Exhibit 4.1


 


EXECUTION COPY


 




 





INDENTURE


 


 


Dated as of September 28, 2006


 


AMONG


 


MCLEODUSA INCORPORATED,


 


as Issuer,


 


THE GUARANTORS NAMED HEREIN,


 


as Guarantors,


 


AND


 


U.S. BANK NATIONAL ASSOCIATION,


 


as Trustee and Collateral Agent


 


 


101⁄2% Senior Second Secured Notes
Due 2011


 





















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
  ARTICLE ONE

  	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
  1

  
	
  SECTION
  1.01

  	
  Definitions

  	
  1

  
	
  SECTION
  1.02

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
  28

  
	
  SECTION
  1.03

  	
  Rules of Construction

  	
  28

  
	
  ARTICLE TWO

  	
  THE SECURITIES

  	
  29

  
	
  SECTION
  2.01

  	
  Form and Dating

  	
  29

  
	
  SECTION
  2.02

  	
  Execution and Authentication;
  Aggregate Principal Amount

  	
  30

  
	
  SECTION
  2.03

  	
  Registrar and Paying Agent

  	
  30

  
	
  SECTION
  2.04

  	
  Obligations of Paying Agent

  	
  31

  
	
  SECTION
  2.05

  	
  Holder Lists

  	
  31

  
	
  SECTION
  2.06

  	
  Transfer and Exchange of Notes

  	
  31

  
	
  SECTION
  2.07

  	
  Replacement Notes

  	
  32

  
	
  SECTION
  2.08

  	
  Outstanding Notes

  	
  32

  
	
  SECTION
  2.09

  	
  Treasury Notes; When Notes Are
  Disregarded

  	
  33

  
	
  SECTION
  2.10

  	
  Temporary Notes

  	
  33

  
	
  SECTION
  2.11

  	
  Cancellation

  	
  33

  
	
  SECTION
  2.12

  	
  CUSIP Numbers

  	
  33

  
	
  SECTION
  2.13

  	
  Deposit of Moneys

  	
  34

  
	
  SECTION
  2.14

  	
  Global Securities

  	
  34

  
	
  SECTION
  2.15

  	
  Book-Entry Provisions for Global
  Notes

  	
  34

  
	
  SECTION
  2.16

  	
  Special Transfer Provisions

  	
  35

  
	
  ARTICLE THREE

  	
  REDEMPTION

  	
  37

  
	
  SECTION
  3.01

  	
  Redemption

  	
  37

  
	
  SECTION
  3.02

  	
  Mandatory Redemption

  	
  37

  
	
  SECTION
  3.03

  	
  Selection of Notes to Be Redeemed

  	
  37

  
	
  SECTION
  3.04

  	
  Notice of Redemption

  	
  38

  
	
  SECTION
  3.05

  	
  Effect of Notice of Redemption

  	
  39

  
	
  SECTION
  3.06

  	
  Deposit of Redemption Price

  	
  39

  
	
  SECTION
  3.07

  	
  Notes Redeemed in Part

  	
  39

  
	
  ARTICLE FOUR

  	
  COVENANTS

  	
  39

  
	
  SECTION
  4.01

  	
  Payment of Notes

  	
  39

  
	
  SECTION
  4.02

  	
  Maintenance of Office or Agency

  	
  40

  
	
  SECTION
  4.03

  	
  Corporate Existence

  	
  40

  
	
  SECTION
  4.04

  	
  Payment of Taxes and Other Claims

  	
  40

  



 


i





















 


	
   

  	
   

  	
  Page

  
	
  SECTION
  4.05

  	
  Maintenance of Properties and
  Insurance

  	
  40

  
	
  SECTION
  4.06

  	
  Compliance Certificate; Notice of
  Default

  	
  41

  
	
  SECTION
  4.07

  	
  Reports to Holders

  	
  41

  
	
  SECTION
  4.08

  	
  Waiver of Stay, Extension or Usury
  Laws

  	
  42

  
	
  SECTION
  4.09

  	
  Limitation on Restricted Payments

  	
  42

  
	
  SECTION
  4.10

  	
  Limitations on Transactions with
  Affiliates

  	
  45

  
	
  SECTION
  4.11

  	
  Limitation on Incurrence of
  Additional Indebtedness

  	
  46

  
	
  SECTION
  4.12

  	
  Limitation on Dividend and Other
  Payment Restrictions Affecting Restricted Subsidiaries

  	
  47

  
	
  SECTION
  4.13

  	
  Additional Guarantees

  	
  48

  
	
  SECTION
  4.14

  	
  Limitation on Change of Control

  	
  49

  
	
  SECTION
  4.15

  	
  Limitation on Asset Sales

  	
  51

  
	
  SECTION
  4.16

  	
  Limitation on Liens

  	
  53

  
	
  SECTION
  4.17

  	
  Conduct of Business

  	
  53

  
	
  SECTION
  4.18

  	
  Limitation on Issuances and Sales
  of Capital Stock of Subsidiaries

  	
  53

  
	
  SECTION
  4.19

  	
  Payments for Consent

  	
  54

  
	
  SECTION
  4.20

  	
  Further Assurances Relating to the
  Collateral

  	
  54

  
	
  SECTION
  4.21

  	
  Real Estate Mortgages and Filings

  	
  54

  
	
  SECTION
  4.22

  	
  Regulated Subsidiaries

  	
  55

  
	
  SECTION
  4.23

  	
  Additional Interest

  	
  55

  
	
  ARTICLE FIVE

  	
  SUCCESSOR CORPORATION

  	
  55

  
	
  SECTION
  5.01

  	
  Merger, Consolidation and Sale of
  Assets

  	
  55

  
	
  SECTION
  5.02

  	
  Successor Corporation Substituted

  	
  57

  
	
  ARTICLE SIX

  	
  DEFAULT AND
  REMEDIES

  	
  57

  
	
  SECTION
  6.01

  	
  Events of Default

  	
  57

  
	
  SECTION
  6.02

  	
  Acceleration

  	
  58

  
	
  SECTION
  6.03

  	
  Other Remedies

  	
  59

  
	
  SECTION
  6.04

  	
  Waiver of Past Defaults

  	
  59

  
	
  SECTION
  6.05

  	
  Control by Majority

  	
  60

  
	
  SECTION
  6.06

  	
  Limitation on Suits

  	
  60

  
	
  SECTION
  6.07

  	
  Collection Suit by Trustee or
  Collateral Agent

  	
  60

  
	
  SECTION
  6.08

  	
  Trustee May File Proofs of Claim

  	
  61

  
	
  SECTION
  6.09

  	
  Priorities

  	
  61

  
	
  SECTION
  6.10

  	
  Undertaking for Costs

  	
  62

  



 


ii





















 


	
   

  	
   

  	
  Page

  
	
  SECTION
  6.11

  	
  Restoration of Rights and Remedies

  	
  62

  
	
  SECTION
  6.12

  	
  Rights and Remedies Cumulative

  	
  62

  
	
  SECTION
  6.13

  	
  Delay or Omission not Waiver

  	
  62

  
	
  ARTICLE SEVEN

  	
  TRUSTEE

  	
  62

  
	
  SECTION
  7.01

  	
  Duties of Trustee

  	
  62

  
	
  SECTION
  7.02

  	
  Rights of Trustee

  	
  64

  
	
  SECTION
  7.03

  	
  Individual Rights of Trustee

  	
  65

  
	
  SECTION
  7.04

  	
  Trustee’s Disclaimer

  	
  66

  
	
  SECTION
  7.05

  	
  Notice of Default

  	
  66

  
	
  SECTION
  7.06

  	
  Reports by Trustee to Holders

  	
  67

  
	
  SECTION
  7.07

  	
  Compensation and Indemnity

  	
  67

  
	
  SECTION
  7.08

  	
  Replacement of Trustee

  	
  68

  
	
  SECTION
  7.09

  	
  Successor Trustee by Merger, Etc.

  	
  69

  
	
  SECTION
  7.10

  	
  Eligibility; Disqualification

  	
  69

  
	
  SECTION
  7.11

  	
  Preferential Collection of Claims
  Against Company

  	
  70

  
	
  SECTION
  7.12

  	
  Trustee as Paying Agent

  	
  70

  
	
  SECTION
  7.13

  	
  Co-Trustees, Co-Collateral Agent
  and Separate Trustees, Collateral Agent

  	
  70

  
	
  ARTICLE EIGHT

  	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
  71

  
	
  SECTION
  8.01

  	
  Legal Defeasance and Covenant
  Defeasance

  	
  71

  
	
  SECTION
  8.02

  	
  Satisfaction and Discharge

  	
  73

  
	
  SECTION
  8.03

  	
  Survival of Certain Obligations

  	
  74

  
	
  SECTION
  8.04

  	
  Acknowledgment of Discharge by
  Trustee

  	
  74

  
	
  SECTION
  8.05

  	
  Application of Trust Moneys

  	
  74

  
	
  SECTION
  8.06

  	
  Repayment to the Company; Unclaimed
  Money

  	
  75

  
	
  SECTION
  8.07

  	
  Reinstatement

  	
  75

  
	
  SECTION
  8.08

  	
  Indemnity for Government
  Obligations

  	
  75

  
	
  ARTICLE NINE

  	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
  76

  
	
  SECTION
  9.01

  	
  Without Consent of Holders

  	
  76

  
	
  SECTION
  9.02

  	
  With Consent of Holders

  	
  77

  
	
  SECTION
  9.03

  	
  Compliance with TIA

  	
  78

  
	
  SECTION
  9.04

  	
  Revocation and Effect of Consents

  	
  78

  
	
  SECTION
  9.05

  	
  Notation on or Exchange of Notes

  	
  79

  
	
  SECTION
  9.06

  	
  Trustee or Collateral Agent to Sign
  Amendments, Etc.

  	
  79

  



 


iii





















 


	
   

  	
   

  	
  Page

  
	
  ARTICLE TEN

  	
  GUARANTEE

  	
  79

  
	
  SECTION
  10.01

  	
  Guarantee

  	
  79

  
	
  SECTION
  10.02

  	
  Release of a Guarantor

  	
  80

  
	
  SECTION
  10.03

  	
  Limitation of Guarantor’s Liability

  	
  81

  
	
  SECTION
  10.04

  	
  Guarantors May Consolidate, etc.,
  on Certain Terms

  	
  81

  
	
  SECTION
  10.05

  	
  Contribution

  	
  82

  
	
  SECTION
  10.06

  	
  Waiver of Subrogation

  	
  82

  
	
  SECTION
  10.07

  	
  Evidence of Guarantee

  	
  82

  
	
  SECTION
  10.08

  	
  Waiver of Stay, Extension or Usury
  Laws

  	
  82

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
  83

  
	
  SECTION
  11.01

  	
  Trust Indenture Act Controls

  	
  83

  
	
  SECTION
  11.02

  	
  Notices

  	
  83

  
	
  SECTION
  11.03

  	
  Communications by Holders with
  Other Holders

  	
  84

  
	
  SECTION
  11.04

  	
  Certificate and Opinion as to
  Conditions Precedent

  	
  84

  
	
  SECTION
  11.05

  	
  Statements Required in Certificate
  or Opinion

  	
  85

  
	
  SECTION
  11.06

  	
  Rules by Trustee, Paying Agent,
  Registrar

  	
  85

  
	
  SECTION
  11.07

  	
  Legal Holidays

  	
  85

  
	
  SECTION
  11.08

  	
  Governing Law

  	
  85

  
	
  SECTION
  11.09

  	
  No Adverse Interpretation of Other
  Agreements

  	
  86

  
	
  SECTION
  11.10

  	
  No Recourse Against Others

  	
  86

  
	
  SECTION
  11.11

  	
  Successors

  	
  86

  
	
  SECTION
  11.12

  	
  Duplicate Originals

  	
  86

  
	
  SECTION
  11.13

  	
  Severability

  	
  86

  
	
  SECTION
  11.14

  	
  Waiver of Jury Trial

  	
  86

  
	
  ARTICLE TWELVE

  	
  SECURITY

  	
  87

  
	
  SECTION
  12.01

  	
  Grant of Security Interest

  	
  87

  
	
  SECTION
  12.02

  	
  Intercreditor Agreement

  	
  87

  
	
  SECTION
  12.03

  	
  Recording and Opinions

  	
  87

  
	
  SECTION
  12.04

  	
  Release of Collateral

  	
  88

  
	
  SECTION
  12.05

  	
  Specified Releases of Collateral

  	
  88

  
	
  SECTION
  12.06

  	
  Release upon Satisfaction or
  Defeasance of all Outstanding Obligations

  	
  89

  
	
  SECTION
  12.07

  	
  Form and Sufficiency of Release

  	
  89

  
	
  SECTION
  12.08

  	
  Purchaser Protected

  	
  89

  



 


iv





















 


	
   

  	
   

  	
  Page

  
	
  SECTION
  12.09

  	
  Authorization of Actions to Be
  Taken by the Collateral Agent Under the Intercreditor Agreement and the
  Collateral Agreements

  	
  89

  
	
  SECTION
  12.10 

  	
  Authorization of Receipt of Funds
  by the Collateral Agent Under the Intercreditor Agreement and the Collateral
  Agreements

  	
  90

  



 


 


EXHIBITS:


	
  Exhibit
  A

  	
  -

  	
  Form
  of Initial Note

  	
   

  	
  A-1

  
	
  Exhibit
  B

  	
  -

  	
  Form
  of Exchange Note

  	
   

  	
  B-1

  
	
  Exhibit
  C-1

  	
  -

  	
  Form
  of Private Placement Legend

  	
   

  	
  C-1-1

  
	
  Exhibit
  C-2

  	
  -

  	
  Form
  of Legend for Global Notes

  	
   

  	
  C-2-1

  
	
  Exhibit
  D

  	
  -

  	
  Form of Certificate to Be Delivered in Connection with
  Transfer to Non-QIB Accredited Investors

  	
   

  	
  D-1

  
	
  Exhibit
  E

  	
  -

  	
  Form of Certificate to Be Delivered in Connection with
  Transfers Pursuant to Regulation S

  	
   

  	
  E-1

  
	
  Exhibit
  F

  	
  -

  	
  Form
  of Intercreditor Agreement

  	
   

  	
  F-1

  
	
   

  	
   

  	
   

  
	
  NOTE:

  	
  This
  Table of Contents shall not, for any purpose, be deemed to be part of this
  Indenture

  	
   

  	
   

  
						



 


v





















 


CROSS-REFERENCE TABLE


 


	
  TIA

  	
   

  	
  Indenture

  
	
  Section

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
  7.10

  
	
   

  	
  (a)(2)

  	
  7.10

  
	
   

  	
  (a)(3)

  	
  7.10

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  7.10

  
	
   

  	
  (b)

  	
  7.03; 7.08; 7.10

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  7.03; 7.11

  
	
   

  	
  (b)

  	
  7.03; 7.11

  
	
   

  	
  (c)

  	
  7.03

  
	
   

  	
  312(a)

  	
  2.05

  
	
   

  	
  (b)

  	
  2.05; 7.07; 11.03

  
	
   

  	
  (c)

  	
  11.03

  
	
  313

  	
  (a)

  	
  7.06

  
	
   

  	
  (b)(1)

  	
  7.06

  
	
   

  	
  (b)(2)

  	
  7.06

  
	
   

  	
  (c)

  	
  7.06

  
	
   

  	
  (d)

  	
  7.06

  
	
  314

  	
  (a)

  	
  4.06; 4.07

  
	
   

  	
  (b)

  	
  12.03

  
	
   

  	
  (c)(1)

  	
  4.06; 11.04

  
	
   

  	
  (c)(2)

  	
  11.04

  
	
   

  	
  (c)(3)

  	
  4.06

  
	
   

  	
  (d)

  	
  12.04

  
	
   

  	
  (e)

  	
  11.05

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  7.01(b)

  
	
   

  	
  (b)

  	
  7.05

  
	
   

  	
  (c)

  	
  7.01(a)

  
	
   

  	
  (d)

  	
  7.01(c)

  
	
   

  	
  (e)

  	
  6.11

  
	
  316

  	
  (a)(last sentence)

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
  6.04

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  6.07

  
	
   

  	
  (c)

  	
  2.05; 9.04

  
	
  317

  	
  (a)(1)

  	
  6.08

  
	
   

  	
  (a)(2)

  	
  6.09

  
	
   

  	
  (b)

  	
  2.04

  
	
  318

  	
  (a)

  	
  11.01

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)

  	
  11.01

  



 






N.A.
means Not Applicable


 


NOTE:
This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of this Indenture.


 





















 


INDENTURE, dated as of September 28, 2006, among
McLeodUSA Incorporated, a Delaware corporation (the “Company”), the
Guarantors (as herein defined) and U.S. Bank National Association, as Trustee
(in such capacity, the “Trustee”) and Collateral Agent (in such
capacity, the “Collateral Agent”).


 


WITNESSETH:


 


WHEREAS, the Company, and the Guarantors with respect
to the Guarantees (as herein defined), have duly authorized the creation of an
issue of 101⁄2% Senior Second Secured Notes due 2011 (the “Initial Notes”),
and 101⁄2% Senior Second Secured Exchange Notes due 2011 (the “Exchange Notes”
and, together with the Initial Notes and any Additional Notes (as herein
defined), the “Notes”) and the Guarantees and, to provide therefor, the
Company and the Guarantors have duly authorized the execution and delivery of
this Indenture; and


 


WHEREAS, all things necessary to make the Notes and
Guarantees, when each are duly issued and executed by the Company and the
Guarantors, as applicable, and authenticated and delivered hereunder, the valid
obligations of each of the Company and the Guarantors, respectively, and to
make this Indenture a valid and binding agreement of each of the Company and
the Guarantors, have been done.


 


NOW, THEREFORE, each party hereto agrees as follows
for the benefit of the other parties and for the equal and ratable benefit of
the Holders:


 


ARTICLE
ONE


 


DEFINITIONS
AND INCORPORATION BY REFERENCE


 


SECTION 1.01. Definitions.


 


“Acceleration Notice” has the meaning set forth
in Section 6.02(a).


 


“Acquired Indebtedness” means Indebtedness of a
Person or any of its Subsidiaries (a) existing at the time such Person becomes
a Restricted Subsidiary of the Company or at the time it merges or consolidates
with or into the Company or any of its Restricted Subsidiaries or (b) assumed
in connection with the acquisition of assets from such Person, and in each case
not incurred by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company
or such acquisition, merger or consolidation and which Indebtedness is without
recourse to the Company or any of its Subsidiaries or to any of their
respective properties or assets other than the Person or the assets to which
such Indebtedness related prior to the time such Person became a Restricted
Subsidiary of the Company or the time of such acquisition, merger or
consolidation.


 


“Additional Interest” has, with respect to any
Notes that are entitled to the benefits of a Registration Rights Agreement, the
meaning set forth in such Registration Rights Agreement.


 


“Additional Notes” means any Notes (other than
Exchange Notes) issued after the Issue Date from time to time in accordance
with the terms of this Indenture, including the provisions of Sections 2.02
and 4.11.


 


“Administrative Agent” has the meaning set
forth in the definition of the term “Credit Agreement”.


 

















 


“Affiliate” means, with respect to any
specified Person, any other Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; provided
that Beneficial Ownership of 10% or more of the Voting Stock of the Person
shall be deemed to be control. The terms “controlling” and “controlled”
have meanings correlative of the foregoing.


 


“Affiliate Transaction” has the meaning set
forth in Section 4.10.


 


“Agent” means any Registrar, Paying Agent or
co-Registrar.


 


“Agent Members” has the meaning set forth in Section
2.15(a) and means, with respect to the Depository, Euroclear or
Clearstream, a Person who has an account with the Depository, Euroclear or
Clearstream, respectively (and, with respect to the Depository, shall include
Euroclear and Clearstream).


 


“Applicable Indebtedness” means:


 


(1)                                  in
respect of any asset that is the subject of an Asset Sale at a time when such
asset constitutes Collateral, Indebtedness that is pari passu
with the Notes and secured at such time by such asset; or


 


(2)                                  in
respect of any other asset, Indebtedness that is pari passu with the Notes.


 


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


 


“Asset Acquisition” means:


 


(1)                                  an
Investment by the Company or any Restricted Subsidiary of the Company in any
other Person pursuant to which such Person shall become a Restricted Subsidiary
of the Company or any Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or


 


(2)                                  the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or comprise
any division or business of such Person or any other properties or assets of
such Person.


 


“Asset Sale” means any sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer (other than a Lien
in accordance with this Indenture) for value by (x) the Company or any of its
Restricted Subsidiaries to any Person other than the Company or a Guarantor or
(y) a Foreign Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary of the Company of:


 


(1)                                  any
Capital Stock of any Restricted Subsidiary of the Company; or


 


(2)                                  any
other property or assets of the Company or any Restricted Subsidiary of the
Company other than in the ordinary course of business; provided,
however, that Asset Sales shall not include:


 


2

















 


(a)                                  a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than
$1,000,000;


 


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


 


(c)                                  any
Restricted Payment permitted in Section 4.09 and any Permitted
Investment;


 


(d)                                 the
sale of cash or Cash Equivalents;


 


(e)                                  the
sale or other disposition of used, worn out, obsolete or surplus equipment;


 


(f)                                    the
surrender, waiver, settlement, or release of contract or other rights, or
contract, tort or other litigation or administrative claims;


 


(g)                                 the
sale of, or grant of licenses to, intellectual property in the ordinary course
of business which do not materially interfere with the business of the Company
and its Restricted Subsidiaries;


 


(h)                                 the
sale of assets received upon the foreclosure of a Lien;


 


(i)                                     the
sale or exchange of assets for other non-current assets of equal or greater
value that are useful in a Permitted Business; provided
that if any such transaction or series of related transactions involves assets
with a fair market value greater than $2,500,000, the Board of Directors shall
have determined in good faith that the assets received in exchange are of equal
or greater value;


 


(j)                                     the
disposal of any Capital Stock or other ownership interest in assets or rights
of an Unrestricted Subsidiary; or


 


(k)                                  the
sale, lease, grant of an indefeasible right of use or similar transaction with
respect to excess fiber optic cable capacity (including any such sale, lease or
grant of fiber optic cable) in the ordinary course of business.


 


“ATS Sale” means the sale by the Company and/or
its Subsidiaries of assets related to the business operations of the Company
and/or its Subsidiaries primarily used in providing voice services, Internet
access and cable services through its Advanced Telecommunications Services
division to residential and business customers in Cedar Rapids, Iowa and
Marion, Iowa, and transactions related thereto.


 


“ATS Sale Proceeds” means, with respect to the
ATS Sale, the proceeds in the form of cash or Cash Equivalents including
payments in respect of deferred payment obligations when received in the form
of cash or Cash Equivalents (other than the portion of any such deferred
payment constituting interest) received by the Company or any of its Restricted
Subsidiaries from the ATS Sale, net of:


 


(1)                                  actual
out-of-pocket expenses and fees relating to the ATS Sale (including legal,
accounting and investment banking fees and sales commissions);


 


3

















 


(2)                                  all
taxes and other costs and expenses actually paid or reasonably estimated by the
Company (in good faith) to be payable in cash in connection with the ATS Sale;


 


(3)                                  repayment
of Indebtedness that is secured by the property or assets that are the subject
of the ATS Sale and is required to be repaid in connection with the ATS Sale;
and


 


(4)                                  appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with the ATS Sale and retained by the Company or any Restricted Subsidiary,
as the case may be, after the ATS Sale, including pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
the ATS Sale.


 


“Authenticating Agent” has the meaning set
forth in Section 2.02.


 


“Bankruptcy Code” means the Bankruptcy Reform
Act of 1978, as amended, and codified as 11 U.S.C. §§101 et seq.


 


“Beneficial Owner” has the meaning assigned to
such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in
calculating the beneficial ownership of any particular “person” (as that term
is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed
to have beneficial ownership of all securities that such “person” has the right
to acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms “Beneficially Owns”, “Beneficial Ownership” and
“Beneficially Owned” have meanings correlative to the foregoing.


 


“Board of Directors” means, as to any Person,
the board of directors or similar governing body of such Person or any duly
authorized committee thereof.


 


“Board Resolution” means, with respect to any
Person, a copy of a resolution certified by the Secretary or an Assistant
Secretary of such Person to have been duly adopted by the Board of Directors of
such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.


 


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


 


“Capital Stock” means:


 


(1)                                  with
respect to any Person that is a corporation, any and all shares, interests,
participations or other equivalents (however designated and whether or not voting)
of corporate stock, including each class of Common Stock and Preferred Stock of
such Person;


 


(2)                                  with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person; and


 


(3)                                  any
warrants, rights or options to purchase any of the instruments or interests
referred to in clause (1) or (2) above.


 


“Capitalized Lease Obligation” means, as to any
Person, the obligations of such Person under a lease that are required to be
classified and accounted for as capital lease obligations under GAAP and, for


 


4

















 


purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.


 


“Cash Equivalents” means:


 


(1)                                  marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case, maturing within one year from
the date of acquisition thereof;


 


(2)                                  marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Ratings Group (“S&P”) or Moody’s Investors
Service, Inc. (“Moody’s”);


 


(3)                                  commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-2 from S&P or at
least P-2 from Moody’s;


 


(4)                                  investments
in demand deposits, certificates of deposit, bankers’ acceptances or time
deposits (including Eurodollar time deposits) maturing within one year from the
date of acquisition thereof issued by any bank organized under the laws of the
United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined net capital and surplus of not less than $250,000,000;


 


(5)                                  repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (1) above entered into with any bank or
trust company meeting the qualifications specified in clause (4) above;
and


 


(6)                                  investments
in money market funds which invest ninety-five percent (95%) or more of their
assets in securities of the types described in clauses (1) through (5)
above.


 


“Change of Control” means the occurrence of one
or more of the following events:


 


(1)                                  any
direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one transaction or a series
of related transactions, of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a “Group”), other than a transaction in which the
transferee is controlled by one or more Permitted Holders;


 


(2)                                  the
Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, other than (a) a
transaction in which the surviving or transferee Person is a Person that is
controlled by one or more of the Permitted Holders or (b) any such transaction
where the Voting Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than Disqualified
Capital Stock) of the surviving or transferee Person constituting a majority of
the outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance);


 


(3)                                  the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation, winding up or dissolution of the Company;


 


5

















 


(4)                                  any
Person or Group (other than one or more of the Permitted Holders) is or becomes
the Beneficial Owner, in the aggregate of a majority of the total voting power
of the Voting Stock of the Company; or


 


(5)                                  after
a Public Equity Offering, during any period of two consecutive years after the
date thereof, individuals who at the beginning of any such period constituted
the Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Company was approved pursuant to a vote of a majority of
the directors 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) cease for any reason to constitute a majority of the Board of
Directors then in office.


 


“Change of Control Offer” has the meaning set
forth in Section 4.14(a).


 


“Change of Control Payment Date” has the
meaning set forth in Section 4.14(b)(2).


 


“Clearstream” means Clearstream Banking,
societe anonyme.


 


“Collateral” means “Collateral” as such term is
defined in the Security Agreement, all property mortgaged under the Mortgages
and any other property, whether now owned or hereafter acquired, upon which a
Lien securing the Obligations under this Indenture, any Guarantee or the Notes
is granted or purported to be granted under any Collateral Agreement. The
Collateral does not include assets constituting Excluded Collateral.


 


“Collateral Agent” means the party named as
such in this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.


 


“Collateral Agreements” means, collectively,
the Security Agreement and each Mortgage, in each case, as the same may be in
force from time to time.


 


“Common Stock” of any Person means any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of such Person’s common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes all series and classes of such common stock.


 


“Communications Law” means any and all of (a)
the Communications Act of 1934, as amended (including by the Telecommunications
Act of 1996), any successor federal statute, and the rules, regulations and
published policies of the FCC promulgated thereunder, and any other federal law
governing the provision of telecommunications services and the rules,
regulations and published policies thereunder, and (b) any state law governing
the provision of telecommunications services and the rules and regulations of
any PUC, all as the same may be in effect from time to time.


 


“Company” means the party named as such in this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.


 


“Comparable Treasury Issue” means the United
States Treasury security selected by a Reference Treasury Dealer appointed by
the Company as having a maturity comparable to the remaining term of the Notes
(as if the final maturity of the Notes was October 1, 2009) that would be
utilized at the time of the selection and in accordance with customary
financial practice in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes (as if the final
maturity of the Notes was October 1, 2009).


 


6

















 


“Comparable Treasury Price” means, with respect
to any Redemption Date, (1) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption Date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated “Composite 3:30 pm.
Quotations for U.S. Government Securities” or (2) if such release (or any
successor release is not published or does not contain such prices on such
Business Day), (A) the average of the Reference Treasury Dealer Quotations (as
defined below) for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotation or (B) if the Company obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.


 


“Consolidated Adjusted Cash Flow” means, with
respect to any Person, for any period:


 


(1)                                  Consolidated
Cash Flow for such period;


 


plus


 


(2)                                  the
amount of cash proceeds received during such period from the sale, lease, grant
of an indefeasible right of use or similar transaction with respect to fiber
optic cable capacity (including any such sale, lease or grant of fiber optic
cable) to the extent such cash proceeds exceed any gains relating to any such
sale, lease, grant or similar transaction that are already included in the calculation
of Consolidated Cash Flow for such period;


 


minus


 


(3)                                  the
amount of capital expenditures (including expenditures for maintenance, repair
or improvement of existing properties, plant, equipment or other non-current
assets) incurred during such period;


 


minus


 


(4)                                  the
amount of Consolidated Interest Expense paid in cash during such period,


 


all as
determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP to the extent applicable.


