of the relevant record date. 
Alternatively, the Company may direct the Paying Agent to make the
appropriate amendments to the schedule of principal amounts of the relevant Securities
outstanding and arrange for deposit into the account specified by the Holder or
Holders thereof as of the relevant record date. 
Payment shall be made in such form and upon such terms as specified
herein and the Company shall and Paying Agent may take additional steps as is
necessary to effect such payment.


 


ARTICLE 3


 


Redemption


 


SECTION 3.01                    Notices to
Trustee.  If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.


 


The Company
shall give each notice to the Trustee provided for in this Section at least 60
days before the redemption date unless the Trustee consents in writing to a
shorter period.  Such notice shall be
accompanied by an Officers’ Certificate from the Company to the effect that
such redemption will comply with the conditions herein.  Any such notice may be canceled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.


 


SECTION 3.02                    Selection
of Securities To Be Redeemed.  If
fewer than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that the Trustee in
its sole discretion shall deem to be fair and appropriate.  The Trustee shall make the selection from
outstanding Securities not previously called for redemption.  The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000.  Securities and portions of them
the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000.  Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of Securities
called


 


29

















 


for redemption.  The Trustee shall notify the Company promptly
of the method it has chosen for the selection of Securities or portions of
Securities to be called for redemption.


 


SECTION 3.03                    Notice of
Redemption.  (a)  At least 30 days but not more than 60 days
before a date for redemption
of Securities, the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities to be redeemed at such Holder’s registered
address.


 


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


 


(i)                                     the
redemption date;


 


(ii)                                  the
redemption price and the amount of accrued interest to the redemption date;


 


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


 


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


 


(v)                                 if
fewer than all the outstanding Securities are to be redeemed, the certificate
numbers and principal amounts of the particular Securities to be redeemed;


 


(vi)                              that,
unless the Company defaults in making such redemption payment or the Paying
Agent is prohibited from making such payment pursuant to the terms of this
Indenture, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;


 


(vii)                           the
CUSIP or ISIN number, if any, printed on the Securities being redeemed; and


 


(viii)                        that no
representation is made as to the correctness or accuracy of the CUSIP or ISIN
number, if any, listed in such notice or printed on the Securities.


 


(b)                                 At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name
and at the Company’s expense.  In such
event, the Company shall provide the Trustee with the information required by
this Section.


 


SECTION 3.04                    Effect of
Notice of Redemption.  Once notice of
redemption is mailed, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the
notice.  Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date; provided, however, that
if the redemption date is after a regular record date and on or prior to the
interest payment date, the accrued interest shall be payable to the Holder of
the redeemed Securities registered on the relevant record date.  Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.


 


30

















 


SECTION 3.05                    Deposit of
Redemption Price.  Prior to 11:00
a.m., New York City time, on the redemption date, the Company shall deposit
with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities or portions thereof
to be redeemed on that date other than Securities or portions of Securities
called for redemption that have been delivered by the Company to the Trustee
for cancellation.  Concurrently with such
deposit, the Company shall deliver an Officers’ Certificate and an Opinion of
Counsel to the effect that the redemption complies with the conditions
contained in this Indenture.  On and
after the redemption date, interest shall cease to accrue on Securities or
portions thereof called for redemption so long as the Company has deposited
with the Paying Agent funds sufficient to pay the principal of, plus accrued
and unpaid interest on, the Securities to be redeemed, unless the Paying Agent
is prohibited from making such payment pursuant to the terms of this Indenture.


 


SECTION 3.06                    Securities
Redeemed in Part.  Upon surrender of
a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder (at the Company’s expense) a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.


 


SECTION 3.07                    Call Option.  In addition to the redemption rights set
forth above and in accordance with the procedures
set forth in Section 3.03, for the period from the Issue Date through the first
anniversary of the Issue Date, the Company may redeem the Securities in whole
with the proceeds of Refinancing Indebtedness permitted by Section 4.03 at a redemption
price equal to (i) $20,000,000 plus (ii) interest accrued through the
redemption date on the principal amount of $20,000,000 minus (iii) interest, if
any, previously paid in cash on the Securities, all as set forth in the
Securities (the “Call Option”).  The
Company shall have the right to assign the Call Option to any Person at its
sole discretion and such Call Option shall remain binding on the Securities in
accordance with the terms thereof, provided that any such assignee exercising
the Call Option shall be permitted to utilize any available source of funds to
redeem the Securities.


 


ARTICLE 4


 


Covenants


 


SECTION 4.01                    Payment of
Securities.  The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture.  Subject to Section 2.13, principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the Holders on
that date pursuant to the terms of this Indenture.


 


The Company
shall pay interest on overdue principal at the rate borne by the Securities,
and it shall pay interest on overdue installments of interest at the same rate
to the extent lawful.


 


31

















 


SECTION 4.02                    SEC Reports.  Notwithstanding that the Company may not be
subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC
(if permitted by SEC practice and applicable law and regulations) and provide
the Trustee and Holders and prospective Holders (upon request) within 15 days
after it files them with the SEC (or if not permitted, within 15 days after it
would have otherwise been required to file them with the SEC), copies of the
Company’s annual report and the information, documents and other reports that
are specified in Sections 13 and 15(d) of the Exchange Act.  In addition, following the existence of a
Public Market, the Company shall furnish to the Trustee and the Holders,
promptly upon their becoming available, copies of the annual report to shareholders
and any other information provided by the Company to its shareholders
generally.  The Company also shall comply
with the other provisions of Section 314(a) of the TIA.


 


Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).


 


SECTION 4.03                    Limitation
on Indebtedness.  (a)  The Company shall not, and shall not permit
any Restricted Subsidiary
to, Incur, directly or indirectly, any Indebtedness; provided, however, that
the Company or any Restricted Subsidiary that is a Note Guarantor may Incur
Indebtedness if on the date of such Incurrence and after giving effect thereto
the Consolidated Coverage Ratio would be greater than 2.25:1.00.


 


(b)                                 Notwithstanding
Section 4.03(a), the Company and its Restricted Subsidiaries may Incur the
following Indebtedness:


 


(i)                                     Indebtedness
Incurred pursuant to the Credit Agreement in an aggregate principal amount not
to exceed $100.0 million at any one time outstanding less the aggregate amount
of (1) all repayments of principal of such Indebtedness pursuant to Section
4.06 and (2) the aggregate principal amount of Indebtedness Incurred and at
such time outstanding pursuant to Section 4.03(b)(ix);


 


(ii)                                  Indebtedness
of the Company owed to and held by any Restricted Subsidiary or Indebtedness of
a Restricted Subsidiary owed to and held by the Company or any Restricted
Subsidiary; provided, however, that (1) any subsequent issuance or transfer of
any Capital Stock or any other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Indebtedness (except to the Company or a Restricted Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such Indebtedness by
the issuer thereof, (2) if the Company is the obligor on such Indebtedness,
such Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations with respect to the Securities, (3) if a Restricted
Subsidiary is the obligor on such Indebtedness, such Indebtedness is made
pursuant to an intercompany note and (4) if a Note Guarantor is the obligor on
such Indebtedness and the Company is not the obligee, such Indebtedness is
subordinated in right of payment to the Note Guarantee of such Note Guarantor;


 


32

















 


(iii)                               Indebtedness
(1) represented by the Securities (including additional Securities issued
pursuant to Section 2.13) and the Note Guarantees with respect thereto, (2)
outstanding on the 2004 Notes Closing Date (other than the Indebtedness
described in clauses (i) and (ii) above) including, without limitation, the
2003 Notes and the 2004 Notes and any additional securities, regardless of when
issued, in lieu of payment of interest thereon, (3) consisting of Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause
(iii) (including Refinancing Indebtedness) or Section 4.03(a) and (4)
consisting of Guarantees of any Indebtedness otherwise permitted by the terms
of this Indenture;


 


(iv)                              (1)
Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to
the date on which such Restricted Subsidiary was acquired by the Company (other
than Indebtedness Incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary of or was otherwise acquired by the Company) and (2)
Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of
Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause
(iv);


 


(v)                                 Indebtedness
of the Company or a Restricted Subsidiary (1) in respect of performance bonds,
bankers’ acceptances, letters of credit and surety or appeal bonds provided by
the Company and the Restricted Subsidiaries in the ordinary course of their
business, and (2) under Commodity Agreements, Interest Rate Agreements and
Currency Agreements entered into for bona fide hedging purposes of the Company
or any Restricted Subsidiary in the ordinary course of business; provided,
however, that such Interest Rate Agreements or Currency Agreements do not
increase the principal amount of Indebtedness of the Company and its Restricted
Subsidiaries outstanding at any time other than as a result of fluctuations in
interest rates or foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;


 


(vi)                              Indebtedness
(including Capitalized Lease Obligations and Attributable Debt) Incurred by the
Company or any of its Restricted Subsidiaries to finance the purchase, lease or
improvement of property (real or personal), equipment or other assets (in each
case whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets); provided that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (vi) and all Refinancing
Indebtedness Incurred to refund, refinance or replace any Indebtedness Incurred
pursuant to this clause (vi) at any time outstanding, does not exceed the
greater of (x) 5.0% of Tangible Assets and (y) $30.0 million;


 


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


 


(viii)                        Indebtedness
of the Company and its Restricted Subsidiaries arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification,


 


33

















 


adjustment of
purchase price or similar obligations, in each case incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary of the
Company in accordance with the terms of the Indenture, other than Guarantees by
the Company or any Restricted Subsidiary of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary of the
Company for the purpose of financing such acquisition; provided, however, that
the maximum aggregate liability in respect of all such Indebtedness shall not
exceed the gross proceeds, including the fair market value as determined in
good faith by a majority of the Board of Directors of noncash proceeds (the
fair market value of such noncash proceeds being measured at the time it is
received and without giving effect to any subsequent changes in value), actually
received by the Company and its Restricted Subsidiaries in connection with such
disposition;


 


(ix)                                the
Incurrence by a Securitization Entity of Indebtedness in a Qualified
Securitization Transaction that is not recourse to the Company or any Restricted
Subsidiary of the Company (except for Standard Securitization Undertakings) in
an aggregate principal amount, together with the aggregate principal amount of
Indebtedness Incurred and at such time outstanding pursuant to Section
4.03(b)(i), not to exceed $100.0 million at any one time outstanding, less the
aggregate amount of all repayments of all principal of Indebtedness Incurred
pursuant to Section 4.03(b)(i) pursuant to Section 4.06;


 


(x)                                   Indebtedness
of Foreign Subsidiaries; provided that the aggregate outstanding amount of
Indebtedness incurred by such Foreign Subsidiaries under this clause (x) does
not exceed at any one time an amount equal to the sum of (1) 80% of the
consolidated book value of the accounts receivable of all Foreign Subsidiaries and
(2) 60% of the consolidated book value of the inventory of all Foreign
Subsidiaries;


 


(xi)                                Indebtedness
under any Domestic Overdraft Facility; or


 


(xii)                             Indebtedness
of the Company and its Restricted Subsidiaries (in addition to Indebtedness
permitted to be Incurred pursuant to Section 4.03(a) or any other clause of
this Section 4.03(b)); provided that the aggregate principal amount on the date
of Incurrence, when added to all other Indebtedness Incurred pursuant to this
clause (xii) and then outstanding, shall not exceed $20.0 million.


 


(c)                                  Notwithstanding the
foregoing, the Company shall not incur any Indebtedness pursuant to Section
4.03(b) above if the proceeds thereof are used, directly or indirectly, to
repay, prepay, redeem, defease, retire, refund or refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities to
at least the same extent as such Subordinated Obligations.  The Company shall not Incur any Indebtedness
pursuant to Section 4.03(a) or 4.03(b) if such Indebtedness is subordinate or
junior in right of payment to any Senior Indebtedness unless such Indebtedness
is Incurred pursuant to the Credit Agreement or is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness.  In addition,
the Company shall not Incur any Secured Indebtedness which is not Senior
Indebtedness unless contemporaneously therewith effective provision is made to
secure the Securities equally and ratably with (or on a senior basis


 


34

















 


to, in the case of Indebtedness
subordinated in right of payment to the Securities) such Secured Indebtedness
for so long as such Secured Indebtedness is secured by a Lien, except for
Senior Subordinated Indebtedness and Subordinated Obligations secured by Liens
on the assets of any entity existing at the time such entity is acquired by,
and becomes a Restricted Subsidiary of, the Company, whether by merger,
consolidation, purchase of assets or otherwise, provided that such Liens (x)
are not created, incurred or assumed in connection with, or in contemplation of
such entity being acquired by the Company and (y) do not extend to any other
assets of the Company or any of its Subsidiaries.  A Note Guarantor may not Incur any
Indebtedness if such Indebtedness is by its terms expressly subordinate or
junior in right of payment to any Senior Indebtedness of such Note Guarantor
unless such Indebtedness is Incurred pursuant to the Credit Agreement or is Senior
Subordinated Indebtedness of such Note Guarantor or is expressly subordinated
in right of payment to Senior Subordinated Indebtedness of such Note
Guarantor.  In addition, a Note Guarantor
shall not Incur any Secured Indebtedness that is not Senior Indebtedness of
such Note Guarantor unless contemporaneously therewith effective provision is
made to secure the Note Guarantee of such Note Guarantor equally and ratably
with (or on a senior basis to, in the case of Indebtedness subordinated in
right of payment to such Note Guarantee) such Secured Indebtedness for as long
as such Secured Indebtedness is secured by a Lien, except for Senior
Subordinated Indebtedness and Subordinated Obligations of such Note Guarantor
secured by Liens on the assets of any entity existing at the time such entity
is acquired by such Note Guarantor, whether by merger, consolidation, purchase
of assets or otherwise, provided that such Liens (x) are not created, incurred
or assumed in connection with or in contemplation of such assets being acquired
by such Note Guarantor and (y) do not extend to any other assets of the Company
or any of its Subsidiaries.


