Exhibit 4.1


 





















 




 





WMG ACQUISITION CORP.,

as the Issuer,


 


the Guarantors named herein




and


 


WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee


 


INDENTURE


 


Dated as of April 8, 2004


 


U.S. Dollar-denominated 7 3/8% Senior Subordinated Notes due 2014




Sterling-denominated 8 1/8% Senior Subordinated Notes due 2014


 




 
























 


CROSS-REFERENCE
TABLE


 


	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  	
   

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
  7.10

  	
   

  
	
  (a)(2)

  	
  7.10

  	
   

  
	
  (a)(3)

  	
  N.A.

  	
   

  
	
  (a)(4)

  	
  N.A.

  	
   

  
	
  (a)(5)

  	
  7.08; 7.10

  	
   

  
	
  (b)

  	
  7.08; 7.10; 12.02

  	
   

  
	
  (c)

  	
  N.A.

  	
   

  
	
  311(a)

  	
  7.11

  	
   

  
	
  (b)

  	
  7.11

  	
   

  
	
  (c)

  	
  N.A.

  	
   

  
	
  312(a)

  	
  2.05

  	
   

  
	
  (b)

  	
  12.03

  	
   

  
	
  (c)

  	
  12.03

  	
   

  
	
  313(a)

  	
  7.06

  	
   

  
	
  (b)(1)

  	
  7.06

  	
   

  
	
  (b)(2)

  	
  7.06

  	
   

  
	
  (c)

  	
  7.06; 12.02

  	
   

  
	
  (d)

  	
  7.06

  	
   

  
	
  314(a)

  	
  4.06; 4.17

  	
   

  
	
  (b)

  	
  N.A.

  	
   

  
	
  (c)(1)

  	
  7.02; 12.04; 12.05

  	
   

  
	
  (c)(2)

  	
  7.02; 12.04; 12.05

  	
   

  
	
  (c)(3)

  	
  N.A.

  	
   

  
	
  (d)

  	
  N.A.

  	
   

  
	
  (e)

  	
  12.05

  	
   

  
	
  (f)

  	
  N.A.

  	
   

  
	
  315(a)

  	
  7.01(b)

  	
   

  
	
  (b)

  	
  7.05

  	
   

  
	
  (c)

  	
  7.01

  	
   

  
	
  (d)

  	
  6.05; 7.01(c)

  	
   

  
	
  (e)

  	
  6.11

  	
   

  
	
  316(a)(last sentence)

  	
  2.09

  	
   

  
	
  (a)(1)(A)

  	
  6.02

  	
   

  
	
  (a)(1)(B)

  	
  6.04

  	
   

  
	
  (a)(2)

  	
  9.02

  	
   

  
	
  (b)

  	
  6.07

  	
   

  
	
  (c)

  	
  9.05

  	
   

  
	
  317(a)(1)

  	
  6.08

  	
   

  
	
  (a)(2)

  	
  6.09

  	
   

  
	
  (b)

  	
  2.04

  	
   

  
	
  3 18(a)

  	
  12.01

  	
   

  
	
  (c)

  	
  12.01

  	
   

  



 





















 










N.A. means Not Applicable


 


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


 





















 


TABLE
OF CONTENTS


 


	
  ARTICLE
  ONE

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS

  	
   

  
	
  SECTION
  1.02.

  	
  OTHER
  DEFINITIONS

  	
   

  
	
  SECTION
  1.03.

  	
  INCORPORATION
  BY REFERENCE OF TIA

  	
   

  
	
  SECTION
  1.04.

  	
  RULES OF
  CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  
	
  THE SECURITIES

  
	
   

  
	
  SECTION
  2.01.

  	
  AMOUNT OF
  SECURITIES

  	
   

  
	
  SECTION
  2.02.

  	
  FORM AND
  DATING

  	
   

  
	
  SECTION
  2.03.

  	
  EXECUTION
  AND AUTHENTICATION

  	
   

  
	
  SECTION
  2.04.

  	
  REGISTRAR
  AND PAYING AGENT

  	
   

  
	
  SECTION
  2.05.

  	
  PAYING
  AGENT TO HOLD ASSETS IN TRUST

  	
   

  
	
  SECTION
  2.06.

  	
  HOLDER
  LISTS

  	
   

  
	
  SECTION
  2.07.

  	
  TRANSFER
  AND EXCHANGE

  	
   

  
	
  SECTION
  2.08.

  	
  REPLACEMENT
  SECURITIES

  	
   

  
	
  SECTION
  2.09.

  	
  OUTSTANDING
  SECURITIES

  	
   

  
	
  SECTION
  2.10.

  	
  TREASURY
  SECURITIES

  	
   

  
	
  SECTION
  2.11.

  	
  TEMPORARY
  SECURITIES

  	
   

  
	
  SECTION
  2.12.

  	
  CANCELLATION

  	
   

  
	
  SECTION
  2.13.

  	
  DEFAULTED
  INTEREST

  	
   

  
	
  SECTION
  2.14.

  	
  CUSIP,
  ISIN AND COMMON CODE NUMBERS

  	
   

  
	
  SECTION
  2.15.

  	
  DEPOSIT
  OF MONEYS

  	
   

  
	
  SECTION 2.16.

  	
  BOOK-ENTRY
  PROVISIONS FOR GLOBAL SECURITIES

  	
   

  
	
  SECTION
  2.17.

  	
  SPECIAL
  TRANSFER PROVISIONS

  	
   

  
	
  SECTION
  2.18.

  	
  COMPUTATION
  OF INTEREST

  	
   

  
	
  SECTION
  2.19.

  	
  CALCULATION
  OF PRINCIPAL AMOUNT OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  THREE

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
  NOTICES
  TO TRUSTEE

  	
   

  
	
  SECTION
  3.02.

  	
  SELECTION
  OF SECURITIES TO BE REDEEMED

  	
   

  
	
  SECTION
  3.03.

  	
  NOTICE OF
  REDEMPTION

  	
   

  



 


i





















 


	
  SECTION
  3.04.

  	
  EFFECT OF
  NOTICE OF REDEMPTION

  	
   

  
	
  SECTION
  3.05.

  	
  DEPOSIT
  OF REDEMPTION PRICE

  	
   

  
	
  SECTION
  3.06.

  	
  SECURITIES
  REDEEMED IN PART

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FOUR

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  PAYMENT
  OF SECURITIES

  	
   

  
	
  SECTION
  4.02.

  	
  MAINTENANCE
  OF OFFICE OR AGENCY

  	
   

  
	
  SECTION
  4.03.

  	
  CORPORATE
  EXISTENCE

  	
   

  
	
  SECTION
  4.04.

  	
  PAYMENT
  OF TAXES AND OTHER CLAIMS

  	
   

  
	
  SECTION
  4.05.

  	
  MAINTENANCE
  OF PROPERTIES AND INSURANCE

  	
   

  
	
  SECTION
  4.06.

  	
  COMPLIANCE
  CERTIFICATE; NOTICE OF DEFAULT

  	
   

  
	
  SECTION
  4.07.

  	
  COMPLIANCE
  WITH LAWS

  	
   

  
	
  SECTION
  4.08.

  	
  WAIVER OF
  STAY, EXTENSION OR USURY LAWS

  	
   

  
	
  SECTION
  4.09.

  	
  CHANGE OF
  CONTROL

  	
   

  
	
  SECTION
  4.10.

  	
  INCURRENCE
  OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

  	
   

  
	
  SECTION
  4.11.

  	
  RESTRICTED
  PAYMENTS

  	
   

  
	
  SECTION
  4.12.

  	
  LIENS

  	
   

  
	
  SECTION
  4.13.

  	
  ASSET
  SALES

  	
   

  
	
  SECTION
  4.14.

  	
  TRANSACTIONS
  WITH AFFILIATES

  	
   

  
	
  SECTION
  4.15.

  	
  DIVIDEND
  AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

  	
   

  
	
  SECTION
  4.16.

  	
  ADDITIONAL
  SUBSIDIARY GUARANTEES

  	
   

  
	
  SECTION
  4.17.

  	
  REPORTS
  TO HOLDERS

  	
   

  
	
  SECTION
  4.18.

  	
  LIMITATION
  ON LAYERING

  	
   

  
	
  SECTION
  4.19.

  	
  BUSINESS
  ACTIVITIES

  	
   

  
	
  SECTION
  4.20.

  	
  PAYMENTS
  FOR CONSENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FIVE

  
	
   

  
	
  SUCCESSOR
  CORPORATION

  
	
   

  
	
  SECTION
  5.01.

  	
  MERGER,
  CONSOLIDATION, OR SALE OF ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  
	
  DEFAULT AND
  REMEDIES

  
	
   

  
	
  SECTION
  6.01.

  	
  EVENTS OF
  DEFAULT

  	
   

  
	
  SECTION
  6.02.

  	
  ACCELERATION

  	
   

  



 


ii





















 


	
  SECTION 6.03.

  	
  OTHER
  REMEDIES

  	
   

  
	
  SECTION 6.04.

  	
  WAIVER OF
  DEFAULTS

  	
   

  
	
  SECTION 6.05.

  	
  CONTROL
  BY MAJORITY

  	
   

  
	
  SECTION 6.06.

  	
  LIMITATION
  ON SUITS

  	
   

  
	
  SECTION 6.07.

  	
  RIGHTS OF
  HOLDERS TO RECEIVE PAYMENT

  	
   

  
	
  SECTION 6.08.

  	
  COLLECTION
  SUIT BY TRUSTEE

  	
   

  
	
  SECTION 6.09.

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
   

  
	
  SECTION 6.10.

  	
  PRIORITIES

  	
   

  
	
  SECTION 6.11.

  	
  UNDERTAKING
  FOR COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  SEVEN

  
	
   

  
	
  TRUSTEE

  
	
   

  
	
  SECTION
  7.01.

  	
  DUTIES OF
  TRUSTEE

  	
   

  
	
  SECTION
  7.02.

  	
  RIGHTS OF
  TRUSTEE

  	
   

  
	
  SECTION
  7.03.

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE

  	
   

  
	
  SECTION
  7.04.

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  
	
  SECTION
  7.05.

  	
  NOTICE OF
  DEFAULT

  	
   

  
	
  SECTION
  7.06.

  	
  REPORTS
  BY TRUSTEE TO HOLDERS

  	
   

  
	
  SECTION
  7.07.

  	
  COMPENSATION
  AND INDEMNITY

  	
   

  
	
  SECTION
  7.08.

  	
  REPLACEMENT
  OF TRUSTEE

  	
   

  
	
  SECTION
  7.09.

  	
  SUCCESSOR
  TRUSTEE BY MERGER, ETC

  	
   

  
	
  SECTION
  7.10.

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
   

  
	
  SECTION
  7.11.

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST THE ISSUER

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  EIGHT

  
	
   

  
	
  DISCHARGE
  OF INDENTURE; DEFEASANCE

  
	
   

  
	
  SECTION
  8.01.

  	
  TERMINATION
  OF THE ISSUER’S OBLIGATIONS

  	
   

  
	
  SECTION
  8.02.

  	
  LEGAL
  DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
  SECTION
  8.03.

  	
  CONDITIONS
  TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE

  	
   

  
	
  SECTION
  8.04.

  	
  APPLICATION
  OF TRUST MONEY

  	
   

  
	
  SECTION
  8.05.

  	
  REPAYMENT
  TO THE ISSUER

  	
   

  
	
  SECTION
  8.06.

  	
  REINSTATEMENT

  	
   

  
	
   

  	
   

  	
   

  



 


iii





















 


	
  ARTICLE
  NINE

  
	
   

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.01.

  	
  WITHOUT
  CONSENT OF HOLDERS

  	
   

  
	
  SECTION
  9.02.

  	
  WITH
  CONSENT OF HOLDERS

  	
   

  
	
  SECTION
  9.03.

  	
  EFFECT ON
  SENIOR DEBT

  	
   

  
	
  SECTION
  9.04.

  	
  COMPLIANCE
  WITH TIA

  	
   

  
	
  SECTION
  9.05.

  	
  REVOCATION
  AND EFFECT OF CONSENTS

  	
   

  
	
  SECTION
  9.06.

  	
  NOTATION
  ON OR EXCHANGE OF SECURITIES

  	
   

  
	
  SECTION
  9.07.

  	
  TRUSTEE
  TO SIGN AMENDMENTS, ETC

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  
	
  SUBORDINATION
  OF SECURITIES

  
	
   

  
	
  SECTION
  10.01.

  	
  SECURITIES SUBORDINATED TO SENIOR DEBT

  	
   

  
	
  SECTION
  10.02.

  	
  SUSPENSION OF PAYMENT WHEN SENIOR DEBT
  IS IN DEFAULT

  	
   

  
	
  SECTION
  10.03.

  	
  SECURITIES SUBORDINATED TO PRIOR PAYMENT
  OF ALL SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE
  ISSUER

  	
   

  
	
  SECTION
  10.04.

  	
  PAYMENTS MAY BE MADE PRIOR TO DISSOLUTION

  	
   

  
	
  SECTION
  10.05.

  	
  HOLDERS TO BE SUBROGATED TO RIGHTS OF
  HOLDERS OF SENIOR DEBT

  	
   

  
	
  SECTION
  10.06.

  	
  OBLIGATIONS OF THE ISSUER UNCONDITIONAL

  	
   

  
	
  SECTION
  10.07.

  	
  NOTICE TO TRUSTEE

  	
   

  
	
  SECTION
  10.08.

  	
  RELIANCE ON JUDICIAL ORDER OR
  CERTIFICATE OF LIQUIDATING AGENT

  	
   

  
	
  SECTION
  10.09.

  	
  TRUSTEE’S RELATION TO SENIOR DEBT

  	
   

  
	
  SECTION
  10.10.

  	
  SUBORDINATION RIGHTS NOT IMPAIRED BY
  ACTS OR OMISSIONS OF THE ISSUER OR HOLDERS OF SENIOR DEBT.

  	
   

  
	
  SECTION
  10.11.

  	
  SECURITYHOLDERS AUTHORIZE TRUSTEE TO
  EFFECTUATE SUBORDINATION OF SECURITIES

  	
   

  
	
  SECTION
  10.12.

  	
  THIS ARTICLE TEN NOT TO PREVENT EVENTS
  OF DEFAULT

  	
   

  
	
  SECTION
  10.13.

  	
  TRUSTEE’S COMPENSATION NOT PREJUDICED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  ELEVEN

  
	
   

  
	
  GUARANTEES

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.01.

  	
  UNCONDITIONAL
  GUARANTEE

  	
   

  
	
  SECTION
  11.02.

  	
  SUBORDINATION
  OF GUARANTEE

  	
   

  
	
  SECTION
  11.03.

  	
  LIMITATION
  ON GUARANTOR LIABILITY

  	
   

  



 


iv





















 


	
  SECTION
  11.04.

  	
  EXECUTION AND DELIVERY OF SUBSIDIARY
  GUARANTEE FOR FUTURE GUARANTORS

  	
   

  
	
  SECTION
  11.05.

  	
  RELEASE
  OF A GUARANTOR

  	
   

  
	
  SECTION
  11.06.

  	
  WAIVER
  OF SUBROGATION

  	
   

  
	
  SECTION
  11.07.

  	
  IMMEDIATE
  PAYMENT

  	
   

  
	
  SECTION
  11.08.

  	
  NO
  SET-OFF

  	
   

  
	
  SECTION
  11.09.

  	
  GUARANTEE
  OBLIGATIONS ABSOLUTE

  	
   

  
	
  SECTION
  11.10.

  	
  GUARANTEE
  OBLIGATIONS CONTINUING

  	
   

  
	
  SECTION
  11.11.

  	
  GUARANTEE
  OBLIGATIONS NOT REDUCED

  	
   

  
	
  SECTION
  11.12.

  	
  GUARANTEE
  OBLIGATIONS REINSTATED

  	
   

  
	
  SECTION
  11.13.

  	
  GUARANTEE
  OBLIGATIONS NOT AFFECTED

  	
   

  
	
  SECTION
  11.14.

  	
  WAIVER

  	
   

  
	
  SECTION
  11.15.

  	
  NO
  OBLIGATION TO TAKE ACTION AGAINST THE ISSUER

  	
   

  
	
  SECTION
  11.16.

  	
  DEALING
  WITH THE ISSUER AND OTHERS

  	
   

  
	
  SECTION
  11.17.

  	
  DEFAULT
  AND ENFORCEMENT

  	
   

  
	
  SECTION
  11.18.

  	
  AMENDMENT,
  ETC

  	
   

  
	
  SECTION
  11.19.

  	
  ACKNOWLEDGMENT

  	
   

  
	
  SECTION
  11.20.

  	
  COSTS
  AND EXPENSES

  	
   

  
	
  SECTION
  11.21.

  	
  NO
  MERGER OR WAIVER; CUMULATIVE REMEDIES

  	
   

  
	
  SECTION
  11.22.

  	
  SURVIVAL
  OF GUARANTEE OBLIGATIONS

  	
   

  
	
  SECTION
  11.23.

  	
  GUARANTEE
  IN ADDITION TO OTHER GUARANTEE OBLIGATIONS

  	
   

  
	
  SECTION
  11.24.

  	
  SEVERABILITY

  	
   

  
	
  SECTION
  11.25.

  	
  SUCCESSORS
  AND ASSIGNS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  TWELVE

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION
  12.01.

  	
  TIA
  CONTROLS

  	
   

  
	
  SECTION
  12.02.

  	
  NOTICES

  	
   

  
	
  SECTION
  12.03.

  	
  COMMUNICATIONS
  BY HOLDERS WITH OTHER HOLDERS

  	
   

  
	
  SECTION
  12.04.

  	
  CERTIFICATE
  AND OPINION AS TO CONDITIONS PRECEDENT

  	
   

  
	
  SECTION
  12.05.

  	
  STATEMENTS
  REQUIRED IN CERTIFICATE OR OPINION

  	
   

  
	
  SECTION
  12.06.

  	
  RULES
  BY TRUSTEE, PAYING AGENT, REGISTRAR

  	
   

  
	
  SECTION
  12.07.

  	
  LEGAL
  HOLIDAYS

  	
   

  
	
  SECTION
  12.08.

  	
  GOVERNING
  LAW

  	
   

  
	
  SECTION
  12.09.

  	
  NO
  ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
   

  
	
  SECTION
  12.10.

  	
  NO
  RECOURSE AGAINST OTHERS

  	
   

  
	
  SECTION
  12.11.

  	
  SUCCESSORS

  	
   

  
	
  SECTION
  12.12.

  	
  DUPLICATE
  ORIGINALS

  	
   

  



 


v





















 


	
  SECTION
  12.13.

  	
  SEVERABILITY

  	
   

  
	
  SECTION
  12.14.

  	
  CURRENCY OF ACCOUNT; CONVERSION OF CURRENCY;
  FOREIGN EXCHANGE RESTRICTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  



 


 


EXHIBITS


 


	
  Exhibit A

  	
  -

  	
  Form of Dollar
  Security

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Sterling
  Security

  	
   

  
	
  Exhibit C-1

  	
  -

  	
  Form of Legend
  for Dollar 144A Securities and Other Dollar Securities That Are Restricted Securities

  	
   

  
	
  Exhibit C-2

  	
  -

  	
  Form of Legend
  for Sterling 144A Securities and Other Sterling Securities That Are Restricted Securities

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Legend
  for Regulation S Security

  	
   

  
	
  Exhibit E-1

  	
  -

  	
  Form of Legend
  for Global Dollar Security

  	
   

  
	
  Exhibit E-2

  	
  -

  	
  Form of Legend
  for Global Sterling Security

  	
   

  
	
  Exhibit F

  	
  -

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

  	
   

  
	
  Exhibit G

  	
  -

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

  	
   

  
	
  Exhibit H

  	
  -

  	
  Form of Guarantee

  	
   

  



 


Note:                                           This Table of Contents shall not, for any
purpose, be deemed to be part of the Indenture.


 


vi





















 


INDENTURE
dated as of April 8, 2004 between WMG ACQUISITION CORP., a Delaware corporation
(the “Issuer”), as issuer, the
Guarantors (as defined herein) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as trustee (the “Trustee”).


 


Each party
hereto agrees as follows for the benefit of each other party and for the equal
and ratable benefit of the Holders.


ARTICLE ONE


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.01.                                         Definitions.


 


Set forth
below are certain defined terms used in this Indenture.


 


“Acquired Debt” means, with respect to any specified Person:


 


(1)           Indebtedness of any
other Person existing at the time such other Person is merged with or into or
became a Restricted Subsidiary of such specified Person, including Indebtedness
incurred in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified Person;
and


 


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


 


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


 


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


 


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


 


“amend” means amend,
modify, supplement, restate or amend and restate, including successively; and “amending” and “amended” have
correlative meanings.


 





















 


“asset” means any
asset or property, whether real, personal or other, tangible or intangible.


 


“Asset Sale” means
(i) the sale, conveyance, transfer or other disposition (whether in a single
transaction or a series of related transactions) of property or assets
(including by way of a sale and leaseback) of the Issuer or any Restricted
Subsidiary (each referred to in this definition as a “disposition”) or (ii) the issuance or sale of Equity
Interests of any Restricted Subsidiary (whether in a single transaction or a
series of related transactions), in each case, other than:


 


(1)           a disposition of
Cash Equivalents or obsolete or worn out property or equipment in the ordinary
course of business or inventory (or other assets) held for sale in the ordinary
course of business and dispositions of property no longer used or useful in the
conduct of business of the Issuer and its Restricted Subsidiaries;


 


(2)           the disposition of
all or substantially all of the assets of the Issuer in a manner permitted
pursuant to Section 5.01 or any disposition that constitutes a Change of
Control pursuant to this Indenture;


 


(3)           the making of any
Restricted Payment or Permitted Investment that is permitted to be made, and is
made, pursuant to Section 4.11 or the granting of a Lien permitted by Section
4.12;


 


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


 


(5)           any disposition of
property or assets or issuance of securities by a Restricted Subsidiary to the
Issuer or by the Issuer or a Restricted Subsidiary to another Restricted
Subsidiary;


 


(6)           the lease,
assignment, sublease, license or sublicense of any real or personal property in
the ordinary course of business;


 


(7)           any sale of Equity
Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary
(with the exception of Investments in Unrestricted Subsidiaries acquired
pursuant to clause (11) of the definition of “Permitted Investments”);


 


(8)           foreclosures on
assets;


 


(9)           disposition of an
account receivable in connection with the collection or compromise thereof;


 


2





















 


(10)         sales of
Securitization Assets and related assets of the type specified in the
definition of “Securitization Financing” to a Securitization Subsidiary in
connection with any Qualified Securitization Financing; and


 


(11)         a transfer of
Securitization Assets and related assets of the type specified in the
definition of “Securitization Financing” (or a fractional undivided interest
therein) by a Securitization Subsidiary in a Qualified Securitization
Financing.


 


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


 


“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” and “Beneficially Owned” have a corresponding
meaning.


 


“Board of Directors” means:


 


(1)           with
respect to a corporation, the board of directors of the corporation;


 


(2)           with respect to a partnership, the
Board of Directors of the general partner of the partnership; and


 


(3)           with respect to any other Person, the
board or committee of such Person serving a similar function.


 


“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
any day other than a Saturday, Sunday or any other day on which banking
institutions in the City of New York are required or authorized by law or other
governmental action to be closed.


 


“Capital Stock” means:


 


(1)           in the case of a corporation, capital
stock;


 


3





















 


(2)           in the case of an association or
business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock;


 


(3)           in the case of a partnership or
limited liability company, partnership or membership interests (whether general
or limited); and


 


(4)           any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.


 


“Capitalized Lease Obligation” means,
at the time any determination thereof is to be made, the amount of the
liability in respect of a capital lease that would at such time be required to
be capitalized and reflected as a liability on a balance sheet (excluding the
footnotes thereto) in accordance with GAAP.


 


“Cash Contribution Amount” means
the aggregate amount of cash contributions made to the capital of the Issuer or
any Guarantor described in the definition of “Contribution Indebtedness.”