 


“Consolidated Cash Flow” means, with respect to
any Person, for any period:


 


(1)                                  Consolidated
Net Income for such period;


 


plus


 


(2)                                  without
duplication and to the extent Consolidated Net Income has been reduced thereby:


 


(a)                                  Consolidated
Interest Expense for such period;


 


(b)                                 Consolidated
income tax expense for such period;


 


(c)                                  all
amounts attributable to consolidated depreciation and amortization expense
(including the amortization of debt issuance costs to the extent such costs are
excluded in the calculation of Consolidated Interest Expense) for such period;


 


7

















 


(d)                                 any
extraordinary non-cash charges for such period;


 


(e)                                  any
Restructuring Expenses for such period; and


 


(f)                                    any
other non-cash charges for such period (other than any non-cash charge which
requires an accrual of or a reserve for cash charges for any future period);


 


minus


 


(3)                                  without
duplication and to the extent included in Consolidated Net Income for such
period, any extraordinary gains and any non-cash items of income for such
period,


 


all as
determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.


 


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


 


(1)                                  Consolidated
Interest Expense (excluding amortization or write-off of deferred financing
costs); plus


 


(2)                                  the
product of (x) the amount of all cash dividend payments on any Disqualified
Capital Stock of such Person and any Preferred Stock of any Restricted
Subsidiary of such Person (other than dividends paid in Qualified Capital Stock
and dividends paid to such Person or any of its Restricted Subsidiaries) paid
or required to be paid during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local tax rate of such
Person, expressed as a decimal.


 


“Consolidated Interest Expense” means, with
respect to any Person for any period, the sum of (i) the interest expense
(including imputed interest expense (as reasonably determined by the Company in
good faith) in respect of Capitalized Lease Obligations) of such Person and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP excluding non-cash amounts for the accretion of asset
retirement obligations and (ii) any interest accrued during such period in
respect of Indebtedness of such Person and its Restricted Subsidiaries that is
required to be capitalized rather than included in consolidated interest
expense for such period in accordance with GAAP.


 


“Consolidated Net Income” means, with respect
to any Person, for any period, the aggregate net income (or loss) of such
Person and its Restricted Subsidiaries for such period on a consolidated basis,
determined in accordance with GAAP; provided,
however, that there shall be excluded therefrom:


 


(1)                                  after-tax
gains and losses from Asset Sales or abandonments or reserves relating thereto;


 


(2)                                  after-tax
items classified as extraordinary gains or losses;


 


(3)                                  the
net income (but not loss) of any Restricted Subsidiary of the referent Person
to the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is restricted by a contract,
operation of law or otherwise;


 


8

















 


(4)                                  the
net income of any Person, other than the referent Person or a Restricted
Subsidiary of the referent Person, except to the extent of cash dividends or
distributions paid to the referent Person or to a Wholly-Owned Subsidiary of
the referent Person by such Person;


 


(5)                                  any
restoration to income of any material contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Income accrued
at any time following the Issue Date;


 


(6)                                  income
or loss attributable to discontinued operations (including operations disposed
of during such period whether or not such operations were classified as
discontinued);


 


(7)                                  all
gains and losses realized on or because of the purchase or other acquisition by
such Person or any of its Restricted Subsidiaries of any securities of such
Person or any of its Restricted Subsidiaries;


 


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


 


(9)                                  interest
expense attributable to dividends on Qualified Capital Stock pursuant to
Statement of Financial Accounting Standards No. 150, “Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity”;


 


(10)                            non-cash
charges resulting from the impairment of long-lived tangible and intangible
assets; and


 


(11)                            in
the case of a successor to the referent Person by consolidation or merger or as
a transferee of the referent Person’s assets, any earnings (or losses) of the
successor corporation prior to such consolidation, merger or transfer of
assets.


 


“Consolidated Net Worth” of any Person means
the consolidated stockholders’ equity of the Person (plus, without duplication,
equity associated with preferred stock), determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.


 


“Consolidated Total Debt” means, with respect
to any Person, as of any date, the aggregate principal amount of consolidated
Indebtedness of such Person and its Restricted Subsidiaries of the nature
referred to in clauses (1), (2), (3), (4), (5)
and (9) of the definition of the term “Indebtedness”.


 


“Corporate Trust Office” means the office of
the Trustee at which the corporate trust business of the Trustee shall, at any
particular time, be principally administered, which office is, at the date of
this Indenture, located at 60 Livingston Avenue, St. Paul, MN 55107-2292,
Attention: Rick Prokosch, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as such
successor Trustee may designate from time to time by notice to the Holders and
the Company).


 


“Covenant Defeasance” has the meaning set forth
in Section 8.01(c).


 


“Credit Agreement” means any credit or loan
agreement entered into by and among the Company or any Guarantor(s), as
borrower(s) thereunder, the other guarantors, if any, party thereto and the
lenders party thereto (together with their successors and assigns, the “Lenders”)
and the agent thereunder (in such capacity, together with its successors and
assigns, the “Administrative Agent”) setting forth the terms and
conditions of such senior credit facility and providing for extensions of
credit thereunder in an aggregate


 


9

















 


principal amount not exceeding the amount permitted
under clause (2) or (13) of the definition of the term “Permitted
Indebtedness”, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended, supplemented or otherwise modified from time to
time, including any agreement extending the maturity of, refinancing, replacing
or otherwise restructuring (including increasing the amount of available
borrowings thereunder (provided
that such increase in borrowings is permitted under clause (2) or (13)
of the definition of the term “Permitted Indebtedness”) or adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under one or more such agreements or any successor
or replacement agreements and whether by the same or any other agent, lender or
group of lenders.


 


“Custodian” means any receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy
Code.


 


“Default” means an event or condition the
occurrence of which is, or with the lapse of time or the giving of notice or
both would be, an Event of Default.


 


“Depository” means The Depository Trust
Company, its nominees and successors (“DTC”).


 


“Disqualified Capital Stock” means that portion
of any Capital Stock which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof on or prior to the first
anniversary of the final maturity date of the Notes for cash or is convertible
into or exchangeable for debt securities of the Company or its Subsidiaries at
any time prior to such anniversary; provided,
however, that only the portion of the Capital Stock or other
security which so matures, is mandatorily redeemable or is so redeemable at the
option of the holder prior to such date shall be deemed to be Disqualified
Capital Stock; provided further,
that if such Capital Stock or other security is issued to any employee or to
any plan for the benefit of employees of the Company or its Subsidiaries or by
any such plan to such employees, such Capital Stock or other security shall not
constitute Disqualified Capital Stock solely because it may be required to be
repurchased by the Company or any of its Subsidiaries in order to satisfy
applicable statutory or regulatory obligations or as a result of such
employee’s termination, death or disability; provided
further, however that if any Capital Stock that would constitute
Disqualified Capital Stock solely because the holders of the Capital Stock have
the right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale, such Capital Stock will not
constitute Disqualified Capital Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock pursuant
to such provisions unless such repurchase or redemption complies with Section
4.09.


 


“Domestic Restricted Subsidiary” means, with
respect to any Person, a Domestic Subsidiary of such Person that is a
Restricted Subsidiary of such Person.


 


“Domestic Subsidiary” means, with respect to
any Person, a Subsidiary of such Person that is not a Foreign Subsidiary of
such Person.


 


“Equity Offering” means an underwritten public
offering of Common Stock of the Company or any holding company of the Company
pursuant to a registration statement filed with the SEC (other than on Form
S-8) or any private placement of Common Stock of the Company or any holding
company of the Company to any Person other than issuances upon exercise of
options by employees of any holding company of the Company, the Company or any
of its Restricted Subsidiaries.


 


10

















 


“Event of Default” has the meaning set forth in
Section 6.01.


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the SEC thereunder or
any successor statute or statutes thereto.


 


“Exchange Notes” has the meaning set forth in
the preamble to this Indenture and means the Notes, if any, issued under Section
2.02 pursuant to a Registration Rights Agreement.


 


“Exchange Offer” means an exchange offer that
may be made by the Company, pursuant to the Registration Rights Agreement, to
exchange for any and all the Notes a like aggregate principal amount of
Exchange Notes having substantially identical terms to the Notes registered
under the Securities Act.


 


“Excluded Collateral” means, collectively:


 


(i)                                     the
Capital Stock of any Subsidiary of the Company;


 


(ii)                                  motor
vehicles;


 


(iii)                               leasehold
interests in real property with respect to which the Company or any Guarantor
is a tenant or subtenant;


 


(iv)                              rights
under any contracts that contain a valid and enforceable prohibition on
assignment of such rights (other than to the extent that any such prohibition
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
of the Uniform Commercial Code of any relevant jurisdiction or any other
applicable law or principles of equity), but only for so long as such
prohibition exists and is effective and valid;


 


(v)                                 property
and assets owned by the Company or any Guarantors that are the subject of
Permitted Liens described in clause (6), (7) or (12) (provided that the Acquired Indebtedness secured thereby
solely consists of (A) Capitalized Lease Obligations secured by Liens that do not
extend to any property or assets which is not leased property subject to such
Capitalized Lease Obligations and (B) Purchase Money Indebtedness secured by
Liens that do not extent to any property or assets of the Company or any
Restricted Subsidiary of the Company other than such property or assets
acquired or constructed and improvements thereto with such Purchase Money
Indebtedness) of the definition thereof for so long as such Permitted Liens are
in effect and the Indebtedness secured thereby otherwise prohibits any other
Liens thereon;


 


(vi)                              property
and assets owned by the Company or any Guarantors upon which the granting of
any Lien to secure the Notes or the Guarantees, as the case may be, is
prohibited by any applicable rule, regulation or law (other than any such rule,
regulation or law which permits the granting of any such Lien upon the giving
of any notice to, or the granting of an approval by, the applicable
governmental authority responsible for administering such rule, regulation or
law); and


 


(vii)                           cash
and cash equivalents that cash collateralize letters of credit that were
outstanding on the Issue Date and issued in an aggregate stated amount not
exceeding $8,400,000 for the purpose of providing security for trade vendors
and lessors and cross-collateralizing performance bonds (including replacements
or renewals thereof with any issuer and any replacements and renewals of such
letters of credit by any issuer from time to time; provided
that the stated amount of any such initial or subsequent replacement letters of
credit does not exceed the undrawn stated amount of the letter(s) of credit
being replaced) so long as the aggregate


 


11

















 


amount of such cash and cash equivalents does not
exceed 105% of the undrawn stated amount of such letters of credit.


 


“Fair Market Value” means, with respect to any
asset or property, the price which could be negotiated in an arm’s length
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be conclusively determined by the Board of
Directors of the Company acting in good faith and shall be evidenced by a Board
Resolution of the Board of Directors of the Company delivered to the Trustee.


 


“FCC” means the Federal Communications
Commission of the United States of America, and any successor, in whole or in
part, to its jurisdiction.


 


“Fidelity” means, as the context may require,
Fidelity Advisor Series I: Fidelity Advisor Leveraged Company Stock Fund,
Fidelity Advisor Series II: Fidelity Advisor High Income Advantage Fund and/or
Fidelity Securities Fund: Fidelity Leveraged Company Stock Fund.


 


“First Lien Agent” means the Person or Persons designated
as such pursuant to the Intercreditor Agreement by the holders of First
Priority Claims.


 


“First Priority Claims” means (a) Indebtedness
permitted pursuant to clause (2) of the definition of the term
“Permitted Indebtedness”, (b) Indebtedness incurred in compliance with the
“Limitation on Incurrence of Additional Indebtedness” covenant and which is
secured by a Permitted Lien of the type described in clause (17) of the
definition thereof Permitted Liens and Refinancing Indebtedness with respect thereto,
(c) First Priority Cash Management Obligations, (d) First Priority Hedging
Obligations, and (e) all other Obligations under the documents relating to
Indebtedness described in the preceding clauses.


 


“First Priority Cash Management Obligations”
means all obligations of the Company and the Guarantors in respect of
overdrafts and related liabilities owed to any other Person that arise from
treasury, depositary or cash management services, including in connection with
any automated clearing house transfers of funds, or any similar transactions,
secured by any assets constituting Collateral under the documents that secure
First Priority Claims.


 


“First Priority Hedging Obligations” means all
obligations of any Person consisting of or relating to Indebtedness permitted
under clause (4)(b) of the definition of the term “Permitted
Indebtedness” that are secured by any assets constituting Collateral under the
documents that secure First Priority Claims.


 


“Foreign Restricted Subsidiary” means any
Restricted Subsidiary that is a Foreign Subsidiary.


 


“Foreign Subsidiary” means, with respect to any
Person, any Subsidiary of such Person that is organized under the laws of any
jurisdiction other than the United States of America, any state thereof or the
District of Columbia.


 


“GAAP” means accounting principles generally
accepted in the United States set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, which are in effect as of the Issue Date.


 


12

















 


“Global Note” has the meaning set forth in Section
2.01.


 


“Guarantee” has the meaning set forth in Section
10.01.


 


“Guarantor” means (1) each of the Company’s
Domestic Restricted Subsidiaries existing on the Issue Date other than
Regulated Subsidiaries and (2) each of the Company’s Domestic Restricted
Subsidiaries that in the future executes a supplemental indenture in which such
Domestic Restricted Subsidiary agrees to be bound by the terms of this
Indenture as a Guarantor; provided
that any Person constituting a Guarantor as described above shall cease to
constitute a Guarantor when its respective Guarantee is released in accordance
with the terms of this Indenture.


 


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


 


“incur” has the meaning set forth in Section
4.11.


 


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


 


(1)                                  all
Obligations of such Person for borrowed money;


 


(2)                                  all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;


 


(3)                                  all
Capitalized Lease Obligations of such Person;


 


(4)                                  all
Obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all Obligations under any title
retention agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate proceedings
and any deferred purchase price represented by earn outs);


 


(5)                                  all
Obligations for the reimbursement of any obligor on any letter of credit,
banker’s acceptance or similar credit transaction, whether or not then due;


 


(6)                                  guarantees
and other contingent obligations in respect of Indebtedness referred to in clauses
(1) through (5) above and clause (8) below;


 


(7)                                  all
Obligations of any other Person of the type referred to in clauses (1)
through (6) which are secured by any Lien on any property or asset of such
Person, the amount of any such Obligation being deemed to be the lesser of the
Fair Market Value of the property or asset securing such Obligation or the
amount of such Obligation;


 


(8)                                  all
Swap Agreements of such Person; and


 


(9)                                  all
Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any.


 


Notwithstanding
the foregoing, Indebtedness shall not include any Qualified Capital Stock. For
purposes hereof, the “maximum fixed repurchase price” of any
Disqualified Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital Stock
as if such Disqualified Capital Stock


 


13

















 


were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by,
the Fair Market Value of such Disqualified Capital Stock, such Fair Market
Value shall be determined reasonably and in good faith by the Board of
Directors of the issuer of such Disqualified Capital Stock.


 


“Indemnified Party” has the meaning set forth
in Section 7.07.


 


“Indenture” means this Indenture, as amended or
supplemented from time to time in accordance with the terms hereof.


 


“Indenture Documents” means, collectively, this
Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the
Collateral Agreements.


 


“Independent Financial Advisor” means a
nationally recognized accounting, appraisal or investment banking firm: (1)
that does not, and whose directors, officers and employees or Affiliates do
not, have a direct or indirect financial interest in the transaction to which
their opinion relates; and (2) that, in the judgment of the Board of Directors
of the Company, is otherwise independent and qualified to perform the task for
which it is to be engaged.


 


“Initial Notes” has the meaning set forth in
the preamble.


 


“Initial Purchaser” means Jefferies &
Company, Inc.


 


“Institutional Accredited Investor” means an
institution that is an “accredited investor” as that term is defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.


 


“Intercreditor Agreement” means the
intercreditor agreement, substantially in the form of Exhibit F hereto,
if entered into by the First Lien Agent, the Trustee, the Collateral Agent, the
Company and the Guarantors, as the same may be amended, supplemented or
modified from time to time.


 


“Interest Payment Date” means the stated
maturity of an installment of interest on the Notes.


 


“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 extensions of credit (including by way of guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition for value of
Capital Stock, Indebtedness or other similar instruments issued by such Person.
If the Company or any Restricted Subsidiary issues, sells or otherwise disposes
of any Capital Stock of a Person that is a Restricted Subsidiary such that,
after giving effect thereto, such Person is no longer a Restricted Subsidiary,
any Investment by the Company or any Restricted Subsidiary in such Person
remaining after giving effect thereto will be deemed to be a new Investment at
such time. The acquisition by the Company or any Restricted Subsidiary of a
Person that holds an Investment in a third Person will be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person at
such time. Except as otherwise provided for herein, the amount of an Investment
shall be its fair market value at the time the Investment is made and without
giving effect to subsequent changes in value.


 


For purposes of the definition of the term
“Unrestricted Subsidiary”, the definition of the term “Restricted Payment” and Section
4.09:


 


14

















 


(i)                                     “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 equal to an amount (if positive) equal to (A) the Company’s
“Investment” in such Subsidiary at the time of such redesignation less (B) the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation; and


 


(ii)                                  any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its Fair Market Value at the time of such transfer, in each case as determined
in good faith by the Board of Directors of the Company.


 


“Issue Date” means September 28, 2006.


 


“Jefferies” means, as the context may require,
Jefferies & Company, Inc., Jefferies Employees Opportunity Fund LLC,
Jefferies Partners Opportunity Fund LLC and/or Jefferies Partners Opportunity
Fund II LLC.


 


“Legal Defeasance” has the meaning set forth in
Section 8.01(b).


 


“Legal Holiday” has the meaning set forth in Section
11.07.


 


“Lenders” has the meaning set forth in the
definition of the term “Credit Agreement”.


 


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


 


“Material Adverse Effect” means a material
adverse effect on (a) the business, assets, operations, prospects or financial
condition of the Company and its Restricted Subsidiaries, taken as a whole, (b)
the ability of any of the Company or the Guarantors to perform its material
obligations under the Indenture Documents, (c) the rights of or benefits
available to the Secured Parties under the Indenture Documents.


 


“Maturity Date” means October 1, 2011.


 


“Mortgages” means the mortgages, deeds of
trust, deeds to secure Indebtedness or other similar documents, if any,
granting Liens on any Premises, as well as the other Collateral secured by and
described in the mortgages, deeds of trust, deeds to secure Indebtedness or
other similar documents.


 


“Net Cash Proceeds” means, with respect to:


 


(a)                                  any
Asset Sale (other than the ATS Sale), the proceeds in the form of cash or Cash
Equivalents including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (other than the portion of any
such deferred payment constituting interest) received by the Company or any of
its Restricted Subsidiaries from such Asset Sale, net of:


 


(1)                                  actual
out-of-pocket expenses and fees relating to such Asset Sale (including legal,
accounting and investment banking fees and sales commissions);


 


15

















 


(2)                                  all
taxes and other costs and expenses actually paid or reasonably estimated by the
Company (in good faith) to be payable in cash in connection with such Asset
Sale;


 


(3)                                  repayment
of Indebtedness that is secured by the property or assets that are the subject
of such Asset Sale and is required to be repaid in connection with such Asset
Sale; and


 


(4)                                  appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale; and


 


(b)                                 an
Asset Sale consisting of the ATS Sale, the excess of (1) the ATS Sale Proceeds
over (2) the aggregate principal amount of Notes redeemed pursuant to Section
5(d) of the Notes.


 


“Net Proceeds Offer” has the meaning set forth
in Section 4.15.


 


“Net Proceeds Offer Amount” has the meaning set
forth in Section 4.15.


 


“Net Proceeds Offer Payment Date” has the
meaning set forth in Section 4.15.


 


“Net Proceeds Offer Trigger Date” has the
meaning set forth in Section 4.15.


 


“Non-U.S. Person” means a Person who is not a
U.S. person, as defined in Regulation S.


 


“Notes” has the meaning set forth in the
preamble to this Indenture and means the Initial Notes, the Additional Notes,
if any, and the Exchange Notes treated as a single class of securities, as
amended or supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.


 


“Obligations” means all obligations for
principal, premium, interest (including with respect to the Notes, any interest
accruing after the commencement of any bankruptcy, insolvency, or similar
proceeding, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.


 


“Offering” means the offering of the Initial
Notes described in the Offering Circular.


 


“Offering Circular” means the final offering
circular, dated as of September 19, 2006, relating to the offering of the
Initial Notes.


 


“Officer” means the Chief Executive Officer,
the President, the Chief Financial Officer, or any Vice President of the
Company.


 


“Officers’ Certificate” means a certificate
signed by two Officers of the Company, at least one of whom shall be the
principal financial officer of the Company, and delivered to the Trustee and/or
the Collateral Agent, as applicable.


 


16

















 


“Opinion of Counsel” means a written opinion of
counsel who shall be reasonably acceptable to the Trustee and/or the Collateral
Agent, as applicable.


 


“Paying Agent” has the meaning set forth in Section
2.03.


 


“Permitted Business” means:


 


(1)                                  the
delivery or distribution of telecommunications, voice, data or video services;


 


(2)                                  any
business or activity reasonably related or ancillary to those listed above,
including, any business the Company or a Restricted Subsidiary conducts on the
Issue Date, and the acquisition, holding or exploitation of any license
relating to the delivery of those services; or


 


(3)                                  any
other business or activity in which the Company and the Restricted Subsidiaries
expressly contemplate engaging under the provisions of the Company’s
certificate of incorporation and bylaws as in effect on the Issue Date.


 


“Permitted Holders” means JPMorgan Chase Bank,
N.A., Fidelity, Wayzata and Jefferies, their respective Affiliates and any fund
managed or controlled by any of the foregoing Persons (including their
respective Affiliates).


 


“Permitted Indebtedness” means, without
duplication, each of the following:


 


(1)                                  Indebtedness
under the Initial Notes issued in the Offering or in the Exchange Offer in an
aggregate outstanding principal amount not to exceed $120,000,000 and the
related Guarantees;


 


(2)                                  Indebtedness
incurred pursuant to the Credit Agreement in an aggregate principal amount at
any time outstanding not to exceed $20,000,000, as such amount may be reduced
from time to time as a result of permanent prepayments of loans made
thereunder, or, without duplication, the permanent reductions to the revolving
commitments thereunder, in each case, as provided in clause (3)(b) of
the first paragraph of Section 4.15;


 


(3)                                  other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on the
Issue Date;


 


(4)                                  Indebtedness
in respect of Swap Agreements entered into (a) to hedge or mitigate risks to
which the Company or any of its Restricted Subsidiary has actual exposure, or
(b) in order to effectively cap, collar or exchange interest rates (from fixed
to floating rates, from one floating rate to another floating rate or
otherwise) with respect to any interest-bearing liability or investment of the Company
or any of its Restricted Subsidiaries;


 


(5)                                  intercompany
Indebtedness of (a) the Company or a Guarantor for so long as such Indebtedness
is held by the Company or a Guarantor (provided that
if as of any date any Person other than the Company or a Guarantor owns or
holds any such Indebtedness or holds a Lien in respect of such Indebtedness,
such date shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness under this clause (5)(a) by the issuer of such
Indebtedness), (b) a Specified Subsidiary for so long as such Indebtedness is
held by the Company or a Restricted Subsidiary and is permitted to be made as a
Permitted Investment under clause (1)(b) of the definition thereof (provided that if as of any date any Person other than the
Company or a Restricted Subsidiary owns or holds any such Indebtedness or holds
a Lien in


 


17

















 


respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted Indebtedness
under this clause (5)(b) by the issuer of such Indebtedness), and (c)
the Company or a Guarantor for so long as such Indebtedness is held by a
Specified Subsidiary (provided that (i) if as of any date any
Person other than such Specified Subsidiary owns or holds any such Indebtedness
or holds a Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness under this clause
(5)(c) by the issuer of such Indebtedness, and (ii) any such Indebtedness
is unsecured and subordinated, pursuant to a written agreement, to the
Company’s Obligations under the Notes and this Indenture or such Guarantor’s
Obligations under its Guarantees and this Indenture);


 


(6)                                  Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however, that such
Indebtedness is extinguished within three Business Days of incurrence;


 


(7)                                  Indebtedness
of the Company or any of its Restricted Subsidiaries represented by letters of
credit for the account of the Company or such Restricted Subsidiary, as the
case may be, in order to provide security for workers’ compensation claims,
payment obligations in connection with self-insurance or similar requirements
in the ordinary course of business;


 


(8)                                  obligations
in respect of performance, bid and surety bonds appeals bonds, completion
guarantees, including any bonds required by or under a Communications Law, or
in each case similar obligations provided by the Company or any Restricted
Subsidiary in the ordinary course of business;


 


(9)                                  Indebtedness
represented by Capitalized Lease Obligations and Purchase Money Indebtedness of
the Company and its Restricted Subsidiaries incurred in the ordinary course of
business (including Refinancings thereof that do not result in an increase in
the aggregate principal amount of Indebtedness of such Person as of the date of
such proposed Refinancing (plus the amount of any premium required to be paid
under the terms of the instrument governing such Indebtedness and plus the
amount of reasonable expenses incurred by the Company in connection with such
Refinancing)) not to exceed $10,000,000 at any time outstanding;


 


(10)                            Refinancing
Indebtedness;


 


(11)                            Indebtedness
represented by guarantees by the Company or a Restricted Subsidiary of
Indebtedness incurred by the Company or a Restricted Subsidiary so long as the
incurrence of such Indebtedness by the Company or any such Restricted
Subsidiary is otherwise permitted by the terms of this Indenture;


 


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


 


18

















 


(13)                            additional
Indebtedness of the Company and its Restricted Subsidiaries in an aggregate
principal amount not to exceed $6,000,000 at any time outstanding (which amount
may, but need not be, incurred in whole or in part under the Credit Agreement);


 


(14)                            Indebtedness
in respect of the purchase price for insurance premiums;


 


(15)                            Indebtedness
owed to any insurer pursuant to reimbursement or indemnification obligations
incurred in the ordinary course of business; and


 


(16)                            contingent
liabilities arising out of endorsements of checks or other negotiable
instruments for deposit or collection in the ordinary course of business.


 


For purposes of determining compliance with Section
4.11, (a) the outstanding principal amount of any item of Indebtedness
shall be counted only once and (b) in the event that an item of Indebtedness
meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (16) above or is entitled to be
incurred pursuant to the proviso to the first sentence of clause (a) of Section
4.11, the Company shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with Section
4.11. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of
Disqualified Capital Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Capital Stock for purposes of Section
4.11.


 


“Permitted Investments” means:


 


(1)                                  Investments
(a) by the Company or any Restricted Subsidiary of the Company in any Person
that is or will become immediately after such Investment a Guarantor or that
will merge or consolidate with or into the Company or a Guarantor, or that
transfers or conveys all or substantially all of its assets to the Company or a
Guarantor, (b) by the Company or any Restricted Subsidiary of the Company in
(x) for so long as McLeodUSA Telecommunications Services, Inc., an Iowa
corporation (“MTSI”), is a Regulated Subsidiary, MTSI to the extent made
in the ordinary course of business consistent with past practices or (y) any
Person that is or will become immediately after such Investment a Specified
Subsidiary or that will merge or consolidate with or into a Specified
Subsidiary to the extent that the aggregate amount of such Investments pursuant
to this clause (1)(b)(y) at any time outstanding does not exceed
$5,000,000, and (c) by any Specified Subsidiary in the Company or a Guarantor (provided that any Indebtedness evidencing such Investment is
unsecured and subordinated, pursuant to a written agreement, to the Company’s
Obligations under the Notes and this Indenture or such Guarantor’s Obligations
under its Guarantees and this Indenture);


 


(2)                                  Investments
in cash and Cash Equivalents;


 


(3)                                  Investments
in connection with a Swap Agreement entered into (a) to hedge or mitigate risks
to which the Company or any of its Restricted Subsidiary has actual exposure,
or (b) in order to effectively cap, collar or exchange interest rates (from
fixed to floating rates, from one floating rate to another floating rate or
otherwise) with respect to any interest-bearing liability or investment of the
Company or any of its Restricted Subsidiaries;


 


(4)                                  Investments
in the Notes;


 


19

















 


(5)                                  Investments
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of trade creditors, suppliers or customers in exchange
for claims against such trade creditors, suppliers or customers or received in
connection with any other judgment or settlement with a trade creditor,
supplier or customer or received in connection with any other judgment or
settlement with a trade creditor, supplier or customer;


 


(6)                                  Investments
made by the Company or its Restricted Subsidiaries as a result of consideration
received in connection with an Asset Sale made in compliance with Section
4.15;


 


(7)                                  Investments
in existence on the Issue Date;


 


(8)                                  loans
and advances, including advances for travel and moving expenses, to employees,
officers and directors of the Company and its Restricted Subsidiaries in the
ordinary course of business for bona fide business purposes not in excess of
$1,000,000 at any one time outstanding; and


 


(9)                                  advances
to suppliers and customers and other extensions of trade credit in the ordinary
course of business;


 


(10)                            Guarantees
constituting Indebtedness permitted by Section 4.11;


 


(11)                            Investments
of any Person existing at the time such Person becomes a Restricted Subsidiary
of the Company or consolidates or merges with the Company or any of its
Restricted Subsidiaries so long as such investments were not made in
contemplation of any such Person becoming a Restricted Subsidiary or of such
consolidation or merger;


 


(12)                            Investments
constituting deposits described in clause (3) or (10) of the
definition of the term “Permitted Liens”;


 


(13)                            Investments
in Permitted Joint Ventures of up to $5,000,000 outstanding at any time; or


 


(14)                            Investments
not otherwise permitted by the foregoing clauses in an aggregate principal
amount not exceeding $1,000,000 at any time outstanding.


 


“Permitted Joint Ventures” means an entity
characterized as a joint venture, however structured, engaged in a Permitted Business
and in which the Company or a Restricted Subsidiary (a) owns at least 40% of
the ownership interest or (b) has a right to receive at least 40% of the
profits or distributions; provided
that such joint venture is not a Subsidiary of the Company.