 


(d)                                 Notwithstanding any
other provision of this Section 4.03, the maximum amount of Indebtedness that
the Company or any Restricted Subsidiary may Incur pursuant to this Section
shall not be deemed to be exceeded solely as a result of fluctuations in the
exchange rates of currencies.  For
purposes of determining the outstanding principal amount of any particular
Indebtedness Incurred pursuant to this Section 4.03, (i) Indebtedness Incurred
pursuant to the Credit Agreement prior to or on the Closing Date shall be
treated as Incurred pursuant to Section 4.03(b)(i) to the extent of
availability thereunder, (ii) Guarantees of, or obligations in respect of
letters of credit relating to, Indebtedness which is otherwise included in the
determination of a particular amount of Indebtedness shall not be included,
(iii) if obligations in respect of letters of credit are Incurred pursuant to the
Credit Agreement and are being treated as Incurred pursuant to Section
4.03(b)(i) and the letters of credit relate to other Indebtedness, then such
other Indebtedness shall not be included, (iv) the principal amount of any
Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock
of a Restricted Subsidiary that is not a Note Guarantor will be equal to the
greater of the maximum mandatory redemption or repurchase price (not including,
in either case, any redemption or repurchase premium) or the maximum
liquidation preference, (v) the principal amount of Indebtedness, Disqualified
Stock of the Company or a Restricted Subsidiary or Preferred Stock of a
Restricted Subsidiary that is not a Note Guarantor issued at a price less than
the principal amount thereof, the maximum fixed redemption or repurchase price
thereof or liquidation preference thereof, as applicable, will be equal to the
amount of the liability or obligation in respect thereof determined in
accordance with GAAP, (vi) if such Indebtedness is denominated in a currency
other than U.S. dollars, the U.S. dollar equivalent principal amount thereof
shall be calculated based on the relevant currency exchange rates in effect on
the date such Indebtedness was Incurred, (vii) the accrual of interest,


 


35

















 


accrual of dividends, the
accretion of accreted value, the payment of interest in the form of additional
Indebtedness and the payment of dividends or distributions in the form of
additional Capital Stock shall not be deemed an Incurrence of Indebtedness for
purposes of this Section 4.03, (viii) Indebtedness permitted by this Section
4.03 need not be permitted solely by reference to one provision permitting such
Indebtedness but may be permitted in part by one such provision and in part by
one or more other provisions of this Section permitting such Indebtedness, and
(ix) in the event that Indebtedness meets the criteria of more than one of the
types of Indebtedness described in this Section 4.03, the Company, in its sole
discretion, shall classify (or later reclassify) such Indebtedness and only be
required to include the amount of such Indebtedness in one of such clauses.


 


SECTION 4.04                    Limitation
on Restricted Payments.  (a)  The Company shall not, and shall not permit
any Restricted
Subsidiary, directly or indirectly, to (i) declare or pay any dividend or make
any distribution of any kind on or in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving the
Company) or similar payment to the holders (solely in their capacities as such)
of its Capital Stock except dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and except dividends or distributions
payable to the Company or another Restricted Subsidiary (and, if such
Restricted Subsidiary has shareholders other than the Company or other
Restricted Subsidiaries, to its other shareholders on a pro rata basis), (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
the Company or any Restricted Subsidiary held by Persons other than the Company
or another Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease
or otherwise acquire or retire for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment any Subordinated
Obligations (other than (1) the purchase, repurchase or other acquisition of
Subordinated Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within
one year of the date of acquisition and (2) Indebtedness Incurred pursuant to
Section 4.03(b)(ii)) or (iv) make any Investment (other than a Permitted
Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to as a “Restricted Payment”) if at the time the Company
or such Restricted Subsidiary makes such Restricted Payment:


 


(1)                                  a
Default shall have occurred and be continuing (or would result therefrom);


 


(2)                                  the
Company could not Incur at least $1.00 of additional Indebtedness under Section
4.03(a); or


 


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


 


(A)                              50%
of the Consolidated Net Income accrued during the period (treated as one
accounting period) from the beginning of the fiscal quarter immediately
following the fiscal quarter during which the Closing Date occurred


 


36

















 


to the end of
the most recent fiscal quarter ending prior to the date of such Restricted
Payment for which consolidated financial statements of the Company are publicly
available (or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit);


 


(B)                                100%
of the aggregate Net Cash Proceeds (other than in respect of an Excluded
Contribution) received by the Company (x) as capital contributions to the
Company after the Closing Date or (y) from the issue or sale of its Capital
Stock (other than Disqualified Stock) subsequent to the Closing Date (other
than a capital contribution from or an issuance or sale to (a) a Subsidiary of
the Company or (b) an employee equity ownership or participation plan or other
trust established by the Company or any of its Subsidiaries);


 


(C)                                100%
of the fair market value (as determined in good faith by the Board of Directors
of the Company) of shares of Qualified Stock of the Company or any Restricted
Subsidiary issued after the Closing Date to acquire assets from a third party;


 


(D)                               the
amount by which Indebtedness of the Company or its Restricted Subsidiaries is
reduced on the Company’s balance sheet upon the conversion or exchange (other than
by a Subsidiary of the Company) subsequent to the Closing Date of any
Indebtedness of the Company or its Restricted Subsidiaries issued after the
Closing Date which is convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash or the fair
market value of other property distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange);


 


(E)                                 100%
of the aggregate amount received by the Company or any Restricted Subsidiary in
cash from the sale or other disposition (other than to (x) the Company or a
Subsidiary of the Company or (y) an employee equity ownership or participation
plan or other trust established by the Company or any of its Subsidiaries) of
Restricted Investments made by the Company or any Restricted Subsidiary after
the Closing Date and from repurchases and redemptions of such Restricted
Investments from the Company or any Restricted Subsidiary by any Person (other
than (x) the Company or any of its Subsidiaries or (y) an employee equity
ownership or participation plan or other trust established by the Company or
any of its Restricted Subsidiaries) and from repayments of loans or advances
which constituted Restricted Investments;


 


(F)                                 the
amount equal to the net reduction in Investments in Unrestricted Subsidiaries
since the Closing Date resulting from (x) payments of dividends, repayments of
the principal of loans or advances or other transfers of assets to the Company
or any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of “Investment”) not to exceed, in
the case of any Unrestricted Subsidiary, the amount of Investments previously
made by the Company or any Restricted Subsidiary in


 


37

















 


such
Unrestricted Subsidiary, which amount was included in the calculation of the
amount of Restricted Payments; and


 


(G)                                $5.0
million.


 


(b)                                 The
provisions of Section 4.04(a) shall not prohibit:


 


(i)                                     any
purchase, repurchase, retirement or other acquisition or retirement for value
of, or other distribution in respect of, Capital Stock of the Company made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company or capital contributions to the Company after the
Closing Date (other than Disqualified Stock and other than Capital Stock issued
or sold to, or capital contribution from, a Subsidiary of the Company or an
employee equity ownership or participation plan or other trust established by
the Company or any of its Subsidiaries); provided, however, that (1) such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments and (2) the Net Cash Proceeds from such sale or capital
contribution applied in the manner set forth in this clause (i) shall be
excluded from the calculation of amounts under Section 4.04(a)(iv)(3)(B);


 


(ii)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Obligations of the Company or a Restricted Subsidiary
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, (x) Capital Stock of the Company or a Restricted Subsidiary or (y)
Subordinated Obligations of the Company or a Restricted Subsidiary that are
permitted to be Incurred pursuant to Section 4.03; provided,  however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall be
excluded in the calculation of the amount of Restricted Payments;


 


(iii)                               any
purchase or redemption of Subordinated Obligations from Net Available Cash to
the extent permitted by Section 4.06; provided, however, that such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments;


 


(iv)                              Investments
that are made with Excluded Contributions; provided, however, that such
Investments shall be excluded in the calculation of the amount of Restricted Payments;


 


(v)                                 dividends
or other distributions paid to holders of, or redemptions from holders of,
Capital Stock within 60 days after the date of declaration thereof, or the
giving of formal notice of redemption, if at such date of declaration such
dividends or other distributions or redemptions would have complied with this
Section 4.04(a); provided, however, that such dividend, distribution or
redemption shall be included in the calculation of the amount of Restricted
Payments;


 


(vi)                              any
repurchase of Capital Stock owned by former officers, directors, consultants or
employees of the Company or its Subsidiaries or their assigns, estates and
heirs or entities controlled by them; provided, however, that the amount of
such repurchases since the Closing Date shall not, in the aggregate, exceed the
sum of


 


38

















 


(1) $10.0
million (which amount shall be increased by the amount of any Net Cash Proceeds
to the Company from (A) sales of Capital Stock of the Company to management,
other employees or Permitted Holders subsequent to the Closing Date to the
extent such amounts are not included under Section 4.04(a)(iv)(3)(B) and (B)
any “key-man” life insurance policies which are used to make such repurchases)
and (2) $2.0 million per fiscal year of the Company commencing with fiscal year
2006 (which amount may be used in a subsequent fiscal year to the extent not
used during a fiscal year); provided further, however, that the cancelation of
Indebtedness owing to the Company from such former officers, directors,
consultants or employees of the Company or any of its Restricted Subsidiaries
in connection with a repurchase of Capital Stock of the Company shall not be
deemed to constitute a Restricted Payment under the Indenture; provided
further, however, that such repurchase shall be included in the calculation of
the amount of Restricted Payments;


 


(vii)                           repurchases
of Capital Stock deemed to occur upon the exercise of stock options, warrants
or other convertible securities if such Capital Stock represents a portion of
the exercise price thereof; provided, however, that such repurchases shall be
excluded in the calculation of the amount of Restricted Payments; or


 


(viii)                        so long as
no Default or Event of Default shall have occurred and be continuing, payments
not to exceed $500,000 in the aggregate since the Closing Date to enable the
Company to make payments to holders of its Capital Stock in lieu of the
issuance of fractional shares of its Capital Stock; provided, however, that such
payments shall be excluded in the calculation of the amount of Restricted
Payments.


 


SECTION 4.05                    Limitation
on Restrictions on Distributions from Restricted Subsidiaries.  The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any of its Restricted Subsidiaries (it being understood that the
priority of any preferred stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
common stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock), (b) make any loans or advances to the Company
(it being understood that the subordination of loans or advances made to the
Company to other Indebtedness Incurred by the Company shall not be deemed a
restriction on the ability to make loans or advances) or (c) transfer any of
its property or assets to the Company or any of its Restricted Subsidiaries,
except:


 


(i)                                     any
encumbrance or restriction pursuant to applicable law or any applicable rule,
regulation or order, or an agreement in effect at or entered into on the
Closing Date (including the Credit Agreement);


 


(ii)                                  any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Capital Stock or Indebtedness of such Restricted
Subsidiary, in each case Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company (other
than Capital Stock or Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any


 


39

















 


portion of the
funds or credit support utilized to consummate the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was otherwise acquired by the Company) and outstanding
on such date;


 


(iii)                               any
encumbrance or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (c)(i) or
(c)(ii) of this Section 4.05 or this clause (iii) or contained in any amendment
to an agreement referred to in clause (c)(i) or (c)(ii) of this Section 4.05 or
this clause (c)(iii);  provided, however,
that the encumbrances and restrictions contained in any such Refinancing
agreement or amendment are no more restrictive, taken as a whole, than the
encumbrances and restrictions contained in such predecessor agreements;


 


(iv)                              in
the case of clause (c), any encumbrance or restriction (1) that restricts in a
customary manner the assignment of any lease, license or similar contract or
the subletting, assignment or transfer of any property or asset that is subject
to a lease, license or similar contract, (2) that is or was created by virtue
of any transfer of, agreement to transfer or option or right with respect to
any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture, (3) 
contained in security agreements securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the transfer
of the property subject to such security agreements, or (4) encumbrances or
restrictions relating to Indebtedness permitted to be  Incurred pursuant to Section 4.03(b)(vi) for
property acquired in the ordinary course of business that only imposes
encumbrances or restrictions on the property so acquired (it being agreed that
any such encumbrance or restriction may also secure other Indebtedness
permitted to be Incurred by the Company and provided by the same financing
source providing the Indebtedness Incurred pursuant to Section 4.03(b)(vi));


 


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


 


(vi)                              customary
provisions in joint venture agreements and other similar agreements entered
into in the ordinary course of business;


 


(vii)                           Indebtedness
or other contractual requirements of a Securitization Entity in connection with
a Qualified Securitization Transaction; provided, that such restrictions apply
only to such Securitization Entity;


 


(viii)                        net worth
provisions in leases and other agreements entered into by the Company or any
Restricted Subsidiary in the ordinary course of business; and


 


(ix)                                any
agreement or instrument governing Indebtedness (whether or not outstanding) of
Foreign Subsidiaries of the Company permitted to be Incurred pursuant to
Section 4.03(a) or Section 4.03(b)(x).


 


40

















 


SECTION 4.06                    Limitation
on Sales of Assets and Subsidiary Stock. 
(a)  The Company shall not, and
shall not permit any
Restricted Subsidiary to, make any Asset Disposition unless (i) the Company or
such Restricted Subsidiary receives consideration (including by way of relief
from, or by any other Person assuming sole responsibility for, any liabilities,
contingent or otherwise) at the time of such Asset Disposition at least equal
to the fair market value of the Capital Stock and assets subject to such Asset
Disposition, (ii) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of (1) cash or Temporary
Cash Investments, (2) properties and assets to be owned by the Company or any
Restricted Subsidiary and used in a Permitted Business or (3) Capital Stock in
one or more Persons engaged in a Permitted Business that are or thereby become
Restricted Subsidiaries of the Company, and (iii) an amount equal to 100% of
the Net Available Cash from such Asset Disposition is applied by the Company
(or such Restricted Subsidiary, as the case may be):


 


(1)                                  first,
(i) to the extent the Company elects (or is required by the terms of any
Indebtedness), to prepay, repay, redeem or purchase (x)  Bank Indebtedness or (y) other Senior
Indebtedness of the Company or Indebtedness (other than any Disqualified Stock)
of a Restricted Subsidiary (in the case of clause (y), other than Indebtedness
owed to the Company or an Affiliate of the Company and other than Preferred
Stock of a Restricted Subsidiary that is not a Note Guarantor) or (ii) to the
extent the Company or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by
a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary or the application by the Company of the Net Available
Cash received by a Restricted Subsidiary of the Company), in each case within
365 days (or, in the case of Foreign Subsidiary Asset Dispositions, 545 days)
from the later of such Asset Disposition or the receipt of such Net Available
Cash; provided that pending the final application of any such Net Available
Cash, the Company and its Restricted Subsidiaries may temporarily reduce
Indebtedness or otherwise invest such Net Available Cash in any manner not
prohibited by this Indenture;


 


(2)                                  second,
within 365 days from the later of such Asset Disposition or the receipt of such
Net Available Cash (or, in the case of Foreign Subsidiary Asset Dispositions,
545 days), to the extent of the balance of such Net Available Cash after such
application in accordance with clause (1), to make an Offer (as defined below)
to purchase Securities pursuant to and subject to the conditions set forth in
Section 4.06(b); provided, however, that if the Company elects (or is required
by the terms of any Senior Subordinated Indebtedness), such Offer may be made
ratably to purchase the Securities and other Senior Subordinated Indebtedness
of the Company; and


 


(3)                                  third,
to the extent of the balance of such Net Available Cash after application in
accordance with clauses (1) (other than the proviso thereof) and (2) for any
general corporate purpose not restricted by the terms of this Indenture;


 


provided, however, that in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (1) or (2) above, the Company or such Restricted Subsidiary


 


41

















 


shall retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.


 


Notwithstanding
the foregoing provisions of this Section 4.06, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this Section 4.06(a) except to the extent that the aggregate
Net Available Cash from all Asset Dispositions since the Closing Date that is
not applied in accordance with this Section 4.06(a) exceeds $10.0 million since the Closing Date.