 


“Cash Equivalents” means:


 


(1)           U.S. dollars, pounds sterling, euros,
or, in the case of any Foreign Subsidiary, such local currencies held by it
from time to time in the ordinary course of business;


 


(2)           securities issued or directly and
fully and unconditionally guaranteed or insured by the government or any agency
or instrumentality of the United States or any member nation of the European
Union having maturities of not more than 12 months from the date of
acquisition;


 


(3)           certificates of deposit, time
deposits and eurodollar time deposits with maturities of 12 months or less from
the date of acquisition, bankers’ acceptances with maturities not exceeding 12
months and overnight bank deposits, in each case, with any lender party to the
Credit Agreement or with any commercial bank having capital and surplus in
excess of $500,000,000;


 


(4)           repurchase obligations for underlying
securities of the types described in clauses (2) and (3) above entered into
with any financial institution meeting the qualifications specified in clause
(3) above;


 


(5)           commercial paper maturing within 12
months after the date of acquisition and having a rating of at least A-1 from
Moody’s or P-1 from S&P;


 


4





















 


(6)           investment funds at least 95% of the
assets of which constitute Cash Equivalents of the kinds described in clauses
(1) through (5) of this definition; and


 


(7)           readily marketable direct obligations
issued by any state of the United States or any political subdivision thereof
having one of the two highest rating categories obtainable from either Moody’s
or S&P with maturities of 12 months or less from the date of acquisition.


 


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


 


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


 


(2)           the Issuer becomes aware of (by way
of a report or any other filing pursuant to Section 13(d) of the Exchange Act,
proxy, vote, written notice or otherwise) the acquisition by any Person or
group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act, or any successor provision), including any group acting for the
purpose of acquiring, holding or disposing of securities (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in
a single transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision), of 50% or more of the total voting power of the Voting Stock of the
Issuer or any of its direct or indirect parent corporations; or


 


(3)           (A) prior to the first public
offering of common stock of either Holdco or the Issuer, the first day on which
the Board of Directors of Holdco shall cease to consist of a majority of
directors who (i) were members of the Board of Directors of Holdco on the Issue
Date or (ii) were either (x) nominated for election by the Board of Directors
of Holdco, a majority of whom were directors on the Issue Date or whose
election or nomination for election was previously approved by a majority of
such directors, or (y) designated or appointed by a Permitted Holder (each of
the directors selected pursuant to clauses (A)(i) and (A)(ii), “Continuing Directors”) and (B) after the
first public offering of common stock of either Holdco or the Issuer, (i) if
such public offering is of Holdco common stock, the first day on which a
majority of the members of the Board of Directors of Holdco are not Continuing
Directors or (ii) if such public offering is of the Issuer’s common stock, the
first day on which a majority of the members of the Board of Directors of the
Issuer are not Continuing Directors.


 


“Cinram Adjustment” means
cost savings and other adjustments to the Issuer from the disposition of its
DVD and CD manufacturing, printing, packaging, physical distribution and
merchandising businesses to Cinram International, Inc., which was consummated


 


5





















 


on October 24, 2003, and the
associated long-term supply contract with Cinram for physical product and
distribution.


 


“Code” means the United States Internal
Revenue Code of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder. Section references to the Code are
to the Code, as in effect on the Issue Date, and any subsequent provisions of
the Code, amendatory thereof, supplemental thereto or substituted therefor.


 


“Commission” means
the Securities and Exchange Commission.


 


“Common
Depository” means, with respect to the Global Sterling
Securities, HSBC Bank plc, as common depository for Euroclear and Clearstream
or another Person designated as common depositary by the Issuer, which Person
must be a clearing agency registered under the Exchange Act.


 


“Consolidated
Depreciation and Amortization Expense” means, with respect to
any Person for any period, the total amount of depreciation and amortization
expense, including the amortization of deferred financing fees and other
noncash charges (excluding any noncash item that represents an accrual or
reserve for a cash expenditure for a future period), of such Person and its
Restricted Subsidiaries for such period on a consolidated basis and otherwise
determined in accordance with GAAP.


 


“Consolidated
Interest Expense” means, with respect to any Person for any
period, the sum, without duplication, of: (a) consolidated interest expense of
such Person and its Restricted Subsidiaries for such period (including
amortization of original issue discount, noncash interest payments (other than
imputed interest as a result of purchase accounting), the interest component of
Capitalized Lease Obligations, net payments (if any) pursuant to interest rate
Hedging Obligations, but excluding amortization of deferred financing fees or
expensing of any bridge or other financing fees relating to the Specified
Financings) and (b) consolidated capitalized interest of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, less (c)
interest income actually received in cash for such period; provided, however, that
Securitization Fees shall not be deemed to constitute Consolidated Interest
Expense.


 


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


 


(1)           any net after-tax
extraordinary, unusual or nonrecurring gains or losses (including, without
limitation, severance, relocation, transition and other restructuring costs)
(less all fees and expenses relating thereto) shall be excluded;


 


6





















 


(2)           the Net Income for such period shall
not include the cumulative effect of a change in accounting principle(s) during
such period;


 


(3)           any net after-tax
gains or losses (less all fees and expenses relating thereto) attributable to
asset dispositions other than in the ordinary course of business (as determined
in good faith by the Board of Directors of the Issuer) shall be excluded;


 


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


 


(5)           solely for the purpose of determining
the amount available for Restricted Payments under clause (3) of Section
4.11(a), the Net Income for such period of any Restricted Subsidiary (other
than a Guarantor) shall be excluded if the declaration or payment of dividends
or similar distributions by that Restricted Subsidiary of its Net Income is not
permitted at the date of determination without any prior governmental approval
(which has not been obtained) or, directly or indirectly, by the operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, unless such restriction with respect to the
payment of dividends or similar distributions has been legally waived; provided that
Consolidated Net Income of such Person shall be increased by the amount of
dividends or distributions or other payments that are actually paid in cash (or
to the extent converted into cash) to such Person or a Restricted Subsidiary
thereof in respect of such period, to the extent not already included therein;


 


(6)           any noncash
impairment charges resulting from the application of Statements of Financial
Accounting Standards No. 142 and No. 144 and the amortization of intangibles
arising pursuant to Statement of Financial Accounting Standards No. 141 shall
be excluded;


 


(7)           solely for purposes of determining
the amount available for Restricted Payments under clause (3) of Section
4.11(a), an amount equal to any reduction in current taxes recognized during
the applicable period by the Issuer and its Restricted Subsidiaries as a direct
result of deductions arising from (A) the amortization allowed under Section
167 or 197 of the Code for the goodwill and other intangibles arising from the
Transactions and (B) employee termination and related restructuring reserves
established pursuant to purchase accounting for the two-year period commencing
with


 


7





















 


the Issue
Date, in each case, will be included in the calculation of “Consolidated Net
Income” so long as such addition will not result in double-counting;


 


(8)           noncash compensation charges,
including any such charges arising from stock options, restricted stock grants
or other equity-incentive programs shall be excluded;


 


(9)           any net after-tax gains or losses
(less all fees and expenses or charges relating thereto) attributable to the
early extinguishment of Indebtedness shall be excluded; and


 


(10)         any noncash charges resulting from
mark-to-market accounting in accordance with Statements of Financial Accounting
Standards No. 133 and No. 150 and Emerging Issues Task Force Issue No. 00-19
relating to warrants owned by Time Warner Inc. shall be excluded.


 


Notwithstanding
the foregoing, for the purpose of Section 4.11 only (other than clause (3)(d)
of subsection (a) thereof), there shall be excluded from Consolidated Net
Income any income arising from any sale or other disposition of Restricted
Investments made by the Issuer and the Restricted Subsidiaries, any repurchases
and redemptions of Restricted Investments by the Issuer and the Restricted
Subsidiaries, any repayments of loans and advances which constitute Restricted
Investments by the Issuer and any Restricted Subsidiary, any sale of the stock
of an Unrestricted Subsidiary or any distribution or dividend from an
Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted under clause (3)(d) of Section
4.11(a).


 


“Consolidated
Tangible Assets” means, with respect to any Person, the
consolidated total assets of such Person and its Restricted Subsidiaries
determined in accordance with GAAP, less all goodwill, trade names, trademarks,
patents, organization expense and other similar intangibles properly classified
as intangibles in accordance with GAAP.


 


“Contingent
Obligations” means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any such primary
obligation or (B) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor,
or (iii) to purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation against loss in
respect thereof.


 


8





















 


“Contribution
Indebtedness” means Indebtedness of the Issuer or any
Guarantor in an aggregate principal amount not greater than twice the aggregate
amount of cash contributions (other than Excluded Contributions) made to the
capital of the Issuer or such Guarantor after the Issue Date; provided that
such Contribution Indebtedness:


 


(1)           if the aggregate
principal amount of such Contribution Indebtedness is greater than one times
such cash contributions to the capital of the Issuer or such Guarantor, as
applicable, the amount of such excess shall be (A) (x) Subordinated
Indebtedness (other than Secured Indebtedness) or (y) Indebtedness that ranks pari passu with
the Securities (other than Secured Indebtedness) and (B) Indebtedness with a
Stated Maturity later than the Stated Maturity of the Securities, and


 


(2)           (a) is incurred
within 180 days after the making of such cash contributions and (b) is so
designated as Contribution Indebtedness pursuant to an Officers’ Certificate on
the date of the incurrence thereof.


 


“Corporate Trust
Office” means the corporate trust office of the Trustee
located at Sixth Street and Marquette Avenue, N9303-20, Minneapolis, Minnesota
55479, Attention: Corporate Trust Department, or such other office, designated
by the Trustee by written notice to the Issuer, at which at any particular time
its corporate trust business shall be administered.


 


“Credit Agreement” means that certain Amended
and Restated Credit Agreement, dated as of April 8, 2004, by and among the
Issuer, the other borrowers from time to time party thereto, Holdco, Banc of
America Securities LLC and Deutsche Bank Securities Inc., as Joint Lead
Arrangers and Joint Book Managers, Lehman Brothers Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Co-Arrangers and Co-Book Managers, Deutsche
Bank Securities Inc. and Lehman Commercial Paper Inc., as Co-Syndication
Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Documentation Agent, and Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer and the lenders party thereto from time to time,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
restated, supplemented, modified, renewed, refunded, replaced or refinanced
from time to time in one or more agreements or indentures (in each case with
the same or new lenders or institutional investors), including any agreement
extending the maturity thereof or otherwise restructuring all or any portion of
the Indebtedness thereunder or increasing the amount loaned or issued
thereunder or altering the maturity thereof.


 


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


 


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


 


9





















 


“Depositary” shall
mean The Depository Trust Company, New York, New York, or a successor thereto
registered under the Exchange Act or other applicable statute or regulation.


 


“Designated
Noncash Consideration” means the fair market value of noncash
consideration received by the Issuer or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers’ Certificate setting forth the basis of
such valuation, less the amount of cash or Cash Equivalents received in
connection with a subsequent sale of such Designated Noncash Consideration.


 


“Designated
Preferred Stock” means Preferred Stock of the Issuer or any
direct or indirect parent company of the Issuer (other than Disqualified Stock)
that is issued for cash (other than to the Issuer or any of its Subsidiaries or
an employee stock ownership plan or trust established by the Issuer or any of
its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant
to an Officers’ Certificate, on the issuance date thereof, the cash proceeds of
which are excluded from the calculation set forth in clause (3) of Section
4.11(a).


 


“Designated
Senior Debt” means:


 


(1)           any Indebtedness outstanding under
the Credit Agreement; and


 


(2)           any other Senior Debt permitted under
this Indenture the principal amount of which is $25.0 million or more and that
has been designated by the Issuer in the instrument evidencing that Senior Debt
as “Designated Senior Debt.”


 


“Disqualified
Stock” means, with respect to any Person, any Capital Stock
of such Person which, by its terms (or by the terms of any security into which
it is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable (other than as a result
of a change of control or asset sale), pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof (other than as
a result of a change of control or asset sale), in whole or in part, in each
case prior to the date 91 days after the earlier of the final maturity date of
the Securities or the date the Securities are no longer outstanding; provided, however, that
if such Capital Stock is issued to any plan for the benefit of employees of
Holdco or its Subsidiaries or by any such plan to such employees, such Capital
Stock shall not constitute Disqualified Stock solely because it may be required
to be repurchased by Holdco or its Subsidiaries in order to satisfy applicable
statutory or regulatory obligations.


 


“Dollar Exchange
Securities” means any Dollar Securities issued in exchange
for Initial Dollar Securities or Dollar Securities without a legend.


 


10





















 


“Dollar
Securities” means the U.S. Dollar-denominated 7 3/8% Senior
Subordinated Notes due 2014 issued by the Issuer, including, without
limitation, the Dollar Exchange Securities and the Additional Dollar
Securities, treated as a single class of securities, as amended from time to
time in accordance with the terms hereof, that are issued pursuant to this
Indenture.


 


“Domestic
Subsidiary” means any Subsidiary of the Issuer that was
formed under the laws of the United States, any state of the United States, the
District of Columbia or any territory of the United States.


 


“EBITDA” means,
with respect to any Person for any period, the Consolidated Net Income of such
Person for such period plus, without duplication,


 


(1)           provision for taxes based on income
or profits, plus franchise or similar taxes of such Person for such period
deducted in computing Consolidated Net Income, plus


 


(2)           Consolidated Interest Expense of such
Person for such period to the extent the same was deducted in calculating such
Consolidated Net Income, plus


 


(3)           Consolidated Depreciation and
Amortization Expense of such Person for such period to the extent such
depreciation and amortization were deducted in computing Consolidated Net
Income, plus


 


(4)           any reasonable expenses or charges
related to any Equity Offering, Permitted Investment, acquisition, recapitalization
or Indebtedness permitted to be incurred under this Indenture or to the
Transactions and, in each case, deducted in such period in computing
Consolidated Net Income, plus


 


(5)           the amount of any restructuring
charges or reserves (which, for the avoidance of doubt, shall include
retention, severance, systems establishment cost, excess pension charges,
contract termination costs, including future lease commitments, and costs to
consolidate facilities and relocate employees) deducted in such period in
computing Consolidated Net Income, plus


 


(6)           without duplication, any other
noncash charges (including any impairment charges and the impact of purchase
accounting, including, but not limited to, the amortization of inventory
step-up) reducing Consolidated Net Income for such period (excluding any such
charge that represents an accrual or reserve for a cash expenditure for a
future period), plus


 


(7)           any net gain or loss resulting from
Hedging Obligations relating to currency exchange risk, plus


 


11





















 


(8)           the amount of management, monitoring,
consulting and advisory fees and related expenses paid to the Sponsors (or any
accruals relating to such fees and related expenses) during such period; provided that
such amount shall not exceed $10.0 million in any four-quarter period, plus


 


(9)           Securitization Fees to the extent
deducted in calculating Consolidated Net Income for such period, plus


 


(10)         the Cinram Adjustment, plus


 


(11)         any net after-tax income or loss from
discontinued operations and any net after-tax gains or losses on disposal of
discontinued operations, plus


 


(12)         without duplication, pension
curtailment expenses, transaction costs and executive contract expenses
incurred by affiliated entities of the Issuer (other than Holdco and its
Subsidiaries) on behalf of Holdco or any of its Subsidiaries and reflected in
the combined financial statements of the Issuer as capital contributions, less


 


(13)         without duplication, noncash items
increasing Consolidated Net Income of such Person for such period (excluding
any items which represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges or asset valuation adjustments made in any prior
period).


 


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


 


“Equity Offering”
means any public or private sale of common stock or Preferred
Stock of the Issuer or any of its direct or indirect parent corporations
(excluding Disqualified Stock), other than (i) public offerings with respect to
common stock of the Issuer or of any direct or indirect parent corporation of
the Issuer registered on Form S-8, (ii) any such public or private sale that
constitutes an Excluded Contribution or (iii) an issuance to any Subsidiary.


 


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


 


“Exchange
Securities” means the Dollar Exchange Securities and the
Sterling Exchange Securities.


 


“Excluded
Contribution” means net cash proceeds, marketable securities
or Qualified Proceeds, in each case received by the Issuer and its Restricted
Subsidiaries from:


 


12





















 


(1)           contributions to its common equity
capital; and


 


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


 


in each case designated as
Excluded Contributions pursuant to an Officers’ Certificate on the date such
capital contributions are made or the date such Equity Interests are sold, as
the case may be, which are excluded from the calculation set forth in clause
(3) of Section 4.11(a).


 


“Existing
Indebtedness” means Indebtedness of the Issuer and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of this Indenture.


 


“Fixed Charge
Coverage Ratio” means, with respect to any Person for any
period consisting of such Person and its Restricted Subsidiaries’ most recently
ended four fiscal quarters for which internal financial statements are
available, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that the Issuer or any
Restricted Subsidiary incurs, assumes, guarantees or redeems any Indebtedness
or issues or repays Disqualified Stock or Preferred Stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or repayment of Indebtedness, or such
issuance or redemption of Disqualified Stock or Preferred Stock, as if the same
had occurred at the beginning of the applicable four-quarter period. For
purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers or consolidations (as determined in accordance
with GAAP) that have been made by the Issuer or any Restricted Subsidiary
during the four-quarter reference period or subsequent to such reference period
and on or prior to or simultaneously with the Calculation Date shall be
calculated on a
pro forma basis assuming that all such Investments, acquisitions,
dispositions, mergers or consolidations (and the change in any associated fixed
charge obligations and the change in EBITDA resulting therefrom) had occurred
on the first day of the four-quarter reference period. If since the beginning
of such period any Person (that subsequently became a Restricted Subsidiary or
was merged with or into the Issuer or any Restricted Subsidiary since the
beginning of such period) shall have made any Investment, acquisition,
disposition, merger or consolidation that would have required adjustment
pursuant to this definition, then the Fixed Charge Coverage Ratio shall be
calculated giving pro
forma effect thereto for such period as if such Investment,
acquisition, disposition, merger or consolidation had occurred at the beginning
of the applicable four-quarter period.


 


13





















 


For purposes
of this definition, whenever pro forma effect is to be given to an
Investment, acquisition, disposition, merger or consolidation (including the
Transactions and the related restructuring initiatives) 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 Issuer
and shall comply with the requirements of Rule 11-02 of Regulation S-X
promulgated by the Commission, except that such pro forma calculations may include
operating expense reductions for such period resulting from such transaction
that is being given pro
forma effect that have been realized or (A) for which the steps
necessary for realization have been taken (or are taken concurrently with such
transaction) or (B) with respect to any transactions other than the Transaction
(and the related restructuring initiatives), for which the steps necessary for
realization are reasonably expected to be taken within the six-month period
following such transaction and, in each case, including, but not limited to,
(a) reduction in personnel expenses, (b) reduction of costs related to
administrative functions, (c) reduction of costs related to leased or owned
properties and (d) reductions from the consolidation of operations and
streamlining of corporate and record label overhead; provided that, in either case, such
adjustments are set forth in an Officers’ Certificate signed by the Issuer’s
chief financial officer and another Officer which states (i) the amount of such
adjustment or adjustments, (ii) that such adjustment or adjustments are based
on the reasonable good faith beliefs of the Officers executing such Officers’
Certificate at the time of such execution and (iii) that any related incurrence
of Indebtedness is permitted pursuant to this Indenture. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the interest on such
Indebtedness shall be calculated as if the rate in effect on the Calculation
Date had been the applicable rate for the entire period (taking into account
any Hedging Obligations applicable to such Indebtedness). Interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Issuer to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP. For purposes of making the computation referred to
above, interest on any Indebtedness under a revolving credit facility computed
on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as the Issuer may designate.


 


“Fixed Charges” means,
with respect to any Person for any period, the sum of, without duplication, (a)
Consolidated Interest Expense (excluding all noncash interest expense and
amortization/accretion of original issue discount in connection with the
Specified Financings (including any original issue discount created by fair
value adjustments to the Issuer’s existing Indebtedness as a result of purchase
accounting)) of such Person for such period, (b) all cash dividends paid,
accrued and/or scheduled to be paid or accrued during such period (excluding
items eliminated in consolidation) on any series of Preferred Stock of such


 


14





















 


Person and (c) all cash
dividends paid, accrued and/or scheduled to be paid or accrued during such
period (excluding items eliminated in consolidation) on any series of
Disqualified Stock.


 


“Foreign
Subsidiary” means any Subsidiary of the Issuer that is not a
Domestic Subsidiary.


 


“GAAP” means generally accepted accounting
principles in the United States in effect on the date of this Indenture. For
purposes of this Indenture, the term “consolidated”
with respect to any Person means such Person consolidated with its
Restricted Subsidiaries and does not include any Unrestricted Subsidiary.


 


“Global Security”
has the meaning set forth in Section 2.16.


 


“Government
Securities” means, in the case of the Dollar Securities, U.S.
Government Securities and, in the case of the Sterling Securities, U.K.
Government Securities.


 


“guarantee” means
a guarantee other than by endorsement of negotiable instruments for collection
in the ordinary course of business, direct or indirect, in any manner
including, without limitation, through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness or other
obligations.


 


“Guarantee” means
any guarantee of the obligations of the Issuer under this Indenture and the
Securities by a Guarantor in accordance with the provisions of this Indenture.
When used as a verb, “Guarantee” shall
have a corresponding meaning.


 


“Guarantor” means
any Person that incurs a Guarantee of the Securities; provided that upon
the release and discharge of such Person from its Guarantee in accordance with
this Indenture, such Person shall cease to be a Guarantor.


 


“Guarantor Senior
Debt” means, with respect to any Guarantor, the principal of,
premium, if any, and interest (including any interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
or allowable claim under applicable law) on any Indebtedness and any
Securitization Repurchase Obligation of such Guarantor, whether outstanding on
the Issue Date or thereafter created, incurred or assumed, unless, in the case
of any particular obligation, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
obligation shall not be senior in right of payment to the Guarantee of such
Guarantor. Without limiting the generality of the foregoing, “Guarantor Senior
Debt” shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed 


 


15





















 


or allowable claim under
applicable law) on, and all other amounts owing in respect of (including
guarantees of the foregoing obligations):


 


(1)           all monetary obligations of every
nature of such Guarantor under, or with respect to, the Credit Agreement,
including, without limitation, obligations to pay principal, premium and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof); and


 


(2)           all Hedging Obligations (and guarantees
thereof),


 


in each case whether
outstanding on the Issue Date or thereafter incurred.


 


Notwithstanding
the foregoing, “Guarantor Senior Debt” shall not include:


 


(1)           any Indebtedness of such Guarantor to
a Subsidiary of such Guarantor (other than any Securitization Repurchase
Obligation);


 


(2)           Indebtedness to, or guaranteed on
behalf of, any shareholder, director, officer or employee of such Guarantor or
any Subsidiary of such Guarantor (including, without limitation, amounts owed
for compensation) other than the guarantee of Holdco of Indebtedness under the
Credit Agreement;


 


(3)           Indebtedness to trade creditors and
other amounts incurred in connection with obtaining goods, materials or
services (including guarantees thereof or instruments evidencing such
liabilities);


 


(4)           Indebtedness represented by Capital
Stock;


 


(5)           any liability for federal, state,
local or other taxes owed or owing by such Guarantor;


 


(6)           that portion of any Indebtedness
incurred in violation of Section 4.10;


 


(7)           Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11, United
States Code, is without recourse to the Issuer; and


 


(8)           any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of
such Guarantor.


 


“Hedging
Obligations” means, with respect to any Person, the
obligations of such Person under:


 


16





















 


(1)           currency exchange, interest rate or
commodity swap agreements, currency exchange, interest rate or commodity cap
agreements and currency exchange, interest rate or commodity collar agreements;
and


 


(2)           other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange,
interest rates or commodity prices.


 


“Holdco” means
WMG Holdings Corp., a Delaware corporation and the direct parent of the Issuer.


 


“Holder” or
“Securityholder” means the
registered holder of any Security.


 


“incur” means
to directly or indirectly create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to any Indebtedness (including Acquired Debt) and “incurrence” shall have a correlative meaning.


 


“Indebtedness” means,
with respect to any Person,


 


(a)           any indebtedness
(including principal and premium) of such Person, whether or not contingent,


 


(i)            in respect of borrowed money,


 


(ii)           evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or, without double counting,
reimbursement agreements in respect thereof),


 


(iii)          representing the balance deferred and
unpaid of the purchase price of any property (including Capitalized Lease
Obligations), except any such balance that constitutes a trade payable or
similar obligation to a trade creditor, in each case accrued in the ordinary
course of business or


 


(iv)          representing any Hedging Obligations,


 


if and to the
extent that any of the foregoing Indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet
(excluding the footnotes thereto) of such Person prepared in accordance with
GAAP,


 


(b)           Disqualified Stock
of such Person,


 


(c)           to the extent not
otherwise included, any obligation by such Person to be liable for, or to pay,
as obligor, guarantor or otherwise, the Indebtedness of another


 


17





















 


Person (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business) and


 


(d)           to the extent not
otherwise included, Indebtedness of another Person secured by a Lien on any
asset owned by such Person (whether or not such Indebtedness is assumed by such
Person);


 


provided, however, that
Contingent Obligations incurred in the ordinary course of business and not in
respect of borrowed money shall be deemed not to constitute Indebtedness.