 


“Permitted Liens” means the following types of
Liens:


 


(1)                                  Liens
for taxes, assessments or governmental charges or claims either (a) not
delinquent or (b) contested in good faith by appropriate proceedings and as to
which the Company or its Restricted Subsidiaries shall have set aside on its
books such reserves as may be required pursuant to GAAP;


 


(2)                                  statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law or pursuant to customary
reservations or retentions of title incurred in the ordinary course of business
for sums not yet


 


20

















 


delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made in respect thereof;


 


(3)                                  Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government or other contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);


 


(4)                                  any
judgment Lien not giving rise to an Event of Default under Section 6.01(5);


 


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


 


(6)                                  any
interest or title of a lessor under any Capitalized Lease Obligation permitted
pursuant to clause (9) of the definition of the term “Permitted
Indebtedness”; provided that such Liens do not
extend to any property or assets which is not leased property subject to such
Capitalized Lease Obligation;


 


(7)                                  Liens
securing Purchase Money Indebtedness permitted pursuant to clause (9) of
the definition of the term “Permitted Indebtedness”; provided,
however, that (a) the Indebtedness shall not be secured by a Lien on
any property or assets of the Company or any Restricted Subsidiary of the
Company other than such property or assets so acquired or constructed and
improvements thereto and (b) the Lien securing such Indebtedness shall be
created within 180 days of such acquisition or construction or, in the case of
a refinancing of any Purchase Money Indebtedness, within 180 days of such
refinancing;


 


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


 


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


 


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


 


(11)                            Liens
securing Swap Agreements that relate to Indebtedness that is otherwise
permitted under this Indenture;


 


(12)                            Liens
securing Acquired Indebtedness incurred in accordance with Section 4.11;
provided that:


 


(a)                                  such
Liens secured such Acquired Indebtedness at the time of and prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted


 


21

















 


Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company; and


 


(b)                                 such
Liens do not extend to or cover any property or assets of the Company or of any
of its Restricted Subsidiaries other than the property or assets that secured
the Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the Company;


 


(13)                            Liens
existing as of the Issue Date and securing Indebtedness permitted to be
outstanding under clause (3) of the definition of the term “Permitted
Indebtedness” to the extent and in the manner such Liens are in effect on the
Issue Date;


 


(14)                            Liens
securing the Notes and all other monetary obligations under this Indenture and
the Guarantees;


 


(15)                            Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under this paragraph and
which has been incurred in accordance with Section 4.11 or clause (1),
(3) or (10) of the definition of the term “Permitted
Indebtedness”; provided, however, that such
Liens: (i) are no less favorable to the Holders and are not more favorable to
the lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced; and (ii) do not extend to or cover any property
or assets of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced;


 


(16)                            Liens
securing Indebtedness under the Credit Agreement to the extent such
Indebtedness is permitted under clause (2) or (13) of the
definition of the term “Permitted Indebtedness”; and


 


(17)                            Liens
securing Acquired Indebtedness or Indebtedness (and all other Obligations
related thereto) of the Company or a Guarantor, the proceeds of which are used
by the Company or such Guarantor to acquire assets that will be used in a
Permitted Business of the Company or such Guarantor or the Capital Stock of a Person
that becomes a Guarantor or is merged with or into the Company or a Guarantor; provided, that immediately thereafter the ratio of:


 


(1)                                  the
aggregate principal amount (or accreted value, as the case may be) of First
Priority Claims of the Company and its Restricted Subsidiaries on a
consolidated basis outstanding as of the Transaction Date (it being understood
and agreed that any First Priority Claims in respect of any unused revolving
commitment (including any unused revolving commitment under the Credit
Agreement) shall be deemed to be fully drawn and outstanding on the Transaction
Date),


 


to


 


(2)                                  the
Pro Forma Consolidated Cash Flow of the Company for the four full consecutive
fiscal quarters ended immediately preceding the Transaction Date,


 


in each case, determined on a pro forma basis as if
any such Indebtedness had been incurred and the proceeds thereof had been
applied at the beginning of such four consecutive fiscal quarters, would be
greater than zero and less than 2.75 to 1.00.


 


22














 


“Person” means an individual, partnership,
corporation, limited liability company, unincorporated organization, trust or
joint venture, or a governmental agency or political subdivision thereof.


 


“Physical Notes” has the meaning set forth in Section
2.15(b).


 


“Preferred Stock” of any Person means any
Capital Stock of such Person that has preferential rights to any other Capital
Stock of such Person with respect to dividends or redemptions or upon
liquidation.


 


“Premises” has the meaning set forth in Section
4.21.


 


“principal” of any Indebtedness (including the
Notes) means the principal amount (or accreted value, as the case may be) of
such Indebtedness plus the premium, if any, on such Indebtedness.


 


“Private Placement Legend” means the legend
initially set forth on the Notes in the form set forth in Exhibit C-1.


 


“Pro Forma Consolidated Cash Flow” means, with
respect to any Person, for any period, the Consolidated Cash Flow of such
Person for such period calculated on a pro forma basis to give effect to any
Asset Sale or other disposition or Asset Acquisition (including acquisitions of
other Persons by merger, consolidation or purchase of Capital Stock) by such
Person during such period as if such Asset Sale or other disposition or Asset
Acquisition had taken place on the first day of such period. For purposes of
this definition, whenever pro  forma effect is to be given to an
Asset Acquisition and the amount of income or earnings relating thereto, 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 (net of associated
expenses) for such period resulting from the Asset Acquisition or other
Investment which is being given pro  forma effect that (a) would
be permitted to be reflected on pro forma financial statements pursuant to Rule
11-02 of Regulation S-X under the Securities Act or (b) have been realized or
for which substantially all the steps necessary for realization have been taken
or, at the time of determination, are reasonably expected to be taken with 180
days immediately following any such Asset Acquisition or other Investment,
including, but not limited to, the execution, termination, renegotiation or
modification of any contracts, the termination of any personnel or the closing
of any facility, as applicable, provided
that, in any case, such adjustments shall be calculated on an annualized basis
and such adjustments are set forth in an Officers’ Certificate signed by the
Company’s chief financial officer and another Officer which states in detail
(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 such adjustment or adjustments and the plan or plans related thereto have
been reviewed and approved by the Company’s Board of Directors.


 


“Public Equity Offering” means an underwritten public
offering of Common Stock of the Company or any holding company of the Company
pursuant to a registration statement filed with the SEC (other than on Form
S-8) that results in net cash proceeds to the Company of at least $35,000,000.


 


“PUC” means the public utilities commission for
any state or any other jurisdiction or any successor agency, and any successor,
in whole or in part, to its functions or jurisdictions.


 


“Purchase Money Indebtedness” means
Indebtedness of the Company and its Restricted Subsidiaries incurred for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment, provided that the aggregate principal


 


23

















 


amount of such Indebtedness does not exceed the lesser
of the Fair Market Value of such property or such purchase price or cost.


 


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


 


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


 


“Record Date” means any of the Record Dates
specified in the Notes, whether or not a Legal Holiday.


 


“Redemption Date” means, when used with respect
to any Note to be redeemed, the date fixed for redemption of such Note pursuant
to this Indenture and the Notes.


 


“Redemption Price” means, when used with
respect to any Note to be redeemed, the price fixed for redemption pursuant to
this Indenture and the Notes.


 


“Reference Treasury Dealer” means any primary
U.S. government securities dealer in the City of New York selected by the
Company.


 


“Reference Treasury Dealer Quotation” means,
with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Company by such Reference Treasury
Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date.


 


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


 


“Refinancing Indebtedness” means any
Refinancing by the Company or any Restricted Subsidiary of the Company of
Indebtedness incurred in accordance with Section 4.11 (other than
pursuant to Permitted Indebtedness) or clause (1), (3) or (10)
of the definition of Permitted Indebtedness, in each case that does not:


 


(1)                                  have
an aggregate principal amount (or, if such Indebtedness is issued with original
issue discount, an aggregate offering price) greater than the sum of (x) the
aggregate principal amount of the Indebtedness being Refinanced (or, if such
Indebtedness being Refinanced is issued with original issue discount, the
aggregate accreted value) as of the date of such proposed Refinancing plus (y)
the amount of fees, expenses, premium, defeasance costs and accrued but unpaid
interest relating to the Refinancing of such Indebtedness being Refinanced;


 


(2)                                  create
Indebtedness with: (a) a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is less than the Weighted Average
Life to Maturity of the Indebtedness being Refinanced; or (b) a stated final
maturity earlier than the stated final maturity of the Indebtedness being
Refinanced; or


 


(3)                                  affect
the security, if any, for such Refinancing Indebtedness (except to the extent
that less security is granted to holders of such Refinancing Indebtedness);


 


24

















 


provided, that if such Indebtedness being
Refinanced is subordinate or junior by its terms to the Notes, then such
Refinancing Indebtedness shall be subordinate by its terms to the Notes at
least to the same extent and in the same manner as the Indebtedness being
Refinanced.


 


“Registrar” has the meaning set forth in Section
2.03.


 


“Registration Rights Agreement” means (a) the
Registration Rights Agreement, dated as of the Issue Date, between the Company,
the Guarantors and the Initial Purchaser, as the same may be amended or
modified from time to time in accordance with the terms thereof and (b) any
registration rights agreement between the Company, the Guarantors and the other
parties thereto in connection with the issuance of Additional Notes.


 


“Regulated Subsidiary” means any Domestic
Restricted Subsidiary of the Company that (a) is required to obtain regulatory
or other governmental approvals to become a Guarantor or to grant a Lien on its
assets pursuant to any Collateral Agreement and (b) has not obtained such
approvals.


 


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


 


“Regulation S Temporary Global Note” has the
meaning set forth in Section 2.01.


 


“Regulation S Permanent Global Note” has the
meaning set forth in Section 2.01.


 


“Restricted Payment” has the meaning set forth
in Section 4.09.


 


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


 


“Restricted Security” has the meaning assigned
to such term in Rule 144(a)(3) under the Securities Act; provided that the
Trustee shall be entitled to request and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.


 


“Restricted Subsidiary” of any Person means any
Subsidiary of such Person which at the time of determination is not an
Unrestricted Subsidiary.


 


“Restructuring Expenses” means any
restructuring expenses as defined by GAAP.


 


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


 


“SEC” means the Securities and Exchange
Commission.


 


“Secured Parties” means the Collateral Agent,
the Trustee and the Holders.


 


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


 


“Security Agreement” means the Security and
Pledge Agreement, dated as of the Issue Date, made by the Company and the Guarantors
in favor of the Collateral Agent, as amended or supplemented from time to time
in accordance with its terms.


 


“Significant Subsidiary” with respect to any
Person, means any Restricted Subsidiary of such Person that satisfies the
criteria for a “significant subsidiary” set forth in Rule 1-02(w) of Regulation
S-X under the Exchange Act.


 


25

















 


“Specified Subsidiary” means, as the context
may require, a Foreign Restricted Subsidiary of the Company and/or a Regulated
Subsidiary.


 


“Subsidiary” with respect to any Person, means:


 


(1)                                  any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such
Person; or


 


(2)                                  any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.


 


“Swap Agreement” means any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Company or any of
its Restricted Subsidiaries shall be a Swap Agreement.


 


“TIA” means the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture, except as otherwise set forth in Section 9.03.


 


“Transaction Date” means with respect to the
incurrence of any Indebtedness by the Company or any of its Restricted
Subsidiaries that is a Guarantor, the date such Indebtedness is to be incurred
and, with respect to any Restricted Payment, the date such Restricted Payment
is to be made.


 


“Treasury Rate” means, with respect to any
Redemption Date, the rate per annum equal to the semi-annual equivalent yield
to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption period.


 


“Trust Officer” means any officer of the
Trustee assigned by the Trustee to administer this Indenture or, in the case of
a successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.


 


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


 


“Unrestricted Subsidiary” of any Person means:


 


(1)                                  any
Subsidiary of such Person that at the time of determination shall be or
continue to be designated an Unrestricted Subsidiary by the Board of Directors
of such Person in the manner provided below; and


 


(2)                                  any
Subsidiary of an Unrestricted Subsidiary.


 


The Board of Directors of the Company may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock 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 that:


 


26

















 


(1)                                  the
Company certifies to the Trustee that such designation complies with Section
4.09; and


 


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


 


The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary only if:


 


(1)                                  immediately
after giving effect to such designation, the Company is able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.11; and


 


(2)                                  both
immediately before and after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing.


 


Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by promptly filing with the Trustee a
copy of the Board Resolution giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing
provisions.


 


“U.S. Government Obligations” means
non-callable direct obligations of, and non-callable obligations guaranteed by,
the United States of America for the payment of which the full faith and credit
of the United States of America is pledged.


 


“U.S. Legal Tender” means such coin or currency
of the United States which, as at the time of payment, shall be immediately
available legal tender for the payment of public and private debts.


 


“Voting Stock” means, with respect to any
Person, securities of any class or classes of Capital Stock of such Person
entitling the holders thereof (whether at all times or only so long as no
senior class of stock has voting power by reason of any contingency) to vote in
the election of members of the Board of Directors (or equivalent governing
body) of such Person.


 


“Wayzata” means, as the context may require,
Wayland Distressed Opportunities Fund I-B, LLC, Wayland Distressed
Opportunities Fund I-C, LLC, Wayzata Recovery Fund, LLC, Wayzata Opportunities
Fund Offshore, L.P. and Wayzata Opportunities Fund, LLC.


 


“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing (1) the then outstanding aggregate principal amount of such
Indebtedness into (2) the sum of the total of the products obtained by
multiplying:


 


(a)                                  the
amount of each then remaining installment, sinking fund, serial maturity or
other required payment of principal, including payment at final maturity, in
respect thereof, by


 


(b)                                 the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.


 


“Wholly-Owned Subsidiary” of any Person means
any Restricted Subsidiary of such Person of which all the outstanding Capital
Stock (other than in the case of a Foreign Subsidiary, directors’


 


27

















 


qualifying shares or an immaterial amount of shares
required to be owned by other Persons pursuant to applicable law) are owned by
such Person or any Wholly-Owned Subsidiary of such Person.


 


SECTION 1.02. Incorporation by Reference of Trust
Indenture Act.


 


Whenever this Indenture refers to a provision of the
TIA, such provision is incorporated by reference in, and made a part of, this
Indenture. The following TIA terms used in this Indenture have the following
meanings:


 


“indenture securities” means the Notes.


 


“indenture security holder” means a Holder.


 


“indenture to be qualified” means this Indenture.


 


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


 


“obligor” on the indenture securities means the
Company or any other obligor on the Notes.


 


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 and not otherwise defined herein have the meanings assigned to them
therein.


 


SECTION 1.03. Rules of Construction.


 


Unless the context otherwise requires:


 


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


 


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


 


(3)                                  “or”
is not exclusive;


 


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


 


(5)                                  “herein”,
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;


 


(6)                                  when
the words “includes” or “including” are used herein, they shall be deemed to be
followed by the words “without limitation”;


 


(7)                                  all
references to “interest” in this Indenture and each other Indenture Document in
respect of any Note shall include any Additional Interest due on such Note
pursuant to the terms of the applicable Registration Rights Agreement; and


 


(8)                                  all
references to Sections or Articles refer to Sections or Articles of this
Indenture unless otherwise indicated.


 


28

















 


ARTICLE
TWO


 


THE
SECURITIES


 


SECTION 2.01. Form and Dating.


 


The Initial Notes and the Additional Notes and the
Trustee’s certificate of authentication thereon shall be substantially in the
form of Exhibit A hereto. The Exchange Notes and the Trustee’s
certificate of authentication thereon shall be substantially in the form of Exhibit
B hereto; provided, that the
form of the Exchange Notes shall include such variations as are required or,
subject to Section 9.02, permitted by the Registration Rights Agreement.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or Depository rule or usage. The Company shall approve the form
of the Notes and any notation, legend or endorsement on them. Each Note shall
be dated the date of its authentication.


 


The terms and provisions contained in the forms of the
Notes annexed hereto as Exhibit A and Exhibit B shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.


 


Notes offered and sold in reliance on Rule 144A shall
be issued initially in the form of one or more permanent Global Notes in
registered form, substantially in the form set forth in Exhibit A hereto
(“Global Notes”), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legends set forth in Exhibits C-1
and C-2.


 


Notes offered and sold to Institutional Accredited
Investors in reliance on Rule 501(a)(1), (2), (3) or (7) under the Securities
Act shall be issued initially in the form of one or more permanent Global Notes
deposited with the Trustee, as custodian for the Depository, duly executed by the
Company and authenticated by the Trustee as hereinafter provided and shall bear
the legends set forth in Exhibits C-1 and C-2.


 


Notes offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
temporary Global Notes (a “Regulation S Temporary Global Note”)
deposited with the Trustee, as custodian for the Depository, and registered in
the name of the Depository or the nominee of the Depository for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed
by the Company and authenticated by the Trustee as hereinafter provided and
shall bear the legends set forth in Exhibits C-1 and C-2.


 


Following the termination of the Restricted Period,
beneficial interests in a Regulation S Temporary Global Note will be exchanged
for beneficial interests in a permanent Global Note ( a “Regulation S
Permanent Global Note”) pursuant to the Applicable Procedures.
Simultaneously with the authentication of a Regulation S Permanent Global Note,
the Trustee will cancel the related Regulation S Temporary Global Note.


 


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


 


29

















 


The aggregate principal amount of any Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depository, as hereinafter provided.


 


The definitive Notes shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Notes may be listed, all as determined by the Officers
executing such Notes, as evidenced by their execution of such Notes.


 


SECTION 2.02. Execution and Authentication;
Aggregate Principal Amount.


 


An Officer (who shall have been duly authorized by all
requisite corporate actions) shall sign the Notes for the Company by manual or
facsimile signature.


 


If an Officer whose signature is on a Note or
Guarantee was an Officer at the time of such execution but no longer holds that
office or position at the time the Trustee authenticates the Note or Guarantee,
the Note or Guarantee shall nevertheless be valid.


 


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


 


The Trustee shall authenticate (i) Initial Notes for
original issue in the aggregate principal amount not to exceed $120,000,000
(ii) Exchange Notes from time to time for issue only pursuant to the applicable
Registration Rights Agreement in exchange for a like principal amount of
Initial Notes or Additional Notes, and (iii) subject to compliance with Section
4.11, one or more series of Additional Notes for original issue after the
Issue Date, in each case upon written orders of the Company in the form of an
Officers’ Certificate, which Officers’ Certificate shall, in the case of any
issuance of Additional Notes, certify that such issuance is in compliance with Section
4.11. In addition, each Officers’ Certificate shall specify the amount of
Initial Notes, Exchange Notes or Additional Notes to be authenticated and the
date on which the Initial Notes, Exchange Notes or Additional Notes are to be
authenticated.


 


All Notes issued under this Indenture shall vote and
consent together on all matters as one class and no series of Notes will have
the right to vote or consent as a separate class on any matter.


 


The Trustee may appoint an authenticating agent (the “Authenticating
Agent”) reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.


 


The Notes shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 in principal amount and any
integral multiple thereof.


 


SECTION 2.03. Registrar and Paying Agent.


 


The Company shall maintain an office or agency which
shall initially be the office of the Trustee in the Borough of Manhattan, The
City of New York, where (a) Notes may be presented or surrendered for
registration of transfer or for exchange (the “Registrar”), and (b)
Notes may be presented or


 


30

















 


surrendered for payment (the “Paying Agent”)
and (c) notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served (provided
that such notice or demand is also given to the Company as provided in Section
11.02). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company, upon prior written notice to the Trustee, may have
one or more co-Registrars and one or more additional Paying Agents reasonably
acceptable to the Trustee. The term “Paying Agent” includes any additional
Paying Agent. Neither the Company nor any Affiliate of the Company may act as
Paying Agent.


 


The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which agreement shall
incorporate the provisions of the TIA and implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee in
writing, in advance, of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice,
the Trustee shall act as such, as shall be entitled to appropriate compensation
therefore, pursuant to Section 7.07.


 


The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of demands and notices in
connection with the Notes. The Paying Agent or Registrar may resign upon thirty
(30) days’ written notice to the Company.


 


The Company appoints The Depository Trust Company as
Depository.


 


SECTION 2.04. Obligations of Paying Agent.


 


The Company shall require each Paying Agent other than
the Trustee to agree in writing that such Paying Agent shall hold separate and
apart from, and not commingle with any other properties, for the benefit of the
Holders or the Trustee, all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Paying Agent shall promptly notify the Trustee in writing of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it
to the Trustee and to account for any assets distributed. Upon receipt by the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.


 


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 the Holders and shall otherwise comply with TIA Section 312(b). If
the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee before each Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably request of the names and addresses of the
Holders, which list may be conclusively relied upon by the Trustee.


 


SECTION 2.06. Transfer and Exchange of Notes.


 


Subject to the provisions of Sections 2.15 and 2.16,
when Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations of the same series,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested (if its requirements for such


 


31

















 


transaction are met); provided,
however, that the Notes presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing and such other documents as the Registrar or Co-Registrar may
reasonably require. To permit registrations of transfers and exchanges, the
Company shall issue and the Trustee shall authenticate Notes at the Registrar’s
or co-Registrar’s request. No service charge shall be made for any registration
of transfer or exchange, but the Company or the Trustee may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Section
2.10, 3.07, 4.14, 4.15 or 9.05, in which event
the Company shall be responsible for the payment of such taxes).


 


The Registrar or co-Registrar shall not be required to
register the transfer or exchange of any Note (i) during a period beginning at
the opening of business fifteen (15) days before the mailing of a notice of
redemption of Notes and ending at the close of business on the day of such
mailing and (ii) selected for redemption in whole or in part pursuant to Article
Three, except the unredeemed portion of any Note being redeemed in part.


 


Any Holder of a Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through the Depository, in accordance with this
Indenture and the Applicable Procedures.


 


SECTION 2.07. Replacement Notes.


 


If a mutilated Note is surrendered to the Trustee or
if the Holder of a Note claims in writing that the Note has been lost,
destroyed or wrongfully taken, then, in the absence of written notice to the
Company or the Trustee that such Note has been acquired by a protected
purchaser, the Company shall issue and the Trustee shall authenticate a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding if the Trustee’s requirements are met. Except
with respect to mutilated Notes, if required by the Trustee or the Company,
such Holder must provide an affidavit of lost certificate and an indemnity bond
or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Note is replaced. The Company may charge such
Holder for its reasonable out-of-pocket expenses in replacing a Note, including
reasonable fees and expenses of its counsel and of the Trustee and its counsel.
In case any mutilated, lost, destroyed or wrongfully taken Note has become or
is about to become due and payable, the Company in its discretion may pay such
Note instead of issuing a new Note in replacement thereof. Every replacement
Note shall constitute an additional obligation of the Company, entitled to the
benefits of this Indenture, subject to Section 2.08.


 


SECTION 2.08. Outstanding Notes.


 


Notes outstanding at any time are all the Notes that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section 2.08
as not outstanding. Subject to the provisions of Section 2.09, a Note
does not cease to be outstanding because the Company or any of its Affiliates
holds the Note.


 


If a Note is replaced pursuant to Section 2.07
(other than a mutilated Note surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to Section
2.07.


 


32

















 


If on a Redemption Date or the Maturity Date the
Paying Agent holds U.S. Legal Tender or U.S. Government Obligations sufficient
to pay all of the principal and interest due on the Notes payable on that date
and is not prohibited from paying such money to the Holders thereof pursuant to
the terms of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.


 


SECTION 2.09. Treasury Notes; When Notes Are
Disregarded.


 


In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver, consent or
notice, Notes owned by the Company or any of its Affiliates shall be considered
as though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which the Trustee actually knows are so owned shall be
so considered. Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.


 


SECTION 2.10. Temporary Notes.


 


Until definitive Notes are ready for delivery, the
Company may prepare and execute and the Trustee shall authenticate temporary
Notes upon receipt of a written order of the Company in the form of an
Officers’ Certificate. The Officers’ Certificate shall specify the amount of
temporary Notes to be authenticated and the date on which the temporary Notes
are to be authenticated. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers appropriate
for temporary Notes. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Notes in exchange for temporary
Notes. Until so exchanged, the temporary Notes shall be entitled to the same
benefits under this Indenture as definitive Notes.


 


SECTION 2.11. Cancellation.


 


The Company at any time may deliver Notes previously
authenticated hereunder which the Company has acquired in any lawful manner, to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company
may not issue new Notes to replace Notes that it has paid or delivered to the
Trustee for cancellation. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
The Trustee shall dispose of all cancelled Notes in accordance with the
Trustee’s customary procedures.


 


SECTION 2.12. CUSIP Numbers.


 


A “CUSIP” number shall be printed on the Notes, and
the Trustee shall use the CUSIP number in notices of redemption, purchase or
exchange as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Notes and that reliance may be placed only on the other identification numbers
printed on the Notes. The Company shall promptly notify the Trustee of any
change in the CUSIP number.


 


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SECTION 2.13. Deposit of Moneys.


 


Prior to 10:00 a.m. New York City time on each
Interest Payment Date and the Maturity Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to make cash payments, if any, due on
such Interest Payment Date or the Maturity Date, as the case may be.


 


SECTION 2.14. Global Securities.


 


Neither the Trustee nor any Agent shall have any
responsibility for any actions taken or not taken by the Depository.


 


SECTION 2.15. Book-Entry Provisions for Global
Notes.


 


(a)                                  The
Global Notes initially shall (i) be registered in the name of the Depository or
the nominee of the Depository, (ii) be delivered to the Trustee as custodian
for the Depository and (iii) bear legends as set forth in Exhibit C-2. Members
of, or participants in, the Depository (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Note held on their
behalf by the Depository, or the Trustee as its custodian, or under any Global
Note, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.


 


(b)                                 Transfers
or exchanges of the Global Notes shall be limited to transfers or exchanges in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged in accordance with the Applicable Procedures of the Depository and
the provisions of Section 2.16, provided, however,
that prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Temporary Global Note may not be made to a U.S.
Person or for the account or benefit of a U.S. Person (other than the Initial
Purchaser). In addition, Notes in the form of certificated Notes in registered
form in substantially the form set forth in Exhibit A hereto (the “Physical
Notes”) shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Notes if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Notes and a successor Depository is not appointed by the Company within ninety
(90) days of such notice or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depository
to issue Physical Notes; provided that a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Physical Note or transferred to a Person who takes delivery
thereof in the form of a Physical Note prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in
the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.


 


(c)                                  Any
beneficial interest in one of the Global Notes that is transferred to a Person
who takes delivery in the form of an interest in another Global Note shall,
upon transfer, cease to be an interest in such first Global Note and become a
beneficial interest in such other Global Note and, accordingly, shall
thereafter be subject to all transfer restrictions, if any, and other


 


34

















 


procedures applicable to a beneficial interest in such
other Global Notes for as long as it remains such an interest.


 


(d)                                 In
connection with any transfer or exchange of a portion of the beneficial
interest in the Global Note to beneficial owners pursuant to paragraph (b) above,
the Registrar shall (if one or more Physical Notes are to be issued) reflect on
its books and records the date of such transfer or exchange and a decrease in
the principal amount of the Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more Physical Notes of like tenor and aggregate principal amount.


 


(e)                                  In
connection with the transfer or exchange of an entire Global Note to beneficial
owners pursuant to paragraph (b) above, the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Notes, an equal aggregate principal amount of Physical Notes of
authorized denominations.


 


(f)                                    Any
Physical Note constituting a Restricted Security delivered in exchange for an
interest in the Global Note pursuant to paragraph (b) above, except as
otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.16, bear the legend regarding transfer restrictions applicable to the
Physical Notes set forth in Exhibit C-1.


 


(g)                                 The
Holder of a Global Note 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 Notes.


 


SECTION 2.16. Special Transfer Provisions.


 


(a)                                  Transfers
to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:


 


(i)                                     the
Registrar shall register the transfer of any Note constituting a Restricted
Security, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after September 28, 2008 or (y) (1) in the case of a
transfer to an Institutional Accredited Investor which is not a QIB (excluding
Non-U.S. Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto or (2) in the
case of a transfer to a Non-U.S. Person, the proposed transferor has delivered
to the Registrar a certificate substantially in the form of Exhibit E
hereto; and


 


(ii)                                  if
the proposed transferor is an Agent Member holding a beneficial interest in the
Global Note, upon receipt by the Registrar of (x) the certificate, if any,
required by clause (i) above and (y) instructions given in accordance
with the Applicable Procedures and the Registrar’s procedures,


 


whereupon
(1) the Registrar shall reflect on its books and records the date of such
transfer and (if the transfer does not involve a transfer of outstanding
Physical Notes) a decrease in the principal amount of the Global Note in an amount
equal to the principal amount of the beneficial interest in the Global Note to


 


35

















 


be
transferred, and (2) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and principal
amount.


 


(b)                                 Transfers
to QIBs. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):


 


(i)                                     the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that it is purchasing the Note for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144 A, and is aware that the sale
to it is being made in reliance on Rule 144 A and acknowledges that it has
received such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A; and


 


(ii)                                  if
the proposed transferee is an Agent Member, and the Notes to be transferred
consist of Physical Notes which after transfer are to be evidenced by an
interest in the Global Note, upon receipt by the Registrar of instructions
given in accordance with the Applicable Procedures and the Registrar’s
procedures, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Global Note in an amount equal to
the principal amount of the Physical Notes to be transferred, and the Trustee
shall cancel the Physical Notes so transferred.


 


(c)                                  Private
Placement Legend. Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend, the Registrar shall deliver Notes that do
not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the Registrar shall
deliver only Notes that bear the Private Placement Legend unless (i) the
circumstance contemplated by clause (i)(x) of Section 2.16(a)
exists or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.


 


(d)                                 General.
By its acceptance of any Note bearing the Private Placement Legend, each Holder
of such a Note acknowledges the restrictions on transfer of such Note set forth
in this Indenture and in the Private Placement Legend and agrees that it shall
transfer such Note only as provided in this Indenture.


 


36

















 


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 Agent Members or beneficial owners of interest in any Global Note)
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.


 


The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15
or this Section 2.16. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.


 


ARTICLE
THREE


 


REDEMPTION


 


SECTION 3.01. Redemption.


 


The Company may, at its option, redeem the Notes, in
whole or in part, at specified times and under specified conditions, as set
forth in Sections 5(a), 5(b), 5(c) and 5(d) of the Notes. If the Company elects
to redeem Notes pursuant to Section 5 (a), 5(b), 5(c) or 5(d) of the Notes, it
shall, prior to mailing the notice of redemption referred to in Section 3.04
and at least 45 days prior to the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) furnish to the Trustee and Paying Agent
an Officers’ Certificate setting forth the Redemption Date and the principal
amount of the Notes to be redeemed, the Section of the Notes pursuant to which
the redemption shall occur and the Redemption Price. Each Officers’ Certificate
provided for in this Section 3.01 shall be accompanied by an Opinion of
Counsel stating that such redemption complies with the conditions herein and in
the Notes.