 


For the
purposes of this Section 4.06, the following are deemed to be cash: (A) the
assumption of any liabilities of the Company (other than Disqualified Stock of
the Company) or any Restricted Subsidiary and the release of the Company or
such Restricted Subsidiary from all liability on such liabilities in connection
with such Asset Disposition and (B) securities received by the Company or any
Restricted Subsidiary from the transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash.


 


(b)                                 In the event of an
Asset Disposition that requires the purchase of Securities (and other Senior
Subordinated Indebtedness) pursuant to Section 4.06(a)(iii)(2), the Company
shall be required to purchase Securities (and other Senior Subordinated
Indebtedness) tendered pursuant to an offer by the Company for the Securities
(and other Senior Subordinated Indebtedness) (the “Offer”) at a purchase price
of 100% of their principal amount plus accrued and unpaid interest to the date
of purchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 4.06(c). 
If the aggregate purchase price of Securities (and other Senior
Subordinated Indebtedness) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Securities (and other Senior
Subordinated Indebtedness), the Company shall apply the remaining Net Available
Cash for any general corporate purpose not restricted by the terms of the
Indenture.  The Company shall not be
required to make an Offer for Securities (and other Senior Subordinated
Indebtedness) pursuant to this Section 4.06 if the Net Available Cash available
therefor (after application of the proceeds as provided in clause (1) of
Section 4.06(a)(iii)) is less than $10.0 million for any particular Asset
Disposition since the Closing Date (which lesser amount shall be carried
forward for purposes of determining whether an Offer is required with respect
to the Net Available Cash from any subsequent Asset Disposition).  Upon completion of the Offer, the amount of
Net Available Cash shall be reduced to zero.


 


(c)                                  (i)  Promptly, and in any event within 10 days
after the Company becomes obligated to make an Offer, the Company shall be
obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to
prorating as hereinafter described in the event the Offer is oversubscribed) in
integral multiples of $1,000 of principal amount, at the applicable purchase
price.  The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of
such notice (the “Purchase Date”) and shall contain such information concerning
the business of the Company which the Company in good faith believes will
enable such Holders to make an informed decision (which at a minimum shall
include (1) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly


 


42

















 


Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (2) a
description of material developments in the Company’s business subsequent to
the date of the latest of such reports, and (3) if material, appropriate pro
forma financial information) and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the address referred to
in clause (c) (iii).


 


(ii)                                  Not
later than the date upon which written notice of an Offer is delivered to the
Trustee as provided above, the Company shall deliver to the Trustee an
Officers’ Certificate as to (1) the amount of the Offer (the “Offer Amount”),
(2) the allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (3) the compliance of such
allocation with the provisions of Section 4.06(a).  By no later than 11:00 a.m. New York City
time on the Purchase Date, the Company shall irrevocably deposit with the
Trustee or with a paying agent (or, if the Company is acting as its own paying
agent, segregate and hold in trust) an amount equal to the Offer Amount or, if
less, the purchase price of Securities (and other Senior Subordinated
Indebtedness) tendered and accepted for payment in the Offer.  Upon the expiration of the period for which
the Offer remains open (the “Offer Period”), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof that have been
properly tendered to and are to be accepted by the Company.  The Trustee (or the Paying Agent, if not the
Trustee) shall, on the date of purchase, mail or deliver payment to each
tendering Holder in the amount of the purchase price.


 


(iii)                               Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
Purchase Date.  Holders shall be entitled
to withdraw their election if the Trustee or the Company receives not later
than one Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered by the Holder for purchase and a
statement that such Holder is withdrawing his election to have such Security
purchased.  If at the expiration of the
Offer Period the aggregate principal amount of Securities and any other Senior
Subordinated Indebtedness included in the Offer surrendered by holders thereof
exceeds the Offer Amount, the Company shall select the Securities and other
Senior Subordinated Indebtedness to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Securities
and other Senior Subordinated Indebtedness in denominations of $1,000, or
integral multiples thereof, shall be purchased).  Holders whose Securities are purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.


 


(iv)                              At
the time the Company delivers Securities to the Trustee which are to be
accepted for purchase, the Company shall also deliver an Officers’ Certificate
stating that such Securities are to be accepted by the Company pursuant to and
in accordance with the terms of this Section. 
A Security shall be deemed to have been accepted for purchase


 


43

















 


at the time
the Trustee, directly or through an agent, mails or delivers payment therefor
to the surrendering Holder.


 


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


 


SECTION 4.07                    Limitation
on Transactions with Affiliates. 
(a)  The Company shall not, and
shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into or conduct any transaction
(including, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an “Affiliate
Transaction”) unless such Affiliate Transaction is on terms (i) that are no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those that could be obtained at the time of such transaction in
arm’s-length dealings with a Person who is not such an Affiliate, (ii) that, in
the event that such Affiliate Transaction involves an aggregate amount in
excess of $5.0 million, (1) are set forth in writing and (2) except as provided
in Section 4.07(a)(iii), have been approved by a majority of the members of the
Board of Directors having no personal stake in such Affiliate Transaction (if
any such members exist) and (iii) that, in the event (1) such Affiliate
Transaction involves an amount in excess of $10.0 million, or (2) if there are
no members of the Board of Directors having no personal stake in such Affiliate
Transaction and such Affiliate Transaction involves an aggregate amount in
excess of $5.0 million, have been determined by a nationally recognized
appraisal, accounting or investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries.


 


(b)                                 The provisions of
Section 4.07(a) shall not prohibit (i) any Restricted Payment permitted to be
paid pursuant to Section 4.04, (ii) any issuance of securities, or other
payments awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, options to purchase Capital Stock of the
Company and equity ownership, restricted stock plans, long-term incentive plans,
stock appreciation rights plans, participation plans or similar employee
benefits plans approved by the Board of Directors, (iii) the grant of options
(and the exercise thereof) to purchase Capital Stock of the Company or similar
rights to employees and directors of the Company pursuant to plans approved by
the Board of Directors, (iv) loans or advances to officers, directors or
employees in the ordinary course of business, but in any event not to exceed
$2.0 million in the aggregate outstanding at any one time, (v) the payment of
reasonable fees to directors of the Company and its Subsidiaries who are not
employees of the Company or its Subsidiaries and other reasonable fees,
compensation, benefits and indemnities paid or entered into by the Company or its
Restricted Subsidiaries in the ordinary course of business to or with the
officers, directors or employees of the Company and its Restricted
Subsidiaries, (vi) any transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries, (vii) the provision by Persons
who may be deemed Affiliates or stockholders of the Company (other than J.P.
Morgan Partners, LLC and Persons directly or indirectly controlled by J.P.
Morgan Partners, LLC) of investment banking, commercial banking, trust, lending
or financing, investment, underwriting, placement agent,


 


44

















 


financial advisory or similar
services to the Company or its Subsidiaries performed after the Closing Date,
(viii) sales of Capital Stock to Permitted Holders approved by a majority of
the members of the Board of Directors who do not have a material direct or
indirect financial interest in or with respect to the transaction being
considered, or (ix) the existence or performance by the Company or any
Restricted Subsidiary under any agreement as in effect as of the Closing Date
or replacement agreement therefor or any transaction contemplated thereby
(including pursuant to any amendment thereto or replacement agreement therefor)
so long as such amendment or replacement is not more disadvantageous to the
Holders of the Securities in any material respect than the original agreement
as in effect on the Closing Date.


 


SECTION 4.08                    Change of
Control.  (a)  Upon a Change of Control, each Holder shall
have the right to require that the
Company repurchase all or any part of such Holder’s Securities at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.08(b); provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to repurchase the Securities
pursuant to this Section 4.08 in the event that it has exercised its right to
redeem all the Securities under paragraph 5 of the Securities.  In the event that at the time of such Change
of Control the terms of any agreement governing Bank Indebtedness of the
Company or its Subsidiaries restrict or prohibit the repurchase of Securities
pursuant to this Section 4.08, then prior to the mailing of the notice to
Holders provided for in Section 4.08(b) below but in any event within 30 days
following any Change of Control, the Company shall (i) repay in full all such
Bank Indebtedness or offer to repay in full all such Bank Indebtedness and
repay the Bank Indebtedness of each lender who has accepted such offer or (ii)
obtain the requisite consent of the lenders under such agreements to permit the
repurchase of the Securities as provided for in Section 4.08(b).


 


(b)                                 Within 30 days
following any Change of Control (except as provided in the proviso to the first
sentence of Section 4.08(a)), the Company shall mail a notice to each Holder
with a copy to the Trustee (the “Change of Control Offer”) stating:


 


(i)                                     that
a Change of Control has occurred and that such Holder has the right to require
the Company to purchase all or a portion (in integral multiples of $1,000) of
such Holder’s Securities at a purchase price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date);


 


(ii)                                  the
circumstances and relevant facts and financial information regarding such
Change of Control;


 


(iii)                               the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and


 


(iv)                              the
instructions determined by the Company, consistent with this Section, that a
Holder must follow in order to have its Securities purchased.


 


45

















 


(c)                                  Holders electing to
have a Security purchased shall be required to surrender the Security, with an
appropriate form duly completed, to the Company at the address specified in the
notice at least three Business Days prior to the purchase date.  Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the purchase date a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
which was delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Security purchased.  Holders whose Securities are purchased only
in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.


 


(d)                                 On the purchase date,
all Securities purchased by the Company under this Section shall be delivered
to the Trustee for cancellation, and the Company shall pay the purchase price
plus accrued and unpaid interest to the Holders entitled thereto.


 


(e)                                  Notwithstanding the
foregoing provisions of this Section, the Company shall not be required to make
a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in Section 4.08(b) applicable to a Change of
Control Offer made by the Company and purchases all Securities validly tendered
and not withdrawn under such Change of Control Offer.


 


(f)                                    At the time the
Company delivers Securities to the Trustee which are to be accepted for
purchase, the Company shall also deliver an Officers’ Certificate stating that
such Securities are to be accepted by the Company pursuant to and in accordance
with the terms of this Section 4.08.  A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.


 


(g)                                 Prior to any Change of
Control Offer, the Company shall deliver to the Trustee an Officers’
Certificate stating that all conditions precedent contained herein to the right
of the Company to make such offer have been complied with.


 


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


 


SECTION 4.09                    Compliance
Certificate.  The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers’ Certificate (which certificate may be the same certificate
required by TIA Section 314(a)(4)) stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or not the signers
know of any Default that occurred during such period.  If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto.  The Company
also shall comply with TIA Section 314(a)(4).


 


46

















 


SECTION 4.10                    Further Instruments
and Acts.  Upon request of the
Trustee or as otherwise necessary, the Company shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.


 


SECTION 4.11                    Future Note
Guarantors.  The Company shall cause
each Domestic Subsidiary and any other Restricted Subsidiary that
guarantees any Senior Indebtedness (other than a Foreign Subsidiary that
guarantees Senior Indebtedness Incurred by another Foreign Subsidiary) to
become a Note Guarantor, and, if applicable, execute and deliver to the Trustee
a supplemental indenture substantially in the form of Exhibit B pursuant to
which such Domestic or other Restricted Subsidiary will Guarantee payment of
the Securities.


 


SECTION 4.12                    Limitation
on Lines of Business.  The Company
shall not, and shall not permit any Restricted Subsidiary to, engage in
any business, other than a Permitted Business, except that the Company and any
of its Restricted Subsidiaries may engage in a new business so long as the
Company and its Restricted Subsidiaries, taken as a whole, remain substantially
engaged in a Permitted Business.


 


ARTICLE 5


 


Successor Company


 


SECTION 5.01                    When
Company May Merge or Transfer Assets.                             (a)    The Company shall not consolidate with or merge with or into,
or convey, transfer or lease all or substantially all its assets to, any
Person, unless:


 


(i)                                     the
resulting, surviving or transferee Person (the “Successor Company”) shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
Company (if not the Company) shall expressly assume, by a supplemental
indenture hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company under the Securities and
this Indenture;


 


(ii)                                  immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted Subsidiary as
a result of such transaction as having been Incurred by the Successor Company
or such Restricted Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing;


 


(iii)                               immediately
after giving effect to such transaction, the Successor Company would be able to
Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a); and


 


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


 


47

















 


The Successor
Company shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture, but the predecessor Company in
the case of a conveyance, transfer or lease of all or substantially all its
assets shall not be released from the obligation to pay the principal of and
interest on the Securities.


 


(b)                                 The Company shall not
permit any Note Guarantor to consolidate with or merge with or into any Person
unless:


 


(i)                                     (1)
the resulting, surviving or transferee Person will be a corporation,
partnership or limited liability company organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia,
and such Person (if not such Note Guarantor) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of such Note Guarantor under
its Note Guarantee; (2) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person or any Restricted Subsidiary as a result of such
transaction as having been Incurred by such Person or such Restricted
Subsidiary at the time of such transaction), no Default shall have occurred and
be continuing; and (3) the Company shall have delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; or


 


(ii)                                  such
transaction results in the Company receiving cash or other property (other than
Capital Stock representing a controlling interest in the successor entity), and
the transaction is made in compliance with Section 4.06.


 


(c)                                  Notwithstanding the
foregoing, (i) any Restricted Subsidiary may consolidate with, merge into or
transfer or lease all or part of its properties and assets to the Company or a
Subsidiary that is a Note Guarantor and (ii) the Company may merge with an
Affiliate incorporated solely for (1) the purpose of incorporating the Company or
(2) organizing the Company in another jurisdiction to realize tax or other
benefits.


 


ARTICLE 6


 


Defaults and Remedies


 


SECTION 6.01                    Events of
Default.  An “Event of Default”
occurs if:


 


(a)                                  the
Company defaults in any payment of interest on any Security when the same
becomes due and payable, whether or not such payment shall be prohibited by
Article 10, and such default continues for a period of 30 days;


 


(b)                                 the
Company (i) defaults in the payment of the principal of any Security when the
same becomes due and payable at its Stated Maturity, upon required redemption
or repurchase, upon declaration or otherwise, whether or not such payment shall
be prohibited by Article 10 or (ii) fails to redeem or purchase Securities when
required pursuant to this Indenture or the Securities, whether or not such
redemption or purchase shall be prohibited by Article 10;


 


48

















 


(c)                                  the
Company or any Note Guarantor fails to comply with Section 5.01;


 


(d)                                 the
Company or any Restricted Subsidiary fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.11 or 4.12 (other than a failure to purchase
Securities when required under Section 4.06 or 4.08) and such failure continues
for 45 days after the written notice specified below;


 


(e)                                  the
Company or any Restricted Subsidiary fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred to in (a), (b),
(c) or (d) above) and such failure continues for 60 days after the written notice
specified below;


 


(f)                                    the
principal amount of any Indebtedness of the Company or any Restricted
Subsidiary is not paid within any applicable grace period after final maturity
or the acceleration by the holders thereof because of a default and the aggregate
principal amount of such Indebtedness unpaid or accelerated exceeds $10.0
million or its foreign currency equivalent at the time and such failure
continues for 30 days after the written notice specified below;


 


(g)                                 the
Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:


 


(i)                                     commences
a voluntary case;


 


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


 


(iii)                               consents
to the appointment of a Custodian of it or for any substantial part of its
property; or


 


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


 


or takes any
comparable action under any foreign laws relating to insolvency;


 


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


 


(i)                                     is
for relief against the Company or any Significant Subsidiary in an involuntary
case;


 


(ii)                                  appoints
a Custodian of the Company or any Significant Subsidiary or for any substantial
part of its property; or


 


(iii)                               orders
the winding up or liquidation of the Company or any Significant Subsidiary;


 


or any similar
relief is granted under any foreign laws and the order or decree remains
unstayed and in effect for 60 days;


 


49

















 


(i)                                     any
judgment or decree for the payment of money in excess of  $10.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has
acknowledged liability in writing) or its foreign currency equivalent against
the Company or a Restricted Subsidiary if such judgment or decree becomes final
and nonappealable and remains outstanding for a period of 60 days following
such judgment and is not discharged, waived or the execution thereof stayed; or


 


(j)                                     any
Note Guarantee of a Material Subsidiary ceases to be in full force and effect
(except as contemplated by the terms thereof) or any Note Guarantor or Person
acting by or on behalf of such Note Guarantor denies or disaffirms its
obligations under this Indenture or any Note Guarantee and such Default
continues for 10 days after the written notice specified below.