 


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


 


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


 


“Initial Purchasers”
means with respect to the Dollar Securities, Deutsche Bank
Securities Inc., Banc of America Securities LLC, Lehman Brothers Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and with respect to the
Sterling Securities, Deutsche Bank AG London, Bank of America Securities
Limited, Lehman Brothers International and Merrill Lynch International and such
other initial purchasers party to the Securities Purchase Agreement entered
into in connection with the offer and sale of the Securities.


 


“Interest” means,
with respect to the Securities, interest and any Additional Interest on the
Securities.


 


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


 


“Investments” means,
with respect to any Person, all direct or indirect investments by such Person
in other Persons (including Affiliates) in the forms of loans (including
guarantees or other obligations), advances or capital contributions (excluding
accounts receivable, trade credit, advances to customers, commission, travel
and similar advances to officers and employees, in each case made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities issued by any other
Person and investments that are required by GAAP to be classified on the
balance sheet (excluding the footnotes) of such Person in the same manner as
the other investments included in this definition to the extent such
transactions involve the transfer of cash or other property. If the Issuer or
any Subsidiary of the Issuer sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Issuer such that, after
giving effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Issuer, the Issuer


 


18





















 


will be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in Section 4.11(c).


 


For purposes
of the definition of “Unrestricted Subsidiary” and Section 4.11, (i) “Investments”
shall include the portion (proportionate to the Issuer’s equity interest in
such Subsidiary) of the fair market value of the net assets of a Subsidiary of
the Issuer 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 Issuer shall be deemed to
continue to have a permanent “Investment” in an Unrestricted Subsidiary in an
amount (if positive) equal to (x) the Issuer’s “Investment” in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate to the
Issuer’s equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; (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 Issuer; and (iii) any transfer of Capital Stock that
results in an entity which became a Restricted Subsidiary after the Issue Date
ceasing to be a Restricted Subsidiary shall be deemed to be an Investment in an
amount equal to the fair market value (as determined by the Board of Directors
of the Issuer in good faith as of the date of initial acquisition) of the
Capital Stock of such entity owned by the Issuer and the Restricted Subsidiaries
immediately after such transfer.


 


“Issue Date” means
April 8, 2004, the date of original issuance of the Securities.


 


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


 


“Luxembourg
Paying Agent” has the meaning set forth in Section 2.04.


 


“Management
Agreement” means the Management Agreement by and among the
Issuer, Holdco and the Sponsors and/or their Affiliates as in effect on the
Issue Date.


 


“Maturity Date” means
April 15, 2014.


 


“Moody’s” means
Moody’s Investors Service, Inc.


 


19





















 


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


 


“Net Indebtedness
to EBITDA Ratio” means, with respect to any Person, the ratio
of: (a) the Indebtedness (which, for purposes of any calculations of the Net
Indebtedness to EBITDA Ratio, shall include, without duplication, any Qualified
Securitization Financing, Non-Recourse Acquisition Financing Indebtedness and
Non-Recourse Product Financing Indebtedness) of the Issuer and its Restricted
Subsidiaries, as of the end of the most recently ended fiscal quarter, plus the
amount of any Indebtedness incurred subsequent to the end of such fiscal
quarter, less the amount of cash and Cash Equivalents that would be stated on
the balance sheet of the Issuer and held by the Issuer as of such date of
determination, as determined in accordance with GAAP, to (b) the Issuer’s
EBITDA for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
event for which such calculation is being made shall occur (the “Measurement Period”); provided, however, that:
(i) in making such computation, Indebtedness shall include the greater of (x)
the average daily balance outstanding under any revolving credit facility
during the most recently ended fiscal quarter and (y) the actual amount of
Indebtedness outstanding under any revolving credit facility as of the date for
which such calculation is being made; and (ii) if the Issuer or any of its
Restricted Subsidiaries consummates a material acquisition or an Asset Sale or
other disposition of assets subsequent to the commencement of the Measurement
Period but prior to the event for which the calculation of the Net Indebtedness
to EBITDA Ratio is made, then the Net Indebtedness to EBITDA Ratio shall be
calculated giving pro
forma effect to such material acquisition or Asset Sale or other
disposition of assets as if the same had occurred at the beginning of the
applicable period. Any pro forma calculations necessary pursuant to this “Net
Indebtedness to EBITDA Ratio” shall be made in accordance with the provisions
set forth in the second paragraph of the definition of “Fixed Charge Coverage
Ratio.”


 


“Net Proceeds” means
the aggregate cash proceeds received by the Issuer or any Restricted Subsidiary
in respect of any Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and brokerage and sales commissions, any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), repayment of Indebtedness that is
secured by the property or assets that are the subject of such Asset Sale and
any deduction of appropriate amounts to be provided by the Issuer as a reserve
in accordance with GAAP against any liabilities associated with the asset
disposed of in such transaction and retained by the Issuer after such sale or
other disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
transaction.


 


20


















 


“Net Senior
Indebtedness to EBITDA Ratio” means, with respect to any
Person, the ratio of (a) the Senior Debt (which, for purposes of any
calculations of the Net Senior Indebtedness to EBITDA Ratio, shall include,
without duplication, to the extent constituting Senior Debt, any Qualified
Securitization Financing, Non-Recourse Acquisition Financing Indebtedness and
Non-Recourse Product Financing Indebtedness) of the Issuer and its Restricted
Subsidiaries, as of the end of the most recently ended fiscal quarter, plus the
amount of any Senior Debt incurred subsequent to the end of such fiscal
quarter, less the amount of cash and Cash Equivalents that would be stated on
the balance sheet of the Issuer and held by the Issuer as of such date of
determination, as determined in accordance with GAAP, to (b) the Issuer’s
EBITDA for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
event for which such calculation is being made shall occur (the “Measurement
Period”); provided, however, that: (i) in making
such computation, Senior Debt shall include the greater of (x) the average
daily balance outstanding under any revolving credit facility during the most
recently ended fiscal quarter and (y) the actual amount of Indebtedness
outstanding under any revolving credit facility as of the date for which such
calculation is being made; and (ii) if the Issuer or any of its Restricted
Subsidiaries consummates a material acquisition or an Asset Sale or other
disposition of assets subsequent to the commencement of the Measurement Period
but prior to the event for which the calculation of the Net Senior Indebtedness
to EBITDA Ratio is made, then the Net Senior Indebtedness to EBITDA Ratio shall
be calculated giving pro
forma effect to such material acquisition or Asset Sale or other
disposition of assets, as if the same had occurred at the beginning of the
applicable period. Any pro forma calculations necessary pursuant to this “Net Senior
Indebtedness to EBITDA Ratio” shall be made in accordance with the provisions
set forth in the second paragraph of the definition of “Fixed Charge Coverage
Ratio.”


 


“Non-Recourse
Acquisition Financing Indebtedness” means any Indebtedness
incurred by the Issuer or any Restricted Subsidiary to finance the acquisition,
exploitation or development of assets (including directly or through the
acquisition of entities holding such assets) not owned by the Issuer or any of
its Restricted Subsidiaries prior to such acquisition, exploitation or
development, which assets are used for the creation or development of Product
for the benefit of the Issuer, and in respect of which the Person to whom such
Indebtedness is owed has no recourse whatsoever to the Issuer or any of its
Restricted Subsidiaries for the repayment of or payment of such Indebtedness
other than recourse to the acquired assets or assets that are the subject of
such exploitation or development for the purpose of enforcing any Lien given by
the Issuer or such Restricted Subsidiary over such assets, including the
receivables, inventory, intangibles and other rights associated with such
assets and the proceeds thereof.


 


“Non-Recourse
Product Financing Indebtedness” means any Indebtedness
incurred by the Issuer or any Restricted Subsidiary solely for the purpose of
financing (whether directly or through a partially-owned joint venture) the
production, acquisition, exploitation,


 


21





















 


creation or development of
items of Product produced, acquired, exploited, created or developed after the
Issue Date (including any Indebtedness assumed in connection with the
production, acquisition, creation or development of any such items of Product
or secured by a Lien on any such items of Product prior to the production,
acquisition, creation or development thereof) where the recourse of the
creditor in respect of that Indebtedness is limited to Product revenues
generated by such items of Product or any
rights pertaining thereto and where the Indebtedness is unsecured save
for Liens over such items of Product or revenues and such rights and any
extension, renewal, replacement or refinancing of such Indebtedness. “Non-Recourse
Product Financing Indebtedness” excludes, for the avoidance of doubt, any
Indebtedness raised or secured against Product where the proceeds are used for
any other purposes.


 


“Non-U.S. Person”
has the meaning assigned to such term in Regulation S.


 


“Obligations” means
any principal, interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with respect to
letters of credit), damages and other liabilities, and guarantees of payment of
such principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, payable under the documentation governing any
Indebtedness.


 


“Offering
Memorandum” means the offering memorandum of the Issuer dated
April 1, 2004 relating to the Securities.


 


“Officer” means the Chairman of the Board, the
Chief Executive Officer, the Chief Financial Officer, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer or the Secretary or Assistant Secretary or General Counsel or Deputy
General Counsel of the Issuer.


 


“Officers’ Certificate” means a certificate
signed on behalf of the Issuer by two Officers of the Issuer, one of whom is
the principal executive officer, the principal financial officer, the treasurer
or the principal accounting officer of the Issuer, that meets the requirements
set forth in this Indenture.


 


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


 


“Permitted Asset
Swap” means any transfer of property or assets by the Issuer
or any of its Restricted Subsidiaries in which at least 90% of the
consideration received by the transferor consists of properties or assets
(other than cash) that will be used in a Permitted Business; provided that the aggregate fair market
value of the property or assets being transferred by the Issuer or such
Restricted Subsidiary is not greater than the aggregate fair market value of the
property or assets received by the Issuer or such Restricted Subsidiary in


 


22





















 


such exchange (provided, however, that
in the event such aggregate fair market value of the property or assets being
transferred or received by the Issuer is (x) less than $50.0 million, such
determination shall be made in good faith by the Board of Directors of the
Issuer and (y) greater than or equal to $50.0 million, such determination shall
be made by an Independent Financial Advisor).


 


“Permitted
Business” means the media and entertainment business and any
services, activities or businesses incidental or directly related or similar
thereto, any line of business engaged in by the Issuer on the Issue Date or any
business activity that is a reasonable extension, development or expansion
thereof or ancillary thereto.


 


“Permitted Debt” is
defined in Section 4.10(b).


 


“Permitted
Holders” means (i) the Sponsors and their Affiliates (not
including, however, any portfolio companies of any of the Sponsors); (ii) Edgar
Bronfman Jr.; (iii) immediate family members (including spouses and direct
descendants) of the Person described in clause (ii); (iv) any trusts created
for the benefit of the Person described in clause (ii) or (iii) or any trust
for the benefit of any such trust; (v) in the event of the incompetence or
death of any Person described in clauses
(ii) and (iii), such Person’s estate, executor, administrator, committee or
other personal representative or beneficiaries, in each case who at any
particular date shall beneficially own or have the right to acquire, directly
or indirectly, Capital Stock of the Issuer; or (vi) Time Warner Inc. if at such
time as Time Warner Inc. owns 50% or more of the total voting power of the
Voting Stock of the Issuer or any direct or indirect parent company of the
Issuer and after giving pro forma effect to the acquisition of such Voting Stock and
the incurrence of any Indebtedness used to finance the acquisition thereof, (x)
Time Warner Inc. has a rating of at least “investment grade” status from
S&P and Moody’s and (y) neither S&P, Moody’s nor any other nationally
recognized rating agency shall have downgraded, or indicated an intention to
downgrade, the corporate rating of Time Warner Inc. to a level below its then
existing corporate rating by any such agency.


 


“Permitted
Investments” means


 


(1)           any Investment by the Issuer in any
Restricted Subsidiary or by a Restricted Subsidiary in another Restricted
Subsidiary;


 


(2)           any Investment in
cash and Cash Equivalents;


 


(3)           any Investment by the Issuer or any
Restricted Subsidiary of the Issuer in a Person that is engaged in a Permitted
Business if as a result of such Investment (A) such Person becomes a Restricted
Subsidiary or (B) such Person, in one transaction or a series of related transactions,
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Issuer or a
Restricted Subsidiary;


 


23





















 


(4)           any Investment in securities or other
assets not constituting cash or Cash Equivalents and received in connection
with an Asset Sale made pursuant to Section 4.13 or any other disposition of
assets not constituting an Asset Sale;


 


(5)           any Investment
existing on the Issue Date and any modification, replacement, renewal or
extension thereof; provided that the amount of any such
Investment may be increased (x) as required by the terms of such Investment as
in existence on the Issue Date or (y) as otherwise permitted under this
Indenture;


 


(6)           loans and advances
to employees and any guarantees not in excess of $15.0 million in the aggregate
outstanding at any one time;


 


(7)           any Investment
acquired by the Issuer or any Restricted Subsidiary (A) in exchange for any
other Investment or accounts receivable held by the Issuer or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by the
Issuer or any Restricted Subsidiary with respect to any secured Investment or
other transfer of title with respect to any secured Investment in default;


 


(8)           Hedging Obligations permitted under
clause (9) of the definition of “Permitted Debt” in Section 4.10(b);


 


(9)           loans and advances
to officers, directors and employees for business-related travel expenses,
moving expenses and other similar expenses, in each case incurred in the
ordinary course of business;


 


(10)         any advance directly
or indirectly related to royalties or future profits (whether or not recouped),
directly or indirectly (including through capital contributions or loans to an
entity or joint venture relating to such artist(s) or writer(s)), to one or
more artists or writers pursuant to label and license agreements, agreements
with artists/writers and related ventures, pressing and distribution
agreements, publishing agreements and any similar contract or agreement entered
into from time to time in the ordinary course of business;


 


(11)         any Investment by the Issuer or a
Restricted Subsidiary in a Permitted Business having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(11) that are at that time outstanding (without giving effect to the sale of an
Unrestricted Subsidiary to the extent the proceeds of such sale do not consist
of cash and/or marketable securities), not to exceed the greater of $75.0
million and 8.0% of Consolidated Tangible Assets (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


24





















 


(12)         Investments the payment for which
consists of Equity Interests of the Issuer or any of its direct or indirect
parent corporations (exclusive of Disqualified Stock);


 


(13)         guarantees (including
Guarantees) of Indebtedness permitted under Section 4.10 and performance
guarantees consistent with past practice;


 


(14)         any transaction to
the extent it constitutes an Investment that is permitted and made in
accordance with Section 4.14 (except transactions described in clauses (2), (6)
and (7) of Section 4.14(b));


 


(15)         Investments by the Issuer or a
Restricted Subsidiary in joint ventures engaged in a Permitted Business having
an aggregate fair market value, taken together with all other Investments made
pursuant to this clause (15) that are at that time outstanding amount, not to
exceed the greater of $50.0 million and 4.0% of Consolidated Tangible Assets
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value);


 


(16)         Investments
consisting of licensing or contribution of intellectual property pursuant to
joint marketing arrangements with other Persons; and


 


(17)         any Investment in a
Securitization Subsidiary or any Investment by a Securitization Subsidiary in
any other Person in connection with a Qualified Securitization Financing,
including Investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Securitization Financing or any related
Indebtedness; provided, however, that any Investment in a
Securitization Subsidiary is in the form of a Purchase Money Note, contribution
of additional Securitization Assets or an equity interest.


 


“Permitted Junior
Securities” means:


 


(1)           Equity Interests in
the Issuer, any Guarantor or any direct or indirect parent of the Issuer; or


 


(2)           unsecured debt securities that are
subordinated to all Senior Debt (and any debt securities issued in exchange for
Senior Debt) to substantially the same extent as, or to a greater extent than,
the Securities and the Guarantees are subordinated to Senior Debt under this
Indenture.


 


“Permitted Liens”
means the following types of Liens:


 


(1)           deposits of cash or
government bonds made in the ordinary course of business to secure surety or
appeal bonds to which such Person is a party;


 


25





















 


(2)           Liens in favor of issuers of
performance, surety, bid, indemnity, warranty, release, appeal or similar bonds
or with respect to other regulatory requirements or letters of credit or
bankers’ acceptances issued, and completion guarantees provided for, in each
case pursuant to the request of and for the account of such Person in the
ordinary course of its business or consistent with past practice;


 


(3)           Liens on property or shares of stock
of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not
created or incurred in connection with, or in contemplation of, such other
Person becoming such a Subsidiary; provided, further, however, that such Liens may not
extend to any other property owned by the Issuer or any Restricted Subsidiary;


 


(4)           Liens on property at the time the
Issuer or a Restricted Subsidiary acquired the property, including any
acquisition by means of a merger or consolidation with or into the Issuer or
any Restricted Subsidiary; provided,
however, that such Liens are not created or incurred in connection
with, or in contemplation of, such acquisition; provided, further, however, that such Liens may not extend
to any other property owned by the Issuer or any Restricted Subsidiary;


 


(5)           Liens securing Indebtedness or other
obligations of a Restricted Subsidiary owing to the Issuer or another
Restricted Subsidiary permitted to be incurred in accordance with Section 4.10;


 


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


 


(7)           Liens on 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;


 


(8)           Liens in favor of
the Issuer or any Restricted Subsidiary;


 


(9)           Liens to secure any
Indebtedness that is incurred to refinance any Indebtedness that has been
secured by a Lien existing on the Issue Date or referred to in clauses (3), (4)
and (19)(B) of this definition; provided,
however, that such Liens (x) 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 (y) do not
extend to or cover any property or assets of the Issuer or any of its
Restricted Subsidiaries
not securing the Indebtedness so refinanced;


 


26





















 


(10)         Liens on Securitization Assets and
related assets of the type specified in the definition of “Securitization
Financing” incurred in connection with any Qualified Securitization Financing;


 


(11)         Liens for taxes,
assessments or other governmental charges or levies not yet delinquent, or
which are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted or for property taxes on property that the
Issuer or one of its Subsidiaries has determined to abandon if the sole
recourse for such tax, assessment, charge, levy or claim is to such property;


 


(12)         judgment liens in respect of judgments
that do not constitute an Event of Default so long as such Liens are adequately
bonded and any appropriate legal proceedings that may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;


 


(13)         pledges, deposits or
security under workmen’s compensation, unemployment insurance and other social
security laws or regulations, or deposits to secure the performance of tenders,
contracts (other than for the payment of Indebtedness) or leases, or deposits
to secure public or statutory obligations, or deposits as security for
contested taxes or import or customs duties or for the payment of rent, or
deposits or other security securing liabilities to insurance carriers under
insurance or self-insurance arrangements, in each case incurred in the ordinary
course of business or consistent with past practice;


 


(14)         Liens imposed by law,
including carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’
Liens, in each case for sums not overdue by more than 30 days or, if more than
30 days overdue, are unfiled and no other action has been taken to enforce such
Lien or which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted;


 


(15)         encumbrances, ground
leases, easements or reservations of, or rights of others for, licenses, rights
of way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning, building codes or other restrictions (including, without
limitation, minor defects or irregularities in title and similar encumbrances)
as to the use of real properties or Liens incidental to the conduct of business
or to the ownership of properties that do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business;


 


(16)         leases, licenses, subleases or
sublicenses granted to others in the ordinary course of business that do not
(x) interfere in any material respect with the business of the Issuer or any of
its material Restricted Subsidiaries or (y) secure any Indebtedness;


 


27





















 


(17)         banker’s Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with a depositary institution, provided that (a) such deposit account is
not a dedicated cash collateral account and is not subject to restrictions
against access by the Issuer in excess of those set forth by regulations
promulgated by the Federal Reserve Board or other applicable law and (b) such
deposit account is not intended by the Issuer or any Restricted Subsidiary to
provide collateral to the depositary institution;


 


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


 


(19)         (A) other Liens securing Indebtedness
for borrowed money with respect to property or assets with an aggregate fair
market value (valued at the time of creation thereof) of not more than $15.0
million at any time and (B) Liens securing Indebtedness incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions to,
property of such Person; provided, however, that (x) the Lien may
not extend to any other property (except for accessions to such property) owned
by such Person or any of its Restricted Subsidiaries at the time the Lien is
incurred, (y) such Liens attach concurrently with or within 270 days after the
acquisition, repair, replacement, construction or improvement (as applicable)
of the property subject to such Liens and (z) with respect to Capitalized Lease
Obligations, such Liens do not at any time extend to or cover any assets
(except for accessions to such assets) other than the assets subject to such
Capitalized Lease Obligations; provided that individual financings of equipment
provided by one lender may be cross-collateralized to other financings of
equipment provided by such lender;


 


(20)         Liens to secure Non-Recourse Product
Financing Indebtedness permitted to be incurred pursuant to clause (18) of the
definition of “Permitted Debt” in Section 4.10(b), which Liens may not secure
Indebtedness other than Non-Recourse Product Financing Indebtedness and which
Liens may not attach to assets other than the items of Product acquired,
exploited, created or developed with the proceeds of such Indebtedness and
Liens to secure Non-Recourse Acquisition Financing Indebtedness permitted to be
incurred pursuant to clause (18) of the definition of “Permitted Debt” in
Section 4.10(b), which Liens may not secure Indebtedness other than
Non-Recourse Acquisition Financing Indebtedness and which Liens may not attach
to assets other than the assets acquired, exploited, created or developed with
the proceeds of such Indebtedness;


 


(21)         Liens (i) of a collection bank arising
under Section 4-210 of the Uniform Commercial Code on items in the course of
collection, (ii) attaching to commodity trading accounts or other commodities
brokerage accounts incurred in the ordinary


 


28





















 


course of
business and (iii) in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) and which are within the
general parameters customary in the banking industry;


 


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


 


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


 


(24)         Liens solely on any
cash earnest money deposits made by the Issuer or any of its Restricted
Subsidiaries in connection with any letter of intent or purchase agreement
permitted under this Indenture.


 


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


 


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


 


“Private
Placement Legend” means the legends initially set forth on
the Dollar Securities in the form set forth in Exhibit C-1 or the
Sterling Securities in the form set forth in Exhibit C-2.


 


“Product” means
any music (including musical and audio visual recordings, musical performance,
songs and compositions and also includes mail order music and activities
relating or incidental to music such as touring, merchandising and artist
management), music copyright, motion picture, television programming, film,
videotape, digital file, video clubs, DVD manufactured or distributed or any
other product produced for theatrical, non-theatrical or television release or
for release in any other medium, in each case whether recorded on film,
videotape, cassette, cartridge, disc or on or by any other means, method,
process or device, whether now known or hereafter developed, with respect to
which the Issuer or any Restricted Subsidiary:


 


(1)           is an initial
copyright owner; or


 


29





















 


(2)           acquires (or will
acquire upon delivery) an equity interest, license, sublicense or administration
or distribution right.


 


“Purchase
Agreement” means the Purchase Agreement dated November 24,
2003, as amended by the amendment to the Purchase Agreement dated February 29,
2004, between Time Warner Inc. and WMG Acquisition Corp.


 


“Purchase Money
Note” means a promissory note of a Securitization Subsidiary
evidencing a line of credit, which may be irrevocable, from Holdco or any
Subsidiary of Holdco to a Securitization Subsidiary in connection with a
Qualified Securitization Financing, which note is intended to finance that
portion of the purchase price that is not paid in cash or a contribution of
equity and which (a) shall be repaid from cash available to the Securitization
Subsidiary, other than (i) amounts required to be established as reserves, (ii)
amounts paid to investors in respect of interest, (iii) principal and other
amounts owing to such investors and (iv) amounts paid in connection with the
purchase of newly generated receivables and (b) may be subordinated to the
payments described in clause (a).


 


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


 


“Qualified
Institutional Buyer” or “QIB”
shall have the meaning specified in Rule 144A under the Securities
Act.


 


“Qualified
Proceeds” means assets that are used or useful in, or Capital
Stock of any Person engaged in, a Permitted Business; provided that
the fair market value of any such assets or Capital Stock shall be determined
by the Board of Directors of the Issuer in good faith, except that in the event
the value of any such assets or Capital Stock exceeds $25.0 million, the fair
market value shall be determined by an Independent Financial Advisor.