 


SECTION 3.02. Mandatory Redemption.


 


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


 


SECTION 3.03. Selection of Notes to Be Redeemed.


 


If fewer than all of the Notes are to be redeemed
pursuant to Section 5(a), 5(b), 5(c) or 5(d) of the Notes, as applicable, the
Trustee shall select the Notes to be redeemed (1) in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed or (2) if such Notes are not then listed on a national
securities exchange, on a pro  rata basis or by such method as the
Trustee may reasonably determine is fair and appropriate; provided that if a partial redemption is
made with the proceeds of an Equity Offering then the selection of Notes or
portions thereof for redemption shall be made by the Trustee only on a pro  rata
basis or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is prohibited. The Trustee shall make the
selection from the Notes outstanding and not previously called for redemption
and shall promptly notify the Company in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof, to be redeemed.


 


Notes of a principal amount in denominations of $1,000
may be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the


 


37

















 


principal amount of Notes that have denominations
larger than $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.


 


SECTION 3.04. Notice of Redemption.


 


At least thirty (30) days but not more than sixty (60)
days before a Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first class mail, postage prepaid, to each Holder whose
Notes are to be redeemed at its registered address, with a copy to the Trustee
and any Paying Agent. At the Company’s written request delivered at least
fifteen days prior to the date such notice is to be given (unless a shorter
period shall be acceptable to the Trustee), the Trustee shall give the notice
of redemption in the Company’s name and at the Company’s expense, provided that the Company provides the
Trustee with all information required for such notice of redemption. Failure to
give Notice of redemption, or any defect therein to any Holder of any Note
selected for redemption shall not impair or affect the validity of the
redemption of any other Note.


 


Each notice of redemption shall identify the Notes to
be redeemed and shall state:


 


(1)                                  the
Redemption Date;


 


(2)                                  the
Redemption Price and the amount of accrued interest, if any, to be paid;


 


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


 


(4)                                  the
CUSIP number;


 


(5)                                  the
subsection of the Notes pursuant to which such redemption is being made;


 


(6)                                  the
place where such Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;


 


(7)                                  that,
unless the Company fails to deposit with the Paying Agent funds in satisfaction
of the applicable Redemption Price plus accrued interest, if any, on Notes
called for redemption ceases to accrue on and after the Redemption Date in
accordance with Section 3.06, and the only remaining right of the
Holders of such Notes is to receive payment of the Redemption Price plus
accrued interest, if any, upon surrender to the Paying Agent of the Notes
redeemed;


 


(8)                                  if
any Note is being redeemed in part, the portion of the principal amount of such
Note, to be redeemed and that, after the Redemption Date, and upon surrender of
such Note, a new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof shall be issued; and


 


(9)                                  if
fewer than all the Notes are to be redeemed, the identification of the
particular Notes (or portion thereof) to be redeemed, as well as the aggregate
principal amount of Notes to be redeemed and the aggregate principal amount of
Notes to be outstanding after such partial redemption.


 


If any of the Notes to be redeemed is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to redemption.


 


38

















 


SECTION 3.05. Effect of Notice of Redemption.


 


Once notice of redemption is mailed in accordance with
Section 3.04, Notes or portions thereof called for redemption shall
become irrevocably due and payable on the Redemption Date and at the Redemption
Price plus accrued interest, if any, thereon. Upon surrender to the Trustee or
Paying Agent, such Notes or portions thereof called for redemption shall be
paid at the Redemption Price plus accrued interest, if any, thereon, to the
Redemption Date, but installments of interest thereon, if any, the maturity of
which is on or prior to the Redemption Date, shall be payable to Holders of
record at the close of business on the relevant Record Dates referred to in the
Notes.


 


SECTION 3.06. Deposit of Redemption Price.


 


Not later than 10:00 a.m. local time in the place of
payment on the Redemption Date, the Company shall deposit with the Paying Agent
U.S. Legal Tender sufficient to pay the Redemption Price plus accrued interest,
if any, of all Notes or portions thereof to be redeemed on that date.


 


The Paying Agent shall promptly return to the Company
any U.S. Legal Tender so deposited which is not required for that purpose,
except with respect to monies owed as obligations to the Trustee pursuant to Article
Seven.


 


If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such Redemption Price plus
accrued interest, if any, interest on the Notes to be redeemed shall cease to
accrue on and after the applicable Redemption Date, whether or not such Notes
are presented for payment.


 


SECTION 3.07. Notes Redeemed in Part.


 


Upon surrender of a Note that is to be redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder
at the expense of the Company a new Note or Notes equal in principal amount to
the unredeemed portion of the Note surrendered.


 


ARTICLE
FOUR


 


COVENANTS


 


SECTION 4.01. Payment of Notes.


 


The Company shall pay or cause to be paid the
principal of, or premium, if any, or interest, if any, on the Notes on the
dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of, or premium, if any, or interest, if any, on the
Notes shall be considered paid on the date it is due if the Trustee or Paying
Agent (other than the Company or an Affiliate of the Company) holds at 10:00
a.m. (New York time) on that date U.S. Legal Tender designated for and
sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture. The Company
shall pay interest on overdue principal at 1% per annum in excess of the rate
per annum set forth in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.


 


Notwithstanding anything to the contrary contained in
this Indenture, the Company may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States
from principal or interest payments hereunder.


 


39

















 


SECTION 4.02. Maintenance of Office or Agency.


 


The Company shall maintain the office or agency
required under Section 2.03. The Company shall give prior written notice
to the Trustee and the Holders of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.


 


SECTION 4.03. Corporate Existence.


 


Except as otherwise permitted by Article Four, Five
or Ten, the Company shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
corporate existence and the limited liability company, partnership or corporate
existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of the Company and each such Restricted
Subsidiary and the material rights (charter and statutory) and franchises of
the Company and each such Restricted Subsidiary; provided, however, that the Company shall not be required to
preserve, with respect to itself, any material right or franchise and, with
respect to any of its Restricted Subsidiaries, any such existence, material
right or franchise, if the Board of Directors of the Company, shall determine
in good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken
as a whole.


 


SECTION 4.04. Payment of Taxes and Other Claims.


 


The Company shall pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes but not including regulatory charges
or levies such as federal or state universal service contributions) levied or
imposed upon it or any of its Restricted Subsidiaries or its properties or any
of its Restricted Subsidiaries’ properties and (ii) all material lawful claims
for labor, materials and supplies that, if unpaid, might by law become a Lien
upon its properties or any of its Restricted Subsidiaries’ properties; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being or shall be contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken or where the failure to effect such
payment or discharge could not reasonably be expected to have a Material
Adverse Effect.


 


SECTION 4.05. Maintenance of Properties and
Insurance.


 


(a)                                  The
Company shall, and shall cause each of its Restricted Subsidiaries to, maintain
its properties in good working order and condition in all material respects
(subject to ordinary wear and tear) and make all necessary repairs, renewals,
replacements, betterments and improvements thereto; provided,
however, that nothing in this Section 4.05 shall prevent the
Company or any of its Restricted Subsidiaries from discontinuing the operation
and maintenance of any of its properties if such discontinuance is, in the good
faith judgment of the Board of Directors or other governing body of the Company
or the Subsidiary concerned, as the case may be, desirable in the conduct of
its businesses and could not reasonably be expected to have a Material Adverse
Effect.


 


(b)                                 The
Company shall, and shall cause each of its Restricted Subsidiaries to,
maintain, with financially sound and reputable insurance companies, insurance
(including


 


40

















 


appropriate self-insurance) against loss or damage of
the kinds that, in the good faith judgment of the Company, are adequate and
appropriate for the conduct of the business of the Company and its Restricted
Subsidiaries.


 


SECTION 4.06. Compliance Certificate; Notice of
Default.


 


(a)                                  The
Company and each Guarantor shall deliver to the Trustee, within ninety (90)
days after the end of the Company’s fiscal year, an Officers’ Certificate
stating that a review of the activities of the Company and its Restricted
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers (one of whom is the principal executive
officer, principal financial officer or principal accounting officer) with a
view to determining whether they have kept, observed, performed and fulfilled
their obligations under this Indenture and further stating, as to each such
Officer signing such certificate, that to the best of such Officer’s actual
knowledge no Default or Event of Default occurred during such preceding fiscal
year and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the Default or
Event of Default and its status with particularity. The Officers’ Certificate
shall also notify the Trustee should the Company elect to change the manner in
which it fixes its fiscal year end.


 


(b)                                 (i)
If any Default or Event of Default has occurred and is continuing or (ii) if
any Holder seeks to exercise any remedy hereunder with respect to a claimed
Default under this Indenture or the Notes, the Company shall deliver to the
Trustee, at its address set forth in Section 11.02, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail an Officers’ Certificate specifying such
event, notice or other action within five (5) Business Days of its becoming
aware of such occurrence.


 


SECTION 4.07. Reports to Holders.


 


Whether or not required by the rules and regulations
of the SEC, so long as any Notes are outstanding, the Company will furnish to
the Trustee and, upon request, to the Holders:


 


(1)                                  all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10 Q and 10 K if the Company were
required to file such Forms, including a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management’s Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company, if any) and, with respect to the
annual information only, a report thereon by the Company’s certified
independent accountants; and


 


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


 


in
each case, within the time periods required for filing such forms and reports
as specified in the SEC’s rules and regulations for non-accelerated filers
unless the Company is otherwise an accelerated filer under the rules or
regulations promulgated by the SEC.


 


41

















 


Notwithstanding the foregoing, the Company may satisfy
such requirements prior to the effectiveness of the registration statement
contemplated by the Registration Rights Agreement by filing with the SEC such
registration statement within the time period required for such filing as
specified in the Registration Rights Agreement, to the extent that any such
registration statement contains substantially the same information as would be
required to be filed by the Company if it were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, and by providing the
Trustee and Holders with such registration statement (and any amendments
thereto) promptly following the filing thereof.


 


In addition, following the consummation of the
Exchange Offer, whether or not required by the rules and regulations of the
SEC, the Company will file a copy of all such information and reports with the
SEC for public availability within the time periods specified in the SEC’s
rules and regulations (unless the SEC will not accept such a filing). Prior to
the consummation of the Exchange Offer, for so long as any Notes remain
outstanding, it will furnish to the Holders and prospective purchasers of Notes
upon their request, the information required to be delivered pursuant to Rule
144(A)(d)(4) under the Securities Act.


 


The receipt by the Trustee of any such reports and
documents pursuant to this Section 4.07 shall not constitute notice or
constructive notice of any information contained in such documents or
determinable from information contained in such documents, including the
Company’s compliance with any covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers’ Certificate).


 


SECTION 4.08. Waiver of Stay, Extension or Usury
Laws.


 


Each of the Company and the Guarantors covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law that would prohibit
or forgive the Company and each of the Guarantors from paying all or any
portion of the principal of, premium, if any, or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and (to
the extent that it may lawfully do so) each of the Company and the Guarantors
hereby expressly waives all benefit or advantage of any such law, and covenants
that it 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.


 


SECTION 4.09. Limitation on Restricted Payments.


 


The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly:


 


(1)                                  declare
or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Company and dividends
and distributions payable to the Company or another Restricted Subsidiary of
the Company) on or in respect of shares of Capital Stock of the Company or its
Restricted Subsidiaries to holders of such Capital Stock;


 


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


 


42

















 


(3)                                  make
any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness of the
Company or any Guarantor that is subordinate or junior in right of payment to
the Notes or a Guarantee; or


 


(4)                                  make
any Investment (other than Permitted Investments);


 


(each
of the foregoing actions set forth in clauses (1), (2), (3)
and (4) being referred to as a “Restricted Payment”), if at the time of
such Restricted Payment or immediately after giving effect thereto:


 


(i)                                     a
Default or an Event of Default shall have occurred and be continuing;


 


(ii)                                  the
Company is not able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.11 or


 


(iii)                               the
aggregate amount of Restricted Payments (including such proposed Restricted
Payment) made subsequent to the Issue Date (the amount expended for such
purposes, if other than in cash, being the Fair Market Value of such property
at the time of the making thereof) shall exceed the sum of:


 


(A)                              50%
of the aggregate amount of the Consolidated Adjusted Cash Flow of the Company
accrued on a cumulative basis during the period (taken as one accounting
period) beginning on the first day of the Company’s fiscal quarter during which
the Issue Date occurs and ending on the last day of the last full fiscal
quarter preceding the Transaction Date; plus


 


(B)                                100%
of the aggregate net cash proceeds received by the Company from any Person
(other than a Subsidiary of the Company) from the issuance and sale subsequent
to the Issue Date of Qualified Capital Stock of the Company (excluding any net
proceeds from an Equity Offering to the extent used to redeem Notes pursuant to
the provisions described in Section 5(b) of the Notes); plus


 


(C)                                without
duplication of any amounts included in clause (iii)(B) above, 100% of
the aggregate net cash proceeds of any equity contribution received by the
Company from a holder of the Company’s Capital Stock subsequent to the Issue
Date (excluding any net proceeds from an Equity Offering to the extent used to
redeem Notes pursuant to the provisions described in Section 5(b) of the
Notes); plus


 


(D)                               100%
of the aggregate net cash proceeds received from the issuance of Indebtedness
or shares of Disqualified Capital Stock of the Company that have been converted
into or exchanged for Qualified Capital Stock of the Company subsequent to the
Issue Date; plus


 


(E)                                 an
amount equal to the sum of (i) the net reduction in the Investments (other than
Permitted Investments) made by the Company or any Restricted Subsidiary in any
Person resulting from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of such Investment
and proceeds representing the return of capital (excluding dividends and
distributions), in each case received by the Company or any Restricted
Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary, the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Unrestricted


 


43

















 


Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however,
that the foregoing sum shall not exceed, in the case of any such Person or
Unrestricted Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.


 


In the
case of clauses (iii)(B) and (C) above, any net cash proceeds
from issuances and sales of Qualified Capital Stock of the Company financed
directly or indirectly using funds borrowed from the Company or any Subsidiary
of the Company, shall be excluded until and to the extent such borrowing is
repaid.


 


Notwithstanding the foregoing, the provisions set
forth in the immediately preceding paragraph do not prohibit:


 


(1)                                  the
payment of any dividend or other distribution or redemption within 60 days
after the date of declaration of such dividend or call for redemption if such
payment would have been permitted on the date of declaration or call for
redemption;


 


(2)                                  the
acquisition of any shares of Qualified Capital Stock of the Company, either (i)
solely in exchange for other shares of Qualified Capital Stock of the Company
or (ii) through the application of net proceeds of a sale for cash (other than
to a Subsidiary of the Company) of shares of Qualified Capital Stock of the
Company within 60 days after such sale;


 


(3)                                  the
acquisition of any Indebtedness of the Company or the Guarantors that is
subordinate or junior in right of payment to the Notes and Guarantees either
(i) solely in exchange for shares of Qualified Capital Stock of the Company, or
(ii) through the application of net proceeds of (a) a sale for cash (other than
to a Subsidiary of the Company) within 60 days after such sale of shares of
Qualified Capital Stock of the Company or (b) if no Default or Event of Default
would exist after giving effect thereto, Refinancing Indebtedness;


 


(4)                                  an
Investment either (i) solely in exchange for shares of Qualified Capital Stock
of the Company or (ii) through the application of the net proceeds of a sale
for cash (other than to a Subsidiary of the Company) of shares of Qualified
Capital Stock of the Company within 60 days after such sale;


 


(5)                                  if
no Default or Event of Default has occurred and is continuing or would exist
after giving effect thereto, the repurchase or other acquisition of shares of
Capital Stock of the Company from employees, former employees, directors or
former directors of the Company (or permitted transferees of such employees,
former employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors of the Company under which such shares were
granted, issued or sold; provided, however,
that the aggregate amount of such repurchases and other acquisitions in any
calendar year shall not exceed $250,000 plus any such amounts not used in prior
fiscal years;


 


(6)                                  in
the event of a Change of Control, and if no Default shall have occurred and be
continuing or would exist after giving effect, the payment, purchase,
redemption, defeasance or other acquisition or retirement of Indebtedness that
is subordinated to the Notes or the Guarantees, in each case, at a purchase
price not greater than 101% of the principal amount of such Indebtedness (or,
if such Indebtedness was issued with original issue discount, 101% of the
accreted value), plus any accrued and unpaid interest thereon; provided, however, that prior to or substantially
concurrently with such payment, purchase, redemption, defeasance or other


 


44

















 


acquisition or retirement, the Company has made a
Change of Control Offer with respect to the Notes as a result of such Change of
Control and has repurchased all Notes validly tendered and not withdrawn in
connection with such Change of Control Offer;


 


(7)                                  repurchases
of Capital Stock deemed to occur upon exercise of stock options, warrants or
other similar rights if such Capital Stock represents a portion of the exercise
price of such options, warrants or other similar rights;


 


(8)                                  payments
or distributions to dissenting stockholders of Capital Stock of the Company
pursuant to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of the Company or any of its
Restricted Subsidiaries; and


 


(9)                                  if
no Default shall have occurred and be continuing or would exist after giving
effect thereto, other Restricted Payments not to exceed $10,000,000 in the
aggregate after the Issue Date.


 


In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii)
of the first paragraph of this Section 4.09, amounts expended pursuant
to clauses (1), (2)(ii), (3)(ii)(a) and (4)(ii) of
the immediately preceding paragraph shall be included in such calculation and
amounts expended pursuant to any other clause of the immediately preceding
paragraph shall be excluded therefrom.


 


Promptly following the end of each fiscal quarter
during which any Restricted Payment was made, the Company shall deliver to the
Trustee an Officers’ Certificate stating that each such Restricted Payment
complies with this Indenture and setting forth in reasonable detail the basis
upon which the required calculations were computed, which calculations may be
based upon the Company’s latest available internal quarterly financial
statements.


 


SECTION 4.10. Limitations on Transactions with
Affiliates.


 


(a)                                  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an “Affiliate Transaction”), other than:


 


(x)                                   Affiliate
Transactions permitted under paragraph (b) below, and


 


(y)                                 Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction at such time on an
arm’s-length basis from a Person that is not an Affiliate of the Company or
such Restricted Subsidiary.


 


With
respect to all Affiliate Transactions involving consideration to either party
reasonably expected to be in excess of $1,000,000 (other than those set forth
in paragraph (b) below), the Company shall deliver an Officers’
Certificate to the Trustee certifying that such transactions are in compliance
with clause (y) above. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a Fair Market Value in
excess of $5,000,000 shall be approved by a majority of the members of the
Board of Directors of the Company (including a majority of the disinterested
members thereof), as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such


 


45

















 


transaction
complies with the foregoing provisions. If the Company or any Restricted Subsidiary
of the Company enters into an Affiliate Transaction (or a series of related
Affiliate Transactions related to a common plan) that involves an aggregate
Fair Market Value of more than $10,000,000, the Company shall, prior to the
consummation thereof, obtain a favorable opinion as to the fairness of the
financial terms of such transaction or series of related transactions to the
Company or the relevant Restricted Subsidiary, as the case may be, from an
Independent Financial Advisor and file the same with the Trustee.


 


(b)                                 The
restrictions set forth in paragraph (a) above shall not apply to:


 


(1)                                  customary
fees and compensation including bonuses and other benefits paid to and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any Restricted Subsidiary of the Company as determined in
good faith by the Board of Directors of the Company or senior management and
consistent with prior practices;


 


(2)                                  transactions
exclusively between or among the Company and any of its Restricted Subsidiaries
or exclusively between or among such Restricted Subsidiaries; provided that such transactions are not otherwise prohibited
by this Indenture;


 


(3)                                  any
agreement as in effect as of the Issue Date or any transaction contemplated thereby
and any amendment thereto or any replacement agreement thereto so long as any
such amendment or replacement agreement is not more disadvantageous to the
Holders in any material respect than the original agreement as in effect on the
Issue Date;


 


(4)                                  Restricted
Payments permitted by this Indenture; and


 


(5)                                  any
employment, stock option, stock repurchase, employee benefit compensation,
business expense reimbursement, severance, termination or other
employment-related agreements, arrangements or plans entered into by the
Company or any of its Restricted Subsidiaries for the benefit of its employees
in the ordinary course of business.


 


SECTION 4.11. Limitation on Incurrence of
Additional Indebtedness.


 


(a)                                  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, “incur”) any Indebtedness
(other than Permitted Indebtedness); provided, however,
that if no Default or Event of Default shall have occurred and be continuing at
the time of or as a consequence of the incurrence of any such Indebtedness, the
Company or any of its Restricted Subsidiaries that is or, upon such incurrence,
becomes a Guarantor may incur Indebtedness (including Acquired Indebtedness) if
on the date of the incurrence of such Indebtedness the ratio of:


 


(1)                                  the
aggregate principal amount (or accreted value, as the case may be) of Indebtedness
of the Company and its Restricted Subsidiaries on a consolidated basis
outstanding as of the Transaction Date (it being understood and agreed that any
Indebtedness in respect of any unused revolving commitment (including any
unused revolving commitment under the Credit Agreement) shall be deemed to be
fully drawn and outstanding on the Transaction Date)


 


to


 


(2)                                  the
Pro Forma Consolidated Cash Flow of the Company for the four full consecutive
fiscal quarters ended immediately preceding the Transaction Date, in each case,


 


46

















 


determined on a pro forma basis as if any such
Indebtedness had been incurred and the proceeds thereof had been applied at the
beginning of such four consecutive fiscal quarters, would be greater than zero
and less than 4.00 to 1.00.


 


(b)                                 The
Company will not, and will not permit any of its Domestic Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness which by its
terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of the Company or such Domestic
Restricted Subsidiary unless such Indebtedness is also by its terms (or by the
terms of any agreement governing such Indebtedness) made expressly subordinate to
the Obligations of the Company or such Domestic Restricted Subsidiary under (i)
in the case of the Company, the Notes and this Indenture or (ii) in the case of
such Domestic Restricted Subsidiary, its Guarantee and this Indenture, in each
case, to the same extent that such Indebtedness to be incurred is subordinated
to such other Indebtedness; provided, however,
for the avoidance of doubt, that no Indebtedness will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being unsecured or by virtue of being secured on a
junior Lien basis.


 


SECTION 4.12. Limitation on Dividend and Other
Payment Restrictions Affecting Restricted Subsidiaries.


 


The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any contractual encumbrance or
restriction on the ability of any Restricted Subsidiary of the Company to:


 


(1)                                  pay
dividends or make any other distributions on or in respect of its Capital
Stock;


 


(2)                                  make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or


 


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


 


except
for such encumbrances or restrictions existing under or by reason of:


 


(a)                                  applicable
law, rule or regulation;


 


(b)                                 this
Indenture, the Intercreditor Agreement and the Collateral Agreements;


 


(c)                                  customary
non-assignment provisions of any lease or license of the Company or any
Restricted Subsidiary of the Company to the extent such provisions restrict the
transfer, assignment, subletting or sublicensing of the lease or license of the
property leased or licensed thereunder;


 


(d)                                 any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person or the properties or assets of the Person so acquired;


 


(e)                                  the
Credit Agreement (and all replacements or substitutions thereof on terms no
more adverse to the Holders);


 


(f)                                    agreements
existing on the Issue Date to the extent and in the manner such agreements
exist on the Issue Date;


 


47

















 


(g)                                 restrictions
on the transfer of assets subject to any Lien permitted under this Indenture;


 


(h)                                 restrictions
imposed by any agreement to sell assets or Capital Stock permitted under this
Indenture to any Person pending the closing of such sale;


 


(i)                                     provisions
in joint venture agreements and other similar agreements (in each case relating
solely to the respective joint venture or similar entity or the equity
interests therein) entered into in the ordinary course of business;


 


(j)                                     restrictions
contained in the terms of Purchase Money Indebtedness or Capitalized Lease
Obligations not incurred in violation of this Indenture; provided
that such restrictions relate only to the assets financed with such
Indebtedness;


 


(k)                                  restrictions
in other Indebtedness incurred in compliance with Section 4.11
(including Permitted Indebtedness); provided that
such restrictions, taken as a whole, are, in the good faith judgment of the
Board of Directors of the Company, no more materially restrictive taken as a
whole with respect to such encumbrances and restrictions than those contained
in the existing agreements referenced in clauses (b), (e) and (f)
above or otherwise determined by the Board of Directors of the Company to be
customary in comparable financings and that the Board of Directors determines
will not have a material and adverse effect on the Company’s ability to make
principal or interest payments on the Notes;


 


(l)                                     restrictions
on cash or other deposits imposed by customers under contracts or other
arrangements entered into or agreed to in the ordinary course of business; or


 


(m)                               an
agreement governing Indebtedness incurred to Refinance the Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in clause (b), (d),
or (k) above; provided, however,
that the provisions relating to such encumbrance or restriction contained in
any such Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(b), (d), or (k).


 


SECTION 4.13. Additional Guarantees.


 


If the Company or any of its Restricted Subsidiaries
shall organize, acquire or otherwise invest in another Person that is or
becomes a Domestic Restricted Subsidiary that is not a Guarantor, then the
Company shall cause such Domestic Restricted Subsidiary that is not a Guarantor
to:


 


(1)                                  execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Domestic Restricted
Subsidiary shall unconditionally guarantee on a senior secured basis all of the
Company’s obligations under the Notes and this Indenture on the terms set forth
in this Indenture;


 


(2)                                  execute
and deliver to the Collateral Agent amendments to the Intercreditor Agreement
and the Collateral Agreements and take such other actions necessary or as the
Collateral Agent deems advisable in order to grant to the Collateral Agent, for
the benefit of the Holders, a perfected Lien in the assets other than Excluded
Collateral of such Domestic Restricted Subsidiary, including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Collateral Agreements, by law or as may be reasonably be
requested by the Collateral Agent;


 


48

















 


(3)                                  take
such further action and execute and deliver such other documents specified in
this Indenture or otherwise reasonably requested by the Trustee to effectuate
the foregoing; and


 


(4)                                  deliver
to the Trustee an Opinion of Counsel that such supplemental indenture and any
other documents required to be delivered have been duly authorized, executed
and delivered by such Domestic Restricted Subsidiary and constitute legal,
valid, binding and enforceable obligations of such Domestic Restricted
Subsidiary and such other opinions regarding the perfection of such Liens in
the assets of such Domestic Restricted Subsidiary.


 


Thereafter,
such Domestic Restricted Subsidiary shall be a Guarantor for all purposes of
this Indenture.


 


Notwithstanding anything to the contrary in the
immediately preceding paragraph, any Domestic Restricted Subsidiary that is a
Regulated Subsidiary shall not be required to take the actions required by this
Section 4.13 until such time as it ceases to be a Regulated Subsidiary.


 


SECTION 4.14. Limitation on Change of Control.


 


(a)                                  Upon
the occurrence of a Change of Control, each Holder will have the right to
require the Company to purchase all or a portion (in integral multiples of
$1,000) of such Holder’s Notes that are outstanding on the date of purchase
using immediately available funds pursuant to the offer described below (the “Change
of Control Offer”), at a purchase price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest to such date of
purchase.


 


(b)                                 Within
30 days following the date upon which the Change of Control occurred, the
Company shall send, by registered first-class mail, postage prepaid, a notice
to each record Holder as shown on the register of Holders, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer. The
notice to the Holders shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Change of Control Offer. Such
notice shall state:


 


(1)                                  that
the Change of Control Offer is being made pursuant to this Section 4.14
and that all Notes tendered and not withdrawn shall be accepted for payment;


 


(2)                                  the
purchase price (including the amount of accrued interest, if any) and the
purchase date (which shall be no earlier than thirty (30) days nor later than
sixty (60) days from the date such notice is mailed, other than as may be
required by law) (the “Change of Control Payment Date”);


 


(3)                                  that
any Note not tendered shall continue to accrue interest;


 


(4)                                  that,
unless the Company defaults in making payment therefor, any Note accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;


 


(5)                                  that
Holders electing to have a Note purchased pursuant to a Change of Control Offer
shall be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control Payment Date;


 


(6)                                  that
Holders shall be entitled to withdraw their election if the Paying Agent
receives, not later than three (3) Business Days prior to the Change of Control
Payment Date, a


 


49

















 


telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is withdrawing
its election to have such Notes purchased;


 


(7)                                  that
Holders whose Notes are purchased only in part shall be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued
shall be in an original principal amount of $1,000 or integral multiples
thereof; and


 


(8)                                  the
circumstances and relevant facts regarding such Change of Control.


 


If any of the Notes subject to the Change of Control
Offer is in the form of a Global Note, then the Company shall modify such
notice to the extent necessary to comply with the procedures of the Depository
applicable to repurchases.


 


On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the purchase price of, plus accrued
interest on, if any, of all Notes or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Notes so accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes
or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so tendered the purchase price for such
Notes and the Company shall promptly issue and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes surrendered;
provided that each such new Note
shall be in a principal amount of $1,000 or an integral multiple thereof. Any
Notes not so accepted shall be promptly mailed by the Company to the Holders
thereof. For purposes of this Section 4.14, the Trustee shall act as the
Paying Agent.


 


Any amounts remaining after the purchase of Notes
pursuant to a Change of Control Offer shall be returned by the Paying Agent to
the Company.


 


Neither the Board of Directors of the Company nor the
Trustee may waive the Company’s obligation to offer to purchase the Notes
pursuant to this Section 4.14.


 


Notes (or portions thereof) purchased pursuant to a
Change of Control offer will be cancelled and may not be reissued.


 


The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.14, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.14 by virtue thereof.


 


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 of this Section 4.14 and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.


 


50

















 


SECTION 4.15. Limitation on Asset Sales.