 


The foregoing
shall constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body.


 


The term
“Bankruptcy Law” means Title 11, United States Code, or any similar Federal or
state law for the relief of debtors.  The
term “Custodian” means any receiver, trustee, assignee, liquidator, custodian
or similar official under any Bankruptcy Law.


 


A Default
under clause (d), (e), (f) or (j) above is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company or the Note
Guarantor, as applicable, does not cure such Default within the time specified
after receipt of such notice.  Such
notice must specify the Default, demand that it be remedied and state that such
notice is a “Notice of Default”.


 


The Company
shall deliver to the Trustee, within 30 days after the occurrence thereof,
written notice in the form of an Officers’ Certificate of any event which is, or
with the giving of notice or the lapse of time or both would become, an Event
of Default, its status and what action the Company is taking or proposes to
take with respect thereto.


 


SECTION 6.02                    Acceleration.  If an Event of Default (other than an Event of
Default specified in Section 6.01(g) or
(h) with respect to the Company) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities by
written notice (specifying the Event of Default and stating that the notice is
a “notice of acceleration”) to the Company may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable.  Upon such a declaration, such principal and interest
shall be due and payable immediately.  If
an Event of Default specified in Section 6.01(g) or (h) with respect to the
Company occurs, the principal of and interest on all the Securities shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders.  The Holders of a majority in principal amount
of the Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has


 


50

















 


become due solely because of
acceleration.  No such rescission shall
affect any subsequent Default or impair any right consequent thereto.


 


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


 


The Trustee
may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. 
A delay or omission by the Trustee or any Holder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.


 


SECTION 6.04                    Waiver of
Past Defaults.  The Holders of a
majority in principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of
the principal of or interest on a Security, (b) a Default arising from the
failure to redeem or purchase any Security when required pursuant to the terms
of this Indenture or (c) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Holder affected.  When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair
any consequent right.


 


SECTION 6.05                    Control by
Majority.  The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section
7.01, that the Trustee determines is unduly prejudicial to the rights of other
Holders or would involve the Trustee in personal liability; provided, however,
that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. 
Prior to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.


 


SECTION 6.06                    Limitation
on Suits.  (a)  Except to enforce the right to receive
payment of principal, premium (if any)
or interest when due, no Holder may pursue any remedy with respect to this
Indenture or the Securities unless:


 


(i)                                     the
Holder gives to the Trustee written notice stating that an Event of Default is
continuing;


 


(ii)                                  the
Holders of at least 25% in principal amount of the  Securities make a written request to the
Trustee to pursue the remedy;


 


(iii)                               such
Holder or Holders offer to the Trustee reasonable security or indemnity
reasonably satisfactory to it against any loss, liability or expense;


 


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(iv)                              the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and


 


(v)                                 the
Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day period.


 


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


 


SECTION 6.07                    Rights of
Holders to Receive Payment. 
Notwithstanding any other provision of this Indenture, the right of any Holder to
receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed or provided for in the
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.


 


SECTION 6.08                    Collection
Suit by Trustee.  If an Event of
Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount then due
and owing (together with interest on overdue principal and (to the extent
lawful) on any unpaid interest at the rate provided for in the Securities) and
the amounts provided for in Section 7.07.


 


SECTION 6.09                    Trustee May
File Proofs of Claim.  The Trustee
may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Holders allowed in any judicial proceedings relative to the Company, any
Subsidiary or Note Guarantor, their creditors or their property and, unless
prohibited by law or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.


 


SECTION 6.10                    Priorities.  If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the following
order:


 


FIRST:       to the Trustee for amounts
due under Section 7.07;


 


SECOND:  to holders of Senior
Indebtedness of the Company to the extent required by Article 10 and to holders
of Senior Indebtedness of the Note Guarantors to the extent required by Article
12;


 


THIRD:  to Holders for amounts
due and unpaid on the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal and interest, respectively; and


 


FOURTH:  to the Company.


 


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The Trustee may fix a record date and
payment date for any payment to Holders pursuant to this Section. At least 15
days before such record date, the Trustee shall mail to each Holder and the
Company a notice that states the record date, the payment date and amount to be
paid.


 


SECTION 6.11                    Undertaking
for Costs. In any suit for the enforcement of any right or remedy under
this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Securities.


 


SECTION 6.12                    Waiver of
Stay or Extension Laws. Neither the Company nor any Note Guarantor (to the
extent it may lawfully
do so) shall at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company and each Note
Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.


 


ARTICLE 7


 


Trustee


 


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


 


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


 


(i)                                     the Trustee
undertakes to perform such duties and only such duties as are specifically
set forth in this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and


 


(ii)                                  in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, with respect to any certificate or
opinions required to be furnished to it hereunder, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).


 


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


 


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


 


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


 


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


 


(iv)                              No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have
reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.


 


(d)                                 Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b) and (c) of this Section.


 


(e)                                  The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.


 


(f)                                    Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.


 


(g)                                 Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the provisions of the TIA.


 


SECTION 7.02                    Rights of
Trustee. (a)  The Trustee may conclusively rely on any document
(whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.


 


(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officers’
Certificate or Opinion of Counsel.


 


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


 


(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee’s conduct does not constitute willful
misconduct or negligence.


 


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(e)                                  The
Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.


 


(f)                                    The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document unless requested in writing to do so by the Holders of not less
than a majority in principal amount of the Securities at the time outstanding,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the Company’s expense and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.


 


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


 


(h)                                 The
Trustee may request that the Company deliver a certificate setting forth
the names of individuals and/or titles of officers authorized at such time to
take specified actions pursuant to this Indenture, which Officers’ Certificate may be
signed by any person authorized to sign an Officers’ Certificate, including any
person specified as so authorized in any certificate previously delivered and
not superseded.


 


(i)                                     The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.


 


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


 


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


 


SECTION 7.03                    Individual
Rights of Trustee. The Trustee in its individual or any other capacity may become
the owner or pledgee of
Securities and may otherwise deal


 


55

















 


with the Company or its Affiliates with the same rights it would have
if it were not Trustee. Any Paying Agent or Registrar may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.


 


SECTION 7.04                    Trustee’s
Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the
validity or adequacy of this Indenture, any Note Guarantee or the Securities,
it shall not be accountable for the Company’s use of the proceeds from the
Securities, and it shall not be responsible for any statement of the Company or
any Note Guarantor in this Indenture or in any document issued in connection
with the sale of the Securities or in the Securities other than the Trustee’s
certificate of authentication. The Trustee shall not be charged with knowledge
of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (i) or
(j) or of the identity of any Significant Subsidiary unless either (a) a
Trust Officer shall have actual knowledge thereof or (b) the Trustee shall
have received notice thereof in accordance with Section 13.02 hereof from
the Company, any Note Guarantor or any Holder at the Corporate Trust Office of
the Trustee, such notice referencing the Securities and this Indenture.


 


SECTION 7.05                    Notice of
Defaults. If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall
mail to each Holder notice of the Default within the earlier of 90 days after
it occurs or 30 days after it is actually known to a Trust Officer. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Holders.


 


SECTION 7.06                    Reports by
Trustee to Holders. As promptly as practicable after each May 15
beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in
each year, the Trustee shall mail to each Holder a brief report dated as of
such May 15 that complies with TIA Section 313(a) if and to the
extent required thereby. The Trustee shall also comply with TIA Section 313(b) and
313(c).


 


A copy of each report at the time of its
mailing to Holders shall be filed with the SEC and each stock exchange (if any)
on which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.


 


SECTION 7.07                    Compensation
and Indemnity. The Company shall pay to the Trustee from time to time
reasonable compensation
for its services as shall be agreed to in writing from time to time by the
Company and the Trustee. The Trustee’s compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of- pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee’s agents,
counsel, accountants and experts. The Company and each Note Guarantor, jointly
and severally, shall indemnify the Trustee and any predecessor Trustee against
any and all loss, liability, claim, damage or expense (including reasonable
attorneys’ fees), including taxes (other than taxes based upon, measured by or
determined by the income of the


 


56

















 


Trustee), incurred by or in connection with the administration of this
trust and the performance of its duties hereunder. The Trustee shall notify the
Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof; provided, however, that any failure so to
notify the Company shall not relieve the Company or any Note Guarantor of its
indemnity obligations hereunder. The Company shall defend the claim and the
indemnified party shall provide reasonable cooperation at the Company’s expense
in the defense. Such indemnified parties may have separate counsel and the
Company and the Note Guarantors, as applicable shall pay the fees and expenses
of such counsel; provided, however, that the Company shall not be required to
pay such fees and expenses if it assumes such indemnified parties’ defense and,
in such indemnified parties’ reasonable judgment, there is no conflict of
interest between the Company and the Note Guarantors, as applicable, and such
parties in connection with such defense. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by an
indemnified party through such party’s own willful misconduct, negligence or
bad faith.


 


To secure the Company’s payment obligations
in this Section, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest on particular Securities.


 


The Company’s payment obligations pursuant to
this Section shall survive the satisfaction or discharge of this
Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee. Without prejudice to any
other rights available to the Trustee under applicable law, when the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(g) or
(h) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.


 


SECTION 7.08                    Replacement
of Trustee. (a)  The Trustee may resign at any time by so notifying
the Company. The Holders
of a majority in principal amount of the Securities may remove the Trustee
by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:


 


(i)                                     the Trustee fails
to comply with Section 7.10;


 


(ii)                                  the Trustee is
adjudged bankrupt or insolvent;


 


(iii)                               a receiver or other
public officer takes charge of the Trustee or its property; or


 


(iv)                              the Trustee otherwise
becomes incapable of acting.


 


(b)                                 If
the Trustee resigns, is removed by the Company or by the Holders of a majority
in principal amount of the Securities and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.


 


(c)                                  A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of
the retiring


 


57

















 


Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.


 


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


 


(e)                                  If
the Trustee fails to comply with Section 7.10, unless the Trustee’s duty
to resign is stayed as provided in TIA Section 310(b), any Holder who has
been a bona fide holder of a Security for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.


 


(f)                                    Notwithstanding
the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.


 


SECTION 7.09                    Successor
Trustee by Merger. If the Trustee consolidates with, merges or converts
into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.


 


In case at the time such successor or
successors by merger, conversion or consolidation to the Trustee shall succeed
to the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.


 


SECTION 7.10                    Eligibility;
Disqualification. The Trustee shall at all times satisfy the requirements
of TIA Section 310(a).
The Trustee shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA Section 310(b); subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.


 


SECTION 7.11                    Preferential
Collection of Claims Against the Company. The Trustee shall comply with TIA
Section 311(a),
excluding any creditor relationship listed in


 


58

















 


TIA Section 311(b). A Trustee who has resigned or been removed
shall be subject to TIA Section 311(a) to the extent indicated.


 


ARTICLE 8


 


Discharge of
Indenture; Defeasance


 


SECTION 8.01                    Discharge
of Liability on Securities; Defeasance. (a)  When (i) all
outstanding Securities (other than
Securities replaced or paid pursuant to Section 2.07) have been canceled
or delivered to the Trustee for cancelation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as a result of
the mailing of a notice of redemption pursuant to Article 3 hereof, and
the Company irrevocably deposits with the Trustee funds in an amount sufficient
or U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, in the written opinion of a
nationally recognized firm of independent public accountants delivered to the
Trustee (which delivery shall only be required if U.S. Government Obligations
have been so deposited), to pay the principal of, premium (if any) and interest
on the outstanding Securities when due at maturity or upon redemption of,
including interest thereon to maturity or such redemption date (other than
Securities replaced or paid pursuant to Section 2.07) and if in the case
of both clause (i) and (ii) the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 8.01(c),
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.


 


(b)                                 Subject
to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all
of its obligations under the Securities and this Indenture (“legal defeasance
option”) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11 and 4.12 and the operation of Section 5.01(a)(iii),
6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of the
Company only), 6.01(h) (with respect to Significant Subsidiaries of the
Company only) 6.01(i) and 6.01(j) (“covenant defeasance option”). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. In the event that the Company
terminates all of its obligations under the Securities and this Indenture by
exercising its legal defeasance option or its covenant defeasance option, the
obligations under the Note Guarantees shall each be terminated simultaneously
with the termination of such obligations.


 


If the Company exercises its legal defeasance
option, payment of the Securities may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of
Default specified in Section 6.01(d), 6.01(f), 6.01(g) (with respect
to Significant Subsidiaries only), 6.01(h) (with respect to Significant
Subsidiaries only), 6.01(i) or 6.01(j) or because of the failure of the
Company to comply with Section 5.01(a)(iii).


 


Upon satisfaction of the conditions set forth
herein and upon request of the Company, the Trustee shall acknowledge in
writing the discharge of those obligations that the Company terminates.


 


59

















 


(c)                                  Notwithstanding
clauses (a) and (b) above, the Company’s obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in this Article 8 shall
survive until the Securities have been paid in full. Thereafter, the Company’s
obligations in Sections 7.07, 8.04, 8.05 and 8.06 shall survive.


 


SECTION 8.02                    Conditions
to Defeasance. (a)  The Company may exercise its legal defeasance
option or its covenant
defeasance option only if:


 


(i)                                     the Company
irrevocably deposits in trust with the Trustee money in an amount sufficient or
U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, to pay the principal of,
premium (if any) and interest, on the Securities when due at maturity or
redemption, as the case may be, including interest thereon to maturity or
such redemption date;


 


(ii)                                  the Company delivers
to the Trustee a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without investment will provide cash at
such times and in such amounts as will be sufficient to pay principal, premium,
if any, and interest when due on all the Securities to maturity or redemption,
as the case may be;


 


(iii)                               123 days pass after the
deposit is made and during the 123-day period no Default specified in Section 6.01(g) or
(h) with respect to the Company occurs which is continuing at the end of
the period;


 


(iv)                              the deposit does not
constitute a default under any other agreement binding on the Company and is
not prohibited by Article 10;


 


(v)                                 the Company delivers
to the Trustee an Opinion of Counsel to the effect that the trust resulting
from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;


 


(vi)                              in the case of the legal
defeasance option, the Company shall have delivered to the Trustee an Opinion
of Counsel stating that (1) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (2) since the
date of this Indenture there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit and legal
defeasance and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such deposit
and legal defeasance had not occurred;


 


(vii)                           in the case of the covenant
defeasance option, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred; and


 


60

















 


(viii)                        the Company delivers to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
all conditions precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.