 


“Qualified
Securitization Financing” means any Securitization Financing
of a Securitization Subsidiary that meets the following conditions: (i) the
Board of Directors of the Issuer shall have determined in good faith that such
Qualified Securitization Financing (including financing terms, covenants,
termination events and other provisions) is in the aggregate economically fair
and reasonable to the Issuer and the Securitization Subsidiary, (ii) all sales
of Securitization Assets and related assets to the Securitization Subsidiary
are made at fair market value (as determined in good faith by the Issuer) and
(iii) the financing terms, covenants, termination events and other provisions
thereof shall be market terms (as determined in good faith by the Issuer) and
may include Standard Securitization Undertakings. The grant of a security
interest in any Securitization Assets of the Issuer or any of its Restricted
Subsidiaries (other than a Securitization Subsidiary) to secure Indebtedness
under the Credit Agreement and any Refinancing Indebtedness with respect
thereto shall not be deemed a Qualified Securitization Financing.


 


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“Record Date” means
the applicable Record Date specified in the Securities; provided that if
any such date is not a Business Day, the Record Date shall be the first day
immediately preceding such specified day that is a Business Day.


 


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


 


“Redemption
Price,” when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.


 


“refinance” means
to extend, refinance, renew, replace, defease or refund, including successively;
and “refinancing” and “refinanced” shall have correlative
meanings.


 


“Registration
Rights Agreement” means (a) the Registration Rights Agreement
dated as of April 8, 2004, among the Issuer, the Guarantors and the Initial
Purchasers relating to the Securities and (b) any other similar Exchange and
Registration Rights Agreement relating to Additional Securities.


 


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


 


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


 


“Responsible
Officer” means, when used with respect to the Trustee, any
officer in the Corporate Trust Office of the Trustee to whom any corporate
trust matter is referred because of such officer’s knowledge of and familiarity
with the particular subject and shall also mean any officer who shall have
direct responsibility for the administration of this Indenture.


 


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


 


“Restricted
Security” means a Security that constitutes a “Restricted
Security” within the meaning of Rule 144(a)(3) under the Securities Act; provided, however, that
the Trustee shall be entitled to request and conclusively rely on an Opinion of
Counsel with respect to whether any Security constitutes a Restricted Security.


 


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


 


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


 


“S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc.


 


“Secured
Indebtedness” means any Indebtedness secured by a Lien.


 


“Securities” means
the Dollar Securities and the Sterling Securities.


 


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


 


“Securities
Purchase Agreement” means (a) the Purchase Agreement dated
April 1, 2004, among the Issuer, the Guarantors and the Initial Purchasers and
(b) any other similar purchase agreement relating to the Additional Securities.


 


“Securitization
Assets” means any accounts receivable or catalog, royalty or
other revenue streams from Product subject to a Qualified Securitization
Financing.


 


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


 


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


 


“Securitization
Repurchase Obligation” means any obligation of a seller of
Securitization Assets in a Qualified Securitization Financing to repurchase
Securitization Assets arising as a result of a breach of a representation,
warranty or covenant or otherwise, including as a result of a receivable or
portion thereof becoming subject to any asserted defense,


 


32





















 


dispute, offset or counterclaim
of any kind as a result of any action taken by, any failure to take action by
or any other event relating to the seller.


 


“Securitization
Subsidiary” means a Wholly Owned Subsidiary of Holdco (or
another Person formed for the purposes of engaging in a Qualified
Securitization Financing in which Holdco or any Subsidiary of Holdco makes an
Investment and to which Holdco or any Subsidiary of Holdco transfers Securitization
Assets and related assets) which engages in no activities other than in
connection with the financing of Securitization Assets of Holdco or its
Subsidiaries, all proceeds thereof and all rights (contractual and other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board of
Directors of Holdco or such other Person (as provided below) as a
Securitization Subsidiary and (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (i) is guaranteed by Holdco or
any other Subsidiary of Holdco (excluding guarantees of obligations (other than
the principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings), (ii) is recourse to or obligates Holdco or any
other Subsidiary of Holdco in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of Holdco
or any other Subsidiary of Holdco, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither Holdco nor any other
Subsidiary of Holdco has any material contract, agreement, arrangement or understanding
other than on terms which Holdco reasonably believes to be no less favorable to
Holdco or such Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of Holdco and (c) to which neither Holdco nor
any other Subsidiary of Holdco has any obligation to maintain or preserve such
entity’s financial condition or cause such entity to achieve certain levels of
operating results. Any such designation by the Board of Directors of Holdco or
such other Person shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the resolution of the Board of Directors of Holdco or such
other Person giving effect to such designation and an Officer’s certificate
certifying that such designation complied with the foregoing conditions.


 


“Senior Debt” means
the principal of, premium, if any, and interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed or allowable claim under applicable law) on any
Indebtedness and any Securitization Repurchase Obligation of the Issuer,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular obligation, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such obligation shall not be senior in right of payment
to the Securities. Without limiting the generality of the foregoing, “Senior
Debt” shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is


 


33





















 


an allowed or allowable claim
under applicable law) on, and all other amounts owing in respect of (including
guarantees of the foregoing obligations):


 


(1)           all monetary obligations of every
nature of the Issuer under, or with respect to, the Credit Agreement,
including, without limitation, obligations to pay principal, premium and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof); and


 


(2)           all Hedging Obligations (and
guarantees thereof), in each case whether outstanding on the Issue Date or
thereafter incurred.


 


Notwithstanding
the foregoing, “Senior Debt” shall not include:


 


(1)           any Indebtedness of the Issuer to a
Subsidiary of the Issuer (other than any Securitization Repurchase Obligation);


 


(2)           Indebtedness to, or guaranteed on
behalf of, any shareholder, director, officer or employee of the Issuer or any
Subsidiary of the Issuer (including, without limitation, amounts owed for
compensation) other than the guarantee of Holdco of Indebtedness under the
Credit Agreement;


 


(3)           Indebtedness to trade creditors and
other amounts incurred in connection with obtaining goods, materials or
services (including guarantees thereof or instruments evidencing such
liabilities);


 


(4)           Indebtedness represented by Capital
Stock;


 


(5)           any liability for federal, state,
local or other taxes owed or owing by the Issuer;


 


(6)           that portion of any Indebtedness
incurred in violation of Section 4.10;


 


(7)           Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11, United
States Code, is without recourse to the Issuer; and


 


(8)           any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of
the Issuer.


 


“Significant
Subsidiary” means any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.


 


34





















 


“Specified
Financings” means the financings included in the Transactions
and this offering of the Securities.


 


“Sponsors” means
Thomas H. Lee Partners, L.P. (together with any limited partner thereof,
whether or not such investment in the Issuer is made through the same entity),
Bain Capital Partners, LLC, Providence Equity Partners and Music Capital
Partners, L.P.


 


“Standard
Securitization Undertakings” means representations,
warranties, covenants and indemnities entered into by Holdco or any Subsidiary
of Holdco which Holdco has determined in good faith to be customary in a
Securitization Financing, including, without limitation, those relating to the
servicing of the assets of a Securitization Subsidiary, it being understood
that any Securitization Repurchase Obligation shall be deemed to be a Standard
Securitization Undertaking.


 


“Stated Maturity”
means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.


 


“Sterling
Exchange Securities” means any Sterling Securities issued in
exchange for Initial Sterling Securities or Sterling Securities without a
legend.


 


“Sterling
Securities” means the Sterling-denominated 8 1/8% Senior
Subordinated Notes due 2014 issued by the Issuer, including, without
limitation, the Sterling Exchange Securities and the Additional Sterling
Securities, treated as a single class of securities, as amended from time to
time in accordance with the terms hereof, that are issued pursuant to this
Indenture.


 


“Stockholders
Agreement” means the Stockholders Agreement by and among the
Issuer, the Sponsors and/or their Affiliates and the other stockholders party
thereto in effect on the Issue Date.


 


“Subordinated
Indebtedness” means (a) with respect to the Issuer, any
Indebtedness of the Issuer that is by its terms subordinated in right of
payment to the Securities and (b) with respect to any Guarantor of the
Securities, any Indebtedness of such Guarantor that is by its terms
subordinated in right of payment to its Guarantee of the Securities.


 


“Subsidiary” means,
with respect to any specified Person:


 


(1)           any corporation,
association or other business entity, of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or


 


35





















 


trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and


 


(2)           any partnership,
joint venture, limited liability company or similar entity of which (x) more than
50% of the capital accounts, distribution rights, total equity and voting
interests or general or limited partnership interests, as applicable, are owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person or a combination thereof whether in the form
of membership, general, special or limited partnership or otherwise and (y)
such Person or any Wholly Owned Restricted Subsidiary of such Person is a
controlling general partner or otherwise controls such entity.


 


“Tax” means any tax, duty, levy, impost,
assessment or other governmental charge (including penalties, interest and any
other liabilities related thereto).


 


“Taxing Authority”
means any government or political subdivision or territory or
possession of any government or any authority or agency therein or thereof
having power to tax.


 


“TIA” means the Trust Indenture Act of 1939
(15 U.S.C. §§ 77aaa-77bbbb), as amended, as in effect on the date of the
execution of this Indenture until such time as this Indenture is qualified
under the TIA, and thereafter as in effect on the date on which this Indenture
is qualified under the TIA, except as otherwise provided in Section 9.04.


 


“Transactions” means
the transactions contemplated by (i) the Purchase Agreement, (ii) the Credit
Agreement and (iii) the offering of the Securities.


 


“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.


 


“U.K. Government
Securities” means securities that are:


 


(1)                                  direct
obligations of the United Kingdom or issued by any agency or instrumentality
thereof for the timely payment of which its full faith and credit is pledged,
or


 


(2)                                  obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United Kingdom, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
Kingdom,


 


36





















 


which, in each case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.K. Government
Securities or a specific payment of principal of or interest on any such U.K.
Government Securities held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.K. Government Securities or the specific payment of
principal or interest on the U.K. Government Securities evidenced by such
depository receipt.


 


“U.K. Legal
Tender” means such coin or currency of the United Kingdom as at the
time of payment shall be legal tender for the payment of public and private
debts.


 


“Unrestricted
Securities” means one or more Dollar Securities that do not
and are not required to bear the legends in the form set forth in Exhibit
C-1 or Sterling Securities that do not and are not required to bear the
legends in the form set forth in Exhibit C-2, including, without
limitation, the Exchange Securities.


 


“Unrestricted
Subsidiary” means (i) any Subsidiary of the Issuer that at
the time of determination is an Unrestricted Subsidiary (as designated by the
Board of Directors of the Issuer, as provided below) and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Issuer may designate
any Subsidiary of the Issuer (including any existing Subsidiary and any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Equity Interests or
Indebtedness of, or owns or holds any Lien on, any property of, the Issuer or
any Subsidiary of the Issuer (other than any Subsidiary of the Subsidiary to be
so designated), provided
that (a) any Unrestricted Subsidiary must be an entity of which
shares of the Capital Stock or other equity interests (including partnership
interests) entitled to cast at least a majority of the votes that may be cast
by all shares or equity interests having ordinary voting power for the election
of directors or other governing body are owned, directly or indirectly, by the
Issuer, (b) such designation complies with Section 4.11 and (c) each of (I) the
Subsidiary to be so designated and (II) 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 Issuer or any Restricted Subsidiary. The Board of Directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that,
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and (1) the Issuer could incur $1.00 of additional
Indebtedness pursuant to the Coverage Ratio Exception described under Section
4.10(a), or (2) the Fixed Charge Coverage Ratio for the Issuer and its
Restricted Subsidiaries would be greater than such ratio for the Issuer and its
Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such
designation. Any such designation by the Board of Directors shall be notified


 


37





















 


by the Issuer 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.  Dollar
Equivalent” means, with respect to any monetary amount in a currency
other than U.S. Dollars, at any time for the determination thereof, the amount
of U.S. Dollars obtained by converting such foreign currency involving in such
computation into U.S. Dollars at the spot rate for the purchase of U.S. Dollars
with the applicable foreign currency as quoted by Reuters at approximately
10:00 A.M., New York City time, on such date of determination (or if no such
quote is available on such date, on the immediately preceding Business Day for
which such a quote is available).


 


“U.S.  Government
Securities” means securities that are


 


(a)           direct obligations of the United
States of America for the timely payment of which its full faith and credit is
pledged or


 


(b)           obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America,


 


which, in either case, are not
callable or redeemable at the option of the issuers thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government
Securities or a specific payment of principal of or interest on any such
Government Securities held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Securities or the specific payment of
principal of or interest on the Government Securities evidenced by such
depository receipt.


 


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


 


“Voting Stock” of
any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.


 


“Weighted Average
Life to Maturity” means, when applied to any Indebtedness at any date, the number of years
obtained by dividing:


 


38





















 


(1)           the sum 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 of the Indebtedness, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by


 


(2)           the then outstanding principal amount
of such Indebtedness.


 


“Wholly Owned
Restricted Subsidiary” is any Wholly Owned Subsidiary that is
a Restricted Subsidiary.


 


“Wholly Owned
Subsidiary” of any Person means a Subsidiary of such Person,
100% of the outstanding Capital Stock or other ownership interests of which
(other than directors’ qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.


 


SECTION 1.02.                                         Other
Definitions.


 


	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Additional Dollar Securities”

  	
   

  	
  2.01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Additional Securities”

  	
   

  	
  2.01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Additional Sterling Securities”

  	
   

  	
  2.01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.14

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Alternate Offer”

  	
   

  	
  4.09

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Asset Sale Offer”

  	
   

  	
  4.13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Asset Sale Offer Amount”

  	
   

  	
  4.13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Asset Sale Payment”

  	
   

  	
  4.13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Asset Sale Payment Date”

  	
   

  	
  4.13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Base Currency”

  	
   

  	
  12.14

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.09

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  4.09

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.09

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Covenant
  Defeasance”

  	
   

  	
  8.02

  	
   

  	
   

  



 


39





















 


	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Coverage Ratio Exception”

  	
   

  	
  4.10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  4.13

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Guarantee Obligations”

  	
   

  	
  11.01

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “incur”

  	
   

  	
  4.10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Judgment Currency”

  	
   

  	
  12.14

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Luxembourg Paying Agent”

  	
   

  	
  2.04

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Non-Payment Default”

  	
   

  	
  10.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Other Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.04

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Payment Blockage Notice”

  	
   

  	
  10.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Payment Blockage Period”

  	
   

  	
  10.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Payment Default”

  	
   

  	
  10.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Permitted Debt”

  	
   

  	
  4.10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Physical Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Refunding Capital Stock”

  	
   

  	
  4.11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Registrar”

  	
   

  	
  2.04

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Regulation S Dollar Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Regulation S Global Dollar Security”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Regulation S Global Security”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Regulation S Global Sterling Security”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Regulation S Sterling Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Restricted Global Securities”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Restricted Period”

  	
   

  	
  2.16

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Retired Capital Stock”

  	
   

  	
  4.11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Rule 144A Dollar Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Rule 144A Global Dollar Securities”

  	
   

  	
  2.02

  	
   

  	
   

  



 


40





















 


	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Rule 144A Global Sterling Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Rule 144A Sterling Securities”

  	
   

  	
  2.02

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Sterling Paying Agent”

  	
   

  	
  2.04

  	
   

  	
   

  



 


SECTION 1.03.                                         Incorporation
by Reference of TIA.


 


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 Securities.


 


“indenture
security holder” means a Holder or a Securityholder.


 


“indenture to be qualified” means
this Indenture.


 


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


 


“obligor” on
the indenture securities means the Issuer or any other obligor on the Securities.


 


All other TIA
terms used in this Indenture that are defined by the TIA, defined by the TIA
reference to another statute or defined by Commission rule and not otherwise
defined herein have the meanings assigned to them therein.


 


SECTION 1.04.                                         Rules
of Construction.


 


Unless the
context otherwise requires:


 


(1)           a term has the meaning assigned to it
herein, whether defined expressly or by reference;


 


(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)           words used herein
implying any gender shall apply to both genders;


 


41





















 


(6)           provisions apply to successive events
and transactions;


 


(7)           “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;


 


(8)           the words “including,”
“includes” and similar words shall be deemed to be followed by “without
limitation”;


 


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


 


(10)         the principal amount
of any Preferred Stock shall be (i) the maximum liquidation value of such
Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock, whichever is greater;


 


(11)         unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP;


 


(12)         “$” and “U.S. Dollars”
each refer to United States dollars, or such other money of the United States
of America that at the time of payment is legal tender for payment of public
and private debts;


 


(13)         “£” and “pounds
sterling” each refer to the lawful currency of the United Kingdom that at the
time of payment is legal tender for payment of public and private debts; and


 


(14)         whenever in this Indenture there is
mentioned, in any context, principal, interest or any other amount payable
under or with respect to any Securities, such mention shall be deemed to
include mention of the payment of Additional Interest, to the extent that, in
such context, Additional Interest is, was or would be payable in respect
thereof.


 


42





















 


ARTICLE TWO


 


THE SECURITIES


 


SECTION 2.01.                                         Amount
of Securities.


 


The Trustee
shall initially authenticate Securities for original issue on the Issue Date in
an aggregate principal amount of $465,000,000 of Dollar Securities (the “Initial
Dollar Securities”) and an aggregate principal amount of
£100,000,000 of Sterling Securities (the “Initial Sterling Securities”
and, together with the Initial Dollar Securities, the “Initial
Securities”) upon a written order of the Issuer in the form
of an Officers’ Certificate of the Issuer (other than as provided in Section
2.08). The Trustee shall authenticate Dollar Securities (the “Additional
Dollar Securities”) and Sterling Securities (the “Additional
Sterling Securities”)
thereafter in unlimited amount (so long as permitted by the terms of this
Indenture, including, without limitation, Section 4.10) (any such Securities,
the “Additional
Securities”) for original issue upon a written order of the
Issuer in the form of an Officers’ Certificate in aggregate principal amount as
specified in such order (other than as provided in Section 2.08). Each such
written order shall specify the principal amount of Additional Dollar
Securities and/or Additional Sterling Securities to be authenticated and the
date on which the Additional Dollar Securities and/or Additional Sterling
Securities are to be authenticated.


 


SECTION 2.02.                                         Form
and Dating.


 


The Dollar
Securities and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto and the Sterling
Securities and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit B hereto, both of which are
incorporated in and form a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, rule or usage to which the
Issuer is subject. Without limiting the generality of the foregoing, Securities
offered and sold to Qualified Institutional Buyers in reliance on Rule 144A (“Rule 144A
Securities”) shall bear the legend and include the form of
assignment set forth in Exhibit C-1 in the case of Dollar Securities and
Exhibit C-2 in the case of Sterling Securities, Securities offered and
sold in offshore transactions in reliance on Regulation S (“Regulation
S Securities”) shall bear the legend and include the form of
assignment set forth in Exhibit D, and Securities offered and sold to
Institutional Accredited Investors in transactions exempt from registration
under the Securities Act not made in reliance on Rule 144A or Regulation S (“Other
Securities”) may be represented by a Restricted Global
Security or, if such an investor may not hold an interest in the Restricted
Global Security, a Physical Security, in each case, bearing the Private
Placement Legend. The Issuer shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its issuance and show the date of its authentication.


 


43





















 


The terms and
provisions contained in the Securities shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Issuer and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and agree to be bound thereby.


 


The Securities
may be presented for registration of transfer and exchange at the offices of
the Registrar.


 


Securities
issued in exchange for interests in a Global Security pursuant to Section 2.16
may be issued in the form of permanent certificated Securities in registered
form in substantially the form set forth in Exhibit A in the case of
Dollar Securities and Exhibit B in the case of Sterling Securities (the “Physical
Securities”).


 


SECTION 2.03.                                         Execution
and Authentication.


 


One Officer,
who shall have been duly authorized by all requisite corporate actions, shall
sign the Securities for the Issuer by manual or facsimile signature.


 


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


 


No Security
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Issuer, and the Issuer shall deliver such Security to the
Trustee for cancellation as provided in Section 2.12, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.


 


The Trustee
may appoint one or more authenticating agents with the consent of the Issuers
to authenticate the Securities. Unless otherwise provided in the appointment,
an authenticating agent may authenticate the Securities whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Issuer and Affiliates of the Issuers. Each
Paying Agent is designated as an authenticating agent for purposes of this
Indenture.


 


44





















 


The Securities
shall be issuable only in registered form without coupons in denominations of
$5,000 and any integral multiples of $1,000, in the case of Dollar Securities,
and £5,000 and any integral multiples of £1,000, in the case of Sterling
Securities.


 


SECTION 2.04.                                         Registrar
and Paying Agent.


 


The Issuer
shall maintain (a) an officer or agency where Securities may be presented for
registration of transfer or for exchange (the “Registrar”), (b) an
office or agency in the Borough of Manhattan, The City of New York, the State
of New York, where Dollar Securities may be presented for payment (the “Dollar
Paying Agent”) (c) an office or agency in the Borough of
Manhattan, The City of New York, the State of New York, and London, England
where Sterling Securities may be presented for payment (the “Sterling
Paying Agent”), (d) so long as the Sterling Securities are
listed on the Luxembourg Stock Exchange, an office or agency in Luxembourg
where Sterling Securities may be presented for payment (the “Luxembourg
Paying Agent”) and (e) an office or agency where notices and
demands to or upon the Issuer, if any, in respect of the Securities and this
Indenture may be served. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Registrar shall provide a copy of such
register. The Issuer may have on or more co-registrars and one or more
additional Paying Agents. The term “Registrar” includes any
co-registrars. The Issuer shall maintain a co-registrar in London, England and,
so long as the Sterling Securities are listed on the Luxembourg Stock Exchange
and if required by the rules of the Luxembourg Stock Exchange, in Luxembourg
where Sterling Securities may be presented for registration of transfer or for
exchange. The term “Paying Agents” means the Dollar
Paying Agent, the Sterling Paying Agent, the Luxembourg Paying Agent (if any)
and any additional Paying Agents. The Issuer or any Affiliate thereof may act
as Registrar or Paying Agent.


 


The Issuer
shall enter into an appropriate agency agreement, which shall incorporate the
provisions of the TIA, with any Agent that is not a party to this Indenture; provided that
any such agency agreement with the Luxembourg Paying Agent need not incorporate
the provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Issuer shall notify the Trustee of the
name and address of any such Agent. If the Issuer fails to maintain a Registrar
or any required co-registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.07.


 


The Issuer
initially appoints the Trustee as Registrar, Dollar Paying Agent and Agent for
service of notices and demands in connection with the Securities and this
Indenture. The Issuer initially appoints HSBC Bank plc, as a co-registrar and
as Sterling Paying Agent.


 


If the
European Council Directive 2003/48/EC or any other directive implementing the
conclusions of the ECOFIN Council meeting of 26-27 November 2000 is
implemented, the Issuer will use its best efforts to maintain a paying agent in
a member state of the European Union that will not be obliged to withhold or
deduct tax pursuant to any European


 


45





















 


Union Directive on the taxation
of savings implementing such conclusions or any law implementing or complying
with, or introduced to conform to, such directive.


 


The Issuer may
change the paying agents, the registrars or the transfer agents without prior
notice to the Holders. If, and for so long as, the Sterling Securities are
listed on the Luxembourg Stock Exchange and its rules so require, the Issuer
will publish a notice of any change of paying agent, registrar or transfer
agent in a newspaper having a general circulation in Luxembourg. The Issuer or
any of its Subsidiaries may act as a paying agent or registrar.


 


The Issuer may
also from time to time designate one or more other offices or agencies where
the Securities may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that
no such designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York and London, England for such purposes. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Issuer, upon 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.


 


SECTION 2.05.                                         Paying
Agent To Hold Assets in Trust.


 


Each Paying
Agent shall hold in trust for the benefit of the Holders or the Trustee all
money held by the Paying Agent for the payment of principal of or premium or
interest on the Securities (whether such money has been paid to it by the
Issuer, one or more of the Guarantors or any other obligor on the Securities),
and the Issuer and each Paying Agent shall notify the Trustee of any Default by
the Issuer (or any other obligor on the Securities) in making any such payment.
Money held in trust by a Paying Agent need not be segregated except as required
by law and in no event shall a Paying Agent be liable for any interest on any
money received by it hereunder. The Issuer at any time may require a Paying
Agent to pay all money held by it to the Trustee and account for any funds
disbursed and the Trustee may at any time during the continuance of any Event
of Default specified in Section 6.01(1) or (2), upon written request to a
Paying Agent, require such Paying Agent to pay forthwith all money so held by
it to the Trustee and to account for any funds disbursed. Upon making such
payment, such Paying Agent shall have no further liability for the money
delivered to the Trustee


 


SECTION
2.06.                                         Holder
Lists.


 


The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Holders. If the
Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least
two (2) Business Days prior to each Interest Payment Date and at such other
times as the Trustee may request in writing a list in


 


46





















 


such form and as of such date
as the Trustee may reasonably require of the names and addresses of Holders,
which list may be conclusively relied upon by the Trustee.