 


The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:


 


(1)                                  the
Company or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed;


 


(2)                                  at
least 75% of the consideration received by the Company or the Restricted
Subsidiary, as the case may be, from such Asset Sale is in the form of cash or
Cash Equivalents and is received at the time of such disposition; provided that the amount of any liabilities (as shown on the
most recent applicable balance sheet) of the Company or such Restricted
Subsidiary (other than liabilities of the Company or such Restricted Subsidiary
that are by their terms subordinated to the Notes or, if applicable, the Guarantees)
that are assumed by the transferee of any such assets shall be deemed to be
cash for purposes of this provision so long as the documents governing such
liabilities provide that there is no further recourse to the Company or any of
its Subsidiaries with respect to such liabilities; and


 


(3)                                  the
Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash
Proceeds relating to such Asset Sale within 360 days of receipt thereof to
make:


 


(a)                                  an
investment in properties, plant, equipment or other non-current assets that
replace the properties and assets that were the subject of such Asset Sale or
in other properties, plant, equipment or other non-current assets that will be
used or useful in a Permitted Business (including expenditures for maintenance,
repair or improvement of existing properties, plant, equipment or other
non-current assets) of the Company and its Restricted Subsidiaries;


 


(b)                                 a
repayment of First Priority Claims and, if such Indebtedness is pursuant to a
revolving commitment under the Credit Agreement, a permanent reduction in such
commitment thereunder;


 


(c)                                  an
acquisition of a majority of the Capital Stock of a Person engaged in a
Permitted Business that becomes a Restricted Subsidiary; or


 


(d)                                 in
the case of Net Cash Proceeds relating to the ATS Sale, an optional redemption
of all or a portion of the Notes in accordance with the provisions described in
Section 5(d) of the Notes.


 


Pending the final application of Net Cash Proceeds,
the Company may temporarily reduce revolving credit borrowings or invest such
Net Cash Proceeds in Cash Equivalents. On the 361st day after an Asset Sale or
such earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clause (3) of the preceding paragraph
(each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of
Net Cash Proceeds which have not been applied on or before such Net Proceeds
Offer Trigger Date as permitted in clause (3) of the preceding paragraph
(each a “Net Proceeds Offer Amount”) shall be applied by the Company or
such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds
Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less
than 30 nor more than 60 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders and all holders of such other Applicable
Indebtedness containing provisions similar to those set forth in this Section
4.15 on a pro  rata


 


51














 


basis, the maximum principal amount of Notes and such
other Applicable Indebtedness that may be purchased with the Net Proceeds Offer
Amount at a price equal to 100% of the principal amount thereof (or if such
Applicable Indebtedness was issued with original issue discount, 100% of the
accreted value), plus accrued and unpaid interest thereon to the date of
purchase; provided, however, that
if at any time any non-cash consideration received by the Company or any
Restricted Subsidiary of the Company, as the case may be, in connection with
any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder on the date of such conversion or disposition, as the case may be,
and the Net Cash Proceeds thereof shall be applied in accordance with this Section
4.15.


 


The Company may defer any Net Proceeds Offer until
there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $5,000,000 resulting from one or more Asset Sales in which case the
accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date
(at which time, the entire unutilized Net Proceeds Offer Amount, and not just
the amount in excess of $5,000,000, shall be applied as required pursuant to
the immediately preceding paragraph). Upon the completion of the Net Proceeds
Offer, such Net Proceeds Offer Amount will be reset at zero.


 


In the event of the transfer of substantially all (but
not all) of the property and assets of the Company and its Restricted
Subsidiaries as an entirety to a Person in a transaction permitted in Section
5.01, which transaction does not constitute a Change of Control, the
successor entity shall be deemed to have sold the properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
Section 4.15, and shall comply with the provisions of this Section
4.15 (other than clause (2) of the first paragraph of this Section
4.15) with respect to such deemed sale as if it constituted an Asset Sale. In
addition, the Fair Market Value of such properties and assets of the Company or
its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this Section 4.15; provided that the amount of such deemed Net Cash Proceeds
shall be reduced by the amount of any liabilities (as shown on the most recent
applicable balance sheet) of the Company or the applicable Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Notes) that are retained along with such properties and assets not so
transferred so long as the documents governing such liabilities provide that
there is no further recourse to such successor entity or any of its
Subsidiaries with respect to such liabilities.


 


To the extent that the aggregate principal amount of
Notes tendered pursuant to such Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company and its Restricted Subsidiaries may use such
deficiency for any purposes not prohibited by this Indenture (including
repayment of Indebtedness). Upon completion of such Net Proceeds Offer, the
amount of Net Proceeds Offer Amount will be reset to zero.


 


Each notice of a Net Proceeds Offer shall be mailed
first class, postage prepaid, to the record Holders as shown on the register of
Holders within 20 days following the Net Proceeds Offer Trigger Date, with a
copy to the Trustee, and shall comply with the procedures set forth in this
Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect
to tender their Notes in whole or in part in integral multiples of $1,000 in
exchange for cash. Holders may elect to tender their Notes in whole or in part
in integral multiples of $1,000 in exchange for cash. To the extent Holders
properly tender Notes in an amount exceeding the Net Proceeds Offer Amount,
Notes of tendering Holders will be purchased on a pro rata basis (based on
amounts tendered). A Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law.


 


52

















 


If any of the Notes subject to a Net Proceeds Offer is
in the form of a Global Note, then the Company shall modify such notice to the
extent necessary to comply with the procedures of the Depository applicable to
repurchases.


 


The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent
that the provisions of any securities laws or regulations conflict with Section
4.15 or Section 5.01, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under Section 4.15 or Section 5.01 by virtue of such
compliance.


 


SECTION 4.16. Limitation on Liens.


 


The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens (other than Permitted Liens) of
any kind against or upon any property or assets of the Company or any of its
Restricted Subsidiaries whether owned on the Issue Date or acquired after the
Issue Date, or any proceeds therefrom, or assign or otherwise convey any right
to receive income or profits therefrom.


 


Notwithstanding anything to the contrary in the
immediately preceding paragraph, the Company will not, and will not cause or
permit any of its Domestic Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or permit or suffer to exist any Liens of any kind against
or upon any (i) real property leasehold interest or (ii) Capital Stock issued
by a Subsidiary of the Company that is held by the Company or any of its
Domestic Restricted Subsidiaries whether on or after the Issue Date or any
right related thereto (other than (A) with respect to any such real property
leasehold interests, Permitted Liens described in clauses (1), (2),
(4) (provided that neither
the Company or any Restricted Subsidiary shall voluntarily take, or consent to
the taking of, any action to perfect any such Permitted Lien described in such clause (4)),
(5), (12), (14), (15) (provided that an additional limitation to the limitations
set forth in such clause (15) shall be that the Indebtedness that was
being Refinanced was only secured by a Permitted Lien described in clause
(12) of the definition thereof), (16) and (17) of the
definition thereof and (B) with respect to any such Capital Stock, Permitted
Liens described in clauses (1), (12), (14), (15) (provided that an additional limitation to
the limitations set forth in such clause (15) shall be that the
Indebtedness that was being Refinanced was only secured by a Permitted Lien
described in clause (12) of the definition thereof), (16) and (17)
of the definition thereof).


 


SECTION 4.17. Conduct of Business.


 


The Company will not, and will not permit any of its
Restricted Subsidiaries to engage in any business other than a Permitted
Business.


 


SECTION 4.18. Limitation on Issuances and Sales of
Capital Stock of Subsidiaries.


 


The Company will not permit or cause any of its
Restricted Subsidiaries to issue, sell, lease, transfer or otherwise dispose of
any Capital Stock (other than to the Company or to a Wholly-Owned Subsidiary of
the Company), except as required by applicable law; provided, however, that this provision shall not prohibit
(1) any issuance or sale if, immediately after giving effect thereto, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
any Investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 4.09 if made on
the date of such issuance or sale or (2) the sale of all of the Capital Stock
of a Restricted Subsidiary in compliance with Section 4.15.


 


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SECTION 4.19. Payments for Consent.


 


The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this
Indenture, the Intercreditor Agreement, any Collateral Agreement, the
Registration Rights Agreement or the Notes, unless such consideration is
offered to be paid or is paid to all Holders that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.


 


SECTION 4.20. Further Assurances Relating to the
Collateral.


 


The Company shall, and shall cause each Guarantor to,
at their sole cost and expense, execute and deliver all such agreements and
instruments as the Collateral Agent or the Trustee shall reasonably request to
more fully or accurately describe the property included as Collateral. The Company
shall, and shall cause each Guarantor to, at their sole cost and expense, file
any such notice filings or other agreements or instruments as may be reasonably
necessary or desirable under applicable law to perfect and continue the
perfection of the Liens created by the Collateral Agreements at such times and
at such places as the Collateral Agent or the Trustee may reasonably request.


 


SECTION 4.21. Real Estate Mortgages and Filings.


 


With respect to any fee interest in any land and the
related improvements (including fixtures) thereon (individually and
collectively, the “Premises”) (i) owned by the Company or a Guarantor on
the Issue Date and that has a Fair Market Value on the Issue Date of greater
than $1,000,000 or (ii) acquired by the Company or a Guarantor after the Issue
Date for a purchase price of greater than $1,000,000, within 90 days of the
Issue Date in the case of clause (i) above and within 90 days of the
acquisition thereof in the case of clause (ii) above:


 


(1)                                  the
Company shall deliver to the Collateral Agent, as mortgagee, fully-executed
counterparts of Mortgages, each dated as of the Issue Date or the date of
acquisition of such property, as the case may be, duly executed by the Company
or the applicable Guarantor, together with evidence of the completion (or
satisfactory arrangements for the completion), of all recordings and filings of
such Mortgage as may be necessary to create a valid, perfected Lien, subject to
Permitted Liens, against the properties purported to be covered thereby;


 


(2)                                  the
Company shall deliver to the Collateral Agent mortgagee’s title insurance
policies in favor of the Collateral Agent, as mortgagee for the ratable benefit
of the Collateral Agent, the Trustee and the Holders in an amount equal to 100%
of the Fair Market Value of the Premises purported to be covered by the related
Mortgage, insuring that title to such property is marketable and that the
interests created by the Mortgage constitute valid Liens thereon free and clear
of all Liens, defects and encumbrances other than Permitted Liens;


 


(3)                                  the
Company shall deliver to the Collateral Agent, with respect to each of the
covered Premises, the most recent survey of such Premises, together with either
(i) an updated survey certification in favor of the Trustee and the Collateral
Agent from the applicable surveyor stating that, based on a visual inspection
of the property and the knowledge of the surveyor, there has been no change in
the facts depicted in the survey or (ii) an affidavit and/or indemnity from the
Company or the applicable Guarantor, as the case may be, stating that to its
knowledge there has been no change in the facts depicted in the survey, other
than, in each case, changes that do not materially adversely affect the use by
the Company or Guarantor, as applicable, of such


 


54

















 


Premises for the Company or such Guarantor’s business
as so conducted, or intended to be conducted, at such Premises and in each
case, in form sufficient for the title insurer issuing the title policy to
remove the standard survey exception from such policy and issue a survey
endorsement to such policy; and


 


(4)                                  the
Company shall cause to be delivered to the Collateral Agent an Opinion of
Counsel that such Mortgage and any other documents required to be delivered
have been duly authorized, executed and delivered by the Company or such
Guarantor, as applicable, and constitute legal, valid, binding and enforceable
obligations of the Company or such Guarantor, as applicable, and such other
opinions regarding the perfection of such Liens created by such Mortgage in
such Premises.


 


SECTION 4.22. Regulated Subsidiaries.


 


The Company shall use its reasonable best efforts to
cause all Regulated Subsidiaries to obtain all regulatory and other
governmental approvals as may be necessary for such Regulated Subsidiaries to
become Guarantors and to grant Liens on their assets pursuant to the Collateral
Agreements. The Company shall cause each Regulated Subsidiary that has not yet
become a Guarantor to (i) promptly deposit, or cause to be transferred, into
one or more of its deposit accounts all proceeds of any receivables paid to
such Regulated Subsidiary and (ii) transfer to the Company or a Guarantor all
such proceeds no later than the close of business on the Business Day following
the date on which such proceeds are made available to such Regulated Subsidiary
by the applicable depositary institution.


 


SECTION 4.23. Additional Interest.


 


If Additional Interest becomes payable by the Company
pursuant to the Registration Rights Agreement, the Company shall deliver to the
Trustee an Officers’ Certificate stating (i) the amount of Additional Interest
due and payable, (ii) the Section of the Registration Rights Agreement pursuant
to which Additional Interest is due and payable and (iii) the date on which
Additional Interest is payable. Unless and until a Trust Officer of the Trustee
receives such an Officers’ Certificate, the Trustee may assume without inquiry
that no Additional Interest is payable; provided,
that the failure of the Company to deliver to the Trustee such Officers’
Certificate shall not relieve the Company of its obligation to pay any such
Additional Interest when due and payable.


 


ARTICLE
FIVE


 


SUCCESSOR
CORPORATION


 


SECTION 5.01. Merger, Consolidation and Sale of
Assets.


 


The Company will not, in a single transaction or
series of related transactions, consolidate or merge with or into any Person,
or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or
permit any Restricted Subsidiary of the Company to sell, assign, transfer,
lease, convey or otherwise dispose of) all or substantially all of its assets
whether as an entirety or substantially as an entirety to any Person unless:


 


(1)                                  either:


 


(a)                                  the
Company shall be the surviving or continuing corporation; or


 


55

















 


(b)                                 the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of
the Company and of the Company’s Restricted Subsidiaries substantially as an
entirety (the “Surviving Entity”):


 


(x)                                   shall
be a corporation organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia; and


 


(y)                                 shall
expressly assume, (i) by supplemental indenture (in form and substance
reasonably satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any,
interest, if any, on all of the Notes and the performance of every covenant of
the Notes, this Indenture and the Registration Rights Agreement on the part of
the Company to be performed or observed thereunder and (ii) by amendment,
supplement or other instrument (in form and substance reasonably satisfactory
to the Trustee and the Collateral Agent), executed and delivered to the Trustee
and the Collateral Agent, all obligations of the Company under the
Intercreditor Agreement and the Collateral Agreements, and in connection
therewith shall cause such instruments to be filed and recorded in such
jurisdictions and take such other actions as may be required by applicable law
to perfect or continue the perfection of the Lien created under the Collateral
Agreements on the Collateral owned by or transferred to the surviving entity;


 


(2)                                  immediately
after giving effect to such transaction and the assumption contemplated by clause
(1)(b)(y) above (including giving effect to any Indebtedness and Acquired
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction), the Company or such Surviving Entity, as the case
may be, (a) shall have a Consolidated Net Worth at least equal to the
Consolidated Net Worth of the Company immediately prior to such transaction and
(b) shall be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.11;


 


(3)                                  immediately
after giving effect to such transaction and the assumption contemplated by clause
(1)(b)(y) above (including giving effect to any Indebtedness and Acquired
Indebtedness incurred or anticipated to be incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; and


 


(4)                                  the
Company or the Surviving Entity shall have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.


 


For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.


 


56

















 


Notwithstanding the foregoing, any merger or
consolidation or sale of all or substantially all of the property and assets of
(i) a Guarantor with and into the Company (with the Company being the surviving
entity) or (ii) the Company with an Affiliate organized solely for the purpose
of reincorporating the Company in another jurisdiction in the United States or
any state thereof or the District of Columbia or changing the legal form of the
Company need only comply with (A) clause (4) of the first paragraph of
this Section 5.01 and (B) in the case of a merger or consolidation
involving the Company as described in clause (ii) above, clause
(1)(b)(y) of the first paragraph of this Section 5.01.


 


SECTION 5.02. Successor Corporation Substituted.


 


Upon any consolidation, combination or merger or any
transfer of all or substantially all of the assets of the Company in accordance
with the foregoing, in which the Company is not surviving or the continuing
corporation, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, lease or transfer is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture and the Notes with the same effect
as if such surviving entity had been named as such. Upon such substitution, the
Company and any Guarantors that remain Subsidiaries of the Company shall be
released from their obligations under this Indenture, the Guarantees and the
other Indenture Documents.


 


ARTICLE
SIX


 


DEFAULT
AND REMEDIES


 


SECTION 6.01. Events of Default.


 


Each of the following is an “Event of Default”:


 


(1)                                  the
failure to pay interest (including Additional Interest, if any) on any Notes or
any other amount (other than principal for or premium, if any, on the Notes)
when the same becomes due and payable and the default continues for a period of
30 days;


 


(2)                                  the
failure to pay the principal of or premium, if any, on any Notes, when such
principal or premium, if any, becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to purchase
Notes tendered and not properly withdrawn pursuant to a Change of Control Offer
or a Net Proceeds Offer);


 


(3)                                  a
default in the observance or performance of any other covenant or agreement
contained in this Indenture (other than the payment of the principal of, or
premium, if any, or interest on any Note), the Intercreditor Agreement or any
Collateral Agreement which default continues for a period of 30 days after the
Company receives written notice specifying the default (and demanding that such
default be remedied) from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Notes (except in the case of a default with respect to Section
5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);


 


(4)                                  the
failure to pay at final maturity (giving effect to any applicable grace periods
and any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary of the Company, or the acceleration of the
final stated maturity of any such Indebtedness (which acceleration is not
rescinded, annulled or otherwise cured within 20 days from the date of
acceleration) if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for failure
to pay principal at


 


57

















 


final maturity or which has been accelerated (in each
case with respect to which the 20-day period described above has elapsed),
aggregates $10,000,000 or more at any time;


 


(5)                                  one
or more judgments in an aggregate amount in excess of $ 10,000,000 shall have
been rendered against the Company or any of its Restricted Subsidiaries (other
than any judgment as to which a reputable and solvent third party insurer has
accepted full coverage) and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become final
and non-appealable;


 


(6)                                  the
Company or any Significant Subsidiary (A) commences a voluntary case or
proceeding under any Bankruptcy Code with respect to itself, (B) consents to
the entry of a judgment, decree or order for relief against it in an
involuntary case or proceeding under any Bankruptcy Code, (C) consents to the
appointment of a Custodian of it or for substantially all of its property, (D)
consents to or acquiesces in the institution of a bankruptcy or an insolvency
proceeding against it, (E) makes a general assignment for the benefit of its
creditors; or (F) takes any corporate action to authorize or effect any of the
foregoing;


 


(7)                                  a
court of competent jurisdiction enters a judgment, decree or order for relief
in respect of the Company or any Significant Subsidiary in an involuntary case
or proceeding under any Bankruptcy Code, which shall (A) approve as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
in respect of the Company or any Significant Subsidiary, (B) appoint a
Custodian of the Company or any Significant Subsidiary or for substantially all
of its property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a period
of sixty (60) consecutive days;


 


(8)                                  any
Collateral Agreement at any time for any reason shall cease to be in full force
and effect in all material respects, or ceases to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby, (except,
in each case, if terminated in accordance with its terms or in accordance with
the terms of this Indenture) superior to and prior to the rights of all third
Persons other than the holders of Permitted Liens and subject to no other Liens
except as expressly permitted by the Intercreditor Agreement, the applicable
Collateral Agreement or this Indenture;


 


(9)                                  the
Company or any of the Guarantors contest in any manner the effectiveness,
validity, binding nature or enforceability of the Intercreditor Agreement or
any Collateral Agreement; or


 


(10)                            the
Guarantee of any Significant Subsidiary ceases to be in full force and effect
or is declared to be null and void and unenforceable or is found to be invalid
or any Guarantor denies its liability under its Guarantee (other than by reason
of release of a Guarantor in accordance with the terms of this Indenture).


 


SECTION 6.02. Acceleration.


 


(a)                                  If
an Event of Default (other than an Event of Default specified in Section 6.01(6)
or (7) with respect to the Company) shall occur and be continuing and
has not been waived, the Trustee or the Holders of at least 25% in aggregate
principal amount of outstanding Notes may declare the principal of and premium,
if any, accrued interest on all the Notes to be due and payable by notice in
writing to the Company and the Trustee (if given by the Holders) specifying the
Event of Default and that it is a “notice of acceleration” (the “Acceleration
Notice”), and the same shall become immediately due and payable.


 


58

















 


(b)                                 If
an Event of Default specified in Section 6.01(6) or (7) with respect
to the Company occurs and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding
Notes shall ipso  facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.


 


(c)                                  At
any time after a declaration of acceleration with respect to the Notes as
described in the preceding paragraphs, the Holders of a majority in principal
amount of the Notes may rescind and cancel such declaration and its
consequences: (1) if the rescission would not conflict with any judgment or
decree; (2) if all existing Events of Default have been cured or waived except
nonpayment of principal, premium, if any, or interest that has become due
solely because of the acceleration; (3) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal and premium, if any, which has become due otherwise than by such
declaration of acceleration, has been paid; (4) if the Company has paid the
Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and its advances; and (5) in the event of
the cure or waiver of an Event of Default of the type described in Section
6.01(6) or (7), the Trustee shall have received an Officers’
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. 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 by proceeding at law or in equity to
collect the payment of principal of, premium, if any, or interest on the Notes
or, subject to the Intercreditor Agreement, to enforce the performance of any
provision of the Notes, this Indenture, any Collateral Agreement or any
Guarantee.


 


The Trustee or the Collateral Agent may maintain a
proceeding even if it does not possess any of the Notes or does not produce any
of them in the proceeding. A delay or omission by the Trustee, the Collateral
Agent 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 to the extent permitted by law.


 


SECTION 6.04. Waiver of Past Defaults.


 


Subject to Sections 2.09 and 9.02, the
Holders of a majority in principal amount of the Notes may waive any existing
Default or Event of Default, and its consequences, except (other than as
provided in Section 6.02(c)) a default in the payment of the principal
of or premium, if any, or interest on any Notes or in respect of a covenant or
provision which under this Indenture cannot be modified or amended without the
consent of the Holder of each Note then outstanding. When a Default or Event of
Default is waived, it is cured and ceases to exist and is deemed to have been
cured and not to have occurred, and any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred for every purpose
of this Indenture, the Notes, the Intercreditor Agreement and the Collateral
Agreements, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.


 


59

















 


SECTION 6.05. Control by Majority.


 


Subject to this Indenture (including Section 2.09),
the Intercreditor Agreement, the Collateral Agreements and applicable law, the
Holders of a majority in aggregate principal amount of the outstanding Notes
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or the Collateral Agent or exercising any trust
or power conferred on the Trustee or the Collateral Agent, including any
remedies provided for in Section 6.03. Subject to Section 7.01
and 7.02(f), however, the Trustee may refuse to follow any direction
that the Trustee believes conflicts with any law, the Intercreditor Agreement
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder, or that may involve the Trustee in personal
liability; provided that the Trustee
may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.


 


SECTION 6.06. Limitation on Suits.


 


A Holder may not pursue any remedy with respect to
this Indenture or the Notes unless:


 


(1)                                  the
Holder gives to the Trustee written notice of a continuing Event of Default;


 


(2)                                  subject
to Section 2.09, Holders of at least 25% in principal amount of the
outstanding Notes make a written request to the Trustee to institute
proceedings in respect of that Event of Default;


 


(3)                                  such
Holders offer to the Trustee security or indemnity satisfactory to the Trustee
against any loss, liability or expense to be incurred in compliance with such
request;


 


(4)                                  the
Trustee does not comply with the request within sixty (60) days after receipt
of the request and the offer and, if requested, the provision of indemnity; and


 


(5)                                  during
such sixty (60) day period the Holders of a majority in principal amount of the
outstanding Notes do not give the Trustee a direction which, in the opinion of
the Trustee, is inconsistent with the request.


 


The foregoing limitations shall not apply to a suit
instituted by a Holder for the enforcement of the payment of principal of,
premium, if any, or interest on such Note on or after the respective due dates
set forth in such Note (including upon acceleration thereof) or the institution
of any proceeding with respect to this Indenture or any remedy hereunder,
including acceleration, by the Holders of a majority in principal amount of
outstanding Notes; provided that
upon institution of any proceeding or exercise of any remedy, such Holders
provide the Trustee with prompt notice thereof.


 


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


 


SECTION 6.07. Collection Suit by Trustee or
Collateral Agent.


 


If an Event of Default in payment of principal of,
premium, if any, or interest specified in Section 6.01(1) or (2)
occurs and is continuing, subject to the Intercreditor Agreement, the Trustee
and the Collateral Agent may recover judgment (i) in its own name and (ii)(x)
in the case of the Trustee, as trustee of an express trust or (y) in the case
of the Collateral Agent, as collateral agent on behalf of each of the Holders,
in each case against the Company or any other obligor on the Notes for the
whole amount of principal, premium, if any, and accrued interest remaining
unpaid, together with interest on overdue


 


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principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest at the rate
set forth in Section 4.01 and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the compensation,
expenses, disbursements and advances of the Trustee, the Collateral Agent and
their respective agents and counsel and any other amounts due the Trustee, the
Collateral Agent and their respective agents and counsel under the
Intercreditor Agreement, the Collateral Agreements and Section 7.07
hereof.


 


SECTION 6.08. Trustee May File Proofs of Claim.


 


The Trustee is authorized to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the compensation, expenses,
taxes, disbursements and advances of the Trustee, its agents and counsel) and
the Holders allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, taxes, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee serving
as Collateral Agent or otherwise under the Intercreditor Agreement, the
Collateral Agreements and Section 7.07. The Company’s payment
obligations under this Section 6.08 shall be secured in accordance
with the provisions of Section 7.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding, provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditors’
committee.


 


SECTION 6.09. Priorities.


 


If the Trustee or the Collateral Agent collects any
money or property (including any Collateral or the proceeds thereof) pursuant
to this Article Six, it shall, subject to the terms of the Intercreditor
Agreement, pay out the money in the following order:


 


First: to the Trustee, the Collateral Agent, the
Paying Agent and the Registrar for amounts due under Section 7.07
(including payment of all compensation expense, all liabilities incurred and
all advances made by the Trustee and the costs and expenses of collection);


 


Second: if the Holders are forced to proceed against
the Company directly without the Trustee, to Holders for their collection
costs;


 


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


 


Fourth: to the Company or any other obligor on the
Notes, as their interests may appear, or as a court of competent jurisdiction
may direct.


 


The Trustee, upon prior notice to the Company, may fix
a record date and payment date for any payment to Holders pursuant to this Section
6.09.


 


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SECTION 6.10. Undertaking for Costs.


 


All parties to this Indenture agree, and each Holder
by its acceptance of its Note shall be deemed to have agreed, that 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, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section 6.10
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.06, or a suit by a Holder or Holders of more than 10% in principal amount
of the outstanding Notes.


 


SECTION 6.11. Restoration of Rights and Remedies.


 


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


 


SECTION 6.12. Rights and Remedies Cumulative.


 


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


 


SECTION 6.13. Delay or Omission not Waiver.


 


No delay or omission of the Trustee or the Collateral
Agent or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or in acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.


 


ARTICLE
SEVEN


 


TRUSTEE


 


SECTION 7.01. Duties of Trustee.


 


The duties and responsibilities of the Trustee shall
be as provided by the TIA and as set forth herein. All provisions of this Article
Seven applicable to the Trustee shall also apply to the Collateral Agent.


 


(a)                                  If
an Event of Default of which the Trustee has knowledge has occurred and is
continuing, the Trustee shall exercise such rights and powers vested in it by
this Indenture and use the


 


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same degree of care and skill in its exercise thereof
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.


 


(b)                                 Except
during the continuance of an Event of Default of which the Trustee has
knowledge:


 


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


 


(2)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; provided, however,
in case of any such certificates or opinions furnished to the Trustee which by
the provisions hereof are furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture but need not confirm or investigate the accuracy
of mathematical calculation or other facts stated herein.


 


(c)                                  Notwithstanding
anything to the contrary herein contained, 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:


 


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


 


(2)                                  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


 


(3)                                  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.


 


Sections 7.01(c)(1), (2) and (3)
shall be in lieu of Section 315(d)(1), 315(d)(2) and 315(d)(3)
of the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3)
are herein expressly excluded form this Indenture, as permitted by the TIA.


 


(d)                                 No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any liability or expense. The Trustee shall be under
no obligation to exercise of any of its rights or powers under this Indenture,
the Intercreditor Agreement or the Collateral Agreements at the request of any
Holders unless such Holder has offered to the Trustee security and indemnity
reasonably satisfactory to the Trustee against such risk, liability or expense
is not reasonably assured to it.


 


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


 


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


 


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(g)                                 Anything
in this Indenture to the contrary notwithstanding, in no event shall the
Trustee, the Paying Agent or the Registrar be liable under or in connection
with this Indenture for indirect, special, incidental, punitive or
consequential losses or damages of any kind whatsoever, including but not
limited to lost profits, whether or not foreseeable, even if the Trustee, the
Paying Agent or the Registrar has been advised of the possibility thereof and
regardless of the form of action in which such damages are sought.


 


(h)                                 The
Trustee shall not be liable for the failure to perform its duties and
obligations hereunder to the extent such failure is directly caused by the
failure of the Company to perform its obligations hereunder.


 


SECTION 7.02. Rights of Trustee.


 


Subject to Section 7.01:


 


(a)                                  The
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement instrument,
opinion, report, request direction, consent, order, bond, note or other paper
or document believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter
stated in the document.


 


(b)                                 Before
the Trustee acts or refrains from acting, it may consult with counsel and may
require an Officers’ Certificate or an Opinion of Counsel, or both, which shall
conform to Sections 11.04 and 11.05. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers’ Certificate or Opinion of Counsel. The written advice of the
Trustee’s counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by the Trustee hereunder in good faith and in reliance
thereon.


 


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


 


(d)                                 The
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken in good faith which it reasonably believes to be authorized or within its
rights or powers under this Indenture.


 


(e)                                  The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled,
upon reasonable notice to the Company, to examine the books, records and
premises of the Company, personally or by agent or attorney and to consult with
the officers and representatives of the Company, including the Company’s
accountants and attorneys at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation. Except as expressly stated herein to the contrary, in no event
shall the Trustee have any responsibility to ascertain whether there has been
compliance with any of the covenants or provisions of Articles Four or Five
hereof.


 


(f)                                    The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture unless such Holders shall
have offered to the Trustee reasonable security or


 


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indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which may be incurred by it in
compliance with such request, order or direction.