 


(b)                                 Before
or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date in accordance with Article 3.


 


(c)                                  Notwithstanding
the foregoing, the Opinion of Counsel required by clause (vi) above need
not be delivered if all Notes not theretofore delivered to the Trustee for
cancelation have become due and payable.


 


SECTION 8.03                    Application
of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to this Article 8. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities. Money and securities so held in trust are not subject to Article 10
or 12.


 


SECTION 8.04                    Repayment
to Company. The Trustee and the Paying Agent shall promptly turn over to
the Company upon request
any money or U.S. Government Obligations held by it as provided in this Article which,
in the written opinion of nationally recognized firm of independent public
accountants delivered to the Trustee (which delivery shall only be required if
U.S. Government Obligations have been so deposited), are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent discharge or defeasance in accordance with this Article.


 


Subject to any applicable abandoned property
law, the Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years, and, thereafter, Holders entitled to the money
must look to the Company for payment as general creditors, and the Trustee and
the Paying Agent shall have no further liability with respect to such monies.


 


SECTION 8.05                    Indemnity
for Government Obligations. The Company shall pay and shall indemnify the
Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.


 


SECTION 8.06                    Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if
the Company has made any payment of principal of or interest on, any Securities
because of the reinstatement of its obligations, the Company shall be


 


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subrogated to the rights of the Holders of such Securities to receive
such payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.


 


ARTICLE 9


 


Amendments


 


SECTION 9.01                    Without
Consent of Holders. The Company, the Note Guarantors and the Trustee may amend
this Indenture or the
Securities without notice to or consent of any Holder:


 


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


 


(ii)                                  to comply with Article 5;


 


(iii)                               to provide for
uncertificated Securities in addition to or in place of certificated
Securities; provided, however, that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of
the Code;


 


(iv)                              to make any change in Article 10
or Article 12 that would limit or terminate the benefits available to any
holder of Senior Indebtedness of the Company or a Note Guarantor (or
Representatives thereof) under Article 10 or Article 12,
respectively;


 


(v)                                 to add additional
Guarantees with respect to the Securities or to secure the Securities;


 


(vi)                              to add to the covenants
of the Company for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company;


 


(vii)                           to comply with any
requirement of the SEC in connection with qualifying, or maintaining the
qualification of, this Indenture under the TIA; or


 


(viii)                        to make any change that does
not materially and adversely affect the rights of any Holder under the
provisions of this Indenture.


 


After an amendment under this Section 9.01
becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment. The failure to give such notice to all Holders, or
any defect therein, shall not impair or affect the validity of an amendment
under this Section 9.01.


 


SECTION 9.02                    With
Consent of Holders. (a)  The Company, the Note Guarantors and the
Trustee may amend this Indenture
or the Securities without notice to any Holder but with the written consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Securities) and compliance with any provisions of this
Indenture may be waived with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or


 


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exchange offer for the Securities). However, without the consent of
each Holder affected, an amendment or waiver may not:


 


(i)                                     reduce the amount
of Securities whose Holders must consent to an amendment;


 


(ii)                                  reduce the rate of or
extend the time for payment of interest on any Security;


 


(iii)                               reduce the principal of
or extend the Stated Maturity of any Security;


 


(iv)                              reduce the premium
payable upon the redemption of any Security or change the time at which any
Security may be redeemed in accordance 
with Article 3;


 


(v)                                 make any Security
payable in money other than that stated in the Security;


 


(vi)                              make any change in Article 10
or Article 12 that adversely affects the rights of any Holder under Article 10
or Article 12;


 


(vii)                           make any change in Section 6.04
or 6.07 or the second sentence of this Section 9.02; or


 


(viii)                        modify the Note Guarantees in
any manner adverse to the Holders.


 


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


 


After an amendment under this Section 9.02
becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment. The failure to give such notice to all Holders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.02.


 


SECTION 9.03                    Compliance
with Trust Indenture Act. Every amendment to this Indenture or the
Securities shall comply
with the TIA as then in effect.


 


SECTION 9.04                    Revocation
and Effect of Consents and Waivers. (a)  A consent to an amendment or
a waiver by a Holder of
a Security shall bind the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder’s Security or portion of the Security if
the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers’ Certificate from the Company certifying that the
requisite number of consents have been received. After an amendment or waiver
becomes effective, it shall bind every Holder. An amendment or waiver becomes
effective upon the (i) receipt by the Company or the Trustee of the
requisite number of consents, (ii) satisfaction of conditions to
effectiveness as set forth in this Indenture and any


 


63

















 


indenture supplemental hereto containing such amendment or waiver and (iii) execution
of such amendment or waiver (or supplemental indenture) by the Company and the
Trustee.


 


(b)                                 The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders entitled to give their consent or take any other
action described above or required or permitted to be taken pursuant to this
Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.


 


SECTION 9.05                    Notation on
or Exchange of Securities. If an amendment changes the terms of a Security,
the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.


 


SECTION 9.06                    Trustee to
Sign Amendments. The Trustee shall sign any amendment authorized pursuant
to this Article 9
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign
it. In signing such amendment the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and shall be provided with, and
(subject to Section 7.01) shall be fully protected in relying upon, an
Officers’ Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture and that such amendment is the legal,
valid and binding obligation of the Company and the Note Guarantors enforceable
against them in accordance with its terms, subject to customary exceptions, and
complies with the provisions hereof (including Section 9.03).


 


ARTICLE 10


 


Subordination


 


SECTION 10.01              Agreement to
Subordinate. The Company agrees, and each Holder by accepting a Security
agrees, that the
Indebtedness evidenced by the Securities is subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full of all Senior Indebtedness of the Company and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Securities shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of the Company and shall rank senior
to all existing and future Subordinated Obligations of the Company; and only Indebtedness
of the Company that is Senior Indebtedness of the Company shall rank senior to
the Securities in accordance with the provisions set forth herein. All
provisions of this Article 10 shall be subject to Section 10.12.


 


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SECTION 10.02              Liquidation,
Dissolution, Bankruptcy. Upon any payment or distribution of the assets of
the Company to creditors
upon a total or partial liquidation or a total or partial dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:


 


(a)                                  holders of Senior
Indebtedness of the Company shall be entitled to receive payment in full of
such Senior Indebtedness before Holders shall be entitled to receive any
payment of principal of or interest on the Securities; and


 


(b)                                 until the Senior
Indebtedness of the Company is paid in full , any payment or distribution to
which Holders would be entitled but for this Article 10 shall be made to
holders of such Senior Indebtedness as their interests may appear, except
that Holders of the Securities may receive Capital Stock and any debt
securities that are subordinated to such Senior Indebtedness to at least the
same extent as the Securities.


 


SECTION 10.03              Default on
Designated Senior Indebtedness. The Company may not pay the principal
of, premium (if any) or
interest on the Securities or make any deposit pursuant to Section 8.01
and may not otherwise repurchase, redeem or otherwise retire any Securities
(collectively, “pay the Securities”) if (a) any principal of, interest on,
unpaid drawings for letters of credit in respect of, or regularly accruing fees
with respect to any, Designated Senior Indebtedness of the Company is not paid
when due or (b) any other default on such Designated Senior Indebtedness
occurs and the maturity of such Designated Senior Indebtedness is accelerated
in accordance with its terms unless, in either case, (i) the default has
been cured or waived and any such acceleration has been rescinded or (ii) such
amounts due under Designated Senior Indebtedness have been paid in full;
provided, however, that the Company may pay the Securities without regard
to the foregoing if the Company and a Trust Officer of the Trustee receive
written notice approving such payment from the Representative of such
Designated Senior Indebtedness with respect to which either of the events set
forth in clause (a) or (b) of this sentence has occurred and is
continuing. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with
respect to any Designated Senior Indebtedness of the Company pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Securities for a period (a “Payment Blockage Period”) commencing upon the
receipt by a Trust Officer of the Trustee (with a copy to the Company) of
written notice specified as a “notice of default” and describing with
particularity the default under such Designated Senior Indebtedness (a “Blockage
Notice”) of such default from the Representative of such Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (a) by written notice to the Trustee and the Company from the
Person or Persons who gave such Blockage Notice, (b) by repayment in full
of such Designated Senior Indebtedness or (c) because the default giving
rise to such Blockage Notice is no longer continuing). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of such Designated Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Indebtedness, the
Company may resume payments on the Securities after the end of such
Payment Blockage Period, including any missed payments. Not more than one
Blockage Notice may be given in


 


65

















 


any consecutive 360-day period, irrespective of the number of defaults
with respect to Designated Senior Indebtedness during such period; provided,
however, that if any Blockage Notice within such 360-day period is given by or
on behalf of any holders of Designated Senior Indebtedness other than the Bank
Indebtedness, the Representative of the Bank Indebtedness may give another
Blockage Notice within such period; provided further, however, that in no event
may the total number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period. For purposes of this Section, no default or event of
default that existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360 consecutive
days, unless such default or event of default shall have been cured or waived
for a period of not less than 90 consecutive days.


 


SECTION 10.04              Acceleration of
Payment of Securities. If payment of the Securities is accelerated because
of an Event of Default,
the Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness of the Company (or their Representative) of the
acceleration. If any Designated Senior Indebtedness of the Company is
outstanding, the Company may not pay the Securities until five Business
Days after such holders or the Representative of such Designated Senior
Indebtedness receive notice of such acceleration and, thereafter, may pay
the Securities only if this Article 10 otherwise permits payment at that
time.


 


SECTION 10.05              When Distribution
Must Be Paid Over. If a payment or distribution is made to Holders that because of this Article 10
should not have been made to them, the Holders who receive the distribution
shall hold such payment or distribution in trust for holders of Senior
Indebtedness of the Company and pay it over to them as their interests may appear.


 


SECTION 10.06              Subrogation. After
all Senior Indebtedness of the Company is paid in full and until the Securities
are paid in full, Holders shall
be subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of such Senior Indebtedness which otherwise would
have been made to Holders is not, as between the Company and Holders, a payment
by the Company on such Senior Indebtedness.


 


SECTION 10.07              Relative Rights.
This Article 10 defines the relative rights of Holders and holders of
Senior Indebtedness of the
Company. Nothing in this Indenture shall:


 


(a)                                  impair, as between
the Company and Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Securities in accordance
with their terms; or


 


(b)                                 prevent the Trustee or
any Holder from exercising its available remedies upon a Default, subject to
the rights of holders of Senior Indebtedness of the Company to receive
distributions otherwise payable to Holders.


 


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SECTION 10.08              Subordination May Not
Be Impaired by Company. No right of any holder of Senior Indebtedness of the Company to enforce
the subordination of the Indebtedness evidenced by the Securities shall be
impaired by any act or failure to act by the Company or by its failure to
comply with this Indenture.


 


SECTION 10.09              Rights of Trustee
and Paying Agent. Notwithstanding Section 10.03, the Trustee or Paying
Agent may continue
to make payments on the Securities and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than three Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives written notice satisfactory to it that
payments may not be made under this Article 10. The Company, the
Registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company may give the notice; provided, however, that,
if an issue of Senior Indebtedness of the Company has a Representative, only
the Representative may give the notice.


 


The Trustee in its individual or any other
capacity may hold Senior Indebtedness of the Company with the same rights
it would have if it were not Trustee. The Registrar and the Paying Agent may do
the same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article 10 with respect to any Senior Indebtedness of the
Company which may at any time be held by it, to the same extent as any
other holder of such Senior Indebtedness; and nothing in Article 7 shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article 10
shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07
or any other Section of this Indenture.


 


SECTION 10.10              Distribution or
Notice to Representative. Whenever a distribution is to be made or a notice
given to holders of
Senior Indebtedness of the Company, the distribution may be made and the
notice given to their Representative (if any).


 


SECTION 10.11              Article 10
Not to Prevent Events of Default or Limit Right To Accelerate. The failure
to make a payment
pursuant to the Securities by reason of any provision in this Article 10
shall not be construed as preventing the occurrence of a Default. Nothing in
this Article 10 shall have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Securities.


 


SECTION 10.12              Trust Monies Not
Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the
proceeds of U.S. Government Obligations held in trust under Article 8 by
the Trustee for the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness of
the Company or subject to the restrictions set forth in this Article 10,
and none of the Holders shall be obligated to pay over any such amount to the
Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.


 


SECTION 10.13              Trustee Entitled
to Rely. Upon any payment or distribution pursuant to this Article 10,
the Trustee and the
Holders shall be entitled to rely (a) upon any order or decree of a court
of competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (b) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders or (c) upon


 


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the Representatives for the holders of Senior Indebtedness of the Company
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness of the Company to participate in any payment or
distribution pursuant to this Article 10, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article 10,
and, if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.


 


SECTION 10.14              Trustee to
Effectuate Subordination. Each Holder by accepting a Security authorizes
and directs the Trustee
on his, her or its behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
and the holders of Senior Indebtedness of the Company as provided in this Article 10
and appoints the Trustee as attorney-in-fact for any and all such purposes.


 


SECTION 10.15              Trustee Not
Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be
deemed to owe any fiduciary
duty to the holders of Senior Indebtedness of the Company and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Holders or the Company or any other Person, money or assets to which any
holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article 10 or otherwise.


 


SECTION 10.16              Reliance by
Holders of Senior Indebtedness on Subordination Provisions. Each Holder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.


 


ARTICLE 11


 


Note
Guarantees


 


SECTION 11.01              Note Guarantees.
(a)  Each Note Guarantor hereby jointly and severally and unconditionally guarantees, as a primary obligor
and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (i) the full and punctual payment when due, whether
at Stated Maturity, by acceleration, by redemption or otherwise, of all
obligations of the Company under this Indenture (including obligations to the
Trustee) and the Securities, whether for payment of principal of or interest on
the Securities and all other monetary obligations (to the fullest extent
permitted by applicable law) of the Company under


 


68

















 


this Indenture and the Securities and (ii) the full and punctual
performance within applicable grace periods of all other obligations of the
Company whether for fees, expenses, indemnification or otherwise under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the “Guaranteed Obligations”). To the fullest extent permitted by
applicable law, each Note Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without
notice or further assent from each such Note Guarantor, and that each such Note
Guarantor shall remain bound under this Article 11 notwithstanding any
extension or renewal of any Guaranteed Obligation.