 


SECTION 2.07.                                         Transfer
and Exchange.


 


Subject to
Sections 2.16 and 2.17, when Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of Securities of other
authorized denominations, the Registrar or co-Registrar shall promptly register
the transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Securities
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Registrar or co-Registrar, duly executed by the Holder thereof or his or her
attorney duly authorized in writing. To permit registrations of transfers and
exchanges, the Issuer shall execute and the Trustee shall authenticate
Securities at the Registrar’s or co-Registrar’s request. No service charge
shall be made for any registration of transfer or exchange, but the Issuer may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith.


 


The Registrar
or co-Registrar shall not be required to register the transfer of or exchange
of any Security (i) during a period beginning at the opening of business 15
days before the mailing of a notice of redemption of Securities and ending at
the close of business on the day of such mailing, (ii) selected for redemption
in whole or in part pursuant to Article Three, except the unredeemed portion of
any Security being redeemed in part, and (iii) during a Change of Control
Offer, an Alternate Offer or an Asset Sale Offer if such Security is tendered
pursuant to such Change of Control Offer, Alternate
Offer or Asset Sale Offer and not withdrawn.


 


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


 


SECTION 2.08.                                         Replacement
Securities.


 


If a mutilated
Security is surrendered to the Registrar or the Trustee, or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Issuer shall issue and the Trustee shall authenticate a replacement
Security (and the Guarantors, if any, shall execute the guarantee thereon) if
the Holder of such Security furnishes to the Issuer and the Trustee evidence
reasonably acceptable to them of the ownership and the destruction, loss or
theft of such Security and if the requirements of Section 8-405 of the New York
Uniform Commercial Code as in effect on the date of this Indenture are met. If
required


 


47





















 


by the Trustee or the Issuer,
an indemnity bond shall be posted, sufficient in the judgment of all to protect
the Issuer, the Guarantors, if any, the Trustee or any Paying Agent from any
loss that any of them may suffer if such Security is replaced. The Issuer may
charge such Holder for the Issuer’s reasonable out-of-pocket expenses in
replacing such Security and the Trustee may charge the Issuer for the Trustee’s
expenses (including, without limitation, attorneys’ fees and disbursements) in
replacing such Security. Every replacement Security shall constitute a
contractual obligation of the Issuer.


 


SECTION 2.09.                                         Outstanding
Securities.


 


The Securities
outstanding at any time are all the Securities that have been authenticated by
the Trustee except (a) those canceled by it, (b) those delivered to it for
cancellation, (c) to the extent set forth in Sections 9.01 and 9.02, on or
after the date on the conditions set forth in Section 9.01 or 9.02 have been
satisfied and (d) these Securities theretofore authenticated by the Trustee hereunder
and those described in this Section as not outstanding. A Security does not
cease to be outstanding because the Issuer or any of its Affiliates holds the
Security (subject to the provisions of Section 2.10).


 


If a Security
is replaced pursuant to Section 2.08 (other than a mutilated Security
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser
in whose hands such Security is a legal, valid and binding obligation of the
Issuer. A mutilated Security ceases to be outstanding upon surrender of such
Security and replacement thereof pursuant to Section 2.08.


 


If the
principal amount of any Security is considered paid under Section 4.01, it ceases
to be outstanding and interest ceases to accrue. If on a Redemption Date or the
Maturity Date the Trustee or Paying Agent (other than the Issuer or an
Affiliate thereof) holds U.S. Legal Tender or U.S. Government Securities
sufficient to pay all of the principal and interest due on the Dollar
Securities payable on that date, or U.K. Legal Tender or U.K. Government
Securities sufficient to pay all of the principal and interest due on the
Sterling Securities payable on that date, then on and after that date such
Dollar Securities and/or Sterling Securities cease to be outstanding and
interest on them ceases to accrue.


 


SECTION 2.10.                                         Treasury
Securities.


 


In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Issuer
or any of its Affiliates shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that a Responsible Officer of the
Trustee actually knows are so owned shall be disregarded.


 


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SECTION 2.11.                                         Temporary
Securities.


 


Until
definitive Securities are ready for delivery, the Issuer may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Issuer considers appropriate for temporary Securities. Without unreasonable
delay, the Issuer shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities. Until such exchange, temporary
Securities shall be entitled to the same rights, benefits and privileges as
definitive Securities. Notwithstanding the foregoing, so long as the Securities
are represented by a Global Security, such Global Security may be in
typewritten form.


 


SECTION 2.12.                                         Cancellation.


 


The Issuer at
any time may deliver Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Securities surrendered to
them for transfer, exchange or payment. The Trustee or, at the direction of the
Trustee, the Registrar or the Paying Agent (other than the Issuer or a
Subsidiary), and no one else, shall cancel and, at the written direction of the
Issuer, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation in accordance with its customary procedures. Subject to
Section 2.08, the Issuer may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation. If the Issuer or
any Guarantor shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.12.


 


SECTION 2.13.                                         Defaulted
Interest.


 


If the Issuer
defaults in a payment of interest on the Dollar Securities or the Sterling
Securities, it shall, unless the Trustee fixes another record date pursuant to
Section 6.10, pay the defaulted interest then borne by the Dollar Securities or
Sterling Securities, as the case may be, plus (to the extent lawful) any
interest payable on the defaulted interest, in accordance with the terms
hereof. The Issuer may pay the defaulted interest to the persons who are
Holders on a subsequent special record date, which special record date shall be
the fifteenth day next preceding the date fixed by the Issuer for the payment
of defaulted interest or the next succeeding Business Day if such date is not a
Business Day. At least 15 days before any such subsequent special record date,
the Issuer shall mail to each Holder, with a copy to the Trustee, a notice that
states the subsequent special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid. The Issuer may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements (if applicable) of any securities
exchange on which the Dollar Securities or the Sterling Securities may be
listed and, upon such notice as may be required by such exchange, if, after
written notice given by the Issuer to the Trustee of the proposed payment


 


49





















 


pursuant to this sentence, such
manner of payment shall be deemed practicable by the Trustee.


 


SECTION 2.14.                                         CUSIP,
ISIN and “Common Code” Numbers.


 


The Issuer in
issuing the Securities may use CUSIP numbers, ISINs and “Common Code” numbers
(if then generally in use) and, if so, the Trustee shall use, as applicable,
CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a
convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness or
accuracy of such numbers, either as printed on the Securities or as contained
in any notice of a redemption, that reliance may be placed only on the other
identification number(s) printed on the Securities. The Issuer shall advise the
Trustee of any change in the CUSIP numbers, ISINs and “Common Code” numbers.


 


SECTION 2.15.                                         Deposit
of Moneys.


 


Prior to 10:00
a.m. New York City time, in the case of the Dollar Securities, and 10:00 a.m.
London time, in the case of the Sterling Securities, on each Interest Payment
Date, Maturity Date, Redemption Date, Change of Control Payment Date and Asset
Sale Offer Payment Date, the Issuer shall have deposited with the Paying Agent
in immediately available funds U.S. Legal Tender, in the case of the Dollar
Securities, or U.K. Legal Tender, in the case of the Sterling Securities,
sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity
Date, Redemption Date, Change of Control Payment Date and Asset Sale Offer
Payment Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Maturity
Date, Redemption Date, Change of Control Payment Date and Asset Sale Offer
Payment Date, as the case may be. The principal and interest on Global
Securities shall be payable to the Depository or the Common Depositary, as
applicable or its nominee, as the case may be, as the sole registered owner and
the sole Holder of the Global Securities represented thereby. The principal and
interest on Physical Securities shall be payable, either in person or by mail,
at the office of the applicable Paying Agent.


 


SECTION 2.16.                                         Book-Entry
Provisions for Global Securities.


 


(a)           Rule 144A Securities that are Dollar
Securities (“Rule 144A Dollar Securities”) initially shall be
represented by one or more Securities in registered, global form without
interest coupons (collectively, the “Rule 144A Global Dollar Securities”).
Rule 144A Securities that are Sterling Securities (“Rule 144A Sterling
Security”) initially shall be represented by one or more Securities in
registered, global form without interest coupons (collectively, the “Rule
144A Global Sterling Security” and, together with the Rule 144A Global
Dollar Security, the “Rule I44A Global Securities”). Regulation S
Securities that are Dollar Securities (“Regulation S Dollar Securities”)
initially shall be represented by one or more Securities in registered, global
form without interest coupons (collectively, the “Regulation S


 


50





















 


Global Dollar
Security”). Regulation S Securities that are Sterling
Securities (“Regulation S  Sterling Securities”) initially shall
be represented by one or more Securities in registered, global form without
interest coupons (collectively, the “Regulation S Global Sterling Security”
and, together with the Regulation S Global Dollar Security, the “Regulation
S Global  Securities”). The term “Global Dollar Securities”
means the Rule 144A Global Dollar Security and the Regulation S Global Dollar
Security. The term “Global Sterling Securities” means, collectively, the
Rule 144A Global Sterling Security and the Regulation S Sterling Security. The
term “Global Securities” means, collectively, the Rule 144A Global
Securities and the Regulation S Global Securities. The Global Securities shall
bear legends as set forth in Exhibit E-1 in the case of Global Dollar
Securities and Exhibit E-2 in the case of Global Sterling Securities.
The Global Securities initially shall (i) be registered in the name of the
Depositary or the Common Depositary, in the case of the Sterling Securities or
the nominee of such Depositary or the Common Depositary, in the case of the
Sterling Securities, in each case for credit to an account of an Agent Member,
(ii) be delivered to the Trustee as custodian for such Depositary or the Common
Depositary, in the case of the Sterling Securities and (iii) bear legends as
set forth in Exhibit C-1 with respect to Restricted Global Dollar
Securities, Exhibit C-2 with respect to Global Sterling Securities and Exhibit
D with respect to Regulation S Global Securities.


 


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


 


(b)           Transfers of Global Dollar Securities
shall be limited to transfer in whole, but not in part, to the Depositary, its
successors or their respective nominees. Transfers of Global Sterling
Securities shall be limited to transfer in whole, but not in part, to the
Common Depositary, its successors or their respective nominees. Interests of
beneficial owners in the Global Securities may be transferred or exchanged for
Physical Securities in accordance with the rules and procedures of the
Depositary or the Common Depositary, as the case may be, and the provisions of
Section 2.17. In addition, a Global Security shall be exchangeable for Physical
Securities if (i) in the case of a Global Dollar Security, the Depositary (x)
notifies the Issuer that it is unwilling or unable to continue as depository
for such Global Security


 


51





















 


and the Issuer thereupon fail
to appoint a successor depository or (y) has ceased to be a clearing agency
registered under the Exchange Act, (ii) in the case of a Global Sterling
Security, (x) Euroclear or Clearstream notifies the Company that it is
unwilling or unable to continue as clearing agency or (y) the Common Depository
notifies the Company that it is unwilling or unable to continue as common
depository for such Global Sterling Note and the Company fails to appoint a
successor common depository within 120 days of such notice, (iii) the Issuer,
at its option, notifies the Trustee in writing that it elects to cause the
issuance of such Physical Securities or (iv) in the case of any GIobal Note,
there shall have occurred and be continuing an Event of Default with respect to
such Global Note. In all cases, Physical Securities delivered in exchange for
any Global Security or beneficial interests therein shall be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the Depositary or the Common Depositary, as applicable, in accordance with its
customary procedures.


 


(c)           In connection with any transfer or
exchange of a portion of the beneficial interest in any Global Security to
beneficial owners pursuant to paragraph (b), the Registrar shall (if one or
more Physical Securities are to be issued) reflect on its books and records the
date and a decrease in the principal amount of the Global Security in an amount
equal to the principal amount of the beneficial interest in the Global Security
to be transferred, and the Issuer shall execute, and the Trustee shall upon
receipt of a written order from the Issuer authenticate and make available for
delivery, one or more Physical Securities of like tenor and amount.


 


(d)           In connection with the transfer of
Global Securities as an entirety to beneficial owners pursuant to paragraph
(b), the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuer shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary or the
Common Depositary, in the case of the Sterling Securities in writing in
exchange for its beneficial interest in the Global Securities, an equal
aggregate principal amount of Physical Securities of authorized denominations.


 


(e)           Any Physical Security constituting a
Restricted Security delivered in exchange for an interest in a Global Security
pursuant to paragraph (b), (c) or (d) shall, except as otherwise provided by
paragraphs (a)(i)(x) and (c) of Section 2.17, bear the Private Placement Legend
or, in the case of the Regulation S Global Security, the legend set forth in Exhibit
D, in each case, unless the Issuers determine otherwise in compliance with
applicable law.


 


(f)            On or prior to the 40th day after
the later of the commencement of the offering of the Securities represented by
the Regulation S Global Security and the issue date of such Securities (such period through and including such 40th day, the “Restricted  Period”), a beneficial interest in a Regulation S Global
Security may be transferred to a Person


 


52





















 


who takes delivery in the form
of an interest in the corresponding Restricted Global Security only upon
receipt by the Trustee of a written certification from the transferor to the
effect that such transfer is being made (i)(a) to a Person that the transferor
reasonably believes is a Qualified Institutional Buyer in a transaction meeting
the requirements of Rule 144A or (b) pursuant to another exemption from the
registration requirements under the Securities Act which is accompanied by an
Opinion of Counsel regarding the availability of such exemption and (ii) in
accordance with all applicable securities laws of any state of the United
States or any other jurisdiction.


 


(g)           Beneficial interests in the
Restricted Global Security may be transferred to a Person who takes delivery in
the form of an interest in the Regulation S Global Security, whether before or
after the expiration of the Restricted Period, only if the transferor first
delivers to the Trustee a written certificate to the effect that such transfer
is being made in accordance with Regulation S or Rule 144 (if available).


 


(h)           Any beneficial interest in one of the
Global Securities that is transferred to a Person who takes delivery in the
form of an interest in another Global Security shall, upon transfer, cease to
be an interest in such Global Security and become an interest in such other
Global Security and, accordingly, shall thereafter be subject to all transfer restrictions
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.


 


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


 


SECTION 2.17.                                         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 Security 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 Security constituting a Restricted Security,
whether or not such Security bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of the date of original issuance
thereof or such other date as such Security shall be freely transferable under
Rule 144 as certified in an Officers’ Certificate 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 F hereto or (2) in the
case of a transfer to a Non-U.S. Person (including a QIB), the proposed
transferor has delivered to the Registrar a certificate substantially


 


53





















 


in the form of
Exhibit G hereto; provided that
in the case of any transfer of a Security bearing the Private Placement Legend
for a Security not bearing the Private Placement Legend, the Registrar has
received an Officers’ Certificate authorizing such transfer; and


 


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


 


whereupon (a) the Registrar
shall reflect on its books and records the date and (if the transfer does not
involve a transfer of outstanding Physical Securities) a decrease in the
principal amount of a Global Security in an amount equal to the principal
amount of the beneficial interest in a Global Security to be transferred, and
(b) the Registrar shall reflect on its books and records the date and an
increase in the principal amount of a Global Security in an amount equal to the
principal amount of the beneficial interest in the Global Security transferred
or the Issuers shall execute and the Trustee shall authenticate and make
available for delivery one or more Physical Securities of like tenor and
amount.


 


(b)           Transfers to OIBs. The
following provisions shall apply with respect to the registration or any
proposed registration of transfer of a Security 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 such Holder’s Security stating, or to a
transferee who has advised the Issuers and the Registrar in writing, that it is
purchasing the Security 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 144A, 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 Issuers 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 Securities to be transferred consist of Physical Securities
which after transfer are to be evidenced by an interest in the Global Security,
upon receipt by the Registrar of instructions given in accordance with the
Depositary’s 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 Security in an amount equal to the principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred.


 


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(c)           Private Placement Legend. Upon
the registration of transfer, exchange or replacement of Securities not bearing
the Private Placement Legend, the Registrar shall deliver Securities that do
not bear the Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities bearing the Private Placement Legend, the
Registrar shall deliver only Securities that bear the Private Placement Legend
unless (i) it has received the Officers’ Certificate required by paragraph
(a)(i)(y) of this Section 2.17, (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Issuers 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 or (iii) such Security has been sold pursuant to an effective registration
statement under the Securities Act and the Registrar has received an Officers’
Certificate from the Issuer to such effect.


 


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


 


The Registrar
shall retain for a period of two years copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Issuer 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 notice to the Registrar.


 


SECTION 2.18.                                         Computation
of Interest.


 


Interest on
the Securities shall be computed on the basis of a 360-day year of twelve
30-day months and actual days elapsed.


 


SECTION 2.19.                                         Calculation
of Principal Amount of Securities.


 


The aggregate
principal amount of the Securities, at any date of determination, shall be the
sum of (1) the principal amount of the Dollar Securities at such date of
determination plus (2) the U.S. Dollar Equivalent, at such date of
determination, of the principal amount of the Sterling Securities at such date
of determination. With respect to any matter requiring consent, waiver,
approval or other action of the Holders of a specified percentage of the
principal amount of all the Securities (and not solely the Dollar Securities or
the Sterling Securities as provided for in the proviso to the first sentence of
Section 9.02(a)), such percentage shall be calculated, on the relevant date of
determination, by dividing (a) the principal amount, as of such date of
determination, of Securities, the Holders of which have so consented, by (b) the
aggregate principal amount, as of such date of determination, of the Securities
then outstanding, in each case, as determined in accordance with the preceding
sentence, and Section 2.09 of this Indenture. Any such calculation made
pursuant to this Section 2.19 shall be made by the Issuer and delivered to the
Trustee pursuant to an Officers’ Certificate.


 


55


















 


ARTICLE THREE


 


REDEMPTION


 


SECTION 3.01.                                         Notices
to Trustee.


 


If the Issuer
elects to redeem Securities pursuant to Section 5 or Section 6 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
Redemption Price and the principal amount of Securities to be redeemed. The
Issuer shall give notice of redemption to the Paying Agent and Trustee at least
30 days but not more than 60 days before the Redemption Date (unless a shorter
notice shall be agreed to by the Trustee in writing), together with an Officers’
Certificate stating that such redemption will comply with the conditions
contained herein.


 


SECTION 3.02.                                         Selection
of Securities To Be Redeemed.


 


If less than
all of the Securities are to be redeemed at any time, the Trustee will select
Securities for redemption as follows:


 


(1)           if the Securities are listed on a
national securities exchange, in compliance with the requirements of the
principal national securities exchange (including the Luxembourg Stock
Exchange) on which the Securities are listed; or


 


(2)           if the Securities are not listed on any securities exchange, on a pro rata basis, by lot or by such
method as the Trustee deems fair and appropriate.


 


No Dollar
Securities of $5,000 or less or Sterling Securities of £5,000 or less shall be
redeemed in part.


 


If a partial
redemption is made with the proceeds of an Equity Offering in accordance with
Section 6 of the Securities, forms of which are attached hereto as Exhibit A
and Exhibit B, the Trustee will select the applicable Securities on a pro rata
basis or on as nearly a pro rata basis as is practicable (subject to DTC
procedures).


 


SECTION 3.03.                                         Notice
of Redemption.


 


At least 30
days but not more than 60 days before a Redemption Date, the Issuer shall mail
a notice of redemption by first class mail, postage prepaid, to each Holder
whose Securities are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a Redemption Date
if the notice is issued in connection with a defeasance of the Securities or a
satisfaction and discharge of this Indenture. At the Issuer’s request, the
Trustee shall forward the notice of redemption in the Issuer’s


 


56





















 


name and at the Issuer’s expense;
provided
that in such case, the Trustee has received notice from the Issuer
at least 31 days, but not more than 60 days, before a Redemption Date (unless a
shorter notice shall be agreed to in writing by the Trustee). Securities called
for redemption become due on the date fixed for redemption. On and after the
Redemption Date, interest ceases to accrue on Securities or portions of them
called for redemption. Each notice of redemption shall identify the Securities
(including the CUSIP number) 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)           that Securities called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price, plus
accrued interest, if any;


 


(5)           that, unless the Issuer defaults in
making the redemption payment, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date, and the only remaining right
of the Holders of such Securities is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Securities redeemed;


 


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


 


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


 


(8)           the CUSIP Number, ISIN and/or “Common
Code” number, if any, printed on the Securities being redeemed;


 


(9)           that no representation is made as to
the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code”
number, if any, listed in such notice or printed on the Securities; and


 


(10)         the Section of the Securities pursuant
to which the Securities are to be redeemed.


 


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The notice, if
mailed in a manner herein provided, shall be conclusively presumed to have been
given, whether or not the Holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the Holder of any
Security designated for redemption in whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security. Notices
of redemption may not be conditional.


 


SECTION 3.04.                                         Effect
of Notice of Redemption.


 


Once notice of
redemption is mailed in accordance with Section 3.03, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price plus accrued interest, if any. Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price (which shall include accrued interest thereon to the Redemption Date),
but installments of interest, 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. On and after the Redemption Date interest shall
cease to accrue on Securities or portions thereof called for redemption.


 


SECTION 3.05.                                         Deposit
of Redemption Price.


 


With respect
to the Dollar Securities, prior to 10:00 a.m., New York time, on the Redemption
Date, the Issuer shall deposit with the Dollar Paying Agent (or, if the Issuer
or a Wholly Owned Subsidiary is a Paying Agent, shall segregate and hold in
trust) U.S. Legal Tender and/or U.S. Government Securities sufficient to pay
the redemption price of and accrued interest on all Dollar Securities or
portions thereof to be redeemed on that date other than Dollar Securities or
portions of Dollar Securities called for redemption that have been delivered by
the Issuer to the Trustee for cancellation. On and after the Redemption Date,
interest shall cease to accrue on Dollar Securities or portions thereof called
for redemption so long as the Issuer has deposited with the Dollar Paying Agent
funds sufficient to pay the principal of, plus accrued and unpaid interest on,
the Dollar Securities.


 


With respect
to the Sterling Securities, prior to 10:00 a.m., London time, on the Redemption
Date, the Issuer shall deposit with the Sterling Paying Agent (or, if the
Issuer or a Wholly Owned Subsidiary is a Paying Agent, shall segregate and hold
in trust) U.K. Legal Tender and/or U.K. Government Securities sufficient to pay
the redemption price of and accrued interest on all Sterling Securities or
portions thereof to be redeemed on that date other than Sterling Securities or
portions of Sterling Securities called for redemption that have been delivered
by the Issuer to the Trustee for cancellation. On and after the Redemption
Date, interest shall cease to accrue on Sterling Securities or portions thereof
called for redemption so long as the Issuer has deposited with the Sterling
Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid
interest on, the Sterling Securities.


 


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SECTION 3.06.                                         Securities
Redeemed in Part.


 


If any
Security is to be redeemed in part only, the notice of redemption that relates
to such Security shall state the portion of the principal amount thereof to be
redeemed. A new Security in principal amount equal to the unredeemed portion of
the original Security shall be issued in the name of the Holder thereof upon
cancellation of the original Security.


 


ARTICLE FOUR


 


COVENANTS


 


SECTION 4.01.                                         Payment
of Securities.


 


(a)           The Issuer shall pay the principal of
(and premium, if any) and interest on the Securities on the dates and in the
manner provided in the Securities and this Indenture. An installment of
principal of or interest on the Securities shall be considered paid on the date
it is due if the Trustee or Paying Agent (other than the Issuer or an Affiliate
thereof) holds on that date U.S. Legal Tender, U.K. Legal Tender, U.S.
Government Securities and/or U.K. Government Securities designated for and
sufficient to pay the installment. Interest on the Securities will be computed
on the basis of a 360-day year comprised of twelve 30-day months.


 


(b)           The Issuer shall pay interest on
overdue principal (including, without limitation, post petition interest in a
proceeding under any Bankruptcy Law), and overdue interest, to the extent
lawful, at the same rate per annum borne by
the Securities.


 


SECTION 4.02.                                         Maintenance
of Office or Agency.


 


(a)           The Issuer shall maintain the offices
or agencies required under Section 2.04. The Issuer shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
offices or agencies.
If at any time the Issuer 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
address of the Trustee set forth in Section 12.02.


 


(b)           The Issuer may also from time to time
designate one or more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Issuer will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.


 


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(c)           The Issuer hereby initially
designates the Corporate Trust Office of the Trustee as one such office or
agency of the Issuer in accordance with Section 2.04.


 


SECTION 4.03.                                         Corporate
Existence.


 


Except as
otherwise permitted by Article Five, the Issuer shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence in accordance with its organizational documents and the
rights (charter and statutory) and material franchises of the Issuer.


 


SECTION 4.04.                                         Payment
of Taxes and Other Claims.