 


(g)                                 The
Trustee shall not be required to give any bond or surety in respect of the
performance of its powers and duties hereunder.


 


(h)                                 Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an
Officer of the Company and any resolution of the Board of Directors shall be
sufficient if evidenced by a copy of such resolution certified by an Officer of
the Company to have been duly adopted and in full force and effect on the date
hereof.


 


(i)                                     The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and shall not be
responsible for any willful misconduct or negligence on the part of any agent
or attorney appointed with due care and in good faith by it hereunder.


 


(j)                                     The
Trustee shall not be liable for any action taken, suffered or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this Indenture.


 


(k)                                  The
Trustee shall not be deemed to have notice or be charged with knowledge of any
Default or Event of Default unless the Trust Officer or the Trustee shall have
received from the Company, any Guarantor or any other obligor upon the Notes or
from any Holder written notice thereof at its address set forth in Section
11.02 hereof, and such notice references the Notes and this Indenture.


 


(l)                                     The
rights, privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
agent, custodian and other Person employed to act hereunder.


 


(m)                               The
Trustee may request that the Company deliver an Officers’ 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 persons authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.


 


(n)                                 The
permissive right of the Trustee to take any action under this Indenture, the
Intercreditor Agreement or any Collateral Agreements shall not be construed as
a duty to so act.


 


(o)                                 In
the event the Trustee receives inconsistent or conflicting requests and
indemnity from two or more groups of Holders, each representing less than a
majority in aggregate principal amount of the Notes then outstanding, the
Trustee, in its sole discretion, may determine what action, if any, shall be
taken.


 


SECTION 7.03. Individual Rights of Trustee.


 


The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the
Company, any Subsidiary of the Company or their respective Affiliates with the
same rights it would have if it were not Trustee including, to the extent not
prohibited in any Indenture Document, (i) to enter into agreements with the
Company resulting in cash management obligations owing to it by the Company or
any of its Subsidiaries, (ii) to issue letters of credit for the account of the
Company or any of its Subsidiaries and to enter into reimbursement agreements
by which


 


65

















 


the obligations of the Company or any of its
Subsidiaries in respect of such letters of credit will be evidenced, (iii) in
each such case to enter into pledge agreements and to accept cash collateral
from the Company or any of its Subsidiaries and rights of setoff against such
cash collateral. Any Agent may do the same with like rights. However, in the
event the Trustee acquires any conflicting interest as defined under the TIA,
it shall eliminate the conflict or resign in accordance with the procedures set
forth in TIA Section 310(b). Further, the Trustee must comply with Sections
7.10 and 7.11, and the Trustee is subject to TIA Sections 310(b) and
311.


 


SECTION 7.04. Trustee’s Disclaimer.


 


The Trustee makes no representation as to the
validity, adequacy or sufficiency of this Indenture, the Notes, the
Intercreditor Agreement or the Collateral Agreements, and it shall not be
accountable for the Company’s use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Company in this Indenture, the
Notes, the Intercreditor Agreement, the Collateral Agreements or any other
documents connected with the issuance of the Notes other than the Trustee’s
certificate of authentication, which shall be taken as the statement of
Company, and the Trustee assumes no responsibility for their correctness.


 


Beyond the exercise of reasonable care in the custody
thereof and the fulfillment of its obligations under this Indenture, the
Intercreditor Agreement and the Collateral Agreements, the Trustee shall have
no duty as to any Collateral in its possession or control or in the possession
or control of any agent or bailee or any income thereon or as to preservation
of rights against prior parties or any other rights pertaining thereto. The
Trustee shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property.


 


The Trustee makes no representations as to and shall
not be responsible for the existence, genuineness, value, sufficiency or
condition of any of the Collateral or as to the security afforded or intended to
be afforded thereby, hereby or by any Collateral Agreement, or for the
validity, perfection, priority or enforceability of the Liens or security
interests in any of the Collateral created or intended to be created by any of
the Collateral Agreements, whether impaired by operation of law or by reason of
any action or omission to act on its part hereunder, except to the extent such
action or omission constitutes gross negligence or willful misconduct on the
part of the Trustee, for the validity or sufficiency of the Collateral, any
Collateral Agreements or any agreement or assignment contained in any thereof,
for the validity of the title of the Company or any Guarantor to the
Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments
or Liens upon the Collateral or otherwise as to the maintenance of the
Collateral. The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Indenture, the
Intercreditor Agreement or any other Collateral Agreement by the Company or any
other Person that is a party thereto or bound thereby.


 


SECTION 7.05. Notice of Default.


 


If a Default or an Event of Default occurs and is
continuing and if a Trust Officer has actual knowledge or has received written
notice from the Company or any Holder, the Trustee shall mail to each Holder,
with a copy to the Company, notice of the Default or Event of Default within
ninety (90) days thereof unless such Default or Event of Default shall have
been cured or waived before the giving of such notice. Except in the case of a
Default or an Event of Default in payment of principal of, premium, if any, or
interest on, any Note, including an accelerated payment and the failure to make
payment on the Change of Control Payment Date pursuant to a Change of Control
Offer and, except in the case of a failure to comply with Article Five,
the Trustee may withhold the notice if and so long as its Board of Directors,
the


 


66

















 


executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.


 


SECTION 7.06. Reports by Trustee to Holders.


 


Within sixty (60) days after each May 15, beginning
with May 15, 2007, the Trustee shall, to the extent that any of the events
described in TIA Section 313(a) occurred within the previous twelve months, but
not otherwise, mail to each Holder a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b)(2) and (c).


 


A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed by the Trustee with the SEC
and each stock exchange or market, if any, on which the Notes are listed or
quoted.


 


The Company shall promptly notify the Trustee if the
Notes become listed, quoted on or delisted from any stock exchange or market
and the Trustee shall comply with TIA Section 313(d).


 


SECTION 7.07. Compensation and Indemnity.


 


The Company shall pay to the Trustee, the Collateral
Agent, the Paying Agent and the Registrar (each an “Indemnified Party”)
from time to time compensation for their respective services as Trustee,
Collateral Agent, Paying Agent or Registrar, as the case may be, as the
Trustee, Collateral Agent and the Company shall have agreed. The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse each Indemnified Party upon request
for all reasonable out-of-pocket expenses, disbursements and advances incurred
or made by it in connection with the performance of its duties under, as the
case may be, this Indenture, the Intercreditor Agreement or the Collateral
Agreements. Such expenses, disbursements and advances shall include the
reasonable fees, expenses, disbursements and advances of each of such
Indemnified Party’s agents and counsel.


 


The Company and the Guarantors, jointly and severally,
hereby indemnify each Indemnified Party and its agents, employees, stockholders
and directors and officers for, and holds each of them harmless against, any
loss, damage, cost, claim, liability or expense (including taxes) incurred by
any of them except for such actions to the extent caused by any gross
negligence or willful misconduct on the part of such Indemnified Party, arising
out of or in connection with this Indenture, the Intercreditor Agreement or the
Collateral Agreements or the administration of this trust, including the
reasonable costs and expenses of enforcing this Indenture against the Company
or any Guarantor (including this Section 7.07) and defending themselves
against any claim or liability in connection with the exercise or performance
of any of their rights, powers or duties hereunder or thereunder (including the
reasonable fees and expenses of counsel). The Trustee shall notify the Company
promptly of any claim asserted against an Indemnified Party for which such
Indemnified Party has advised the Trustee that it may seek indemnity hereunder
or under the Intercreditor Agreement or the Collateral Agreements. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. At the Indemnified Party’s sole discretion, the Company
shall defend the claim and the Indemnified Party shall cooperate and may
participate in the defense; provided
that any settlement of a claim shall be approved in writing by the Indemnified
Party. Alternatively, the Indemnified Party may at its option have separate
counsel of its own choosing and the Company shall pay the reasonable fees and
expenses of such counsel; provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Indemnified Party’s defense and there is no conflict of interest
between the Company and the Indemnified Party in connection with such defense
as reasonably determined by the Indemnified Party. The Company


 


67

















 


need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld.


 


To secure the Company’s and each Guarantor’s payment
obligations in this Section 7.07, the Trustee shall have a Lien prior to
the Notes on all money or property held or collected by the Trustee, in its
capacity as Trustee, for any amount owing it or any predecessor Trustee, except
money or property held in trust to pay principal of or interest on any
particular Notes.


 


When an Indemnified Party incurs expenses or renders
services after an Event of Default specified in Section 6.01(6) or (7)
occurs, such expenses (including the reasonable fees and expenses of its
counsel) and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Code.


 


The obligations of the Company under this Section
7.07 shall survive the satisfaction and discharge of this Indenture,
termination of the Intercreditor Agreement and the Collateral Agreements or the
resignation or removal of the Trustee.


 


The Trustee shall comply with the provisions of TIA
Section 312(b)(2) to the extent applicable.


 


SECTION 7.08. Replacement of Trustee.


 


The Trustee may resign upon 45 days’ prior written
notice to the Company. The Holders of a majority in aggregate principal amount
of the outstanding Notes may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor Trustee. The Company, by a
Board Resolution, may remove the Trustee if:


 


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


 


(2)                                  the
Trustee is adjudged bankrupt or insolvent;


 


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


 


(4)                                  the
Trustee becomes incapable of acting with respect to the Notes.


 


If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall notify each
Holder in writing of such event and shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a majority
in aggregate principal amount of the outstanding Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.


 


A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, trusts, duties and obligations of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such Trustee so ceasing to act hereunder subject
nevertheless to its Lien, if any, provided for in Section 7.07. Upon
request of the Company or the successor Trustee, such retiring Trustee shall at
the expense of the Company and upon payment of the charges of the Trustee then
unpaid, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.


 


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Upon
request of any such successor Trustee or the Holders of a majority in aggregate
principal amount of the outstanding Notes, the Company shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture.


 


If a successor Trustee does not take office within
sixty (60) days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in aggregate principal
amount of the outstanding Notes may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.


 


If the Trustee fails to comply with Section 7.10,
any Holder who satisfies the requirements of TIA Section 310(b)(iii) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.


 


The Company shall give notice of any resignation and
any removal of the Trustee and each appointment of a successor Trustee to all
Holders in writing. Each notice shall include the name of the successor Trustee
and the address of its Corporate Trust Office.


 


Notwithstanding any resignation or replacement of the
Trustee pursuant to this Section 7.08, the Company’s obligations
under Section 7.07 shall continue for the benefit of the retiring
Trustee.


 


SECTION 7.09. Successor Trustee by Merger, Etc.


 


If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another Person, the resulting, surviving or transferee Person without any
further act shall, if such resulting, surviving or transferee Person is
otherwise eligible hereunder, be the successor Trustee; provided, however, that such Person shall
be otherwise qualified and eligible under this Article Seven.


 


In case any Notes have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such
successor Trustee had itself authenticated such Notes.


 


SECTION 7.10. Eligibility; Disqualification.


 


(a)                                  This
Indenture shall always have a Trustee who satisfies the requirements of TIA
Sections 310(a)(1), (2), (3) and (5). The Trustee (or, in the case of a Trustee
that is an Affiliate of a bank holding company system, the related bank holding
company) 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. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA Section 310(a)(2). The Trustee shall comply with 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. The
provisions of TIA Section 310 shall apply to the Company, as obligor of the
Notes.


 


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(b)                                 If
the Trustee has or acquires a conflicting interest within the meaning of the
TIA, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the TIA and
this Indenture.


 


SECTION 7.11. Preferential Collection of Claims
Against Company.


 


The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). A Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.


 


SECTION 7.12. Trustee as Paying Agent.


 


References to the Trustee in Sections 7.01(f), 7.02,
7.03, 7.04, 7.07 and 7.08 and the first paragraph
of Section 7.09 shall include the Trustee in its role as Paying Agent.


 


SECTION 7.13. Co-Trustees, Co-Collateral Agent and
Separate Trustees, Collateral Agent.


 


(a)                                  At
any time or times, for the purpose of meeting the legal requirements of any
jurisdiction in which any of the Collateral may at the time be located, the
Company and the Trustee shall have the power to appoint, and, upon the written
request of the Trustee or of the Holders of at least 25% in principal amount of
the Notes outstanding, the Company shall for such purpose join with the Trustee
in the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by the Trustee
either to act as co-trustee, jointly with the Trustee, of all or any part of
the Collateral, to act as co-Collateral Agent, jointly with the Collateral
Agent, or to act as separate trustees or Collateral Agent of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.13. As of the Issue Date, the
Company hereby appoints U.S. Bank National Association, as the initial
Collateral Agent and U.S. Bank National Association hereby accepts such
appointment and agrees to act and serve in such capacity. If the Company does
not join in such appointment within fifteen (15) days after the receipt by it of
a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee alone shall have the power to make such appointment.


 


(b)                                 Should
any written instrument from the Company be required by any co-trustee,
co-Collateral Agent or separate trustee or separate Collateral Agent so
appointed for more fully confirming to such co-trustee or separate trustee such
property, title, right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the Company.


 


(c)                                  Every
co-trustee, co-collateral agent or separate trustee or separate collateral
agent shall, to the extent permitted by law, but to such extent only, be
appointed subject to the following terms, namely:


 


(i)                                     The
Notes shall be authenticated and delivered, and all rights, powers, duties and
obligations hereunder in respect of the custody of securities, cash and other
personal property held by, or required to be deposited or pledged with, the
Trustee hereunder, shall be exercised solely, by the Trustee.


 


(ii)                                  The
rights, powers, duties and obligations hereby conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee or separate trustee, or by the
Collateral Agent and such co-Collateral Agent or separate Collateral Agent,
jointly as shall be provided in the instrument appointing such


 


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co-trustee or separate trustee or co-Collateral Agent
or separate Collateral Agent, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Trustee shall
be incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
co-trustee or separate trustee, Collateral Agent or co-Collateral Agent or
separate Collateral Agent.


 


(iii)                               The
Trustee at any time, by an instrument in writing executed by it, with the
concurrence of the Company evidenced by a Board Resolution, may accept the
resignation of or remove any co-trustee or separate trustee appointed under
this Section 7.13, and, in case an Event of Default has occurred and is
continuing, the Trustee shall have power to accept the resignation of, or
remove, any such co-trustee, co-collateral agent, separate trustee or separate
collateral agent without the concurrence of the Company. Upon the written
request of the Trustee, the Company shall join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to any
co-trustee, co-collateral agent, separate trustee or separate collateral agent
so resigned or removed may be appointed in the manner provided in this Section
7.13.


 


(iv)                              No
co-trustee, co-collateral agent, separate trustee or separate collateral agent
hereunder shall be personally liable by reason of any act or omission of the
Trustee or the Collateral Agent, or any, other such trustee or collateral agent
hereunder.


 


(v)                                 Any
act of Holders delivered to the Trustee shall be deemed to have been delivered
to each such co-trustee or separate trustee and any act of Holders delivered to
the Collateral Agent shall be deemed to have been delivered to each such
co-collateral agent or separate collateral agent.


 


ARTICLE
EIGHT


 


SATISFACTION
AND DISCHARGE OF INDENTURE


 


SECTION 8.01. Legal Defeasance and Covenant
Defeasance.


 


(a)                                  The
Company may, at its option and at any time, elect to have either paragraph
(b) or paragraph (c) below be applied to the outstanding Notes upon
compliance with the applicable conditions set forth in paragraph (d).


 


(b)                                 Upon
the Company’s exercise under paragraph (a) of the option applicable to
this paragraph (b), the Company and the Guarantors shall be deemed to
have been released and discharged from their obligations with respect to the
outstanding Notes on the date the applicable conditions set forth below are
satisfied (hereinafter, “Legal Defeasance”). For this purpose, such
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be “outstanding” only for the purposes of the
Sections and matters under this Indenture referred to in (i) and (ii)
below, and to have satisfied all their other obligations under such Notes and
this Indenture insofar as such Notes are concerned, except for the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in such
paragraph payments in respect of the principal of, and premium, if any, and interest
on such Notes when such payments are due, (ii) obligations listed in Sections
2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10,
2.13 and 8.03, subject to compliance with this Section 8.01
and (iii) the rights, powers, trusts, duties and immunities of the Trustee and
the Company’s obligations in connection therewith. The


 


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Company may exercise its option under this paragraph
(b) notwithstanding the prior exercise of its option under paragraph (c)
below with respect to the Notes.


 


(c)                                  Upon
the Company’s exercise under paragraph (a) of the option applicable to
this paragraph (c), the Company and its Restricted Subsidiaries shall be
released and discharged from their obligations under any covenant contained in Sections
4.05 and 4.07, Sections 4.09 through 4.23 (provided that the release and discharge of the Company’s
obligations under Section 4.23 shall in no way relieve the Company of
its obligation to pay any Additional Interest when due and payable) and clause
(2) of the first paragraph of Section 5.01 with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall
thereafter be deemed to be not “outstanding” for the purpose of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term, condition
or limitation set forth in any such covenant, whether directly or indirectly,
by reason of any reference elsewhere herein to any such covenant or by reason
of any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 6.01(3) or (4), but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company’s exercise under paragraph
(a) hereof of the option applicable to this paragraph (c), subject
to the satisfaction of the conditions set forth in paragraph (d) below, Section
6.01(3) (solely to the extent Section 6.01(3) pertains to Sections
4.05 and 4.07, Sections 4.09 through 4.23 (other than,
with respect to Section 4.23, the failure to pay Additional
Interest when due and payable which failure shall constitute an Event of
Default to the extent provided in Section 6.01(1))) and clause (2)
of the first paragraph of Section 5.01), 6.01(4), 6.01(5),
6.01(8), 6.01(9) and 6.01(10) shall not constitute Events
of Default.


 


(d)                                 The
following shall be the conditions to application of either paragraph (b)
or paragraph (c) above to the outstanding Notes:


 


(1)                                  the
Company shall have irrevocably deposited in trust with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or non-callable U.S.
Government Obligations or a combination thereof, in such amounts and at such
times as will be sufficient, in the opinion of a nationally-recognized firm of
independent public accountants, to pay the principal of, and premium, if any,
and interest on the outstanding Notes on the stated date for payment therefor
or on the applicable Redemption Date, as the case may be;


 


(2)                                  in
the case of Legal Defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel in the United States reasonably acceptable to the Trustee
confirming that:


 


(a)                                  the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling; or


 


(b)                                 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 Legal
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;


 


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


 


(4)                                  no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit pursuant to clause (1) of this paragraph (except such
Default or Event of Default resulting from the failure to comply with Section
4.11 or 4.16 as a result of the borrowing of funds required to
effect such deposit or the granting of any Liens to secure such borrowing) or
insofar as Defaults or Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of such deposit;


 


(5)                                  such
Legal Defeasance or Covenant Defeasance shall not result in a breach of, or
constitute a default under any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;


 


(6)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent of preferring the
Holders over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company
or others;


 


(7)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with; and


 


(8)                                  the
Company shall have delivered to the Trustee an Opinion of Counsel (subject to
customary qualifications and exclusions) 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, as amended.


 


Notwithstanding
the foregoing, the Opinion of Counsel required by Section 8.01(d)(2)
above with respect to a Legal Defeasance need not be delivered if all Notes not
theretofore delivered to the Trustee for cancellation (1) have become due and
payable or (2) shall become due and payable on the maturity date within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.


 


In the event all or any portion of the Notes are to be
redeemed through such irrevocable trust, the Company must make arrangements
reasonably satisfactory to the Trustee, at the time of such deposit, for the
giving of the notice of such redemption or redemptions by the Trustee in the
name and at the expense of the Company.


 


SECTION 8.02. Satisfaction and Discharge.


 


In addition to the Company’s rights under Section
8.01, the Company may terminate all of its obligations under this Indenture
(subject to Section 8.03) and the Collateral Agreements, when:


 


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(1)                                  either:


 


First:  all the
Notes theretofore authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid as provided in Section 2.07 and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee for
cancellation; or


 


Second:  all
Notes not theretofore delivered to the Trustee for cancellation (i) have become
due and payable, (ii) shall become due and payable at their stated maturity
within one year or (iii) are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee, and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of, and
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be;


 


(2)                                  the
Company has paid all other sums payable under this Indenture and the other
Indenture Documents by the Company; and


 


(3)                                  the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel stating that all conditions precedent under this Indenture relating to
the satisfaction and discharge of this Indenture have been complied with.


 


SECTION 8.03. Survival of Certain Obligations.


 


Notwithstanding the satisfaction and discharge of this
Indenture and of the Notes referred to in Section 8.01 or 8.02,
the respective obligations of the Company and the Trustee under Sections
2.02, 2.03, 2.04, 2.05, 2.06,  2.07, 2.10,
2.13, 4.01 and 4.02,  Article Seven and Sections
8.05, 8.06 and 8.07 shall survive until the Notes are no
longer outstanding, and thereafter the obligations of the Company and the
Trustee under Sections 7.07, 8.05, 8.06 and 8.07
shall survive.


 


SECTION 8.04. Acknowledgment of Discharge by
Trustee.


 


Subject to Section 8.07, after (i) the
conditions of Section 8.01 or 8.02 have been satisfied, (ii) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (iii) the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction
and discharge of this Indenture have been complied with, the Trustee upon
written request shall acknowledge in writing the discharge of the Company’s
obligations under this Indenture except for those surviving obligations specified
in Section 8.03.


 


SECTION 8.05. Application of Trust Moneys.


 


The Trustee shall hold any U.S. Legal Tender or U.S.
Government Obligations deposited with it in the irrevocable trust established
pursuant to Section 8.01. The Trustee shall apply the deposited U.S.
Legal Tender or the U.S. Government Obligations, together with earnings
thereon, through the Paying Agent, in accordance with this Indenture and the
terms of the irrevocable trust agreement established pursuant to Section
8.01, to the payment of principal of, premium, if any, and interest on the
Notes.


 


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Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the Company’s request any U.S. Legal Tender or U.S. Government
Obligations held by it as provided in Section 8.01(d)(1) which, in the
opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.


 


SECTION 8.06. Repayment to the Company; Unclaimed
Money.


 


Subject to Sections 7.07, 8.01 and 8.02,
the Trustee and the Paying Agent shall promptly pay to the Company upon written
request from the Company any excess U.S. Legal Tender or U.S. Government
Obligations held by them at any time. The Trustee and the Paying Agent shall
pay to the Company, upon receipt by the Trustee or the Paying Agent, as the
case may be, of a written request from the Company any money held by it for the
payment of principal, premium, if any, or interest that remains unclaimed for
two years after payment to the Holders is required, without interest thereon; provided, however, that the Trustee and
the Paying Agent before being required to make any payment may, but need not,
at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that after a date
specified therein, which shall be at least thirty (30) days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Company, without interest thereon. After payment to the
Company, Holders entitled to money must look solely to the Company for payment
as general creditors unless an applicable abandoned property law designated
another Person, and all liability of the Trustee or Paying Agent with respect
to such money shall thereupon cease.


 


SECTION 8.07. Reinstatement.


 


If the Trustee or Paying Agent is unable to apply any
U.S. Legal Tender or U.S. Government Obligations in accordance with Section
8.01 or 8.02 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company’s and each Guarantor’s
obligations under this Indenture, the Notes, the Guarantees and each other
Indenture Document shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 or 8.02 until such time as
the Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.01 or 8.02;
provided, however, that if the
Company has made any payment of premium, if any, or interest on or principal of
any Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.


 


SECTION 8.08. Indemnity for Government Obligations.


 


The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.01 or Section
8.02 or the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the
Holders.


 


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ARTICLE
NINE


 


AMENDMENTS,
SUPPLEMENTS AND WAIVERS


 


SECTION 9.01. Without Consent of Holders.


 


From time to time, the Company, the Guarantors, the
Trustee and, if such amendment, modification, waiver or supplement relates to
the Intercreditor Agreement or any Collateral Agreement, the Collateral Agent,
without the consent of the Holders, may amend, modify, waive or supplement
provisions of this Indenture, the Notes, the Guarantees, the Intercreditor
Agreement or the Collateral Agreements:


 


(1)                                  to
cure any ambiguity, defect or inconsistency contained therein;


 


(2)                                  to
provide for uncertificated Notes in addition to or in place of certificated
Notes, respectively;


 


(3)                                  to
provide for the assumption of the Company’s or a Guarantor’s obligations to
Holders in accordance with Section 5.01 or 10.04, as the case may
be;


 


(4)                                  to
make any change that would provide any additional rights or benefits to the
Holders or that does not adversely affect the legal rights of any such Holder
under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or
the Collateral Agreements;


 


(5)                                  to
comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;


 


(6)                                  to
allow any Subsidiary or any other Person to guarantee the Notes;


 


(7)                                  if
necessary, in connection with any addition or release of Collateral permitted
under the terms of this Indenture, the Intercreditor Agreement or the
Collateral Agreements;


 


(8)                                  to
release a Guarantor as permitted under this Indenture and the related
Guarantee;


 


(9)                                  to
provide for the issuance of Additional Notes in accordance with the terms
hereof, to the extent Indebtedness in an aggregate principal amount equal to
the aggregate principal amount of such Additional Notes to be issued could
otherwise be incurred pursuant to this Indenture, without giving effect to such
amendment, modification, waiver or supplement; or


 


(10)                            to
make any amendment to the provisions of this Indenture relating to the form,
authentication, transfer and legending of the Notes; provided,
however, that (a) compliance with this Indenture as so amended would
not result in the Notes being transferred in violation of the Securities Act or
any other applicable securities law and (b) such amendment does not materially
affect the rights of Holders to transfer the Notes,


 


and
unless such amendment, modification, waiver or supplement is specifically
required hereunder, so long as such amendment, modification, waiver or
supplement does not, in the opinion of the Trustee and, if such amendment,
modification, waiver or supplement relates to the Intercreditor Agreement or
any Collateral Agreement, the Collateral Agent, adversely affect the rights of
any of the Holders in any material respect.


 


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Notwithstanding the foregoing, in formulating its
opinion in regards to this Section 9.01 the Trustee or the Collateral
Agent, as applicable, is entitled to rely on such evidence as it deems
appropriate, including solely on an Opinion of Counsel.


 


SECTION 9.02. With Consent of Holders.


 


The Company, the Guarantors and the Trustee or the
Collateral Agent, as applicable, together, with the written consent of the
Holder or Holders of at least a majority in aggregate principal amount of the
outstanding Notes (subject to Section 2.09), may amend or supplement
this Indenture, the Notes, the Intercreditor Agreement, any Collateral
Agreement or the Guarantees without notice to any other Holders. Subject to Section
2.09, the Holder or Holders of a majority in aggregate principal amount of
the outstanding Notes may waive compliance by the Company with any provision of
this Indenture, the Intercreditor Agreement, any Collateral Agreement or the
Notes without notice to any other Holder. However, no amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, shall:


 


(a)                                  without
the consent of each Holder of each Note affected thereby:


 


(1)                                  reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver of any provision of this Indenture or the Notes;


 


(2)                                  reduce
the rate of or change or have the effect of changing the time for payment of
interest (including defaulted interest but excluding Additional Interest) on
any Notes;


 


(3)                                  reduce
the principal of or change or have the effect of changing the fixed maturity of
any Notes, or change the date on which any Notes may be subject to redemption
or reduce the redemption price therefor;


 


(4)                                  make
any Notes payable in money other than that stated in the Notes;


 


(5)                                  make
any change in provisions of this Indenture protecting the right of each Holder
to receive payment of principal of, premium, if any, and interest on such Note
on or after the due date thereof or to bring suit to enforce such payment, or
permitting holders of a majority in principal amount of Notes to waive Defaults
or Events of Default;


 


(6)                                  amend,
change or modify in any material respect the obligation of the Company to make
and consummate a Change of Control Offer after the occurrence of a Change of
Control or make and consummate a Net Proceeds Offer with respect to any Asset
Sale that has been consummated or, after such Change of Control has occurred or
such Asset Sale has been consummated, modify any of the provisions or
definitions with respect thereto;


 


(7)                                  modify
or change any provision of this Indenture or the related definitions affecting
the ranking of the Notes or any Guarantee or any Lien created under any
Collateral Agreement in a manner which adversely affects such Holders;


 


(8)                                  release
any Guarantor from any of its obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this Indenture; or


 


(9)                                  make
any change to Section 9.01 or this Section 9.02; or


 


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(b)                                 without
the consent of the Holder or Holders of at least 75% of the aggregate principal
amount of the outstanding Notes, release all or substantially all of the
Collateral otherwise than in accordance with the terms of this Indenture, the
Intercreditor Agreement or the Collateral Agreements.


 


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, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.


 


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


 


SECTION 9.03. Compliance with TIA.


 


Every amendment, waiver or supplement of this
Indenture, the Notes, the Collateral Agreements, the Intercreditor Agreement or
the Guarantees shall comply with the TIA as then in effect.


 


SECTION 9.04. Revocation and Effect of Consents.


 


Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder’s Note, even if notation of the consent is
not made on any Note. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder’s Note or portion of
such Note by written notice to the Trustee and the Company received before the
date on which the Trustee, and if such amendment, waiver or supplement relates
to the Intercreditor Agreement or any Collateral Agreement, the Collateral
Agent, receives an Officers’ Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.


 


The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver, which record date shall be either (i) at
least thirty (30) days prior to the first solicitation of such consent or (ii)
the date of the most recent list furnished to the Trustee under Section 2.05.
If a record date is fixed, then notwithstanding the last sentence of 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 revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than ninety (90) days after such record date.


 


After an amendment, supplement or waiver becomes effective,
it shall bind every Holder unless it makes a change described in any of clauses
(a)(1) through (9) of Section 9.02, in which case, the
amendment, supplement or waiver shall bind only each Holder of a Note who has
consented to it and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal of,
premium, if any, and interest on a Note, on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.


 


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SECTION 9.05. Notation on or Exchange of Notes.


 


If an amendment, supplement or waiver changes the
terms of a Note, the Trustee may require the Holder of the Note to deliver the
Note to the Trustee. The Trustee at the written direction of the Company may
place an appropriate notation on the Note about the changed terms and return it
to the Holder and the Trustee may place an appropriate notation on any Note
thereafter authenticated. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
an appropriate notation, or issue a new Note, shall not affect the validity and
effect of such amendment, supplement or waiver. Any such notation or exchange
shall be made at the sole cost and expense of the Company. Failure to make the
appropriate notation or issue a new Note shall not effect the validity and
effect of such amendment, supplement or waiver.