 


(b)                                 Each
Note Guarantor waives presentation to, demand of payment from and protest to
the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Note Guarantor waives notice of any default under
the Securities or the Guaranteed Obligations. The obligations of each Note
Guarantor hereunder shall not be affected by (i) the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (ii) any extension or renewal of any
thereof; (iii) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (iv) the release of any security held by any Holder or the
Trustee for the Guaranteed Obligations or any of them; (v) the failure of
any Holder or Trustee to exercise any right or remedy against any other
guarantor of the Guaranteed Obligations; or (vi) any change in the
ownership of such Note Guarantor, except as provided in Section 11.02(b).


 


(c)                                  Each
Note Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Note Guarantors, such that such
Note Guarantor’s obligations would be less than the full amount claimed. Each
Note Guarantor hereby waives any right to which it may be entitled to have
the assets of the Company first be used and depleted as payment of the Company’s
or such Note Guarantor’s obligations hereunder prior to any amounts being
claimed from or paid by such Note Guarantor hereunder. Each Note Guarantor
hereby waives any right to which it may be entitled to require that the
Company be sued prior to an action being initiated against such Note Guarantor.


 


(d)                                 Each
Note Guarantor further agrees that its Note Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Guaranteed
Obligations.


 


(e)                                  The
Note Guarantee of each Note Guarantor is, to the extent and in the manner set
forth in Article 12, subordinated and subject in right of payment to the
prior payment in full of the principal of and premium, if any, and interest on
all Senior Indebtedness of the relevant Note Guarantor and is made subject to
such provisions of this Indenture.


 


(f)                                    Except
as expressly set forth in Sections 8.01(b), 11.02 and 11.06, the obligations of
each Note Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or


 


69

















 


unenforceability of the Guaranteed Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Note
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any remedy under this Indenture, the Securities or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Note Guarantor or
would otherwise operate as a discharge of any Note Guarantor as a matter of law
or equity.


 


(g)                                 Each
Note Guarantor agrees that its Note Guarantee shall remain in full force and
effect until payment in full of all the Guaranteed Obligations or such Note
Guarantee is released upon the merger or the sale of all the Capital Stock or
assets of the Note Guarantor in compliance with Section 4.06 or Article 5.
Each Note Guarantor further agrees that its Note Guarantee herein shall, to the
fullest extent permitted by applicable law, continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof,
of principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.


 


(h)                                 In
furtherance of the foregoing and not in limitation of any other right which any
Holder or the Trustee has at law or in equity against any Note Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform or
comply with any other Guaranteed Obligation, each Note Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount
equal to the sum of (i) the unpaid principal amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (iii) all
other monetary obligations of the Company to the Holders and the Trustee.


 


(i)                                     Each
Note Guarantor agrees that it shall not be entitled to any right of subrogation
in relation to the Holders in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations and all obligations
to which the Guaranteed Obligations are subordinated as provided in Article 12.
Each Note Guarantor further agrees that, as between it, on the one hand, and
the Holders and the Trustee, on the other hand, to the fullest extent permitted
by applicable law, (i) the maturity of the Guaranteed Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the
purposes of any Note Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Note Guarantor for the purposes of this Section 11.01.


 


(j)                                     Each
Note Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder
in enforcing any rights under this Section 11.01.


 


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(k)                                  Upon
request of the Trustee, each Note Guarantor shall execute and deliver such
further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.


 


SECTION 11.02              Limitation on
Liability. (a)  Any term or provision of this Indenture to the
contrary notwithstanding,
the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder
by any Note Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Note
Guarantor, void or voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.


 


(b)                                 A
Note Guarantee as to any Note Guarantor that is a Subsidiary of the Company
shall terminate and be of no further force or effect and such Note Guarantor
shall be deemed to be released from all obligations under this Article 11
upon (A) the merger or consolidation of such Note Guarantor with or into
any Person other than the Company or a Subsidiary or Affiliate of the Company
where such Note Guarantor is not the surviving entity of such consolidation or
merger or (B) the sale by the Company or any Subsidiary of the Company (or
any pledgee of the Company) of the Capital Stock of such Note Guarantor (or by
any other Person as a result of a foreclosure of any lien on such Capital Stock
securing Senior Indebtedness), where, after such sale, such Note Guarantor is
no longer a Subsidiary of the Company; provided, however, that each such
merger, consolidation or sale (or, in the case of a sale by such a pledgee, the
disposition of the proceeds of such sale actually received by the Company or
any of its Subsidiaries) shall (i) comply with Section 4.06 and Section 5.01(b) and
(ii) be contingent upon such Note Guarantor being released from its
Guarantee of, and all pledges and security interests granted in connection
with, the Credit Agreement and any other Indebtedness of the Company or any
Subsidiary of the Company.


 


(c)                                  In
addition, a Note Guarantee of any Note Guarantor that is a Subsidiary of the
Company shall terminate and be of no further force or effect and such Note
Guarantor shall be deemed to be released from all obligations under this Article 11
upon the Issuer’s designation of such Note Guarantor as an Unrestricted
Subsidiary, provided that such designation complies with the other applicable
provisions of this Indenture.


 


At the request of the Company, the Trustee
shall execute and deliver an appropriate instrument evidencing such release (in
the form provided by the Company).


 


SECTION 11.03              Successors and
Assigns. This Article 11 shall be binding upon each Note Guarantor and
its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Securities shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.


 


SECTION 11.04              No Waiver. Neither
a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of
the


 


71

















 


Trustee and the Holders herein expressly specified are cumulative and
not exclusive of any other rights, remedies or benefits which either may have
under this Article 11 at law, in equity, by statute or otherwise.


 


SECTION 11.05              Modification.
No modification, amendment or waiver of any provision of this Article 11,
nor the consent to any departure
by any Note Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Note Guarantor in any case shall
entitle such Note Guarantor to any other or further notice or demand in the
same, similar or other circumstances.


 


SECTION 11.06              Execution of
Supplemental Indenture for Future Note Guarantors. Each Subsidiary which is
required to become a
Note Guarantor pursuant to Section 4.11 shall promptly execute and deliver
to the Trustee a supplemental indenture in the form of Exhibit B
hereto pursuant to which such Subsidiary shall become a Note Guarantor under
this Article 11 and shall guarantee the Guaranteed Obligations. Concurrently
with the execution and delivery of such supplemental indenture, the Company
shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate
to the effect that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and that, subject to the application
of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and
other similar laws relating to creditors’ rights generally and to the
principles of equity, whether considered in a proceeding at law or in equity,
the Note Guarantee of such Note Guarantor is a valid and binding obligation of
such Note Guarantor, enforceable against such Note Guarantor in accordance with
its terms and or to such other matters as the Trustee may reasonably
request.


 


SECTION 11.07              Non-Impairment.
The failure to endorse a Note Guarantee on any Security shall not affect or impair the validity thereof.


 


ARTICLE 12


 


Subordination
of the Note Guarantees


 


SECTION 12.01              Agreement To
Subordinate. Each Note Guarantor agrees, and each Holder by accepting a
Security agrees, that
the obligations of a Note Guarantor hereunder are subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to
the prior payment in full of all Senior Indebtedness of such Note Guarantor and
that the subordination is for the benefit of and enforceable by the holders of
such Senior Indebtedness of such Note Guarantor. The obligations hereunder with
respect to a Note Guarantor shall in all respects rank pari passu with all
other Senior Subordinated Indebtedness of such Note Guarantor and shall rank
senior to all existing and future Subordinated Obligations of such Note
Guarantor; and only Indebtedness of such Note Guarantor that is Senior
Indebtedness of such Note Guarantor shall rank senior to the obligations of
such Note Guarantor in accordance with the provisions set forth herein.


 


SECTION 12.02              Liquidation,
Dissolution, Bankruptcy. Upon any payment or distribution of the assets of
a Note Guarantor to
creditors upon a total or partial liquidation or


 


72

















 


a total or partial dissolution of such Note Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Note Guarantor and its properties:


 


(a)                                  holders of Senior
Indebtedness of such Note Guarantor shall be entitled to receive payment in
full of such Senior Indebtedness before Holders shall be entitled to receive
any payment pursuant to any Guaranteed Obligations from such Note Guarantor;
and


 


(b)                                 until the Senior
Indebtedness of such Note Guarantor is paid in full, any payment or
distribution to which Holders would be entitled but for this Article 12
shall be made to holders of such Senior Indebtedness as their respective
interests may appear, except that Holders may receive Capital Stock
and any debt securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Note Guarantees.


 


SECTION 12.03              Default on
Designated Senior Indebtedness of a Note Guarantor. A Note Guarantor may not
make any payment
pursuant to any of the Guaranteed Obligations or repurchase, redeem or
otherwise retire any Securities (collectively, “pay its Guarantee”) if (a) any
Designated Senior Indebtedness of such Note Guarantor is not paid when due or (b) any
other default on Designated Senior Indebtedness of such Note Guarantor occurs
and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, (i) the default has been
cured or waived and any such acceleration has been rescinded or (ii) such
Designated Senior Indebtedness has been paid in full; provided, however, that
such Note Guarantor may pay its Guarantee without regard to the foregoing
if such Note Guarantor and a Trust Officer of the Trustee receive written
notice approving such payment from the Representative of the holders of such
Designated Senior Indebtedness with respect to which either of the events in
clause (a) or (b) of this sentence has occurred and is continuing. During
the continuance of any default (other than a default described in clause (a) or
(b) of the preceding sentence) with respect to any Designated Senior
Indebtedness of a Note Guarantor pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, such Note Guarantor may not pay its Guarantee for a period (a “Guarantee
Payment Blockage Period”) commencing upon the receipt by a Trust Officer of the
Trustee (with a copy to such Note Guarantor and the Company) of written notice
specified as a “notice of default” and describing with particularity the
default under such Designated Senior Indebtedness (a “Guarantee Blockage Notice”)
of such default from the Representative of the holders of the Designated Senior
Indebtedness of such Note Guarantor specifying an election to effect a
Guarantee Payment Blockage Period and ending 179 days thereafter (or earlier if
such Guarantee Payment Blockage Period is terminated (a) by written notice
to the Trustee (with a copy to such Note Guarantor and the Company) from the
Person or Persons who gave such Guarantee Blockage Notice, (b) because
such Designated Senior Indebtedness has been repaid in full or (c) because
the default giving rise to such Guarantee Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first sentence
of this Section 12.03), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, such Note Guarantor may resume
to paying its Note Guarantee after such Guarantee Payment Blockage Period,
including


 


73

















 


any missed payments. Not more than one Guarantee Blockage Notice may be
given with respect to a Note Guarantor in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness of such Note Guarantor during such period; provided, however, that
if any Guarantee Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Indebtedness of such Note Guarantor
other than the Bank Indebtedness, the Representative of the Bank Indebtedness may give
another Guarantee Blockage Notice within such period; provided further,
however, that in no event may the total number of days during which any
Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in
the aggregate during any 360 consecutive day period. For purposes of this Section 12.03,
no default or event of default that existed or was continuing on the date of
the commencement of any Guarantee Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Guarantee Payment Blockage
Period shall be, or be made, the basis of the commencement of a subsequent
Guarantee Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.


 


SECTION 12.04              Demand for
Payment. If payment of the Securities is accelerated because of an Event of
Default and a demand for
payment is made on a Note Guarantor pursuant to Article 11, the Trustee
(provided that a Trust Officer of the Trustee shall have received written
notice from the Company, such Note Guarantor or a Representative identifying
such Designated Senior Indebtedness, on which notice the Trustee shall be
entitled to conclusively rely) shall promptly notify the holders of the Designated
Senior Indebtedness of such Note Guarantor (or the Representative of such
holders) of such demand. If any Designated Senior Indebtedness of such Note
Guarantor is outstanding, such Note Guarantor may not pay its Guarantee
until five Business Days after such holders or the Representative of the
holders of the Designated Senior Indebtedness of such Note Guarantor receive
notice of such demand and, thereafter, may pay its Guarantee only if this Article 12
otherwise permits payment at that time.


 


SECTION 12.05              When Distribution
Must Be Paid Over. If a payment or distribution is made to Holders that because of this Article 12
should not have been made to them, the Holders who receive the payment or
distribution shall hold such payment or distribution in trust for holders of
the Senior Indebtedness of the relevant Note Guarantor and pay it over to them
as their respective interests may appear.


 


SECTION 12.06              Subrogation. After
all Senior Indebtedness of a Note Guarantor is paid in full and until the Securities are paid in full in cash,
Holders shall be subrogated to the rights of holders of Senior Indebtedness of
such Note Guarantor to receive distributions applicable to Designated Senior
Indebtedness of such Note Guarantor. A distribution made under this Article 12
to holders of Senior Indebtedness of such Note Guarantor which otherwise would
have been made to Holders is not, as between such Note Guarantor and Holders, a
payment by such Note Guarantor on Senior Indebtedness of such Note Guarantor.


 


SECTION 12.07              Relative Rights.
This Article 12 defines the relative rights of Holders and holders of
Senior Indebtedness of a Note
Guarantor. Nothing in this Indenture shall:


 


74

















 


(a)                                  impair, as between a
Note Guarantor and Holders, the obligation of a Note Guarantor which is
absolute and unconditional, to make payments with respect to the Guaranteed
Obligations to the extent set forth in Article 11; or


 


(b)                                 prevent the Trustee or
any Holder from exercising its available remedies upon a default by a Note
Guarantor under its obligations with respect to the Guaranteed Obligations,
subject to the rights of holders of Senior Indebtedness of such Note Guarantor
to receive distributions otherwise payable to Holders.


 


SECTION 12.08              Subordination May Not
Be Impaired by a Note Guarantor. No right of any holder of Senior Indebtedness of a Note
Guarantor to enforce the subordination of the obligations of such Note
Guarantor hereunder shall be impaired by any act or failure to act by such Note
Guarantor or by its failure to comply with this Indenture.


 


SECTION 12.09              Rights of Trustee
and Paying Agent. Notwithstanding Section 12.03, the Trustee or the
Paying Agent may continue
to make payments on the Guaranteed Obligations and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than three Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives written notice satisfactory to
it that payments may not be made under this Article 12. A Note
Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or
a holder of Senior Indebtedness of a Note Guarantor may give the notice;
provided, however, that if an issue of Senior Indebtedness of a Note Guarantor
has a Representative, only the Representative may give the notice.


 


The Trustee in its individual or any other
capacity may hold Senior Indebtedness of a Note Guarantor with the same
rights it would have if it were not Trustee. The Registrar and co-registrar and
the Paying Agent may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to
any Senior Indebtedness of a Note Guarantor which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness of such
Note Guarantor; and nothing in Article 7 shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article 12 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07
or any other Section of this Indenture.


 


SECTION 12.10              Distribution or
Notice to Representative. Whenever a distribution is to be made or a notice
given to holders of
Senior Indebtedness of a Note Guarantor, the distribution may be made and
the notice given to their Representative (if any).