 


The Issuer
shall, and shall cause each of its Subsidiaries to, pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (a) all
material taxes, assessments and governmental charges levied or imposed upon it
or any of its respective Subsidiaries or upon the income, profits or property
of it or any of its respective Subsidiaries and (b) all lawful claims for
labor, materials and supplies which, in each case, if unpaid, might by law
become a material liability or Lien upon the property of it or any of its
Restricted Subsidiaries; provided, however, that the Issuer 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 contested in good faith by appropriate proceedings.


 


SECTION 4.05.                                         Maintenance
of Properties and Insurance.


 


(a)             The Issuer shall cause all material
properties owned by or leased by it or any of its Restricted Subsidiaries used
or useful to the conduct of its business or the business of any of its
Restricted Subsidiaries to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all repairs, renewals, replacements, and betterments thereof, all as in
its judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that
nothing in this Section 4.05 shall prevent the Issuer or any of its Restricted
Subsidiaries from discontinuing the use, operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Issuer or any
such Restricted Subsidiary desirable in the conduct of the business of the
Issuer or any such Restricted Subsidiary; provided, further, that nothing in this
Section 4.05 shall prevent the Issuer or any of its Restricted Subsidiaries
from discontinuing or disposing of any properties to the extent otherwise
permitted by this Indenture.


 


(b)             The Issuer shall maintain, and
shall cause its Restricted Subsidiaries to maintain, insurance with responsible
carriers against such risks and in such amounts, and with such deductibles,
retentions, self insured amounts and co-insurance provisions, as are
appropriate


 


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for a business of this type and
size as determined in good faith by the Issuer, including property and casualty
loss, workers’ compensation and interruption of business insurance.


 


SECTION 4.06.                                         Compliance
Certificate; Notice of Default.


 


(a)             The Issuer shall deliver to the
Trustee, within 90 days after the close of each fiscal year commencing with the
fiscal year ending November 30, 2004, an Officers’ Certificate stating that a
review of the activities of the Issuer and its Restricted Subsidiaries has been
made under the supervision of the signing Officers with a view to determining
whether the Issuer has kept, observed, performed and fulfilled its obligations
under this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of such Officer’s knowledge, the Issuer during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default occurred during such year and at the date of
such certificate there is no Default that has occurred and is continuing or, if
such signers do know of such Default, the certificate shall describe its status
with particularity. The Officers’ Certificate shall also notify the Trustee
should the Issuer elect to change the manner in which it fixes its fiscal year
end.


 


(b)             The Issuer shall deliver to the
Trustee as soon as possible, and in any event within five days after the Issuer
becomes aware of the occurrence of any Default, an Officers’ Certificate
specifying the Default and describing its status with particularity and the
action proposed to be taken thereto.


 


(c)             The Issuer’s fiscal years currently
end on November 30. The Issuer will provide written notice to the Trustee of
any change in its fiscal year.


 


SECTION 4.07.                                         Compliance
with Laws.


 


(a)             The Issuer shall comply, and shall
cause each of its Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States, all
states and municipalities thereof, and of any governmental department,
commission, board, regulatory authority, bureau, agency and instrumentality of
the foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except, in any such case, to the
extent the failure to so comply would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, financial
condition or results of operations of the Issuer and its Restricted
Subsidiaries taken as a whole.


 


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


 


The Issuer
covenants (to the extent permitted by applicable law) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive


 


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the Issuer from paying all or
any portion of the principal of and/or interest on the Securities 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 permitted by applicable law) the Issuer hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.


 


SECTION 4.09.                                         Change
of Control.


 


(a)           If
a Change of Control occurs, each Holder will have the right to require the
Issuer to repurchase all or any part (equal to $5,000 or £5,000 or an integral
multiple of $1,000 or £1,000, as applicable) of that Holder’s Securities
pursuant to a Change of Control Offer (the “Change of Control Offer”) on the terms set forth in this
Indenture. In the Change of Control Offer, the Issuer will offer to pay an
amount in cash (the “Change of Control Payment”) equal to 101% of the aggregate
principal amount of Securities repurchased, plus accrued and unpaid interest
and Additional Interest thereon, if any, on the Securities re-purchased to the
date of purchase.


 


(b)           Within
30 days following any Change of Control, the Issuer will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Securities on the date (the “Change of
Control Payment Date”) specified
in such notice, which date shall be a Business Day no earlier than 30 days and
no later than 60 days from the date such notice is mailed, pursuant to the
procedures required by this Indenture and described in such notice. Such notice
shall state:


 


(1)           that the Change of Control Offer is
being made pursuant to this Section 4.09 and that all Securities tendered and
not withdrawn will be accepted for payment;


 


(2)           the purchase price (including the
amount of accrued interest) and the Change of Control Payment Date;


 


(3)           that any Security not tendered will
continue to accrue interest;


 


(4)           that, unless the Issuer defaults in
making payment therefor, any Security 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
Security purchased pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Security 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;


 


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(6)           that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the second
Business Day prior to the Change of Control Payment Date, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Security purchased;


 


(7)           that Holders whose Securities are
purchased only in part will be issued new Securities in a principal amount
equal to the unpurchased portion of the Securities surrendered; and


 


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


 


(c)           On or before the
Change of Control Payment Date, the Issuer will, to the extent lawful:


 


(1)           accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of Control Offer;


 


(2)           deposit with the Paying Agent U.S.
Legal Tender, U.K. Legal Tender, U.S. Government Securities and/or U.K.
Government Securities sufficient to pay the Change of Control Payment in
respect of all Securities or portions thereof so tendered; and


 


(3)           deliver or cause to be delivered to
the Trustee the Securities properly accepted together with an Officers’
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Issuer.


 


(d)           The Paying Agent
will promptly mail to each Holder of Securities properly tendered the Change of
Control Payment for such Securities, and the Trustee will promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new
Security equal in principal amount to any unpurchased portion of the Securities
surrendered, if any; provided that
each such new Security will be in a principal amount of $5,000 or an integral
multiple of $1,000 in the case of the Dollar Securities, and in a principal
amount of £5,000 or an integral multiple of £1,000 in the case of the Sterling
Securities.


 


Prior to complying
with any of the provisions of this Section 4.09, but in any event within 90
days following a Change of Control, to the extent required to permit the Issuer
to comply with this Section 4.09, the Issuer will either repay all outstanding
Senior Debt or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt. The Issuer will publicly announce the
results of the Change of Control Offer as soon as practicable after the Change
of Control Payment Date. However, if the Change of Control Payment Date is on
or after an interest record date and on or before the related interest payment


 


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date, any accrued and unpaid
interest shall be paid to the Person in whose name a Security is registered at
the close of business on such record date, and no additional interest shall be
payable to Holders who tender Securities pursuant to the Change of Control
Offer.


 


(e)           Notwithstanding
the foregoing, the Issuer shall not be required to make a Change of Control
Offer, as provided above, if, in connection with or in contemplation of any
Change of Control, it or a third party has made an offer to purchase (an “Alternate
Offer”) any and
all Securities validly tendered at a cash price equal to or higher than the
Change of Control Payment and has purchased all Securities properly tendered in
accordance with the terms of such Alternate Offer. The Alternate Offer must
comply with all the other provisions applicable to the Change of Control Offer,
shall remain, if commenced prior to the Change of Control, open for acceptance
until the consummation of the Change of Control and must permit Holders to
withdraw any tenders of Securities made into the Alternate Offer until the
final expiration or consummation thereof.


 


(f)            The
Issuer will comply, and will cause any third party making a Change of Control
Offer or an Alternate Offer to 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 a
Change of Control Offer or an Alternate Offer. To the extent the provisions of
any applicable securities laws or regulations conflict with the provisions of
this Indenture relating to a Change of Control Offer, the Issuer will not be
deemed to have breached its obligations under this Indenture by virtue of
complying with such laws or regulations.


 


SECTION 4.10.                                         Incurrence
of Indebtedness and Issuance of Preferred Stock.


 


(a)           The
Issuer will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly or directly liable, contingently or otherwise,
with respect to (collectively “incur”) any
Indebtedness (including Acquired Debt), and the Issuer will not permit any of
its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that
the Issuer and any Restricted Subsidiary that is a Guarantor may incur Indebtedness
(including Acquired Debt) and any Restricted Subsidiary that is a Guarantor may
issue Preferred Stock if the Fixed Charge Coverage Ratio for the Issuer’s most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Preferred Stock is issued would
have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net
proceeds therefrom) (the “Coverage Ratio Exception”), as if the additional Indebtedness
had been incurred or the Preferred Stock had been issued, as the case may be,
and the application of proceeds therefrom had occurred at the beginning of such
four-quarter period.


 


(b)           Section
4.10(a) will not prohibit the incurrence of any of the following (collectively,
“Permitted
Debt”):


 


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(1)           the existence of
Indebtedness under the Credit Agreement together with the incurrence of the guarantees
thereunder and the issuance and creation of letters of credit and bankers’
acceptances thereunder (with letters of credit and bankers’ acceptances being
deemed to have a principal amount equal to the face amount thereof), up to an
aggregate principal amount, together with amounts outstanding under a Qualified
Securitization Financing incurred pursuant to clause (17) below, of $1,550.0
million outstanding at any one time, less the amount of all mandatory principal
payments (with respect to revolving borrowings and letters of credit, only to
the extent revolving commitments are correspondingly reduced) actually made by
the borrower thereunder in respect of Indebtedness thereunder with Net Proceeds
from Asset Sales;


 


(2)           the incurrence by the Issuer and the
Guarantors of Indebtedness represented by the Securities (including any
Guarantee) issued on the Issue Date;


 


(3)           Existing
Indebtedness (other than Indebtedness described in clauses (1) and (2) of this
Section 4.10(b));


 


(4)           Indebtedness
(including Capitalized Lease Obligations) incurred by the Issuer or any
Restricted Subsidiary to finance the purchase, lease or improvement of property
(real or personal) or equipment that is used or useful in a Permitted Business
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount that, when
aggregated with the principal amount of all other Indebtedness then outstanding
and incurred pursuant to this clause (4), does not exceed the greater of (x)
$50.0 million and (y) 4.0% of Consolidated Tangible Assets;


 


(5)           Indebtedness
incurred by the Issuer or any Restricted Subsidiary constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including without limitation letters of credit in respect of workers’
compensation claims, health, disability or other employee benefits or property,
casualty or liability insurance or self-insurance or other Indebtedness with
respect to reimbursement-type obligations regarding workers’ compensation
claims; provided, however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;


 


(6)           Indebtedness arising from agreements
of the Issuer or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a Subsidiary,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided, however, that (A) such
Indebtedness is not reflected on the balance sheet of the Issuer or any
Restricted Subsidiary (contingent


 


65





















 


obligations
referred to in a footnote to financial statements and not otherwise reflected
on the balance sheet will not be deemed to be reflected on such balance sheet
for purposes of this clause (A)) and (B) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including noncash proceeds (the fair market value of such noncash proceeds
being measured at the time received and without giving effect to any subsequent
changes in value) actually received by the Issuer and any Restricted
Subsidiaries in connection with such disposition;


 


(7)           Indebtedness of the
Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a
Restricted Subsidiary owed to and held by the Issuer or any Restricted
Subsidiary; provided, however, that (A) any subsequent
issuance or transfer of any Capital Stock or any other event that results in any
such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Issuer or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the
incurrence of such Indebtedness by the issuer thereof and (B) if the Issuer is
the obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations of the Issuer with
respect to the Securities;


 


(8)           shares of Preferred
Stock of a Restricted Subsidiary issued to the Issuer or a Restricted
Subsidiary; provided that any subsequent issuance or transfer
of any Capital Stock or any other event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent
transfer of any such shares of Preferred Stock (except to the Issuer or a
Restricted Subsidiary) shall be deemed in each case to be an issuance of such
shares of Preferred Stock;


 


(9)           Hedging Obligations
of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations
entered into for speculative purposes) for the purpose of limiting (A) interest
rate risk with respect to any Indebtedness that is permitted by the terms of
this Indenture to be outstanding or (B) exchange rate risk with respect to any
currency exchange;


 


(10)         obligations in
respect of performance and surety bonds and performance and completion
guarantees provided by the Issuer or any Restricted Subsidiary or obligations
in respect of letters of credit related thereto, in each case in the ordinary
course of business or consistent with past practice;


 


(11)         Indebtedness of the Issuer or any
Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not
otherwise permitted hereunder in an aggregate principal amount or liquidation
preference which, when aggregated with the principal amount and liquidation
preference of all other Indebtedness and Preferred Stock then outstanding and
incurred pursuant to this clause (11), does not at any one time outstanding 


 


66





















 


exceed $150.0
million (it being understood that any Indebtedness or Preferred Stock incurred
pursuant to this clause (11) shall cease to be deemed incurred or outstanding
for purposes of this clause (11) but shall be deemed incurred for the purposes
of Section 4.10(a) from and after the first date on which the Issuer or such
Restricted Subsidiary could have incurred such Indebtedness or Preferred Stock
under Section 4.10(a) without reliance on this clause (11));


 


(12)         any guarantee by the
Issuer or a Guarantor of Indebtedness or other obligations of the Issuer or any
Restricted Subsidiary so long as the incurrence of such Indebtedness incurred
by the Issuer or such Restricted Subsidiary is permitted under the terms of
this Indenture; provided that if such Indebtedness is by its
express terms subordinated in right of payment to the Securities or the
Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of
such Guarantor with respect to such Indebtedness shall be subordinated in right
of payment to such Guarantor’s Guarantee with respect to the Securities
substantially to the same extent as such Indebtedness is subordinated to the
Securities or the Guarantee of such Restricted Subsidiary, as applicable;


 


(13)         the incurrence by the
Issuer or any Restricted Subsidiary of Indebtedness or Preferred Stock that
serves to refund or refinance any Indebtedness incurred as permitted by Section
4.10(a) and clauses (2), (3) and (4) above, this clause (13) and clause (14)
below or any Indebtedness issued to so refund or refinance such Indebtedness
including additional Indebtedness incurred to pay premiums and fees in
connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that
such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at
the time such Refinancing Indebtedness is incurred which is not less than the
remaining Weighted Average Life to Maturity of the Indebtedness being refunded
or refinanced, (B) to the extent such Refinancing Indebtedness refinances
Indebtedness subordinated or pari passu to the Securities, such Refinancing
Indebtedness is subordinated or pari passu to the Securities at least to the same
extent as the Indebtedness being refinanced or refunded, (C) shall not include
(x) Indebtedness or Preferred Stock of a Subsidiary that is not a Guarantor
that refinances Indebtedness or Preferred Stock of the Issuer or (y)
Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that
refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D)
shall not be in a principal amount in excess of the principal amount of,
premium, if any, accrued interest on, and related fees and expenses of, the
Indebtedness being refunded or refinanced and (E) shall not have a stated
maturity date prior to the Stated Maturity of the Indebtedness being refunded
or refinanced; and provided,
further, that subclauses (A), (B) and (E) of this clause (13) will
not apply to any refunding or refinancing of any Senior Debt;


 


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(14)         Indebtedness or Preferred Stock of
Persons that are acquired by the Issuer or any Restricted Subsidiary or merged
into the Issuer or a Restricted Subsidiary in accordance with the terms of this
Indenture; provided that such
Indebtedness or Preferred Stock is not incurred in connection with or in
contemplation of such acquisition or merger; and provided, further, that after giving effect to such incurrence of Indebtedness
either (A) the Issuer would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Coverage Ratio Exception or (B) the Fixed Charge
Coverage Ratio would be greater than immediately prior to such acquisition;


 


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


 


(16)         Indebtedness of the
Issuer or any Restricted Subsidiary of the Issuer supported by a letter of
credit issued pursuant to the Credit Agreement in a principal amount not in
excess of the stated amount of such letter of credit;


 


(17)         Indebtedness incurred by a
Securitization Subsidiary in a Qualified Securitization Financing that is not
recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a
Securitization Subsidiary (except for Standard Securitization Undertakings);


 


(18)         the incurrence of (A)
Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product
Financing Indebtedness;


 


(19)         Contribution Indebtedness;


 


(20)         (a) if the Issuer
could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio
Exception after giving effect to such borrowing, Indebtedness of Foreign
Subsidiaries of the Issuer not otherwise permitted hereunder or (b) if the
Issuer could not incur $1.00 of additional Indebtedness pursuant to the
Coverage Ratio Exception hereof after giving effect to such borrowing,
Indebtedness of Foreign Subsidiaries of the Issuer incurred for working capital
purposes, provided, however, that the
aggregate principal amount of Indebtedness incurred under this clause (20)
which, when aggregated with the principal amount of all other Indebtedness then
outstanding and incurred pursuant to this clause (20), does not exceed the
greater of (x) $100.0 million and (y) 10% of the Consolidated Tangible Assets
of the Foreign Subsidiaries; and


 


(21)         Indebtedness consisting of promissory
notes issued by the Issuer or any Guarantor to current or former officers,
directors and employees or their respective estates,


 


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spouses or
former spouses to finance the purchase or redemption of Equity Interests of
Holdco permitted by Section 4.11.


 


(c)           For purposes of determining
compliance with this Section 4.10, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (21) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Issuer will be permitted
to classify and later reclassify such item of Indebtedness in any manner that
complies with this covenant, and such item of Indebtedness will be treated as
having been incurred pursuant to only one of such categories. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant. Notwithstanding the foregoing,
Indebtedness under the Credit Agreement outstanding on the date on which
Securities are first issued and authenticated under this Indenture will be
deemed to have been incurred on such date in reliance on the exception provided
by clause (1) of the definition of “Permitted Debt” in Section 4.10(b) and the
Issuer shall not be permitted to reclassify all or any portion of such
Indebtedness. The maximum amount of Indebtedness that the Issuer and its
Restricted Subsidiaries may incur pursuant to this covenant shall not be deemed
to be exceeded, with respect to any outstanding Indebtedness, solely as a
result of fluctuations in the exchange rate of currencies.


 


SECTION 4.11.                                         Restricted
Payments.


 


(a)           The Issuer will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly:


 


(A)          declare or pay any dividend or make
any other payment or distribution on account of the Issuer’s or any of its
Restricted Subsidiaries’ Equity Interests, including any dividend or
distribution payable in connection with any merger or consolidation (other than
(x) dividends or distributions by the Issuer payable in Equity Interests (other
than Disqualified Stock) of the Issuer or in options, warrants or other rights
to purchase such Equity Interests (other than Disqualified Stock) or (y)
dividends or distributions by a Restricted Subsidiary to the Issuer or any
other Restricted Subsidiary so long as, in the case of any dividend or
distribution payable on or in respect of any class or series of securities
issued by a Restricted Subsidiary other than a Wholly Owned Subsidiary, the
Issuer or a Restricted Subsidiary receives at least its pro rata share of such
dividend or distribution in accordance with its Equity Interests in such class
or series of securities);


 


(B)           purchase, redeem or otherwise acquire
or retire for value any Equity Interests of the Issuer or any direct or
indirect parent corporation of the Issuer, including in connection with any
merger or consolidation involving the Issuer;


 


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(C)           make any principal payment on, or
redeem, repurchase, defease or otherwise acquire or retire for value, in each
case prior to any scheduled repayment, sinking fund payment or maturity, any
Indebtedness subordinated or junior in right of payment to the Securities (or,
as applicable, any Guarantees) (other than (x) Indebtedness permitted under
clauses (7) and (8) of the definition of “Permitted Debt” in Section 4.10(b) or
(y) the purchase, repurchase or other acquisition of Indebtedness subordinated
or junior in right of payment to the Securities, purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase or
acquisition); or


 


(D)          make any
Restricted Investment (all such payments and other actions set forth in these
clauses (A) through (D) being collectively referred to as “Restricted
Payments”),


 


unless, at the time of and
after giving effect to such Restricted Payment:


 


(1)           no Default or Event
of Default has occurred and is continuing or would occur as a consequence of
such Restricted Payment;


 


(2)           the Issuer would, at the time of such
Restricted Payment and after giving pro
forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Coverage Ratio Exception; and


 


(3)           such Restricted
Payment, together with the aggregate amount of all other Restricted Payments
made by the Issuer and the Restricted Subsidiaries after the Issue Date
(excluding Restricted Payments permitted by clauses (3), (4), (5), (6), (8),
(10), (11), (12), (13), (16) or (17) of Section 4.11(b)), is less than the sum,
without duplication, of


 


(a)           50% of the Consolidated Net Income of
the Issuer for the period (taken as one accounting period) from the beginning
of the first fiscal quarter commencing after the Issue Date to the end of the
Issuer’s most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, in the
case such Consolidated Net Income for such period is a deficit, minus 100% of
such deficit), plus


 


(b)           100% of the aggregate net cash
proceeds and the fair market value, as determined in good faith by the Board of
Directors of the Issuer, of property and marketable securities received by the
Issuer after the Issue Date from the issue or sale of (x) Equity Interests of
the Issuer (including Retired Capital Stock) (but excluding (i) cash proceeds
and marketable securities received 


 


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from Equity
Offerings to the extent used to redeem Securities in compliance with Section 6
of the Securities, (ii) cash proceeds and marketable securities received from
the sale of Equity Interests to members of management, directors or consultants
of the Issuer, any direct or indirect parent corporation of the Issuer and its
Subsidiaries after the Issue Date to the extent such amounts have been applied
to Restricted Payments made in accordance with clause (4) of Section 4.11(b)
and, to the extent actually contributed to the Issuer, Equity Interests of the
Issuer’s direct or indirect parent corporations, (iii) Designated Preferred
Stock and (iv) Disqualified Stock) or (y) debt securities of the Issuer that
have been converted into such Equity Interests of the Issuer (other than
Refunding Capital Stock or Equity Interests or convertible debt securities of
the Issuer sold to a Restricted Subsidiary or the Issuer, as the case may be,
and other than Disqualified Stock or Designated Preferred Stock or debt
securities that have been converted into Disqualified Stock or Designated
Preferred Stock), plus


 


(c)           100% of the aggregate amount of cash
and the fair market value, as determined in good faith by the Board of
Directors of the Issuer, of property and marketable securities contributed to
the capital of the Issuer after the Issue Date (other than (i) net cash
proceeds from Equity Offerings to the extent used to redeem Securities in
compliance with Section 6 of the Securities, (ii) by a Restricted Subsidiary,
(iii) any Excluded Contributions, (iv) any Disqualified Stock, (v) any
Designated Preferred Stock and (vi) the Cash Contribution Amount), plus


 


(d)           100% of the aggregate amount received
in cash and the fair market value, as determined in good faith by the Board of
Directors of the Issuer, of property and marketable securities received by
means of (A) the sale or other disposition (other than to the Issuer or a
Restricted Subsidiary) of Restricted Investments made by the Issuer or its
Restricted Subsidiaries and repurchases and redemptions of such Restricted
Investments from the Issuer or its Restricted Subsidiaries and repayments of
loans or advances which constitute Restricted Investments by the Issuer or its
Restricted Subsidiaries or (B) the sale (other than to the Issuer or a
Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary or a
distribution from an Unrestricted Subsidiary (other than in each case to the
extent the Investment in such Unrestricted Subsidiary was made by a Restricted
Subsidiary pursuant to clause (7) or (11) of Section 4.11(b) or to the extent
such Investment constituted a Permitted Investment) or a dividend from an
Unrestricted Subsidiary, plus


 


(e)           in the case of the redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary or the merger or consolidation
of an Unrestricted Subsidiary 


 


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into the
Issuer or a Restricted Subsidiary or the transfer of assets of an Unrestricted
Subsidiary to the Issuer or a Restricted Subsidiary, the fair market value of the Investment
in such Unrestricted Subsidiary, as determined by the Board of Directors of the
Issuer in good faith at the time of the redesignation of such Unrestricted
Subsidiary as a Restricted Subsidiary or at the time of such merger,
consolidation or transfer of assets (other than an Unrestricted Subsidiary to
the extent the Investment in such Unrestricted Subsidiary was made by a
Restricted Subsidiary pursuant to clause (7) or (11) of Section 4.11(b) or to
the extent such Investment constituted a Permitted Investment).