 


SECTION 9.06. Trustee or Collateral Agent to Sign
Amendments, Etc.


 


The Trustee or the Collateral Agent, as applicable,
shall execute any amendment, supplement or waiver authorized pursuant to this Article
Nine; provided that the
Trustee or the Collateral Agent, as applicable, may, but shall not be obligated
to, execute any such amendment, supplement or waiver which affects the rights,
duties or immunities of the Trustee or the Collateral Agent, as applicable,
under this Indenture, the Intercreditor Agreement or any Collateral Agreement. The
Trustee or Collateral Agent, as applicable, shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers’
Certificate each stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee or the Collateral Agent and shall be paid for by the Company.


 


ARTICLE
TEN


 


GUARANTEE


 


SECTION 10.01. Guarantee.


 


Each Guarantor hereby fully, jointly and severally,
unconditionally and irrevocably guarantees (such guarantee to be referred to
herein as the “Guarantee”), to each of the Holders and to the Trustee
and the Collateral Agent and their respective successors and assigns that (i)
the principal of, premium, if any and interest on the Notes shall be promptly
paid in full when due, subject to any applicable grace period, whether upon
redemption pursuant to the terms of the Notes, by acceleration or otherwise,
and interest (including interest accruing after the commencement of any
bankruptcy, insolvency, or similar proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) on the
overdue principal, if any, and interest on any interest, if any, to the extent
lawful, of the Notes and all other obligations of the Company to the Holders,
the Trustee and the Collateral Agent hereunder, thereunder or under the
Intercreditor Agreement or any Collateral Agreement shall be promptly paid in
full or performed, all in accordance with the terms hereof, thereof and of the
Intercreditor Agreement and the Collateral Agreements; and (ii) in case of any
extension of time of payment or renewal of any of the Notes or of any such
other obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 10.03. The Guarantee of
each Guarantor shall rank senior in right of payment to all existing and future
subordinated Indebtedness of such Guarantor and equal in right of payment with
all other existing and future senior obligations of such Guarantor. Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or


 


79

















 


enforceability of the Notes, this Indenture, the
Intercreditor Agreement or any Collateral Agreement, the absence of any action
to enforce the same, any waiver or consent by any of the Holders with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenants that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in
this Guarantee. Each Guarantor may consolidate with or merge into or sell its
assets to the Company or another Guarantor without limitation in accordance
with Sections 5.01 and 4.15. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, any Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Guarantor, any amount paid by the Company or any
Guarantor to the Trustee, the Collateral Agent or such Holder, this Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Guarantor further agrees that, as between each Guarantor, on the
one hand, and the Holders, the Collateral Agent and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Six for the purposes of this Guarantee
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forthwith become due
and payable by each Guarantor for the purpose of this Guarantee.


 


SECTION 10.02. Release of a Guarantor.


 


A Guarantor will be released from its Guarantee, the
Intercreditor Agreement and the Collateral Agreements (and may subsequently
dissolve) without any action required on the part of the Trustee or any Holder:


 


(1)                                  if
(a) all of the Capital Stock issued by such Guarantor or all or substantially
all of the assets of such Guarantor are sold or otherwise disposed of (including
by way of merger or consolidation and, in the case of a sale of Capital Stock,
whether directly by transfer of Capital Stock issued by that Guarantor or
indirectly by transfer of Capital Stock of other Subsidiaries that, directly or
indirectly, own Capital Stock issued by such Guarantor) to a Person other than
the Company or any of its Domestic Restricted Subsidiaries or (b) such
Guarantor ceases to be a Restricted Subsidiary, and the Company otherwise
complies, to the extent applicable, with the covenant described below under Section
4.15, or


 


(2)                                  if
the Company designates such Guarantor as an Unrestricted Subsidiary in
accordance with the definition thereof, or


 


(3)                                  if
the Company exercises its Legal Defeasance option or its Covenant Defeasance
option as described in Section 8.01, or


 


(4)                                  upon
satisfaction and discharge of this Indenture or payment in full of the
principal of, premium, if any, accrued and unpaid interest on the Notes and all
other Obligations that are then due and payable.


 


The Trustee shall promptly deliver, at the Company’s
expense, an appropriate instrument evidencing such release upon receipt of a
request by the Company accompanied by an Officers’ Certificate certifying as to
the compliance with this Section 10.02. Any Guarantor not so released
remains liable for the full amount of its Guarantee as provided in this Article
Ten.


 


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SECTION 10.03. Limitation of Guarantor’s Liability.


 


Each Guarantor and, by its acceptance hereof, each of
the Holders hereby confirms that it is the intention of all such parties that
the guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of
such Guarantor under the Guarantee shall be limited to the maximum amount as
shall, after giving effect to all other contingent and fixed liabilities of
such Guarantor and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to Section 10.05, result in
the obligations of such Guarantor under the Guarantee not constituting such
fraudulent transfer or conveyance. The net worth of any Guarantor for such
purpose shall include any claim of such Guarantor against the Company for
reimbursement and any claim against any other Guarantor for contribution.


 


SECTION 10.04. Guarantors May Consolidate, etc., on
Certain Terms.


 


Each Guarantor (other than any Guarantor whose
Guarantee is to be released in accordance with the terms of the Guarantee and
this Indenture in connection with any transaction complying with Section
4.15) will not, and the Company will not cause or permit any Guarantor to,
consolidate with or merge with or into or sell, assign, transfer, lease or
convey or otherwise dispose of all or substantially all of such Guarantor’s
assets to any Person, other than the Company or any other Guarantor, unless:


 


(1)                                  the
entity formed by or surviving any such consolidation or merger (if other than
the Guarantor) or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia;


 


(2)                                  such
entity assumes by (i) supplemental indenture (in form and substance reasonably
satisfactory to the Trustee), executed and delivered to the Trustee, all of the
obligations of the Guarantor under the Guarantee and the performance of every
covenant of the Guarantee, this Indenture and the Registration Rights Agreement
and (ii) by amendment, supplement or other instrument (in form and substance
satisfactory to the Trustee and the Collateral Agent) executed and delivered to
the Trustee and the Collateral Agent, all obligations of the Guarantor under
the Intercreditor Agreement and the Collateral Agreements and in connection
therewith shall cause such instruments to be filed and recorded in such
jurisdictions and take such other actions as may be required by applicable law
to perfect or continue the perfection of the Lien created under the Collateral
Agreements on the Collateral owned by or transferred to the surviving entity;
and


 


(3)                                  immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing.


 


Notwithstanding the foregoing, any merger or
consolidation or sale of all or substantially all of the property and assets of
(i) a Guarantor with and into the Company (with the Company being the surviving
entity) or another Guarantor or (ii) a Guarantor with an Affiliate organized
solely for the purpose of reincorporating such Guarantor in another
jurisdiction in the United States or any state thereof or the District of
Columbia or changing the legal form of such Guarantor need only comply with (A)
clause (4) of the first paragraph of Section 5.01 and (B) in the
case of a merger or consolidation involving the Guarantor as described in clause
(ii) above, clause (2) of the immediately preceding paragraph.


 


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SECTION 10.05. Contribution.


 


In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a pro  rata contribution from each other Guarantor
hereunder based on the net assets of each other Guarantor. The preceding
sentence shall in no way affect the rights of the Holders of Notes to the
benefits of this Indenture, the Notes or the Guarantees.


 


SECTION 10.06. Waiver of Subrogation.


 


Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.


 


SECTION 10.07. Evidence of Guarantee.


 


To evidence their guarantees to the Holders set forth
in this Article Ten, each of the Guarantors hereby agrees to execute the
notation of Guarantee in substantially the forms included in the Notes attached
as Exhibit A and Exhibit B. Each such notation of Guarantee shall
be signed on behalf of each Guarantor by an Officer or an assistant Secretary. An
Officer (who shall, in each case, have been duly authorized by all requisite
corporate actions) of the Guarantors shall execute the Guarantees by manual or
facsimile signature.


 


If an Officer whose signature is on a Note was an
Officer at the time of such execution but no longer holds that office or
position at the time the Trustee authenticates such Note, such Note shall
nevertheless be valid.


 


Each Guarantor hereby agrees that its Guarantee set
forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Guarantee.


 


If an Officer or assistant Secretary whose signature
is on this Indenture or on the Guarantee no longer holds that office at the
time the Trustee authenticates the Note on which a Guarantee is endorsed, the
Guarantee shall be valid nevertheless.


 


The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantee set forth in this Indenture on behalf of the Guarantors.


 


SECTION 10.08. Waiver of Stay, Extension or Usury
Laws.


 


Each Guarantor covenants to the extent permitted by
law that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Guarantee; and each Guarantor hereby expressly waives to
the extent permitted by law all benefit or advantage of any such law, and
covenants that it 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.


 


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ARTICLE
ELEVEN


 


MISCELLANEOUS


 


SECTION 11.01. Trust Indenture Act Controls.


 


If any provision of this Indenture limits, qualifies,
or conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. Any provision of
the TIA which is required to be included in a qualified Indenture, but not
expressly included herein, shall be deemed to be included by this reference.


 


SECTION 11.02. Notices.


 


Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by telecopier, by overnight courier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:


 


if to the Company:


 


McLeodUSA Incorporated

1 Martha’s Way

Hiawatha, Iowa 52233

Attention: General Counsel

Facsimile Number: (319) 790-7901


 


if to the Trustee:


 


U.S. Bank National
Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attn: Rick Prokosch

Facsimile Number: (651) 495-8097


 


if to the Collateral
Agent:


 


U.S. Bank National
Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attn: Rick Prokosch

Facsimile Number: (651) 495-8097


 


Each of the Company, the Collateral Agent and the
Trustee by written notice to each of the others may designate additional or
different addresses for notices to such Person. Any notice or communication to
the Company, the Collateral Agent or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; one (1)
Business Day after mailing if sent by overnight courier; and five (5) calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that a notice of change of address or a notice sent by mail to the
Trustee shall not be deemed to have been given until actually received by the
addressee).


 


83

















 


Any notice or communication mailed to a Holder shall
be mailed to such Holder by first class mail or other equivalent means at such
Holder’s address as it appears on the registration books of the Registrar and
shall be sufficiently given to such Holder 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 11.03. Communications by Holders with Other
Holders.


 


Holders may communicate pursuant to TIA Section 312(b)
with other Holders with respect to their rights under this Indenture, the
Intercreditor Agreement, any Collateral Agreement, any Guarantee or the Notes. The
Company, the Trustee, the Collateral Agent, the Registrar and any other Person
shall have the protection of TIA Section 312(c).


 


SECTION 11.04. Certificate and Opinion as to
Conditions Precedent.


 


Upon any request or application by the Company or any
Guarantor to the Trustee to take any action under this Indenture, the
Intercreditor Agreement or any Collateral Agreement, the Company shall furnish
to the Trustee upon request:


 


(1)                                  an
Officers’ Certificate, in form and substance reasonably satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions precedent
to be performed by the Company or the applicable Guarantor (as the case may
be), if any, provided for in this Indenture, the Intercreditor Agreement or any
Collateral Agreement relating to the proposed action have been complied with;
and


 


(2)                                  an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent to be performed by the Company or the applicable Guarantor
(as the case may be), if any, provided for in this Indenture, the Intercreditor
Agreement or any Collateral Agreement relating to the proposed action have been
complied with.


 


In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other Persons as to other matters and any such
Person may certify or give an opinion as to such matters in one or several
documents.


 


Any certificate or opinion of an Officer of the
Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion, or representation by, counsel, unless such Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel or representation by counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous.


 


84

















 


Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.


 


SECTION 11.05. Statements Required in Certificate
or Opinion.


 


Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture, the Intercreditor
Agreement or any Collateral Agreement, other than the Officers’ Certificate
required by Section 4.06, shall include:


 


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


 


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


 


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


 


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


 


SECTION 11.06. Rules by Trustee, Paying Agent,
Registrar.


 


The Trustee may make reasonable rules in accordance
with the Trustee’s customary practices for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.


 


SECTION 11.07. Legal Holidays.


 


A “Legal Holiday” used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or St. Paul, Minnesota at such place of
payment are not required to be open. If a payment date is a Legal Holiday at
such place, payment may be made at such place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening
period.


 


SECTION 11.08. Governing Law.


 


THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES, THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS
CONTEMPLATED BY THIS INDENTURE.


 


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SECTION 11.09. No Adverse Interpretation of Other
Agreements.


 


This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.


 


SECTION 11.10. No Recourse Against Others.


 


A past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company, a Guarantor or the
Trustee shall not have any liability for any obligations of the Company or the
Guarantors under the Notes, the Guarantees, the Intercreditor Agreement, the
Collateral Agreements or this Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder, by
accepting a Note, waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.


 


SECTION 11.11. Successors.


 


All agreements of the Company and the Guarantors in
this Indenture, the Notes, and the Guarantees shall bind their successors. All
agreements of the Trustee and the Collateral Agent in this Indenture shall bind
their respective successors.


 


SECTION 11.12. Duplicate Originals.


 


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


 


SECTION 11.13. Severability.


 


In case any one or more of the provisions in this
Indenture, the Notes or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.


 


SECTION 11.14. Waiver of Jury Trial.


 


EACH OF THE COMPANY, THE GUARANTORS, THE TRUSTEE, THE
COLLATERAL AGENT, AND BY ITS ACCEPTANCE THEREOF, EACH HOLDER OF A NOTE, HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS
INDENTURE, THE NOTES, THE GUARANTEES, THE INTERCREDITOR AGREEMENT, THE
COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE.


 


86

















 


ARTICLE
TWELVE


 


SECURITY


 


SECTION 12.01. Grant of Security Interest.


 


(a)                                  To
secure the due and punctual payment of the principal of, premium, if any, and
interest on the Notes and amounts due hereunder and under the Guarantees when
and as the same shall be due and payable, whether on an Interest Payment Date,
at maturity, by acceleration, purchase, repurchase, redemption or otherwise,
and interest on the overdue principal of, premium, if any, and interest (to the
extent permitted by law), if any, on the Notes and the performance of all other
Obligations of the Company and the Guarantors to the Holders, the Collateral
Agent or the Trustee under this Indenture, the Intercreditor Agreement, the
Collateral Agreements, the Guarantees and the Notes, the Company and the
Guarantors hereby covenant to cause the Intercreditor Agreement and the
Collateral Agreements to be executed and delivered concurrently with this
Indenture. The Collateral Agreements shall provide for the grant by the Company
and Guarantors party thereto to the Collateral Agent security interests in the
Collateral.


 


(b)                                 The
Trustee and each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Intercreditor Agreement and each Collateral Agreement, as the
same may be in effect or may be amended from time to time in accordance with
their respective terms, and authorizes and directs the Collateral Agent to
enter into the Intercreditor Agreement and the Collateral Agreements and to
perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall, and shall cause each Guarantor to, do or cause to
be done, at its sole cost and expense, all such actions and things as may be
necessary or as may be required by the provisions of the Collateral Agreements
to (i) create Liens pursuant to one or more Collateral Agreements on their
respective properties in favor of the Collateral Agent for the benefit of
itself, the Trustee and the Holders or (ii) more fully or accurately describe
the property intended to be Collateral or the obligations intended to be secured
by the Collateral Agreements.


 


SECTION 12.02. Intercreditor Agreement.


 


This Indenture and the Collateral Agreements are
subject to the terms, limitations and conditions set forth in the Intercreditor
Agreement. The Trustee and each Holder of a Note, by its acceptance thereof, is
deemed to have authorized and instructed the Collateral Agent to enter into the
Intercreditor Agreement on its behalf.


 


SECTION 12.03. Recording and Opinions.


 


(a)                                  The
Company shall, and shall cause each Guarantor to, at its sole cost and expense,
take all such actions as may be required under applicable law to perfect the
Liens created by the Collateral Agreements, including (i) the filing of
financing statements and continuation statements relating to the Company or any
Guarantor, (ii) the recordation and filing of Mortgages and fixture filings
related thereto and (iii) the delivery of the certificates evidencing
Collateral pledged under any Collateral Agreement.


 


(a)                                  The
Company shall furnish to the Trustee and the Collateral Agent (if other than
the Trustee), on or within one month of September 15 of each year, commencing
September 15, 2007, an Opinion of Counsel either (i) stating that, in the
opinion of such counsel, all action necessary to perfect the security interests
created by the Collateral Agreements and reciting the details of such action or
referring to prior Opinions of Counsel in which such details are given have
been taken or (ii) stating that, in the Opinion of such Counsel, no such action
is necessary to perfect any security interest created under any of the
Collateral Agreements.


 


87

















 


SECTION 12.04. Release of Collateral.


 


(a)                                  The
Collateral Agent shall not at any time release Collateral from the security
interests created by the Collateral Agreements unless such release is in
accordance with the provisions of this Indenture, the Intercreditor Agreement
and the applicable Collateral Agreements.


 


(b)                                 At
any time when an Event of Default shall have occurred and be continuing, no
release of Collateral pursuant to the provisions of this Indenture, the
Intercreditor Agreement and the Collateral Agreements shall be effective as
against the Holders.


 


(c)                                  The
release of any Collateral from the terms of the Collateral Agreements shall not
be deemed to impair the security under this Indenture in contravention of the
provisions hereof if and to the extent the Collateral is released pursuant to
this Indenture or the Collateral Agreements.


 


(d)                                 Notwithstanding
any provision to the contrary herein, Collateral comprised of accounts
receivable, inventory or (prior to the occurrence and during the continuance of
an Event of Default and the Collateral Agent or the Administrative Agent having
issued (and not terminated) an instruction or entitlement order prohibiting the
release thereof to any depositary or securities intermediary with respect to
any deposit account or securities account under the “control” (as defined in
Section 8-106 or 9-104, as applicable, of the Uniform Commercial Code as in
effect in the State of New York) of the Collateral Agent) the proceeds of the
foregoing shall be subject to release upon sales of such inventory and
collection of the proceeds of such accounts receivable in the ordinary course
of business. If requested in writing by the Company, the Trustee shall instruct
the Collateral Agent to execute and deliver such documents, instruments or
statements and to take such other action as the Company may request to evidence
or confirm that the Collateral falling under this Section 12.04 has been
released from the Liens of each of the Collateral Agreements. The Collateral
Agent shall execute and deliver such documents, instruments and statements and
shall take all such actions promptly upon receipt of such instructions from the
Trustee.


 


SECTION 12.05. Specified Releases of Collateral.


 


Subject to Section 12.04, Collateral may be
released from the Lien and security interest created by the Collateral
Agreements at any time or from time to time in accordance with the provisions
of the Collateral Agreements, the Intercreditor Agreement or as provided hereby.
Upon the request of the Company pursuant to an Officers’ Certificate certifying
that all conditions precedent hereunder or under the applicable Collateral
Agreement have been met and without the consent of any Holder, the Company and
the Guarantors will be entitled to releases of assets included in the
Collateral from the Liens securing the obligations under the Notes and the
Guarantees under any one or more of the following circumstances:


 


(1)                                  to
enable the Company (or a Guarantor) to consummate asset dispositions permitted
or not prohibited under Section 4.15;


 


(2)                                  if
any Subsidiary that is a Guarantor is released from its Guarantee;


 


(3)                                  as
described under Article Nine; or


 


(4)                                  as
required pursuant to the terms of the Intercreditor Agreement.


 


88

















 


Upon receipt of such Officers’ Certificate and any
necessary or proper instruments of termination, satisfaction or release
prepared by the Company, the Collateral Agent shall execute, deliver or
acknowledge such instruments or releases to evidence the release of any
Collateral permitted to be released pursuant to this Indenture, the
Intercreditor Agreement or the Collateral Agreements.


 


SECTION 12.06. Release upon Satisfaction or
Defeasance of all Outstanding Obligations.


 


The Liens on, and pledges of, all Collateral will also
be terminated and released upon any of (i) payment in full of the principal of,
premium, if any, on, accrued and unpaid interest, if any, on the Notes and all
other Obligations hereunder and under the Intercreditor Agreement, the
Guarantees and the Collateral Agreements that are due and payable at or prior
to the time such principal, premium, if any, accrued and unpaid interest, if
any, are paid, (ii) a satisfaction and discharge of this Indenture as described
above under Section 8.02; (iii) the occurrence of a Legal Defeasance or
Covenant Defeasance as described above under Section 8.01 or (iv) upon
the approval of Holders of 75% of the aggregate principal amount of the
outstanding Notes.


 


SECTION 12.07. Form and Sufficiency of Release.


 


In the event that the Company or any Guarantor has
sold, exchanged, or otherwise disposed of or proposes to sell, exchange or
otherwise dispose of any portion of the Collateral that may be sold, exchanged
or otherwise disposed of by the Company or such Guarantor, and the Company or
such Guarantor requests the Trustee or the Collateral Agent to furnish a
written disclaimer, release or quitclaim of any interest in such property under
this Indenture and the Collateral Agreements, the Collateral Agent and the
Trustee, as applicable, shall execute, acknowledge and deliver to the Company
or such Guarantor (in proper form) such an instrument promptly after
satisfaction of the conditions set forth herein for delivery of any such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released herefrom shall be entitled to
rely upon any release executed by the Collateral Agent hereunder as sufficient
for the purpose of this Indenture and as constituting a good and valid release
of the property therein described from the Lien of this Indenture or of the
Collateral Agreements.


 


SECTION 12.08. Purchaser Protected.


 


No purchaser or grantee of any property or rights
purporting to be released herefrom shall be bound to ascertain the authority of
the Trustee or the Collateral Agent to execute the release or to inquire as to
the existence of any conditions herein prescribed for the exercise of such
authority; nor shall any purchaser or grantee of any property or rights
permitted by this Indenture to be sold or otherwise disposed of by the Company
be under any obligation to ascertain or inquire into the authority of the
Company to make such sale or other disposition.


 


SECTION 12.09. Authorization of Actions to Be Taken
by the Collateral Agent Under the Intercreditor Agreement and the Collateral
Agreements.


 


Subject to the provisions of the Intercreditor
Agreement and the applicable Collateral Agreements, (a) the Collateral Agent
shall execute and deliver the Intercreditor Agreement and the Collateral
Agreements and act in accordance with the terms thereof, (b) the Collateral
Agent may, in its sole discretion and without the consent of the Trustee or the
Holders, take all actions it deems necessary or appropriate in order to (i)
enforce any of the terms of the Intercreditor Agreement and the Collateral
Agreements and (ii) collect and receive any and all amounts payable in respect
of the Obligations of the Company and the Guarantors hereunder and under the
Notes, the Guarantees, the Intercreditor Agreement, the Collateral Agreements
and (c) the Collateral Agent shall have power to institute and to


 


89

















 


maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any act that may be
unlawful or in violation of the Intercreditor Agreement, the Collateral
Agreements or this Indenture, and suits and proceedings as the Collateral Agent
may deem expedient to preserve or protect its interests and the interests of
the Trustee and the Holders in the Collateral (including the power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
thereunder or be prejudicial to the interests of the Holders, the Trustee or
the Collateral Agent). Notwithstanding the foregoing, the Collateral Agent may,
at the expense of the Company, request the direction of the Holders with
respect to any such actions and upon receipt of the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, shall take such actions; provided
that all actions so taken shall, at all times, be in conformity with the
requirements of the Intercreditor Agreement.


 


SECTION 12.10. Authorization of Receipt of Funds by
the Collateral Agent Under the Intercreditor Agreement and the Collateral
Agreements.


 


The Collateral Agent is authorized to receive any
funds for the benefit of itself, the Trustee and the Holders distributed under
the Intercreditor Agreement and the Collateral Agreements to the extent
permitted under the Intercreditor Agreement and the Collateral Agreements, for
turnover to the Trustee to make further distributions of such funds to itself,
the Collateral Agent and the Holders in accordance with the provisions of Section
6.09 and the other provisions of this Indenture.


 


[SIGNATURE PAGES FOLLOW]


 


90

















 


SIGNATURES


 


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


 


	
   

  	
  MCLEODUSA INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernard L. Zuroff

  
	
   

  	
   

  	
  Name:

  	
  Bernard L. Zuroff

  
	
   

  	
   

  	
  Title: 

  	
  Group Vice President, General Counsel &

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK, NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
  and Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


SIGNATURES


 


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


 


	
   

  	
  MCLEODUSA
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bernard
  L. Zuroff

  
	
   

  	
   

  	
  Title:
  

  	
  Group
  Vice President, General Counsel &

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BANK, NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
  and
  Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard Prokosch

  
	
   

  	
   

  	
  Name:

  	
  Richard
  Prokosch

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
					



 

















 


	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  MCLEODUSA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bernard L. Zuroff

  
	
   

  	
   

  	
  Name:

  	
  Bernard
  L. Zuroff

  
	
   

  	
   

  	
  Title:
  

  	
  Group
  Vice President, General Counsel &

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  MCLEODUSA
  INFORMATION SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bernard L. Zuroff

  
	
   

  	
   

  	
  Name:

  	
  Bernard
  L. Zuroff

  
	
   

  	
   

  	
  Title:
  

  	
  Group
  Vice President, General Counsel &

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  MCLEODUSA
  NETWORK SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bernard L. Zuroff

  
	
   

  	
   

  	
  Name:

  	
  Bernard
  L. Zuroff

  
	
   

  	
   

  	
  Title:
  

  	
  Group
  Vice President, General Counsel &

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  MCLEODUSA
  PURCHASING, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bernard L. Zuroff

  
	
   

  	
   

  	
  Name:

  	
  Bernard
  L. Zuroff

  
	
   

  	
   

  	
  Title:
  

  	
  Group
  Vice President, General Counsel &

  Secretary

  



 














EXHIBIT A


 


[FORM OF INITIAL NOTE AND ADDITIONAL NOTE]


 


MCLEODUSA INCORPORATED


 


101⁄2% SENIOR SECOND SECURED NOTES DUE 2011


 


CUSIP No.[       ]


	
  No. [  ]

  	
   

  	
  $[        ]

  	
   

  



 


McLeodUSA
Incorporated, a Delaware corporation (the “Company,” which term includes
any successor entity), for value received promises to pay to                                       
or registered assigns the principal sum of                               
Dollars (or such principal amount as may be set forth in the records of the
Trustee hereinafter referred to in accordance with the Indenture) on October 1,
2011, and to pay interest thereon as hereinafter set forth.


 


Interest
Rate:  101⁄2%


 


Interest
Payment Dates:  Interest will be payable
semi-annually in cash in arrears on October 1 and April 1 of each year,
beginning on April 1, 2007.


 


Record
Dates:  September 15 and March 15.


 


Reference is
made to the further provisions of this Note contained on the reverse side of
this Note, which will for all purposes have the same effect as if set forth at
this place.


 


IN WITNESS
WHEREOF, the Company has caused this Note to be signed manually or by facsimile
by its duly authorized officer.


 


	
   

  	
  MCLEODUSA INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					



 


A-1

















 


TRUSTEE CERTIFICATE OF
AUTHENTICATION


 


This is one of
the 101⁄2% Senior Second Secured Notes due 2011 referred to in the
within-mentioned Indenture.


 


	
   

  	
  US BANK NATIONAL ASSOCIATION, as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
					



 


A-2

















 


(REVERSE OF SECURITY)


 


101⁄2 Senior Second
Secured Note due 2011


 


1.             Interest. McLeodUSA Incorporated, a Delaware
corporation (the “Company,” which term includes any successor entity),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Note will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from and
including the Issue Date. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing April 1, 2007. Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. The Company will pay interest on overdue principal at 1% per annum in
excess of the above rate and will pay interest on overdue installments of
interest as such higher rate to the extent lawful. Additional Interest may
accrue on this Note in certain circumstances pursuant to the Registration
Rights Agreement and all references to “interest” in this Note shall include
any Additional Interest due on this Note pursuant to the terms of the
Registration Rights Agreement.


 


[FOR REGULATION S
TEMPORARY GLOBAL NOTES INSERT: Until this Regulation S Temporary Global Note is
exchanged for one or more Regulation S Permanent Global Notes, the Holder
hereof shall not be entitled to receive payments of interest hereon; until so
exchanged in full, this Regulation S Temporary Global Note shall in all other
respects be entitled to the same benefits as other Notes under the Indenture.]


 


2.             Method of Payment. The Company shall pay interest
on the Notes (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date even if the Notes are cancelled on registration of
transfer or registration of exchange after such Record Date, and on or before
such Interest Payment Date. Holders must surrender Notes to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts (“U.S. Legal Tender”). However, the
Company may pay principal and interest by check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment to the Paying Agent
or to a Holder at the Holder’s registered address.


 


3.             Paying Agent and Registrar. Initially, U.S. Bank
National Association (the “Trustee”) will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.


 


4.             Indenture. The Notes and the Guarantees were
issued under an Indenture, dated as of September 28, 2006 (the “Indenture”),
among the Company, the Guarantors named therein, the Trustee and the Collateral
Agent. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The  terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the


 


A-3

















 


Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of such terms. The
Notes are senior second secured obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time.


 


5.             Redemption.


 


(a)           Optional Redemption Prior to
October 1, 2009. The Company may, at its option, redeem the Notes, for
cash, in whole or in part, at any time or from time to time, prior to October
1, 2009, upon not less than 30 nor more than 60 days notice, at a redemption
price equal to the greater of:


 


(1)           100%
of the principal amount of the Notes being redeemed; and


 


(2)           the
sum of the present values of 105.250% of the principal amount of the Notes
being redeemed and scheduled payments of interest on such Notes to and including
October 1, 2009 discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 50 basis points, together in either case with accrued and unpaid
interest, if any, to the Redemption Date.