 


SECTION 12.11              Article 12
Not To Prevent Events of Default or Limit Right To Accelerate. The failure
of a Note Guarantor to
make a payment on any of its Guaranteed Obligations by reason of any provision
in this Article 12 shall not be construed as preventing the occurrence of
a default by such Note Guarantor under such obligations. Nothing in this Article 12
shall have any effect on the right of the Holders or the Trustee to make a
demand for payment on a Note Guarantor pursuant to Article 11.


 


SECTION 12.12              Trustee Entitled
To Rely. Upon any payment or distribution pursuant to this Article 12,
the Trustee and the
Holders shall be entitled to rely (a) upon any order or decree of a court
of competent jurisdiction in which any proceedings of the


 


75

















 


nature referred to in Section 12.02 are pending, (b) upon a
certificate of the liquidating trustee or agent or other Person making such payment
or distribution to the Trustee or to the Holders or (c) upon the
Representatives for the holders of Senior Indebtedness of a Note Guarantor for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Indebtedness of a Note Guarantor and
other Indebtedness of a Note Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12. In the event that the Trustee determines,
in good faith, that evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness of a Note Guarantor to participate in
any payment or distribution pursuant to this Article 12, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness of such Note Guarantor held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article 12, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 12.


 


SECTION 12.13              Trustee To
Effectuate Subordination. Each Holder by accepting a Security authorizes
and directs the Trustee
on his, her or its behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
and the holders of Senior Indebtedness of each of the Note Guarantors as
provided in this Article 12 and appoints the Trustee as attorney-in- fact
for any and all such purposes.


 


SECTION 12.14              Trustee Not
Fiduciary for Holders of Senior Indebtedness of a Note Guarantor. The
Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a
Note Guarantor and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders or the relevant Note Guarantor or
any other Person, money or assets to which any holders of Senior Indebtedness
of such Note Guarantor shall be entitled by virtue of this Article 12 or
otherwise.


 


SECTION 12.15              Reliance by
Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions.
Each Holder by accepting
a Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder
of any Senior Indebtedness of a Note Guarantor, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Securities,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.


 


SECTION 12.16              Defeasance. The
terms of this Article 12 shall not apply to payments from money or the
proceeds of U.S. Government
Obligations held in trust by the Trustee for the payment of principal of and
interest on the Securities pursuant to the provisions described in Section 8.03.


 


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ARTICLE 13


 


Miscellaneous


 


SECTION 13.01              Trust Indenture
Act Controls. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts
with the duties imposed by, or with another provision (an “incorporated
provision”) included in this Indenture by operation of, TIA Sections 310 to
318, inclusive, such imposed duties or incorporated provision shall control.


 


SECTION 13.02              Notices. Any
notice or communication shall be in writing (which may be a facsimile with
the original to follow) and delivered
in person or mailed by first-class mail addressed as follows:


 


	
   

  	
   

  	
  if to the
  Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pliant
  Corporation

  
	
   

  	
   

  	
  1515
  Woodfield Road, Suite 600

  
	
   

  	
   

  	
  Schaumburg,
  Illinois 60173

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention
  of:

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to the
  Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of
  New York Trust Company, N.A.

  
	
   

  	
   

  	
  2 North
  LaSalle Street, Suite 1020

  
	
   

  	
   

  	
  Chicago, IL
  60602

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention
  of:

  
	
   

  	
   

  	
  Corporate
  Trust Administration

  



 


The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent
notices or communications.


 


Any notice or communication mailed to a
Holder shall be mailed, first class mail, to the Holder at the Holder’s
address as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.


 


Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.


 


SECTION 13.03              Communication by
Holders with Other Holders. Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights


 


77

















 


under this Indenture or the Securities. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).


 


SECTION 13.04              Certificate and
Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:


 


(a)                                  an Officers’
Certificate in form reasonably satisfactory to the Trustee stating that,
in the opinion of the signers, all conditions precedent, if any, provided for
in this Indenture relating to the proposed action have been complied with; and


 


(b)                                 an Opinion of Counsel
in form reasonably satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent have been complied with
(provided, however, that such counsel may rely as to matters of fact on Officers’
Certificates).


 


SECTION 13.05              Statements
Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance
with a covenant or condition provided for in this Indenture (other than
pursuant to Section 4.09) shall include:


 


(a)                                  a statement that the
individual making such certificate or opinion has read such covenant or
condition;


 


(b)                                 a brief statement as
to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;


 


(c)                                  a statement that, in
the opinion of such individual, he has made such examination or investigation
as is necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and


 


(d)                                 a statement as to
whether or not, in the opinion of such individual, such covenant or condition
has been complied with.


 


SECTION 13.06              When Securities
Disregarded. In determining whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company,
any Note Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
any Note Guarantor (other than JP Morgan Securities, Inc.) shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.


 


SECTION 13.07              Rules by
Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for
action by or a meeting
of Holders. The Registrar and the Paying Agent may make reasonable rules for
their functions.


 


78

















 


SECTION 13.08              Legal Holidays.
A “Legal Holiday” is a Saturday, a Sunday or other day on which banking institutions are not required by
law or regulation to be open in the State of New York. If a payment date is a
Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.


 


SECTION 13.09              GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.


 


SECTION 13.10              No Recourse
Against Others. A director, officer, employee or stockholder, as such, of
the Company or any of
the Note Guarantors, shall not have any liability for any obligations of the
Company or any of the Note Guarantors under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for
the issue of the Securities.


 


SECTION 13.11              Successors. All
agreements of the Company and each Note Guarantor in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successors.


 


SECTION 13.12              Multiple
Originals. The parties may sign any number of copies of this Indenture.
Each signed copy shall be
an original, but all of them together represent the same agreement. One signed
copy is enough to prove this Indenture.


 


SECTION 13.13              Table of
Contents; Headings. The table of contents, cross-reference sheet and
headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not intended to be considered a part hereof and shall not modify
or restrict any of the terms or provisions hereof.


 


SECTION 13.14              Waiver of Jury
Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES
OR THE TRANSACTION CONTEMPLATED HEREBY.


 


SECTION 13.15              Force Majeure.
In no event shall the Trustee be responsible or liable for any failure or delay
in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the


 


79

















 


Trustee shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.


 


[Rest of page intentionally
left blank]


 


80

















 


IN WITNESS WHEREOF, the parties have caused
this Indenture to be duly executed as of the date first written above.


 


	
   

  	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
   

  	
  Senior Vice President and Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PLIANT CORPORATION INTERNATIONAL,

  
	
   

  	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO, INC.,

  
	
   

  	
   

  	
  PLIANT SOLUTIONS CORPORATION,

  
	
   

  	
   

  	
  UNIPLAST HOLDINGS, INC.,

  
	
   

  	
   

  	
  UNIPLAST U.S., INC.,

  
	
   

  	
   

  	
  UNIPLAST INDUSTRIES CO.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief
  Financial

  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PLIANT PACKAGING OF CANADA, LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Harold C. Bevis

  	
   

  
	
   

  	
   

  	
   

  	
  Harold C. Bevis

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY,

  N.A., as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Judy Bartolini 

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  J. Bartolini 

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


81






 













 


APPENDIX A

PROVISIONS RELATING TO SECURITIES


 


1.                                       Definitions


 


1.1                                 Definitions


 


For the purposes of this Appendix A the
following terms shall have the meanings indicated below:


 


“Definitive Security” means a
certificated Security that does not include the Global Securities Legend.


 


“Depositary” means The Depository
Trust Company, its nominees and their respective successors.


 


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


 


“Global Securities Legend” means the
legend set forth under that caption in Exhibit A to this Indenture.


 


“Plan” means that certain Debtors’
Fourth Amended Joint Plan of Reorganization filed on behalf of the Company and
its subsidiaries with the United States Bankruptcy Court for the District of
Delaware on June 19, 2006.


 


“Securities Custodian” means the
custodian with respect to a Global Security (as appointed by the Depositary) or
any successor person thereto, who shall initially be the Trustee.


 


1.2                                 Other Definitions


 


	
  Term:

  	
   

  	
  Defined

  in Section:

  
	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.1(c)

  
	
  “Global Security”

  	
   

  	
  2.1(b)

  



 


2.                                       The
Securities


 


2.1                                 Form and
Dating


 


(a)                                  The Securities issued
on the date hereof will be issued by the Company pursuant to the Plan. Such
Securities may thereafter be transferred in accordance with applicable
law.


 


(b)                                 Global Securities.
The Securities shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form (collectively,
the “Global Securities”), in each case without interest coupons and bearing the
Global Securities Legend, which shall be deposited on behalf of the recipients
of the Securities represented thereby


 

















 


with the Securities Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture. The aggregate
principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee and on the schedules thereto as hereinafter
provided.


 


(c)                                  Book-Entry
Provisions. This Section 2.1(c) shall apply only to a Global
Security deposited with or on behalf of the Depositary.


 


The Company shall execute and the Trustee
shall, in accordance with this Section 2.1(c) and Section 2.2
and pursuant to an order of the Company signed by two Officers, authenticate
and deliver initially one or more Global Securities that (i) shall be
registered in the name of the Depositary for such Global Security or Global Securities
or the nominee of such Depositary and (ii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary’s instructions or
held by the Trustee as Securities Custodian.


 


Members of, or participants in, the
Depositary (“Agent Members”) shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the Depositary or by the
Trustee as Securities Custodian or under such Global Security, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.


 


(d)                                 Definitive
Securities. Except as provided in Section 2.3 or 2.4, owners of
beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Securities.


 


2.2                                 Authentication.
The Trustee shall authenticate and make available for delivery, upon a written
order of the Company signed by two Officers, Securities for original issue on
the date hereof in an aggregate principal amount not to exceed $35,000,000. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not
exceed $35,000,000, except as provided in Sections 2.07, 2.08 and 2.13 of this
Indenture.


 


2.3                                 Transfer and
Exchange. (a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar with a request:


 


(i)                                     to
register the transfer of such Definitive Securities; or


 


(ii)                                  to
exchange such Definitive Securities for an equal principal amount of Definitive
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its reasonable requirements for
such transaction are met; provided, however, that the Definitive Securities
surrendered for


 


2

















 


transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.


 


(b)                                 Restrictions on
Transfer of a Definitive Security for a Beneficial Interest in a Global
Security. A Definitive Security may not be exchanged for a beneficial
interest in a Global Security except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Security, duly
endorsed or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar, together with written
instructions directing the Trustee to make, or to direct the Securities
Custodian to make, an adjustment on its books and records with respect to such
Global Security to reflect an increase in the aggregate principal amount of the
Securities represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4,
the Company shall issue and the Trustee shall authenticate, upon written order
of the Company in the form of an Officers’ Certificate, a new Global
Security in the appropriate principal amount.


 


(c)                                  Transfer and
Exchange of Global Securities.


 


(i)                                     The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and
the procedures of the Depositary therefor. A transferor of a beneficial
interest in a Global Security shall deliver a written order given in accordance
with the Depositary’s procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial interest
in such Global Security or another Global Security and such account shall be
credited in accordance with such order with a beneficial interest in the
applicable Global Security and the account of the Person making the transfer
shall be debited by an amount equal to the beneficial interest in the Global
Security being transferred.


 


(ii)                                  Notwithstanding
any other provisions of this Appendix (other than the provisions set forth in Section 2.4),
a Global Security may not be transferred as a whole except by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.


 


3

















 


(d)                                 Legend.


 


(i)                                     Each
Security certificate evidencing the Global Securities shall bear a legend in
substantially the following form (each defined term in the legend being
defined as such for purposes of the legend only):


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”


 


(e)                                  Cancelation or
Adjustment of Global Security. At such time as all beneficial interests in
a Global Security have either been exchanged for Definitive Securities,
transferred, redeemed, repurchased or canceled, such Global Security shall be
returned by the Depositary to the Trustee for cancelation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such
reduction.


 


(f)                                    Obligations with
Respect to Transfers and Exchanges of Securities.


 


(i)                                     To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate, Definitive Securities and Global Securities at
the Registrar’s request.


 


(ii)                                  No
service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer
tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or similar
governmental charge payable


 


4

















 


upon exchanges to be registered in the name of
the registered Holder effecting the exchange pursuant to Sections 2.06, 3.06,
4.06, 4.08 and 9.05 of this Indenture).


 


(iii)                               Prior
to the due presentation for registration of transfer of any Security, the
Company, the Trustee, the Paying Agent or the Registrar may deem and treat
the person in whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and interest on
such Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, the Trustee, the Paying Agent or
the Registrar shall be affected by notice to the contrary.


 


(iv)                              All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities 
surrendered upon such transfer or exchange.


 


(g)                                 No Obligation of
the Trustee.


 


(i)                                     The
Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Security, a member of, or a participant in the Depositary or any other
Person with respect to the accuracy of the records of the Depositary or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary) of any
notice (including any notice of redemption or repurchase) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Securities shall be given or made only to the registered
Holders (which shall be the Depositary or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be
exercised only through the Depositary subject to the applicable rules and
procedures of the Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary with respect
to its members, participants and any beneficial owners.


 


(ii)                                  The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Depositary participants,
members or beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.


 


2.4                                 Definitive
Securities


 


(a)                                  A Global Security
deposited with the Depositary or with the Trustee as Securities Custodian
pursuant to Section 2.1 shall be transferred to the beneficial owners
thereof in the form of Definitive Securities in an aggregate principal
amount equal to the principal


 


5

















 


amount of such Global Security, in exchange for such Global Security,
only if such transfer complies with Section 2.3 and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to
be a “clearing agency” registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice or
after the Company becomes aware of such cessation, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.


 


(b)                                 Any Global Security
that is transferable to the beneficial owners thereof pursuant to this Section 2.4
shall be surrendered by the Depositary to the Trustee, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities of
authorized denominations. Any portion of a Global Security transferred pursuant
to this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in
such names as the Depositary shall direct.


 


(c)                                  Subject to the
provisions of Section 2.4(b), the registered Holder of a Global Security may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.


 


(d)                                 In the event of the
occurrence of any of the events specified in Section 2.4(a)(i), (ii) or
(iii), the Company will promptly make available to the Trustee a reasonable
supply of Definitive Securities in fully registered form without interest
coupons.


 


6

















 


EXHIBIT A


 


[FORM OF FACE OF 13%
SENIOR SUBORDINATED NOTES DUE 2010]


 


[Global Securities Legend](1)


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.


 


FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES, THIS INSTRUMENT IS CONSIDERED TO BE ISSUED WITH ORIGINAL ISSUE
DISCOUNT. FOR INFORMATION CONCERNING THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THIS INSTRUMENT, CONTACT JOE
KWEDERIS, SENIOR VICE-PRESIDENT FINANCE OF THE ISSUER AT 1475 WOODFIELD ROAD, SUITE 700,
SCHAUMBURG, ILLINOIS 60173, TEL:  (847)
407-5117.


 


 


	
  No.

  	
   

  	
  $ 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  13% Senior
  Subordinated Note due 2010

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP No.  

  	
   

  
	
   

  	
   

  	
  ISIN No.  