 


(b)           Notwithstanding the foregoing, the
provisions set forth in Section 4.11(a) do not prohibit:


 


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


 


(2)           (A) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of the
Issuer or any direct or indirect parent corporation (“Retired Capital Stock”) or Indebtedness subordinated to
the Securities, in exchange for or out of the proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary or the Issuer) of Equity
Interests of the Issuer or any direct or indirect parent corporation thereof or
contributions to the equity capital of the Issuer (in each case, other than
Disqualified Stock) (“Refunding
Capital Stock”) and
(B) the declaration and payment of dividends on the Retired Capital Stock out
of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Issuer or to an employee stock ownership plan or any trust
established by the Issuer or any of its Subsidiaries) of Refunding Capital
Stock;


 


(3)           the redemption, repurchase or other
acquisition or retirement of Indebtedness subordinated to the Securities made
by exchange for, or out of the proceeds of the substantially concurrent sale
of, new Indebtedness of the borrower thereof, which is incurred in compliance
with Section 4.10 so long as (A) the principal amount of such new Indebtedness
does not exceed the principal amount of the Indebtedness subordinated to the
Securities being so redeemed, repurchased, acquired or retired for value plus
related fees and expenses and the amount of any reasonable premium required to
be paid under the terms of the instrument governing the Indebtedness
subordinated to the Securities being so redeemed, repurchased, acquired or
retired, (B) such new Indebtedness is subordinated to such Securities and any
Guarantees thereof at least to the same extent as such Indebtedness
subordinated to such Securities so purchased, exchanged, redeemed, repurchased,
acquired or retired for value, (C) such new Indebtedness has a final scheduled maturity date equal to
or later than the final scheduled


 


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


 


(4)           a Restricted Payment
to pay for the repurchase, retirement or other acquisition or retirement for
value of common Equity Interests of the Issuer or any of its direct or indirect
parent corporations held by any future, present or former employee, director or
consultant of the Issuer, any of its Subsidiaries or any of its direct or
indirect parent corporations pursuant to any management equity plan or stock
option plan or any other management or employee benefit plan or agreement; provided, however, that the
aggregate amount of Restricted Payments made under this clause (4) does not
exceed in any calendar year $20.0 million (with unused amounts in any calendar
year being carried over to the two succeeding calendar years); and provided, further, that such
amount in any calendar year may be increased by an amount not to exceed (A) the
cash proceeds from the sale of Equity Interests (other than Disqualified Stock)
of the Issuer and, to the extent contributed to the Issuer, Equity Interests of
any of its direct or indirect parent corporations, in each case to members of management,
directors or consultants of the Issuer, any of its Subsidiaries or any of its
direct or indirect parent corporations that occurs after the Issue Date plus
(B) the amount of any cash bonuses otherwise payable to members of management,
directors or consultants of the Issuer or any of its Subsidiaries or any of its
direct or indirect parent corporations in connection with the Transactions that
are foregone in return for the receipt of Equity Interests of the Issuer or any
direct or indirect parent corporation of the Issuer pursuant to a deferred
compensation plan of such corporation plus (C) the cash proceeds of key man
life insurance policies received by the Issuer or its Restricted Subsidiaries
after the Issue Date (provided that the Issuer
may elect to apply all or any portion of the aggregate increase contemplated by
clauses (A), (B) and (C) above in any calendar year) less (D) the amount of any
Restricted Payments previously made pursuant to clauses (A), (B) and (C) of
this clause (4);


 


(5)           the declaration and
payment of dividends to holders of any class or series of Disqualified Stock of
the Issuer or any Restricted Subsidiary issued or incurred in accordance with
this Section 4.11 to the extent such dividends are included in the definition
of “Fixed Charges” for such entity;


 


(6)           the declaration and payment of
dividends or distributions to holders of any class or series of Designated
Preferred Stock (other than Disqualified Stock) issued after the Issue Date and
the declaration and payment of dividends to any direct or indirect parent
company of the Issuer, the proceeds of which will be used to fund the payment
of dividends to holders of any class or series of Designated Preferred Stock


 


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(other than
Disqualified Stock) of any direct or indirect parent company of the Issuer
issued after the Issue Date; provided,
however, that (A) for the most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date of issuance of such Designated Preferred Stock,
after giving effect to such issuance (and the payment of dividends or
distributions) on a pro forma basis, the Issuer would
have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the
aggregate amount of dividends declared and paid pursuant to this clause (6)
does not exceed the net cash proceeds actually received by the Issuer from any
such sale of Designated Preferred Stock (other than Disqualified Stock) issued
after the Issue Date;


 


(7)           Investments in Unrestricted
Subsidiaries having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding, without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash and/or marketable
securities, not to exceed the greater of $25.0 million and 2.0% of Consolidated
Tangible Assets at the time of such Investment (with the fair market value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


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


 


(9)           the payment of dividends on the
Issuer’s common stock following the first public offering of the Issuer’s
common stock or the common stock of any of its direct or indirect parent
corporations after the Issue Date, of up to 6% per annum of the net cash
proceeds received by or contributed to the Issuer in any past or future public
offering, other than public offerings with respect to the Issuer’s common stock
registered on Form S-8 and other than any public sale constituting an Excluded
Contribution;


 


(10)         Investments that are made with Excluded
Contributions;


 


(11)         other Restricted Payments in an
aggregate amount not to exceed $45.0 million;


 


(12)         the declaration and payment of
dividends to, or the making of loans to, Holdco in amounts required for it to
pay:


 


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


 


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(B)           federal, state and
local income taxes to the extent such income taxes are attributable to the
income of the Issuer and the Restricted Subsidiaries and, to the extent of the
amount actually received from the Unrestricted Subsidiaries, in amounts
required to pay such taxes to the extent attributable to the income of the
Unrestricted Subsidiaries, provided, however, that in each case the
amount of such payments in any fiscal year does not exceed the amount that the
Issuer and the Restricted Subsidiaries would be required to pay in respect of
federal, state and local taxes for such fiscal year were the Issuer and the
Restricted Subsidiaries to pay such taxes as a stand-alone taxpayer;


 


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


 


(D)          general corporate
overhead expenses (including professional expenses) for all direct or indirect
parent corporations of the Issuer to the extent such expenses are solely
attributable to the ownership or operation of the Issuer and its Restricted
Subsidiaries; and


 


(E)           fees and expenses
other than to Affiliates related to any unsuccessful equity or debt offering
permitted by this Indenture;


 


(13)         cash dividends or other distributions
on Holdco’s, the Issuer’s or any Restricted Subsidiary’s Capital Stock used to,
or the making of loans, the proceeds of which will be used to, fund the payment
of fees and expenses incurred in connection with the Transactions, or owed to
Affiliates, in each case to the extent permitted by Section 4.14;


 


(14)         distributions or payments of
Securitization Fees and purchases of Securitization Assets pursuant to a
Securitization Repurchase Obligation in connection with a Qualified
Securitization Financing;


 


(15)         the repurchase, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness pursuant
to Sections 4.09 and 4.13; provided that a Change of Control Offer or
Asset Sale Offer, as applicable, has been made and all Securities tendered by
Holders in connection with a Change of Control Offer or Asset Sale Offer, as
applicable, have been repurchased, redeemed or acquired for value;


 


(16)         any Restricted Payment at any time
prior to April 15, 2009 if immediately after giving pro forma effect
to such Restricted Payment pursuant to this clause (16) and the incurrence of
any Indebtedness the net proceeds of which are used to finance such Restricted
Payment:


 


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(A)          the Net Indebtedness
to EBITDA Ratio of the Issuer would not have exceeded 3.75 to 1; and


 


(B)           the Net Senior
Indebtedness to EBITDA Ratio of the Issuer would not have exceeded 2.50 to 1;
or


 


(17)         the declaration and
payment of dividends to Holdco of up to $200.0 million of the net proceeds
received by the Issuer from the sale of Securities on the Issue Date, the
proceeds of which will be used as described in the Offering Memorandum;


 


provided,
however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (2), (5), (6), (7), (9), (11), (14),
(15) and (16) above, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof.


 


(c)           The
amount of all Restricted Payments (other than cash) will be the fair market
value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuer or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
assets or securities that are required to be valued by this Section 4.11 will
be determined in good faith by the Board of Directors of the Issuer. The Issuer’s
determination must be based upon an opinion or appraisal issued by an
Independent Financial Advisor if the fair market value exceeds $25.0 million.


 


(d)           As
of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted
Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except pursuant to the second to last sentence of the
definition of “Unrestricted Subsidiary.” For purposes of designating any
Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding investments
by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in
the Subsidiary so designated will be deemed to be Restricted Payments in an
amount determined as set forth in the second paragraph of the definition of “Investments.”
Such designation will be permitted only if a Restricted Payment in such amount
would be permitted at such time under this Section 4.11 or the definition of “Permitted
Investments” and if such Subsidiary otherwise meets the definition of an “Unrestricted
Subsidiary.” Unrestricted Subsidiaries will not be subject to any of the
restrictive covenants described in this Indenture.


 


SECTION 4.12.                                         Liens.


 


(a)           The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) that secures obligations under any Indebtedness ranking pari passu with
or subordinated to the Securities or a related Guarantee of the Issuer on any
asset or property of the Issuer 


 


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or any Restricted Subsidiary,
or any income or profits therefrom, or assign or convey any right to receive
income therefrom, unless:


 


(1)           in the case of Liens securing
Indebtedness subordinated to the Securities, the Securities and any related
Guarantees are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Liens; or


 


(2)           in all other cases, the Securities
are equally and ratably secured,


 


(b)           Notwithstanding the
foregoing, Section 4.12(a) shall not apply to:


 


(i)            Liens existing on the Issue Date to
the extent and in the manner such Liens are in effect on the Issue Date;


 


(ii)           Liens securing the Securities and the
related Guarantees, Liens securing Senior Debt and the related guarantees of
such Senior Debt; and


 


(iii)          Permitted Liens.


 


SECTION 4.13.                                         Asset
Sales.


 


(a)           The Issuer will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:


 


(1)           the Issuer (or such Restricted
Subsidiary, as the case may be) receives consideration at the time of the Asset
Sale at least equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of;


 


(2)           in the case of Asset Sales involving
consideration in excess of $10.0 million, the fair market value is determined
by the Issuer’s Board of Directors and evidenced by a Board Resolution set
forth in an Officers’ Certificate delivered to the Trustee; and


 


(3)           except for any Permitted Asset Swap,
at least 75% of the consideration received in the Asset Sale by the Issuer or
such Restricted Subsidiary is in the form of cash or Cash Equivalents.


 


For purposes of clause (2)
above, the amount of (i) any liabilities (as shown on the Issuer’s or such
Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of
the Issuer or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Securities) that are assumed by the transferee
of any such assets and from which the Issuer and all Restricted
Subsidiaries have been validly released by all creditors in writing, (ii) any
securities received by the Issuer or such Restricted Subsidiary from such
transferee that are converted by the Issuer or such Restricted Subsidiary into
cash (to the extent of the cash received)


 


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within 180 days following the
closing of such Asset Sale and (iii) any Designated Noncash Consideration
received by the Issuer or any of its Restricted Subsidiaries in such Asset Sale
having an aggregate fair market value (as determined in good faith by the Board
of Directors of the Issuer), taken together with all other Designated Noncash
Consideration received pursuant to this clause (iii) that is at that time
outstanding, not to exceed the greater of (x) $75.0 million and (y) 5.0% of
Consolidated Tangible Assets at the time of the receipt of such Designated
Noncash Consideration (with the fair market value of each item of Designated
Noncash Consideration being measured at the time received without giving effect
to subsequent changes in value), shall be deemed to be cash for purposes of
this paragraph and for no other purpose.


 


(b)           Within 365 days after the receipt of
any Net Proceeds from an Asset Sale, the Issuer may apply those Net Proceeds at
its option:


 


(1)           to permanently reduce Obligations
under Senior Debt of the Issuer (and to correspondingly reduce commitments with
respect thereto) or Indebtedness of the Issuer that ranks pari passu with
the Securities (provided
that if the Issuer shall so reduce Obligations under such
Indebtedness of the Issuer that ranks pari passu with the Securities, it will equally
and ratably reduce Obligations under the Securities by making an offer (in
accordance with the procedures set forth below for an Asset Sale Offer) to all
Holders to purchase at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal
amount of Securities) or Indebtedness of a Restricted Subsidiary, in each case,
other than Indebtedness owed to the Issuer or an Affiliate of the Issuer;


 


(2)           to an investment in (A) any one or
more businesses; provided that such investment in any business is
in the form of the acquisition of Capital Stock and results in the Issuer or a
Restricted Subsidiary owning an amount of the Capital Stock of such business
such that it constitutes a Restricted Subsidiary, (B) capital expenditures or
(C) other assets, in each of (A), (B) and (C), used or useful in a Permitted
Business; and/or


 


(3)           to an investment in (A) any one or
more businesses; provided that such investment in any business is
in the form of the acquisition of Capital Stock and it results in the Issuer or
a Restricted Subsidiary owning an amount of the Capital Stock of such business
such that it constitutes a Restricted Subsidiary, (B) properties or (C) assets
that, in each of (A), (B) and (C), replace the businesses, properties and
assets that are the subject of such Asset Sale.


 


(c)           When the aggregate amount of Net
Proceeds not applied or invested in accordance with the preceding paragraph (“Excess
Proceeds”) exceeds $20.0 million, the Issuer will make an
offer (an “Asset Sale Offer”) to all
Holders and holders of Indebtedness that ranks pari passu with the Securities and
contains provisions similar to those set forth in


 


78





















 


this Indenture with respect to
offers to purchase with the proceeds of sales of assets to purchase, on a pro
rata basis, the maximum principal amount of Securities and
such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds (the “Asset Sale Offer Amount”). The offer price in any Asset Sale
Offer will be equal to 100% of principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the date of purchase (the “Asset Sale
Payment”), and
will be payable in cash.


 


(d)           Pending the final application of any
Net Proceeds, the Issuer may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this
Indenture.


 


(e)           If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Issuer may use those Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Securities tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee will select the Securities to be
purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.


 


(f)            Upon the commencement of an Asset
Sale Offer, the Issuer shall send, by first class mail, a notice to the Trustee
and to each Holder at its registered address. The notice shall contain all instructions
and materials necessary to enable such Holder to tender Securities pursuant to
the Asset Sale Offer. Any Asset Sale Offer shall be made to all Holders. The
notice, which shall govern the terms of the Asset Sale Offer, shall state:


 


(1)           that the Asset Sale Offer is being
made pursuant to this Section 4.13;


 


(2)           the Asset Sale
Offer Amount, the Asset Sale Payment and the date on which Securities tendered
and accepted for payment shall be purchased, which date shall be at least 30
days and no later than 60 days from the date such notice is mailed (the “Asset Sale
Payment Date”);


 


(3)           that any Securities not tendered or
accepted for payment shall continue to accrete or accrue interest;


 


(4)           that, unless the Issuer defaults in
making such payment, any Securities accepted for payment pursuant to the Asset
Sale Offer shall cease to accrete or accrue interest after the Asset Sale
Payment Date;


 


(5)           that Holders electing to have a
Security purchased pursuant to the Asset Sale Offer may only elect to have all
of such Security purchased and may not elect to have only a portion of such
Security purchased;


 


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(6)           that Holders electing to have a
Security purchased pursuant to any Asset Sale Offer shall be required to
surrender the Security, with the form entitled “Option of Holder To Elect
Purchase” on the reverse of the Securities completed, or transfer such Security
by book-entry transfer, to the Issuer, a depository, if appointed by the
Issuer, or the Paying Agent at the address specified in the notice at least
three days before the Asset Sale Payment Date;


 


(7)           that Holders shall
be entitled to withdraw their election if the Issuer, the Depositary or the
Paying Agent, as the case may be, receives, not later than the Asset Sale
Payment Date, a notice setting forth the name of the Holder, the principal
amount of the Security the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Security purchased;


 


(8)           that, if the
aggregate principal amount of Securities surrendered by Holders exceeds the
Asset Sale Offer Amount, the Issuer shall select the Securities to be purchased
on a pro
rata basis (with such adjustments as may be deemed
appropriate by the Issuer so that only Securities in denominations of $5,000 or
£5,000 or integral multiples of $1,000 or £1,000 shall be purchased); and


 


(9)           that Holders whose
Securities were purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered (or
transferred by book-entry transfer); provided that
such Securities shall be in denominations of $5,000 or £5,000 or integral
multiples $1,000 or £1,000.


 


(g)           On the Asset Sale Payment Date, the
Issuer shall, to the extent lawful: (1) accept for payment all Securities or
portions thereof properly tendered pursuant to the Asset Sale Offer; (2)
deposit with the Paying Agent U.S. Legal Tender, U.K. Legal Tender, U.S.
Government Securities and/or U.K. Government Securities sufficient to pay the
Asset Sale Payment in respect of all Securities or portions thereof so
tendered; and (3) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers’ Certificate stating the
aggregate principal amount of Securities or portions thereof being repurchased
by the Issuer. The Issuer shall publicly announce the results of the Asset Sale
Offer on the Asset Sale Payment Date.


 


(h)           The Paying Agent shall promptly mail
to each Holder so tendered the Asset Sale Payment for such Securities, and the
Trustee shall promptly authenticate pursuant to an Authentication Order and
mail (or cause to be transferred by book entry) to each Holder a new Security
equal in principal amount to any unrepurchased portion of the Securities
surrendered, if any; provided that each such new
Security shall be in a principal amount of $5,000 or £5,000 or an integral
multiple of $1,000 or £1,000. However, if the Asset Sale Payment Date is on or
after an interest record date and on or before the related interest payment
date, any accrued and unpaid interest shall be paid to the Person in whose name
a Security


 


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is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Securities pursuant to the Asset Sale Offer.


 


(i)            The Issuer will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of Securities pursuant to an
Asset Sale Offer. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.13, the Issuer will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.13 by virtue of such conflict.


 


SECTION 4.14.                                         Transactions
with Affiliates.


 


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


 


(1)           the Affiliate Transaction is on terms
that are no less favorable to the Issuer or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by the
Issuer or such Restricted Subsidiary with an unrelated Person; and


 


(2)           the Issuer delivers to the Trustee:


 


(a)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, a Board Resolution approving such
Affiliate Transaction set forth in an Officers’ Certificate certifying that
such Affiliate Transaction complies with this Section 4.14 and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and


 


(b)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $75.0 million, an opinion as to the fairness to the
Issuer of such Affiliate Transaction from a financial point of view issued by
an Independent Financial Advisor.


 


(b)           The restrictions set forth in Section
4.14(a) do not apply to:


 


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(1)           transactions between or among the
Issuer and/or any Restricted Subsidiary or any entity that becomes a Restricted
Subsidiary as a result of such transaction;


 


(2)           Restricted Payments (other than
pursuant to clause (7) of Section 4.10(b)) and Permitted Investments (other
than pursuant to clauses (10), (11) and (15) of the definition thereof)
permitted by this Indenture;


 


(3)           the payment to the
Sponsors and any of their Affiliates of annual management, consulting,
monitoring and advisory fees pursuant to the Management Agreement in an
aggregate amount in any fiscal year not to exceed $10.0 million and related
reasonable expenses;


 


(4)           the payment of reasonable and
customary fees paid to, and indemnities provided on behalf of, officers,
directors, employees or consultants of the Issuer, any of its direct or
indirect parent corporations or any Restricted Subsidiary;


 


(5)           the payments by the
Issuer or any Restricted Subsidiary to the Sponsors and any of their Affiliates
made for any financial advisory, financing, underwriting or placement services
or in respect of other investment banking activities, including, without
limitation, in connection with acquisitions or divestitures, which payments are
approved by a majority of the members of the Board of Directors of the Issuer
in good faith;


 


(6)           transactions in
which the Issuer or any Restricted Subsidiary delivers to the Trustee a letter
from an Independent Financial Advisor stating that such transaction is fair to
the Issuer or such Restricted Subsidiary from a financial point of view;


 


(7)           payments or loans
(or cancellations of loans) to employees or consultants of the Issuer or any of
its direct or indirect parent corporations or any Restricted Subsidiary which
are approved by a majority of the Board of Directors of the Issuer in good
faith and which are otherwise permitted under this Indenture;


 


(8)           payments made or
performance under any agreement as in effect on the Issue Date (other than the
Management Agreement and Stockholders Agreement, but including, without
limitation, each of the other agreements entered into in connection with the
Transactions) or any amendment thereto (so long as any such amendment is not
less advantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date);


 


(9)           the existence of, or the performance
by the Issuer or any of its Restricted Subsidiaries of its obligations under
the terms of, the Stockholders Agreement (including any registration rights
agreement or purchase agreements related thereto to


 


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which it is a
party as of the Issue Date and any similar agreement that it may enter into
thereafter); provided, however, that the existence of, or the
performance by the Issuer or any of its Restricted Subsidiaries of its
obligations under, any future amendment to the Stockholders Agreement or under
any similar agreement entered into after the Issue Date shall only be permitted
by this clause (9) to the extent that the terms of any such existing agreement,
together with all amendments thereto, taken as a whole, or new agreement are
not otherwise more disadvantageous to Holders in any material respect than the
original agreement as in effect on the Issue Date;


 


(10)         the Transactions and the payment of all
fees and expenses related to the Transactions and the prepayment of $10.0
million in management fees for the fiscal year ended November 30, 2004;


 


(11)         transactions with customers, clients,
suppliers, or purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the terms of this
Indenture that are fair to Holdco or the Restricted Subsidiaries, in the reasonable
determination of the members of the Board of Directors of the Issuer or the
senior management thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party;


 


(12)         if otherwise permitted hereunder, the
issuance of Equity Interests (other than Disqualified Stock) of Holdco to any
Permitted Holder or to any director, officer, employee or consultant of the
Issuer or Holdco or their Subsidiaries or of the Issuer to Holdco or to any
Permitted Holder or to any director, officer, employee or consultant of the
Issuer or Holdco or their Subsidiaries; and


 


(13)         any transaction with a Securitization
Subsidiary effected as part of a Qualified Securitization Financing.


 


SECTION 4.15.                                         Dividend
and Other Payment Restrictions Affecting Subsidiaries.


 


(a)           The Issuer will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create or
permit to exist or become effective any consensual encumbrance or restriction
on the ability of any such Restricted Subsidiary to:


 


(1)           pay dividends or make any other
distributions on its Capital Stock to the Issuer or any of its Restricted
Subsidiaries, or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Issuer or any of
its Restricted Subsidiaries;


 


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


 


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


 


(b)           However, the preceding restrictions
in Section 4.15(a) will not apply to encumbrances or restrictions existing
under or by reason of:


 


(1)           contractual encumbrances or restrictions
in effect (x) pursuant to the Credit Agreement or related documents or (y) on
the Issue Date, including, without limitation, pursuant to Existing
Indebtedness and its related documentation;


 


(2)           this Indenture and the Securities;


 


(3)           purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions of the nature discussed in clause (3) of Section 4.15(a) on the
property so acquired;


 


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


 


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


 


(6)           contracts for the
sale of assets, including, without limitation, customary restrictions with
respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary;


 


(7)           secured Indebtedness
otherwise permitted to be incurred pursuant to Sections 4.10 and 4.12 that
limits the right of the debtor to dispose of the assets securing such
Indebtedness;


 


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


 


(9)           other Indebtedness or Preferred Stock
(i) of the Issuer or any Restricted Subsidiary that is a Guarantor that is
incurred subsequent to the Issue Date pursuant to Section 4.10 or (ii) that is
incurred by a Foreign Subsidiary of the Issuer subsequent to the Issue Date
pursuant to clause (1), (4), (11) or (20) of Section 4.10(b);


 


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


 


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(11)         customary provisions contained in leases,
subleases, licenses or asset sale agreements and other agreements;


 


(12)         any encumbrances or restrictions of the
type referred to in clauses (1), (2) and (3) of Section 4.15(a) imposed by any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (I) through (11) of this Section 4.15(b), provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of the
Issuer’s Board of Directors, no more restrictive with respect to such dividend
and other payment restrictions than those contained in the dividend or other
payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing;


 


(13)         any encumbrance or restriction of a
Securitization Subsidiary effected in connection with a Qualified
Securitization Financing; provided, however, that such restrictions
apply only to such Securitization Subsidiary; or


 


(14)         any encumbrance or restriction in
connection with Non-Recourse Product Financing Indebtedness or Non-Recourse
Acquisition Financing Indebtedness.


 


SECTION 4.16.                                         Additional
Subsidiary Guarantees.


 


(a)           The Issuer will cause each Restricted Subsidiary
that is a Domestic Subsidiary (unless such Subsidiary is a Securitization
Subsidiary) that:


 


(1)           guarantees any
Indebtedness of the Issuer or any of its Restricted Subsidiaries; or


 


(2)           incurs any
Indebtedness or issues any shares of Preferred Stock permitted to be incurred
or issued pursuant to clause (1) or (11) of the definition of “Permitted Debt”
in Section 4.10(b) or not permitted to be incurred by Section 4.10


 


to execute and deliver to the
Trustee a supplemental indenture pursuant to which such Subsidiary will
guarantee payment of the Securities. Each Guarantee will be limited to an
amount not to exceed the maximum amount that can be guaranteed by that Restricted
Subsidiary without rendering the Guarantee, as it relates to such Restricted
Subsidiary, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors
generally.