 


(b)           Optional Redemption On or After
October 1, 2009. The Company may redeem the Notes for cash, at its
option, in whole or in part at any time on or after October 1, 2009, upon
not less than 30 nor more than 60 days notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve month period commencing on October 1, of the year set forth
below, together with, in each case, accrued and unpaid interest, if any,
thereon, to the Redemption Date: 


 




	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  105.250

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  






 


(c)           Optional Redemption Upon Equity
Offerings. At any time, or from time to time, on or prior to October 1,
2009, the Company may, at its option, upon not less than 30 days nor more than
60 days notice, use an amount not to exceed the net cash proceeds of one or
more Equity Offerings to redeem up to 35% of the aggregate principal amount of
the Notes at a redemption price of 110.500% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the Redemption
Date; provided that:


 


(1)            at
least 65% of the original principal amount of Notes (including Additional
Notes, if any) issued under this Indenture shall remain outstanding immediately
after any such redemption; and


 


(2)            the
Company shall make such redemption not more than 120 days after the
consummation of any such Equity Offering.


 


A-4

















 


(d)           Optional Redemption Upon ATS Sale.
Within 60 days following the consummation of the ATS Sale, the Company may, at
its option, redeem all or a portion of the Notes in an aggregate principal
amount not exceeding the amount of ATS Sale Proceeds received in the ATS Sale
at a Redemption Price equal to 100% of the aggregate principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the Redemption Date.


 


(e)           Mandatory Redemption.


 


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


 


6.             Notice of Redemption. Notice of redemption will
be mailed by first-class mail at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at such Holder’s
registered address with a copy to the Trustee and any Paying Agent. If fewer
than all of the Notes are to be redeemed, at any time, selection of Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro  rata basis
or by such method as the Trustee may reasonably deem to be fair and
appropriate; provided,
that if any such partial redemption made with the proceeds of an Equity
Offering, the Trustee will select the Notes only on a pro  rata
basis or on as nearly a pro  rata basis as is practicable (subject
to DTC procedures), unless such method is prohibited. Notes in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of Notes that have denominations larger than $1,000.


 


Except as set
forth in the Indenture, if monies for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on
such redemption date sufficient to pay such Redemption Price plus accrued and
unpaid interest, the Notes called for redemption will cease to bear interest
from and after such Redemption Date, and the only remaining right of the
Holders of such Notes will be to receive payment of the Redemption Price plus
accrued and unpaid interest as of the Redemption Date upon surrender to the
Paying Agent of the redeemed Notes.


 


7.             Offers to Purchase. Sections 4.14 and 4.15 of the
Indenture provide that upon the occurrence of a Change of Control and after
certain Asset Sales, respectively, and subject to further limitations contained
therein, the Company will make an offer to purchase certain amounts of the
Notes in accordance with the procedures set forth in the Indenture.


 


8.             Registration Rights. Pursuant to the Registration
Rights Agreement among the Company, the Guarantors and the Initial Purchaser,
the Company will be obligated to consummate an Exchange Offer. Upon such
Exchange Offer, the Holders of Notes shall have the right, subject to
compliance with securities laws, to exchange such Notes for 101⁄2%  Senior Second Secured Notes due 2011, which
have been registered under the Securities Act (the “Exchange Notes”), in
like principal amount and having terms identical in all material respects to
the Initial Notes. The Holders of the Initial Notes shall be entitled to
receive certain Additional Interest payments in the event such exchange offer
is not consummated and upon certain other


 


A-5

















 


conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.


 


9.             Denominations; Transfer; Exchange. The Notes are
in registered form, without coupons, in denominations of $1,000 and integral
multiples thereof. A Holder shall register the transfer of or exchange of Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes, fees or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.


 


10.           Persons Deemed Owners. The
registered Holder of a Note shall be treated as the owner of it for all
purposes.


 


11.           Unclaimed Money. If money for
the payment of principal or interest remains unclaimed for two years, the
Trustee and the Paying Agent may pay the money without interest thereon back to
the Company. After that, all liability of the Trustee and such Paying Agent
with respect to such money shall cease.


 


12.           Discharge Prior to Redemption or
Maturity. If the Company at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations, or a combination thereof, sufficient to
pay the principal of and interest on the Notes on the stated date for payment
or redemption and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest and Additional Interest, if
any, on the Notes).


 


13.           Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Notes, the Guarantees, the
Intercreditor Agreement and the Collateral Agreements may be amended or
supplemented with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and any existing
Default or Event of Default or noncompliance with any provision of such
agreements may be waived with the written consent of the Holders of a majority
in aggregate principal amount of the Notes then outstanding. Without consent of
any Holder, the parties thereto may amend or supplement the Indenture, the
Notes, the Guarantees, the Intercreditor Agreement or the Collateral Agreements
to, among other things, cure any ambiguity, defect or inconsistency, provide
for uncertificated Notes in addition to or in place of certificated Notes,
provide for the assumption of the Company’s or any Guarantor’s obligations in
accordance with Section 5.01 and Section 10.04 of the Indenture, make any other
change that would provide any additional rights or benefits to the Holders that
does not adversely affect in any material respect the legal rights of any
Holder of a Note, to comply with the TIA, to allow for additional guarantees,
if necessary, in connection with any addition or release of Collateral
permitted under the Indenture, the Intercreditor Agreement or the Collateral
Agreements and to release a Guarantor from its Guarantee as permitted by the
Indenture.


 


14.           Restrictive Covenants. The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, incur additional


 


A-6

















 


Indebtedness or Liens, make payments in respect of
their Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Restricted
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.


 


15.           Successors. When a successor
assumes, in accordance with the Indenture, all the obligations of its
predecessor under the Notes, the Guarantees and the Indenture, the predecessor
will be released from those obligations.


 


16.           Defaults and Remedies. If an
Event of Default occurs and is continuing (other than certain events of
bankruptcy involving the Company), the Trustee or the Holders of at least 25%
in aggregate principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture
except as provided in the Indenture. The Trustee is not obligated to enforce
the Indenture or the Notes unless it has received reasonable indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.


 


17.           Trustee Dealings with Company.
Subject to the terms of the TIA and the Indenture, the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


18.           No Recourse Against Others. No
past, present or future, director, officer, employee, stockholder or
incorporator, as such, of the Company, a Guarantor or the Trustee will have any
liability for any obligations of the Company or a Guarantor under the Notes,
the Guarantees, the Intercreditor Agreement, the Collateral Agreements or the
Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder, by accepting a Note, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes. Each of the parties hereto
acknowledge that such waiver may not be effective to waive liabilities under
the federal securities laws.


 


19.           Guarantees.           Payment of principal and interest
(including interest on overdue principal and overdue interest, if lawful), is
unconditionally guaranteed, jointly and severally, by each of the Guarantors.


 


20.           Authentication. This Note
shall not be valid until the Trustee or Authenticating Agent manually signs the
certificate of authentication on this Note.


 


21.           Governing Law. THIS NOTE, THE
INDENTURE AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS


 


A-7

















 


MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE
INDENTURE, THE GUARANTEES, THE COLLATERAL AGREEMENTS OR THE TRANSACTIONS
CONTEMPLATED BY THIS INDENTURE.


 


22.           Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).


 


23.           Security. The Company’s and
Guarantors’ obligations under the Notes are secured by liens on the Collateral
pursuant to the terms of the Collateral Agreements. The actions of the Trustee
and the Holders of the Notes secured by such liens and the application of
proceeds from the enforcement of any remedies with respect to such Collateral
are limited pursuant to the terms of the Collateral Agreements.


 


24.           CUSIP Numbers. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes as
a convenience to the Holders of the Notes. No representation is made as to the
accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed thereon.


 


The Company
will furnish to any Holder of a Note upon written request and without charge a
copy of the Indenture. Requests may be made to: 
McLeodUSA Incorporated, 1 Martha’s Way, Hiawatha, Iowa 52233.


 


A-8

















 


FORM OF GUARANTEE


 


The
undersigned and its successors under the Indenture have irrevocably and
unconditionally guaranteed, on a senior secured basis to the extent set forth
in the Indenture, dated as of September 28, 2006, by and among McLeodUSA
Incorporated (the “Company”), the Guarantors and U.S. Bank National
Association, as Trustee and Collateral Agent (the “Indenture”), (i) the
due and punctual payment of the principal of, premium, if any, and interest on
the Notes, subject to any applicable grace period, whether upon redemption
pursuant to the terms of the Notes, by acceleration or otherwise, and interest
(including interest accruing after the commencement of any bankruptcy,
insolvency, or similar proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the overdue principal,
if any, and interest on any interest, if any, of the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders, the Trustee and the Collateral Agent all in accordance
with the terms set forth in Article Ten of the Indenture and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, subject to any applicable grace
period, whether at stated maturity, by acceleration or otherwise. Capitalized
terms used herein have the meanings assigned to them in the Indenture unless
otherwise indicated.


 


THE
OBLIGATIONS OF THE UNDERSIGNED TO HOLDERS OF THE NOTES AND TO THE TRUSTEE
PURSUANT TO THIS NOTATION OF GUARANTEE (THE “GUARANTEE”) AND THE INDENTURE ARE
EXPRESSLY SET FORTH IN ARTICLE TEN OF THE INDENTURE AND REFERENCE IS HEREBY
MADE TO THE INDENTURE FOR THE PRECISE TERMS OF THE GUARANTEE AND ALL OTHER
PROVISIONS OF THE INDENTURE TO WHICH THE GUARANTEE RELATES. EACH HOLDER OF A
NOTE, BY ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE BOUND BY SUCH
PROVISIONS AND (B) APPOINTS THE TRUSTEE ATTORNEY-IN-FACT FOR SUCH HOLDER FOR
SUCH PURPOSES.


 


This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York.


 


	
   

  	
  [NAME OF GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
				



 


A-9





















 


ASSIGNMENT FORM


 


If you the
Holder want to assign this Note, fill in the form below and have your signature
guaranteed:


 


I or we assign and transfer this Note to:


 


(Print or type name, address and zip code and

social security or tax ID number of assignee)


 


and irrevocably appoint

agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the other side of this Note)

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


In connection
with any transfer of this Note occurring prior to the date which is the earlier
of (i) the date of the declaration by the SEC of the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the “Securities
Act”), covering resales of this Note (which effectiveness shall not have
been suspended or terminated at the date of the transfer) and (ii) September
28, 2008, the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that
this Note is being transferred:


 


[Check One]


 


(1)                                               to
the Company or a subsidiary thereof; or


 


(2)                                               pursuant
to and in compliance with Rule 144A under the Securities Act; or


 


(3)                                               to
an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) that has furnished to the Trustee a signed
letter containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or


 


(4)                                               outside
the United States to a person other than a “U.S. person” in compliance with
Rule 904 of Regulation S under the Securities Act; or


 


(5)                                               pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act; or


 


(6)                                               pursuant
to an effective registration statement under the Securities Act.


 


A-10

















 


Unless one of the boxes is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any person other than the registered Holder thereof; provided that if
box (3), (4) or (5) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Notes, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or the Company has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.


 


If none of the
foregoing boxes is checked, the Trustee or Registrar shall not be obligated to
register this Note in the name of any person other than the Holder hereof
unless and until the conditions to any such transfer of registration set forth
herein and in Section 2.15 of the Indenture shall have been satisfied.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the other side of this Note)

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED


 


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


 


	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: To be executed by an executive officer

  



 


A-11

















 


[OPTION OF HOLDER TO ELECT PURCHASE]


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.14 or
Section 4.15 of the Indenture, check the appropriate box:


 


Section 4.14  [         ]


 


Section 4.15  [         ]


 


If you want to
elect to have only part of this Note purchased by the Company pursuant to
Section 4.14 or Section 4.15 of the Indenture, state the amount you elect to
have purchased:


 


	
  $

  	
   

  	
   

  	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: 

  	
  The signature on this assignment must

  correspond with the name as it appears

  upon the face of the within Note in every

  particular without alteration or

  enlargement or any change whatsoever

  and be guaranteed by the endorser’s

  bank or broker.

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
												



 


A-12

















 


EXHIBIT B


 


[FORM OF EXCHANGE NOTE]


 


MCLEODUSA INCORPORATED


 


101⁄2% SENIOR SECOND SECURED NOTES DUE 2011


 


CUSIP No.[       ]


	
  No. [  ]

  	
   

  	
  $[        ]

  	
   

  



 


McLeodUSA
Incorporated, a Delaware corporation (the “Company,” which term includes
any successor entity), for value received promises to pay to                               
or registered assigns the principal sum of                         
Dollars (or such principal amount as may be set forth in the records of the
Trustee hereinafter referred to in accordance with the Indenture) on October 1,
2011, and to pay interest thereon as hereinafter set forth.


 


Interest
Rate:  101⁄2%


 


Interest
Payment Dates:  Interest will be payable
semi-annually in cash in arrears on October 1 and April 1 of each year,
beginning on April 1, 2007.


 


Record
Dates:  September 15 and March 15.


 


Reference is
made to the further provisions of this Note contained on the reverse side of
this Note, which will for all purposes have the same effect as if set forth at
this place.


 


IN WITNESS
WHEREOF, the Company has caused this Note to be signed manually or by facsimile
by its duly authorized officer.


 


	
   

  	
  MCLEODUSA INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					



 


B-1

















 


TRUSTEE CERTIFICATE OF
AUTHENTICATION


 


This is one of
the 101⁄2% Senior Second Secured Notes due 2011 referred to in the
within-mentioned Indenture.


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  Trustee

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
					



 


B-2

















 


(REVERSE OF SECURITY)


 


101⁄2% Senior Second
Secured Note due 2011


 


1.             Interest. McLeodUSA Incorporated, a Delaware
corporation (the “Company,” which term includes any successor entity),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Note will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from and
including the Issue Date. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing April 1, 2007. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months. The
Company will pay interest on overdue principal at 1% per annum in excess of the
above rate and will pay interest on overdue installments of interest as such
higher rate to the extent lawful.


 


[FOR REGULATION S
TEMPORARY GLOBAL NOTES INSERT: Until this Regulation S Temporary Global Note is
exchanged for one or more Regulation S Permanent Global Notes, the Holder
hereof shall not be entitled to receive payments of interest hereon; until so
exchanged in full, this Regulation S Temporary Global Note shall in all other
respects be entitled to the same benefits as other Notes under the Indenture.]


 


2.             Method of Payment. The Company shall pay interest
on the Notes (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date even if the Notes are cancelled on registration of
transfer or registration of exchange after such Record Date, and on or before such
Interest Payment Date. Holders must surrender Notes to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts (“U.S. Legal Tender”). However, the
Company may pay principal and interest by check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment to the Paying Agent
or to a Holder at the Holder’s registered address.


 


3.             Paying Agent and Registrar. Initially, U.S. Bank
National Association (the “Trustee”) will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.


 


4.             Indenture. The Notes and the Guarantees were
issued under an Indenture, dated as of September 28, 2006 (the “Indenture”),
among the Company, the Guarantors named therein, the Trustee and the Collateral
Agent. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The  terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of such terms. The Notes are senior second secured
obligations of the


 


B-3

















 


Company. Each Holder, by accepting a Note, agrees to
be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.


 


5.             Redemption.


 


(a)           Optional Redemption Prior to
October 1, 2009. The Company may, at its option, redeem the Notes in whole
or in part, at any time or from time to time, prior to October 1, 2009, upon
not less than 30 nor more than 60 days notice, at a redemption price equal to
the greater of:


 


(1)           100%
of the principal amount of the Notes being redeemed; and


 


(2)           the
sum of the present values of 105.250% of the principal amount of the Notes
being redeemed and scheduled payments of interest on such Notes to and
including October 1, 2009 discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points, together in either case with accrued and
unpaid interest, if any, to the Redemption Date.


 


(b)           Optional Redemption On or After
October 1, 2009. The Company may redeem the Notes for cash, at its option,
in whole or in part at any time on or after October 1, 2009, upon not less than
30 nor more than 60 days notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve month period commencing on October 1, of the year set forth below,
together with, in each case, accrued and unpaid interest, if any, thereon, to
the Redemption Date: 


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  105.250

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  



 


(c)           Optional Redemption Upon Equity
Offerings. At any time, or from time to time, on or prior to October 1,
2009, the Company may, at its option, upon not less than 30 days nor more than
60 days notice, use an amount not to exceed the net cash proceeds of one or
more Equity Offerings to redeem up to 35% of the aggregate principal amount of
the Notes at a redemption price of 110.500% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the Redemption
Date; provided that:


 


(1)            at
least 65% of the original principal amount of Notes (including Additional
Notes, if any) issued under this Indenture shall remain outstanding immediately
after any such redemption; and


 


(2)            the
Company shall make such redemption not more than 120 days after the
consummation of any such Equity Offering.


 


(d)           Optional Redemption Upon ATS Sale.
Within 60 days following the consummation of the ATS Sale, the Company may, at
its option, redeem all or a portion of the


 


B-4

















 


Notes in an aggregate principal amount not exceeding
the amount of ATS Sale Proceeds received in the ATS Sale at a Redemption Price
equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the Redemption Date.


 


(e)           Mandatory Redemption.


 


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


 


6.             Notice of Redemption. Notice of redemption will
be mailed by first-class mail at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at such Holder’s
registered address with a copy to the Trustee and any Paying Agent. If fewer
than all of the Notes are to be redeemed, at any time, selection of Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro  rata basis
or by such method as the Trustee may reasonably deem to be fair and appropriate;
provided, that if any
such partial redemption made with the proceeds of an Equity Offering, the
Trustee will select the Notes only on a pro  rata basis or on as
nearly a pro  rata basis as is practicable (subject to DTC
procedures), unless such method is prohibited. Notes in denominations of $1,000
may be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
Notes that have denominations larger than $1,000.


 


Except as set
forth in the Indenture, if monies for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on
such redemption date sufficient to pay such Redemption Price plus accrued and
unpaid interest, the Notes called for redemption will cease to bear interest
from and after such Redemption Date, and the only remaining right of the
Holders of such Notes will be to receive payment of the Redemption Price plus
accrued and unpaid interest as of the Redemption Date upon surrender to the
Paying Agent of the redeemed Notes.


 


7.             Offers to Purchase. Sections 4.14 and 4.15 of the
Indenture provide that upon the occurrence of a Change of Control and after
certain Asset Sales, respectively, and subject to further limitations contained
therein, the Company will make an offer to purchase certain amounts of the
Notes in accordance with the procedures set forth in the Indenture.


 


8.             Denominations; Transfer; Exchange. The Notes are
in registered form, without coupons, in denominations of $1,000 and integral
multiples thereof. A Holder shall register the transfer of or exchange of Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes, fees or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.


 


9.             Persons Deemed Owners. The registered Holder of a
Note shall be treated as the owner of it for all purposes.


 


B-5

















 


10.           Unclaimed Money. If money for
the payment of principal or interest remains unclaimed for two years, the
Trustee and the Paying Agent may pay the money without interest thereon back to
the Company. After that, all liability of the Trustee and such Paying Agent
with respect to such money shall cease.


 


11.           Discharge Prior to Redemption or
Maturity. If the Company at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations, or a combination thereof, sufficient to
pay the principal of and interest on the Notes on the stated date for payment
or redemption and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest and Additional Interest, if
any, on the Notes).


 


12.           Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Notes, the Guarantees, the
Intercreditor Agreement and the Collateral Agreements may be amended or
supplemented with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and any existing
Default or Event of Default or noncompliance with any provision of such
agreements may be waived with the written consent of the Holders of a majority
in aggregate principal amount of the Notes then outstanding. Without consent of
any Holder, the parties thereto may amend or supplement the Indenture, the
Notes, the Guarantees, the Intercreditor Agreement or the Collateral Agreements
to, among other things, cure any ambiguity, defect or inconsistency, provide
for uncertificated Notes in addition to or in place of certificated Notes,
provide for the assumption of the Company’s or any Guarantor’s obligations in
accordance with Section 5.01 and Section 10.04 of the Indenture, make any other
change that would provide any additional rights or benefits to the Holders that
does not adversely affect in any material respect the legal rights of any
Holder of a Note, to comply with the TIA, to allow for additional guarantees,
if necessary, in connection with any addition or release of Collateral
permitted under the Indenture, the Intercreditor Agreement or the Collateral
Agreements and to release a Guarantor from its Guarantee as permitted by the
Indenture.


 


13.           Restrictive Covenants. The
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, incur additional Indebtedness
or Liens, make payments in respect of their Capital Stock or certain Indebtedness,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, merge or consolidate with any
other Person, sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.


 


14.           Successors. When a successor
assumes, in accordance with the Indenture, all the obligations of its
predecessor under the Notes, the Guarantees and the Indenture, the predecessor
will be released from those obligations.


 


15.           Defaults and Remedies. If an
Event of Default occurs and is continuing (other than certain events of
bankruptcy involving the Company), the Trustee or the Holders of at least 25%
in aggregate principal amount of Notes then outstanding may declare all the
Notes to


 


B-6

















 


be due and payable in the manner, at the time and with
the effect provided in the Indenture. Holders of Notes may not enforce the
Indenture except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received reasonable indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.


 


16.           Trustee Dealings with Company.
Subject to the terms of the TIA and the Indenture, the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


17.           No Recourse Against Others. No
past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company, a Guarantor or the Trustee will have any
liability for any obligations of the Company or a Guarantor under the Notes,
the Guarantees, the Intercreditor Agreement, the Collateral Agreements or the
Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder, by accepting a Note, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes. Each of the parties hereto
acknowledge that such waiver may not be effective to waive liabilities under
the federal securities laws.


 


18.           Guarantees.           Payment of principal and interest
(including interest on overdue principal and overdue interest, if lawful), is
unconditionally guaranteed, jointly and severally, by each of the Guarantors.


 


19.           Authentication. This Note
shall not be valid until the Trustee or Authenticating Agent manually signs the
certificate of authentication on this Note.


 


20.           Governing Law. THIS NOTE, THE
INDENTURE AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE, THE INDENTURE, THE GUARANTEES, THE
COLLATERAL AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE.


 


21.           Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).


 


B-7

















 


22.           Security. The Company’s and
Guarantors’ obligations under the Notes are secured by liens on the Collateral
pursuant to the terms of the Collateral Agreements. The actions of the Trustee
and the Holders of the Notes secured by such liens and the application of
proceeds from the enforcement of any remedies with respect to such Collateral
are limited pursuant to the terms of the Collateral Agreements.


 


23.           CUSIP Numbers. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes as
a convenience to the Holders of the Notes. No representation is made as to the
accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed thereon.


 


The Company
will furnish to any Holder of a Note upon written request and without charge a
copy of the Indenture. Requests may be made to: 
McLeodUSA Incorporated, 1 Martha’s Way, Hiawatha, Iowa 52233.


 


B-8

















 


FORM OF GUARANTEE


 


The
undersigned and its successors under the Indenture have irrevocably and
unconditionally guaranteed, on a senior secured basis to the extent set forth
in the Indenture, dated as of September 28, 2006, by and among McLeodUSA
Incorporated (the “Company”), the Guarantors and U.S. Bank National
Association, as Trustee and Collateral Agent (the “Indenture”), (i) the
due and punctual payment of the principal of, premium, if any, and interest on
the Notes, subject to any applicable grace period, whether upon redemption
pursuant to the terms of the Notes, by acceleration or otherwise, and interest
(including interest accruing after the commencement of any bankruptcy,
insolvency, or similar proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the overdue principal,
if any, and interest on any interest, if any, of the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders, the Trustee and the Collateral Agent all in accordance
with the terms set forth in Article Ten of the Indenture and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at stated maturity, by acceleration or
otherwise. Capitalized terms used herein have the meanings assigned to them in
the Indenture unless otherwise indicated.


 


THE
OBLIGATIONS OF THE UNDERSIGNED TO HOLDERS OF THE NOTES AND TO THE TRUSTEE
PURSUANT TO THIS NOTATION OF GUARANTEE (THE “GUARANTEE”) AND THE INDENTURE ARE
EXPRESSLY SET FORTH IN ARTICLE TEN OF THE INDENTURE AND REFERENCE IS HEREBY
MADE TO THE INDENTURE FOR THE PRECISE TERMS OF THE GUARANTEE AND ALL OTHER
PROVISIONS OF THE INDENTURE TO WHICH THE GUARANTEE RELATES. EACH HOLDER OF A
NOTE, BY ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE BOUND BY SUCH
PROVISIONS AND (B) APPOINTS THE TRUSTEE ATTORNEY-IN-FACT FOR SUCH HOLDER FOR
SUCH PURPOSES.


 


This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York.


 


	
   

  	
  [NAME OF GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
				



 


B-9

















 


[OPTION OF HOLDER TO ELECT PURCHASE]


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.14 or
Section 4.15 of the Indenture, check the appropriate box:


 


Section 4.14  [         ]


 


Section 4.15  [         ]


 


If you want to
elect to have only part of this Note purchased by the Company pursuant to
Section 4.14 or Section 4.15 of the Indenture, state the amount you elect to
have purchased:


 


	
  $

  	
   

  	
   

  	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: 

  	
  The signature on this assignment must

  correspond with the name as it appears

  upon the face of the within Note in every

  particular without alteration or

  enlargement or any change whatsoever

  and be guaranteed by the endorser’s

  bank or broker.

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
												



 


B-10

















 


ASSIGNMENT FORM


 


If you the
Holder want to assign this Note, fill in the form below and have your signature
guaranteed:


 


I or we assign and transfer this Note to:


 


 


(Print or type name, address and zip code and

social security or tax ID number of assignee)


 


and irrevocably appoint

agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears

  on the other side of this Note)

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								



 


B-11

















 


EXHIBIT C-1


 


FORM OF PRIVATE PLACEMENT LEGEND


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER SECTION 5
OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.


 


THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
(1) REPRESENTS THAT (X) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT), (Y) IT IS A NON-U.S. PURCHASER AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (Z) IT IS AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY
BE HEREINAFTER PROVIDED UNDER RULE 144(K) UNDER THE SECURITIES ACT PERMITTING
RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) (THE “RESALE
RESTRICTION TERMINATION DATE”) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH MCLEODUSA INCORPORATED OR ANY AFFILIATE OF MCLEODUSA
INCORPORATED WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO MCLEODUSA INCORPORATED OR ANY OF ITS SUBSIDIARIES,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF MCLEODUSA INCORPORATED AND THE TRUSTEE,
OR OF THE TRANSFER AGENT,


 


C-1-1

















 


AS APPLICABLE, PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE
JURISDICTION. IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY SHALL BE COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.


 


C-1-2

















 


EXHIBIT C-2


 


FORM OF LEGEND FOR GLOBAL NOTES


 


Any Global
Note authenticated and delivered hereunder shall bear a legend (which would be
in addition to any other legends required in the case of a Restricted Security)
in substantially the following form:


 


[If a Regulation S Temporary Global Note, insert: THE RIGHTS ATTACHING
TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATES NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF
THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
INTEREST HEREON.]


 


THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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.


 


C-2-1

















 


EXHIBIT D


 


 


Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited Investors


 


                                 ,      


 


 


U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attn:  Rick Prokosch


 


Re:                               101⁄2%
Senior Second Secured Notes due 2011 (the “Notes”) of McLeodUSA Incorporated
(the “Company”)


 


Ladies and Gentlemen:


 


In connection
with our proposed purchase of $                      
aggregate principal amount of the Notes, we confirm that:


 


1.             We have received a copy of the Offering Circular (the “Offering
Circular”), dated September 19, 2006, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled “Notice to Investors” of the Offering Circular.


 


2.             We understand that any subsequent transfer of the Notes
is subject to certain restrictions and conditions set forth in the Indenture
dated as of September 28, 2006, relating to the Notes (the “Indenture”)
and the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the “Securities Act”).


 


3.             We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell or otherwise transfer any Notes prior to the
date which is within two years after the original issuance of the Notes or the
last date on which the Note is owned by the Company or any affiliate of the
Company, we will do so only (i) to the Company or any of its subsidiaries,
(ii) inside the United States in accordance with Rule 144A under the
Securities Act to a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act), (iii) inside the United States to an
institutional “accredited investor” (as defined below) provided that, prior to
such transfer, the transferee furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to you a signed letter containing


 


D-1

















 


certain representations and agreements relating to the
restrictions on transfer of the Notes, substantially in the form of this
letter, (iv) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available) or
(vi) pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing any of the Notes
from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.


 


4.             Either (1) we are not, and will not transfer the Notes
to, an entity holding “plan assets,” within the meaning of 29 C.F.R.
2510.3-101, of any “employee benefit plan” within the meaning of Section 3(3)
of the Employee Retirement Security Act of 1974, as amended (“ERISA”), or any “plan”
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended (the “Code”) or (2) our purchase and holding of the notes will not
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the
Code (or any substantially similar applicable law).


 


5.             We understand that, on any proposed resale of any Notes,
we will be required to furnish to you and the Company such certification, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.


 


6.             We are an institutional “accredited investor” (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear
the economic risk of our or their investment, as the case may be.


 


7.             We are acquiring the Notes purchased by us for our own
account or for one or more accounts (each of which is an institutional “accredited
investor”) as to each of which we exercise sole investment discretion.


 


8.             We are not acquiring Notes with a view to any
distribution thereof in a transaction that would violate the Securities Act or
the securities laws of any state of the United States or any other applicable
jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall remain at
all times within our and their control.


 


You and the
Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby, and we agree to


 


D-2

















 


notify you promptly if any of our representations or
warranties herein cease to be accurate and complete.


 


This letter
shall be governed by, and construed in accordance with, the laws of the State
of New York without regard to principles of conflicts of laws.


 


	
   

  	
  Very truly yours,

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  



 


D-3

















 


EXHIBIT E


 


Form of Certificate To Be

Delivered in Connection with

Transfers Pursuant to Regulation S


 


U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attn:  Rick Prokosch


 


Re:                               101⁄2%
Senior Second Secured Notes due 2011 (the “Notes”) of McLeodUSA Incorporated
(the “Company”)


 


Ladies and Gentlemen:


 


In connection
with our proposed sale of $                            
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:


 


1.             the offer of the Notes was not made to a person in the
United States;


 


2.             either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States,
or (b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;


 


3.             no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;


 


4.             the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and


 


5.             we have advised the transferee of the transfer
restrictions applicable to the Notes.


 


You and the
Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.


 


	
   

  	
  Very truly yours,

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  



 


E-1