  	
   

  
					



 






(1)          Insert the following two
paragraphs if Security is to be issued in global form.


 

















 


PLIANT CORPORATION, a Delaware corporation,
promises to pay to Cede & Co., or registered assigns, the principal
sum [listed on the Schedule of Increases or Decreases in Global Security
attached hereto](2) [of $      ](3) on July 15,
2010.


 


Interest Payment Dates: January 15 and July 15.


 


Record Dates: January 1 and July 1.


 


Additional provisions of this Security are
set forth on the other side of this Security.


 


IN WITNESS WHEREOF, the parties have caused
this instrument to be duly executed.


 


	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  	
   

  
	
  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A.,

  	
   

  
	
   

  	
   

  
	
  as Trustee,
  certifies

  	
   

  
	
  that this is
  one of

  	
   

  
	
  the
  Securities referred

  	
   

  
	
  to in the
  Indenture.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  



 






(2)          Insert if Security is to
be issued in global form.


(3)          Insert if Security is to
be issued in definitive form.


 


2

















 


[FORM OF REVERSE SIDE OF
13% SENIOR SUBORDINATED NOTES DUE 2010]


 


13% Senior Subordinated Note
due 2010


 


1.                                       INTEREST


 


PLIANT CORPORATION, a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the “Company”), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above.


 


Interest on the Securities will accrue from
the date of issuance at the rate of 13% per annum until maturity, and will be
payable semiannually on each January 15 and July 15 commencing January 15,
2007, to holders of record on the immediately preceding  January 1 or July 1. Interest on
the Securities shall accrue from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid or duly
provided for, from July 18, 2006 until the principal hereof is due. On
each of the first two interest payment dates, the Company shall, in lieu of the
payment of interest on the Securities in cash, pay interest on the Securities through
the issuance of additional Securities in an aggregate principal amount equal to
the aggregate amount of interest (rounded down to the nearest whole dollar)
that would be payable with respect to the Securities if such interest were paid
in cash. On or before each such interest payment date, the Company shall
deliver to the Trustee and the Paying Agent [an order to increase the principal
amount of this Security by the amount required to pay such interest (or, if
requested by the Trustee or the Holder of this Security, to authenticate a new
global Security executed by the Company with such increased principal amounts)](4) [additional
Securities in the amount required to pay such interest and an order to
authenticate and deliver such additional Securities to the record Holder of
this Security](5). Any additional Securities so issued shall be dated the
applicable interest payment date, shall bear interest from and after such date,
shall mature on July 15, 2010 and shall be governed by, and be subject to
the terms of the Indenture and shall have the same rights and benefits as the
Securities. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.


 


2.                                       METHOD
OF PAYMENT


 


The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered
holders at the close of business on the January 1 or July 1 next
preceding the interest payment date even if the Securities are canceled after
the record date and on or before the interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal, premium, if any, and, except as set forth in
paragraph 1, interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including
principal, premium, if any, and interest) shall be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company or any successor depositary; PROVIDED that any such payment in the form of
additional Securities shall be made in accordance with paragraph 1. The Company


 






(4)          Insert if the Security
is to be issued in global form.


(5)          Insert if the Security
is to be issued in definitive form.


 


3

















 


will make all payments in respect of a certificated Security (including
principal, premium, if any, and interest), at the office of the Paying Agent,
except that, at the option of the Company, payment of interest may be made
by mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on the Securities may also be made, in the case of
a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its
discretion); PROVIDED further that any such payment in the form of
additional Securities shall be made in accordance with paragraph 1.


 


3.                                       PAYING
AGENT AND REGISTRAR


 


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


 


4.                                       INDENTURE


 


The Company issued the Securities under an
Indenture dated as of July 18, 2006 (the “Indenture”), among the Company,
the Note Guarantors and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in
effect on the date of the Indenture (the “TIA”). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all terms and provisions of the Indenture, and
Holders (as defined in the Indenture) are referred to the Indenture and the TIA
for a statement of such terms and provisions.


 


The Securities are senior subordinated
unsecured obligations of the Company limited to $35,000,000 aggregate principal
amount at any one time outstanding (subject to Sections 2.07 and 2.08 of the
Indenture) plus the amount of any additional Securities issued on the first two
interest payment dates in lieu of payment of interest in cash in accordance
with paragraph 1. This Security is one of the Securities referred to in the
Indenture. The Securities and any additional Securities issued in accordance
with paragraph 1 are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates and make Asset Sales.
The Indenture also imposes limitations on the ability of the Company and each
Note Guarantor to consolidate or merge with or into any other Person or the
Company to convey, transfer or lease all or substantially all of its property.


 


To guarantee the due and punctual payment of
the principal and interest on the Securities and all other amounts payable by
the Company under the Indenture and the Securities


 


4

















 


when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Securities and the
Indenture, the Note Guarantors have jointly and severally unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant
to the terms of the Indenture.


 


5.                                       OPTIONAL
REDEMPTION


 


On or after July 18, 2006, the
Securities (including any additional Securities issued in accordance with
paragraph 1) shall be redeemable at the option of the Company, on not less than
30 nor more than 60 days prior notice: (a) in whole with the proceeds of
Refinancing Indebtedness permitted by Section 4.03 of the Indenture
commencing on July 18, 2006 and terminating on the close of business on July 18,
2007, at a redemption price equal to (i) $20,000,000 plus (ii) interest
accrued at a rate of 13% per annum from July 18, 2006 through the
redemption date on an aggregate principal amount of $20,000,000 minus (iii) interest,
if any, previously paid in cash on the Securities (the “Call Option”); and (b) in
whole or in part, commencing on or after July 19, 2007 at a redemption
price equal to 100.00% of the aggregate principal amount of the Securities,
plus accrued and unpaid interest, to the redemption date (subject to the right
of holders of record on the relevant record date to receive interest due on the
relevant interest payment date). The Company shall have the right to assign the
Call Option to any Person at its sole discretion and such Call Option shall
remain binding on the Securities, provided that any assignee of the Call Option
shall comply with the notice requirements of Section 3.03 of the Indenture
as if a party thereto, provided further that any such assignee exercising the
Call Option shall be permitted to utilize any available source of funds to
redeem the Securities.


 


6.                                       SINKING
FUND


 


The Securities are not subject to any sinking
fund.


 


7.                                       NOTICE
OF REDEMPTION


 


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


 


8.                                       REPURCHASE
OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL


 


Upon a Change of Control, any Holder of
Securities will have the right, subject to certain conditions specified in the
Indenture, to cause the Company to repurchase all or any part of the
Securities of such Holder at a purchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant


 


5

















 


interest payment date that is on or prior to the date of purchase) as
provided in, and subject to the terms of, the Indenture.


 


In accordance with Section 4.06 of the
Indenture, the Company will be required to offer to purchase Securities upon
the occurrence of certain events.


 


9.                                       SUBORDINATION


 


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


 


10.                                 DENOMINATIONS;
TRANSFER; EXCHANGE


 


The Securities are in registered form without
coupons in denominations of $1,000 principal amount and whole multiples of
$1,000 principal amount; PROVIDED that the aggregate principal amount of the
Securities issued on the date of original issuance shall not exceed $35,000,000
and shall be issued pro rata to the holders of claims (as defined in Section 101(5) of
title 11 of the United States Code) arising under or evidenced by the
previously existing 13% Senior Subordinated Notes due 2010 being relinquished
pursuant to the Joint Plan of Reorganization of the Company and its
subsidiaries, rounding down such pro rata amount to the nearest $1,000 or
integral multiple thereof; PROVIDED further that additional Securities issued
as payment of interest on the Securities shall be issued in denominations of
$1.00 and integral multiples of $1.00, rounding down such interest payment to
the nearest $1.00 or integral multiple thereof. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.


 


11.                                 PERSONS
DEEMED OWNERS


 


Except as provided in paragraph 2 hereof, the
registered Holder of this Security may be treated as the owner of it for
all purposes.


 


12.                                 UNCLAIMED
MONEY


 


If money for the payment principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent
shall pay the money back to the Company at its written request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look to the Company for payment and not to
the Trustee for payment


 


6

















 


as general creditors and the Trustee and the Paying Agent shall have no
further liability with respect to such monies.


 


13.                                 DISCHARGE
AND DEFEASANCE


 


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


 


14.                                 AMENDMENT;
WAIVER


 


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


 


15.                                 DEFAULTS
AND REMEDIES


 


If an Event of Default occurs (other than an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company) and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the outstanding Securities may declare
the principal of and accrued but unpaid interest on all the Securities to be
due and payable. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs, the principal
of and interest on all the Securities shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any
Holders.  Under certain circumstances,
the Holders of a majority in principal amount of the outstanding Securities may rescind
any such acceleration with respect to the Securities and its consequences.


 


If an Event of Default occurs and is
continuing, the Trustee shall be under no obligation to exercise any of the
rights or powers under the Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee indemnity or security
reasonably satisfactory to it against any loss, liability or expense and
certain other conditions are


 


7

















 


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


 


16.                                 TRUSTEE
DEALINGS WITH THE COMPANY


 


Subject to certain limitations imposed by the
TIA, the Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company, a Note Guarantor or its Affiliates and may otherwise
deal with the Company, a Note Guarantor or its Affiliates with the same rights
it would have if it were not Trustee.


 


17.                                 NO
RECOURSE AGAINST OTHERS


 


A director, officer, employee or stockholder,
as such, of the Company or any Note Guarantor shall not have any liability for
any obligations of the Company or any Note Guarantor under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.


 


18.                                 AUTHENTICATION


 


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


 


19.                                 ABBREVIATIONS


 


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


 


8

















 


20.                                 GOVERNING
LAW


 


THIS SECURITY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.


 


21.                                 CUSIP
AND ISIN NUMBERS


 


The Company has caused CUSIP and ISIN numbers
to be printed on the Securities and has directed the Trustee to use CUSIP and
ISIN numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.


 


THE COMPANY WILL FURNISH TO ANY HOLDER OF
SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE
INDENTURE.


 


ASSIGNMENT FORM


 


To assign this Security, fill in the form below: 


 


	
  I or we assign and transfer this Security
  to

  
	
   

  
	
  (Print or
  type assignee’s name, address and zip code)

  
	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. No.)

  
	
   

  
	
  and irrevocably appoint
                  
  agent to transfer this Security on the books of the Company. The agent may substitute
  another to act for him.

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Sign exactly as your name appears on the
  other side of this Security.)

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed

  	
   

  	
  Signature of Signature

  
	
  by a participant in a

  	
   

  	
  Guarantee

  
	
  recognized signature guaranty

  	
   

  	
   

  
	
  medallion program or other

  	
   

  	
   

  
	
  signature guarantor acceptable

  	
   

  	
   

  
	
  to the Trustee

  	
   

  	
   

  
								



 


9

















 


OPTION OF HOLDER TO ELECT
PURCHASE


 


IF YOU WANT TO ELECT TO HAVE THIS SECURITY
PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 (ASSET DISPOSITION) OR
4.08 (CHANGE OF CONTROL) OF THE INDENTURE, CHECK THE BOX:


 


ASSET DISPOSITION o  CHANGE OF CONTROL o


 


IF YOU WANT TO ELECT TO HAVE ONLY PART OF
THIS SECURITY PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.08 OF
THE INDENTURE, STATE THE AMOUNT ($1,000 OR AN INTEGRAL MULTIPLE THEREOF):


 


	
  $

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
  YOUR SIGNATURE:

  	
   

  	
   

  
	
  (SIGN EXACTLY AS YOUR NAME APPEARS ON THE
  OTHER SIDE OF THE SECURITY)

  
	
   

  	
   

  
	
  SIGNATURE GUARANTEE:

  	
   

  	
   

  
	
   

  	
  SIGNATURE MUST BE GUARANTEED BY A
  PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER
  SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE

  
									



 


10

















 


[TO BE ATTACHED TO GLOBAL
SECURITIES]


 


SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY


 


The initial principal amount of this Global
Security is $[     ]. The following
increases or decreases in this Global Security have been made:


 


	
  Date of

  increase or

  decrease in

  principal

  amount of

  this Global

  Security

  	
   

  	
  Signature of authorized

  signatory of securities

  custodian of this Global

  Security

  	
   

  	
  Amount of

  increase in

  principal

  amount of this

  Global

  Security

  	
   

  	
  Amount of

  decrease in

  principal

  amount of this

  Global

  Security

  	
   

  	
  Principal

  Amount of

  this Global

  Security

  following

  such increase

  or decrease

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


11

















 


EXHIBIT B


 


FORM OF SUPPLEMENTAL
INDENTURE


 


SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”) dated as of [      ], among
[GUARANTOR] (the “New Guarantor”), a subsidiary of PLIANT CORPORATION (or its
successor), a Delaware corporation (the “Company”), [OTHER EXISTING GUARANTORS]
and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association,
as trustee under the indenture referred to below (the “Trustee”).


 


W I T N E S S E T H :


 


WHEREAS the Company and [OLD GUARANTORS] (the
“Existing Guarantors”) have heretofore executed and delivered to the Trustee an
Indenture (the “Indenture”) dated as of July 18, 2006, providing for the
issuance of an aggregate principal amount of up to $35,000,000 of 13% Senior
Subordinated Notes due 2010 plus the amount of any additional securities issued
in lieu of payment of interest in cash pursuant to Section 2.13 of the
Indenture (the “Securities”);


 


WHEREAS Section 4.11 of the Indenture
provides that under certain circumstances the Company is required to cause the
New Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Guarantor shall unconditionally guarantee all the
Company’s obligations under the Securities pursuant to a Note Guarantee on the
terms and conditions set forth herein; and


 


WHEREAS pursuant to Section 9.01 of the
Indenture, the Trustee, the Company and the Existing Guarantors are authorized
to execute and deliver this Supplemental Indenture;


 


NOW THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the New Guarantor, the Company, the Existing Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit
of the holders of the Securities as follows:


 


1.                                       Agreement to
Guarantee. The New Guarantor hereby agrees, jointly and severally with all
the Existing Guarantors, to unconditionally guarantee the Company’s obligations
under the Securities on the terms and subject to the conditions set forth in
Articles 11 and 12 of the Indenture and to be bound by all other applicable
provisions of the Indenture and the Securities.


 


2.                                       Ratification
of Indenture; Supplemental Indentures Part of Indenture. Except as
expressly amended hereby, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions thereof shall remain in
full force and effect. This Supplemental Indenture shall form a part of
the Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.


 


3.                                       Governing Law.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES


 

















 


OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.


 


4.                                       Trustee Makes
No Representation. The recitals contained herein shall be taken as the
statements of the Company, [NEW GUARANTOR] and the Existing Guarantors, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.


 


5.                                       Counterparts.
The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.


 


6.                                       Effect of
Headings. The Section headings herein are for convenience only and
shall not effect the construction thereof.


 


IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture to be duly executed as of the date first
above written.


 


	
   

  	
  [NEW GUARANTOR],

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [OTHER EXISTING GUARANTORS],

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A., as Trustee,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2