 


(b)           Each Guarantee shall be released in
accordance with Article Eleven.


 


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SECTION 4.17.                                         Reports
to Holders.


 


(a)           Whether or not required by the
Commission, so long as any Securities are outstanding, the Issuer will furnish
to the Holders, within the time periods specified in the Commission’s rules and
regulations:


 


(1)           all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Issuer were required to file
such Forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual
information only, a report on the annual financial statements by the Issuer’s
certified independent accountants; and


 


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


 


(b)           In addition, whether or not required
by the Commission, the Issuer will file a copy of all of the information and
reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission’s rules and
regulations (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Issuer has agreed that, for so long as any Securities
remain outstanding, it will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.


 


(c)           In addition, if at any time Holdco
becomes a Guarantor (there being no obligation of Holdco to do so), holds no
material assets other than cash, Cash Equivalents and the Capital Stock of the
Issuer (and performs the related incidental activities associated with such
ownership) and complies with the requirements of Rule 3-10 of Regulation S-X
promulgated by the Commission (or any successor provision), the
reports, information and other documents required to be filed and furnished to
Holders pursuant to this Section 4.17 may, at the option of the Issuer, be
filed by and be those of Holdco rather than the Issuer.


 


(d)           Notwithstanding the foregoing, such
requirements shall be deemed satisfied prior to the commencement of the
Exchange Offer or the effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement) by the filing with the Commission
of the Exchange Offer Registration Statement (as defined in the Registration
Rights Agreement) and/or Shelf Registration Statement, and any amendments
thereto, with such financial information that satisfies Regulation S-X of the
Securities Act.


 


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SECTION 4.18.                                         Limitation
on Layering.


 


The Issuer
will not, and will not permit any Restricted Subsidiary that is a Guarantor to,
directly or indirectly, incur any Indebtedness that is or purports to be by its
terms (or by the terms of any agreement governing such Indebtedness)
contractually subordinated or junior in right of payment to any Senior Debt
(including Acquired Debt) of the Issuer or such Restricted Subsidiary, as the
case may be, unless such Indebtedness is either


 


(1)           pari passu in
right of payment with the Securities; or


 


(2)           subordinate in right of payment to
the Securities.


 


SECTION 4.19.                                         Business
Activities.


 


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


 


SECTION 4.20.                                         Payments
for Consent.


 


The Issuer
will not, and will not permit any of its 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 or the Securities unless such
consideration is offered to be paid and 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.


 


ARTICLE FIVE


 


SUCCESSOR CORPORATION


 


SECTION 5.01.                                         Merger,
Consolidation, or Sale of Assets.


 


(a)           The Issuer may not, directly or
indirectly: (1) consolidate or merge with or into another Person (whether or
not the Issuer is the surviving corporation); or (2) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Issuer and its Subsidiaries taken as a whole, in one
or more related transactions, to another Person, unless:


 


(1)           either: (a) the
Issuer is the surviving corporation; or (b) the Person formed by or surviving
any such consolidation or merger (if other than the Issuer) or to which such
sale, assignment, transfer, conveyance or other disposition has been


 


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made is a
corporation organized or existing under the laws of the United States, any
state of the United States, the District of Columbia or any territory thereof
(the Issuer or such Person, as the case may be, being herein called the “Successor
Company”);


 


(2)           the Successor
Company (if other than the Issuer) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes all
the obligations of the Issuer under the Securities, this Indenture and the
Registration Rights Agreement;


 


(3)           immediately after
such transaction no Default or Event of Default exists;


 


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


 


(a)           the Successor Company or the Person
to which such sale, assignment, transfer, conveyance or other disposition has
been made would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Coverage Ratio Exception; or


 


(b)           the Fixed Charge Coverage Ratio for
the Successor Company and its Restricted Subsidiaries would be greater than
such ratio for the Issuer and its Restricted Subsidiaries immediately prior to
such transaction; and


 


(5)           each Guarantor,
unless it is the other party to the transactions described above, shall have by
supplemental indenture confirmed that its Guarantee shall apply to such Person’s
obligations under this Indenture and the Securities.


 


This Section
5.01 will not apply to a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Issuer and its Restricted
Subsidiaries. Notwithstanding the foregoing clauses (3) and (4), (i) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Issuer or to another Restricted Subsidiary
and (ii) the Issuer may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Issuer in another state of the United States so
long as the amount of Indebtedness of the Issuer and its Restricted
Subsidiaries is not increased thereby.


 


In the event
of any transaction described in and complying with the conditions listed in the
preceding paragraph in which the Issuer is not the continuing corporation, the
successor Person formed or remaining shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer and the Issuer will be
discharged from all obligations and covenants under this Indenture and the
Securities.


 


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(b)           The Issuer will deliver to the
Trustee prior to the consummation of each proposed transaction an Officers’
Certificate certifying that the conditions set forth above are satisfied and an
Opinion of Counsel, which opinion may contain customary exceptions and
qualifications, that the proposed transaction and the supplemental indenture,
if any, comply with this Indenture.


 


ARTICLE SIX


 


DEFAULT AND REMEDIES


 


SECTION 6.01.                                         Events
of Default.


 


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


 


(1)           the Issuer defaults
in payment when due and payable, upon redemption, acceleration or otherwise, of
principal of, or premium, if any, on the Securities, whether or not prohibited
by Article Ten;


 


(2)           the Issuer defaults in the payment
when due of interest or Additional Interest, if any, on or with respect to the
Securities and such default continues for a period of 30 days, whether or not
prohibited by Article Ten;


 


(3)           the Issuer defaults in the
performance of, or breaches any covenant, warranty or other agreement contained
in, this Indenture (other than a default in the performance or breach of a
covenant, warranty or agreement which is specifically dealt with in clauses (1)
or (2) above) and such default or breach continues for a period of 60 days
after the notice specified below;


 


(4)           default under any mortgage, indenture
or instrument under which there is issued or by which there is secured or
evidenced any Indebtedness for money borrowed by the Issuer or any Restricted
Subsidiary or the payment of which is guaranteed by the Issuer or any
Restricted Subsidiary (other than Indebtedness owed to the Issuer or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Issue Date, if (A) such default either (1) results from the
failure to pay any such Indebtedness at its stated final maturity (after giving
effect to any applicable grace periods) or (2) relates to an obligation other
than the obligation to pay principal of any such Indebtedness at its stated
final maturity and results in the holder or holders of such Indebtedness
causing such Indebtedness to become due prior to its stated maturity and (B)
the principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
stated final maturity (after giving effect to any applicable grace periods), or
the maturity 


 


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of which has
been so accelerated, aggregate $25.0 million (or its foreign currency
equivalent) or more at any one time outstanding;


 


(5)           the Issuer or any
Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:


 


(A)          commences a voluntary case,


 


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


 


(C)           consents to the appointment of a
Custodian of it or for all or substantially all of its property,


 


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


 


(E)           takes any comparable action under any
foreign laws relating to incolvency,


 


(F)           generally is not able to pay its
debts as they become due, or


 


(G)           takes any corporate action to
authorize or effect any of the foregoing;


 


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


 


(A)          is for relief against the Issuer or
any Significant Subsidiary in an involuntary case,


 


(B)           appoints a Custodian of the Issuer or
any Significant Subsidiary or for all or substantially all of the property of
the Issuer or any Significant Subsidiary, or


 


(C)           orders the liquidation of the Issuer
or any Significant Subsidiary, and the order or decree remains unstayed and in
effect for 60 days;


 


(7)           the failure by the
Issuer or any Significant Subsidiary to pay final judgments (other than any
judgments covered by insurance policies issued by reputable and creditworthy
insurance companies) aggregating in excess of $25.0 million, which final
judgments remain unpaid, undischarged and unstayed for a period of more than 60
days after such judgment becomes final, and, with respect to any judgments


 


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covered by
insurance, an enforcement proceeding has been commenced by any creditor upon
such judgment or decree which is not promptly stayed; or


 


(8)           the Guarantee of a
Significant Subsidiary ceases to be in full force and effect (except as contemplated
by the terms thereof) or any Guarantor denies or disaffirms its obligations
under this Indenture or any Guarantee and such Default continues for 10 days.


 


SECTION 6.02.                                         Acceleration.


 


If an Event of
Default specified in Sections 6.01(5) and (6) above occurs with respect to the
Issuer and is continuing, then all unpaid principal of, and premium, if any,
and accrued and unpaid interest on all of the outstanding Securities shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of each Trustee or any Holder.


 


If any other
Event of Default shall occur and be continuing, the Trustee or the Holders of
at least 25% in principal amount of outstanding Securities under this Indenture
may declare the principal of and accrued interest on such Securities to be due
and payable by notice in writing to the Issuer and the Trustee specifying the
respective Event of Default and that it is a “notice of acceleration” (the “Acceleration Notice”), and the same:


 


(1)           shall become immediately due and
payable; or


 


(2)           shall become immediately due and
payable upon the first to occur of an acceleration under the Credit Agreement
and five Business Days after receipt by the Issuer and the Representative under
the Credit Agreement of such Acceleration Notice but only if such Event of
Default is then continuing.


 


At any time
after a declaration of acceleration with respect to the Securities as described
in the two preceding paragraphs, the Holders of a majority in principal amount
of the Securities 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 or interest that has
become due solely because of the acceleration;


 


(3)           to the extent the payment of such
interest is lawful, if interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of acceleration,
has been paid;


 


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(4)           if the Issuer has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances; and


 


(5)           in the event of the
cure or waiver of an Event of Default of the type described in Sections 6.01(5)
and (6), if 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.


 


(a)           If a 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 or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.


 


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


 


(c)           In the event of any Event of Default
specified in clause (4) of Section 6.01, such Event of Default and all
consequences thereof (excluding, however, any resulting payment default) will
be annulled, waived and rescinded, automatically and without any action by the
Trustee or the Holders, if within 20 days after such Event of Default arose the
Issuer delivers an Officers’ Certificate to the Trustee stating that (x) the
Indebtedness or guarantee that is the basis for such Event of Default has been
discharged or (y) the holders thereof have rescinded or waived the
acceleration, notice or action (as the case may be) giving rise to such Event
of Default or (z) the default that is the basis for such Event of Default has
been cured, it being understood that in no event shall an acceleration of the
principal amount of the Securities as described above be annulled, waived or
rescinded upon the happening of any such events.


 


(d)           Holders may not enforce this
Indenture or the Securities except as provided in this Indenture and under the
TIA. Subject to the provisions of this Indenture relating to the duties of the
Trustee, the Trustee is under no obligation to exercise any of its rights or
powers under this Indenture at the request, order or direction of any of the
Holders, unless such Holders have offered to the Trustee reasonable indemnity.
Subject to all provisions of this Indenture and applicable law, the Holders of
a majority in aggregate principal amount of the then outstanding Securities
issued under this Indenture have the right to direct the time,


 


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method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee.


 


SECTION 6.04.                                         Waiver
of Defaults.


 


Provided the
Securities are not then due and payable by reason of a declaration of
acceleration, the Holders of a majority in aggregate principal amount of
Securities at the time outstanding may on behalf of the Holders of all the
Securities waive any Default with respect to such Securities and its
consequences by providing written notice thereof to the Issuer and the Trustee,
except a Default (1) in the payment of interest on or the principal of any
Security or (2) in respect of a covenant or provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each outstanding Security affected. In the case of any such waiver, the Issuers,
the Trustee and the Holders will be restored to their former positions and
rights under this Indenture, respectively; provided that no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto. provided,
however, that if any amendment, waiver or other modification will
only affect the Dollar Securities or the Sterling Securities, only the consent
of the Holders of at least a majority in principal amount of the then
outstanding Dollar Securities or Sterling Securities (and not the consent of at
least a majority of all Securities), as the case may be, shall be required.


 


SECTION 6.05.                                         Control
by Majority.


 


The Holders of
not less than a majority in principal amount of the outstanding Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it.
Subject to Section 7.01, however, the Trustee may refuse to follow any
direction that conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder,
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.


 


In the event
the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification against any loss or
expense caused by taking such action or following such direction.


 


SECTION 6.06.                                         Limitation
on Suits.


 


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


 


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


 


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


 


(3)           such Holder or Holders offer and
provide to the Trustee indemnity reasonably satisfactory to the Trustee against
any loss, liability or expense;


 


(4)           the Trustee does not comply with the
request within 45 days after receipt of the request and the offer and the
provision of indemnity; and


 


(5)           during such 45-day period the Holder
or Holders of a majority in principal amount of the outstanding Securities do
not give the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.


 


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.                                         Rights
of Holders To Receive Payment.


 


Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on a Security, on or after the respective
due dates expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.


 


SECTION 6.08.                                         Collection
Suit by Trustee.


 


If a Default
in payment of principal or interest specified in Section 6.01(1) or (2) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Issuer or any other obligor on the
Securities for the whole amount of principal and accrued interest and fees
remaining unpaid, together with interest on overdue principal and, to the
extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.


 


SECTION 6.09.                                         Trustee
May File Proofs of Claim.


 


The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim
for the compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and the Holders allowed in any judicial proceedings
relating to the Issuer, its creditors or its property and shall be entitled and
empowered to collect and receive any monies or


 


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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 compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the Trustee under
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
Securities 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. The Trustee
shall be entitled to participate as a member of any officer committee of
creditors in the matters as it deems necessary or advisable.


 


SECTION 6.10.                                         Priorities.


 


Subject to the
provisions of Article Ten, if the Trustee collects any money or property
pursuant to this Article Six, it shall pay out the money or property in the
following order:


 


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


 


SECOND: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Securities for interest;


 


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


 


FOURTH: to the Issuer or, if applicable, the Guarantors, as their respective
interests may appear.


 


The Trustee,
upon prior notice to the Issuer, may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10.


 


SECTION 6.11.                                         Undertaking
for Costs.


 


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


 


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suit by a Holder or Holders of
more than 10% in principal amount of the outstanding Securities.


 


ARTICLE SEVEN


 


TRUSTEE


 


SECTION 7.01.                                         Duties
of Trustee.


 


(a)             If a Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their
exercise 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 a Default:


 


(1)           The Trustee need perform only those
duties as are specifically set forth herein or in the TIA and no duties,
covenants, responsibilities or obligations shall be implied in this Indenture
against the Trustee.


 


(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 (including
Officers’ Certificates) or opinions (including Opinions of Counsel) furnished
to the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.


 


(c)           Notwithstanding anything to the
contrary herein, 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 Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts.


 


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(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.


 


(d)           No provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or to
take or omit to take any action under this Indenture or take any action at the
request or direction of Holders if it shall have reasonable grounds for
believing that repayment of such funds is not 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 this Section 7.01.


 


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


 


(g)           In the absence of bad faith, negligence
or willful misconduct on the part of the Trustee, the Trustee shall not be
responsible for the application of any money by any Paying Agent other than the
Trustee.


 


SECTION 7.02.                                         Rights
of Trustee.


 


Subject to Section 7.01:


 


(a)           The Trustee may rely conclusively on
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter
stated in the document.


 


(b)           Before the Trustee acts or refrains
from acting, it may require an Officers’ Certificate and an Opinion of Counsel,
which shall conform to the provisions of Section 12.05. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.


 


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


 


(d)           The Trustee shall not be liable for
any action it takes or omits to take in good faith which it reasonably believes
to be authorized or within its rights or powers.


 


(e)           The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and complete
authorization


 


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and protection
from liability in respect of any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.


 


(f)            The Trustee shall 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 indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby.


 


(g)           The Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate (including any Officers’ Certificate), statement, instrument,
opinion (including any Opinion of Counsel), 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 Issuer, to examine the books, records, and premises of the
Issuer, personally or by agent or attorney at the sole cost of the Issuer.


 


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


 


(i)            The permissive rights of the Trustee
to do things enumerated in this Indenture shall not be construed as duties.


 


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


 


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


 


SECTION 7.03.                                         Individual
Rights of Trustee.


 


The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Issuer, its Subsidiaries or their
respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.


 


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SECTION 7.04.                                         Trustee’s
Disclaimer.


 


The Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Issuer’s use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Issuer in this Indenture or any document
issued in connection with the sale of Securities or any statement in the
Securities other than the Trustee’s certificate of authentication. The Trustee
makes no representations with respect to the effectiveness or adequacy of this
Indenture.


 


SECTION 7.05.                                         Notice
of Default.


 


If a Default
occurs and is continuing and the Trustee receives actual notice of such
Default, the Trustee shall mail to each Holder notice of the uncured Default
within 60 days after such Default occurs. Except in the case of a Default in
payment of principal of, or interest on, any Security, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or the Asset Sale Offer Payment Date
pursuant to an Asset Sale Offer, the Trustee may withhold the notice if and so
long as the Board of Directors, the executive committee, or a trust committee
of directors and/or Responsible Officers, of the Trustee in good faith
determines that withholding the notice is in the interest of the Holders.


 


SECTION 7.06.                                         Reports
by Trustee to Holders.


 


Within 60 days
after each May 1, beginning with May 1, 2005, the Trustee shall, to the extent
that any of the events described in TIA § 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 § 313(a). The Trustee also shall comply
with TIA §§ 313(b), 313(c) and 313(d).


 


A copy of each
report at the time of its mailing to Holders shall be mailed to the Issuer and
filed with the Commission and each securities exchange, if any, on which the
Securities are listed.


 


The Issuer
shall notify the Trustee if the Securities become listed on any securities
exchange or of any delisting thereof and the Trustee shall comply with TIA §
313(d).


 


SECTION 7.07.                                         Compensation
and Indemnity.


 


The Issuer
shall pay to the Trustee from time to time such compensation as the Issuer and
the Trustee shall from time to time agree in writing for its services
hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Trustee upon request for all reasonable disbursements, 


 


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expenses and advances
(including reasonable fees and expenses of counsel) incurred or made by it in
addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee’s negligence, bad
faith or willful misconduct. Such expenses shall include the reasonable fees
and expenses of the Trustee’s agents and counsel.


 


The Issuer
shall indemnify each of the Trustee or any predecessor Trustee and its agents,
employees, officers, stockholders and directors for, and hold them harmless
against, any and all loss, damage, claims including taxes (other than taxes
based upon, measured by or determined by the income of the Trustee), liability
or expense incurred by them except for such actions to the extent caused by any
negligence, bad faith or willful misconduct on their part, arising out of or in
connection with the acceptance or administration of this trust including the
costs and expenses of enforcing this Indenture or a Guarantee against the
Issuer or a Guarantor (including this Section 7.07) and the reasonable costs
and expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of the Trustee’s
rights, powers or duties hereunder (whether asserted by the Issuer, any
Guarantor, any Holder or any other Person). The Trustee shall notify the Issuer
promptly of any claim asserted against the Trustee or any of its agents,
employees, officers, stockholders and directors for which it may seek
indemnity. The Issuer may, subject to the approval of the Trustee (which
approval shall not be unreasonably withheld), defend the claim and the Trustee
shall cooperate in the defense. The Trustee and its agents, employees, officers,
stockholders and directors subject to the claim may have separate counsel and
the Issuer shall pay the reasonable fees and expenses of such counsel; provided, however, that
the Issuer will not be required to pay such fees and expenses if, subject to
the approval of the Trustee (which approval shall not be unreasonably
withheld), it assumes the Trustee’s defense and there is no conflict of
interest between the Issuer and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection with
such defense as reasonably determined by the Trustee. The Issuer need not pay
for any settlement made without its written consent. The Issuer need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful
misconduct.


 


To secure the
Issuer’s and the Guarantors’ payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee. The obligations
of the Issuer and the Guarantors under this Section shall not be subordinated
to the payment of Senior Debt pursuant to Article Ten or Section 11.02 except
assets or money held in trust to pay principal of or interest on particular
Securities.


 


When the
Trustee incurs expenses or renders services after a Default specified in
Section 6.01(5) or (6) occurs, such expenses and the compensation for such
services shall


 


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be paid to the extent allowed
under any Bankruptcy Law and are intended to constitute expenses of
administration under any Bankruptcy Law.


 


Notwithstanding
any other provision in this Indenture, the foregoing provisions of this Section
7.07 shall survive the satisfaction and discharge of this Indenture or the
appointment of a successor Trustee.


 


SECTION 7.08.                                         Replacement
of Trustee.


 


The Trustee
may resign at any time by so notifying the Issuer in writing. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Issuer and the Trustee and may appoint a successor
Trustee. The Issuer may remove the Trustee if:


 


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


 


(2)           the Trustee is adjudged a bankrupt or
an insolvent;


 


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


 


(4)           the Trustee becomes incapable of
acting.


 


If the Trustee
resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Issuer shall notify each Holder 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 principal amount of the Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuer.


 


A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuer. Immediately after that, the retiring Trustee shall
transfer, after payment of all sums then owing to the Trustee pursuant to
Section 7.07, 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. A
successor Trustee shall mail notice of its succession to each Holder.


 


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


 


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If the Trustee
fails to comply with Section 7.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.


 


Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Issuer’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 corporation, the resulting,
surviving or transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee; provided that such corporation shall be
otherwise qualified and eligible under this Article Seven.


 


SECTION 7.10.                                         Eligibility;
Disqualification.


 


This Indenture
shall always have a Trustee who satisfies the requirement of TIA §§ 3l0(a)(1),
310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus
of at least $150,000,000 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 the bank holding
company, shall meet the capital requirements of TIA § 310(a)(2). The Trustee
shall comply with TIA § 310(b); provided, however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding, if the requirements for such
exclusion set forth in TIA § 310(b)(1) are met. The provisions of TIA § 310
shall apply to the Issuer and any other obligor of the Securities.


 


SECTION 7.11.                                         Preferential
Collection of Claims Against the Issuer.


 


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


 


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ARTICLE EIGHT


 


DISCHARGE OF INDENTURE; DEFEASANCE


 


SECTION 8.01.                                         Termination
of the Issuer’s Obligations.


 


The Issuer may
terminate its obligations under the Securities and this Indenture, except those
obligations referred to in the penultimate paragraph of this Section 8.01, if
all Securities previously authenticated and delivered (other than destroyed,
lost or stolen Securities which have been replaced or paid or Securities for
whose payment U.S. Legal Tender or U.K. Legal Tender, as applicable, or U.S.
Government Securities or U.K. Government Securities, as applicable, or a
combination thereof, in such amount as is, in the opinion of a nationally
recognized firm of independent public accountants, sufficient without
consideration of reinvestment of such interest, to pay principal of, premium,
if any, and interest on the outstanding Securities to maturity or redemption,
has theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Issuer and thereafter repaid to the Issuer,
as provided in Section 8.05) have been delivered to the Trustee for
cancellation and the Issuer has paid all sums payable by it hereunder, or if:


 


(a)           either (i) pursuant
to Article Three, the Issuer shall have given notice to the Trustee and mailed
a notice of redemption to each Holder of the redemption of all of the
Securities in accordance with the provisions hereof or (ii) all Securities have
otherwise become or will become due and payable by reason of the mailing of a
notice of redemption or otherwise within one (1) year hereunder;


 


(b)           the Issuer shall
have irrevocably deposited or caused to be deposited with the Trustee or a
trustee satisfactory to the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds in
trust solely for the benefit of the Holders of that purpose, U.S. Legal Tender
or U.K. Legal Tender, as applicable, or U.S. Government Securities or U.K.
Government Securities, as applicable, or a combination thereof, in such amount
as is, in the opinion of a nationally recognized firm of independent public
accountants, sufficient without consideration of reinvestment of such interest,
to pay principal of, premium, if any, and interest on the outstanding
Securities to maturity or redemption; provided that
the Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender or U.K. Legal Tender, as applicable, or U.S. Government Securities or
U.K. Government Securities, as applicable, or a combination thereof; to the payment
of said principal, premium, if any, and interest with respect to the
Securities; and provided,
further, that from and after the time of deposit, the U.S. Legal
Tender or U.K. Legal Tender, as applicable, or U.S. Government Securities or
U.K. Securities, as applicable, or combination thereof; deposited shall not be
subject to the rights of holders of Senior Debt pursuant to the provisions of
Article Ten;


 


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(c)           no Default with respect to this
Indenture or the Securities shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit (other than a
Default resulting from borrowing of funds to be applied to such deposit) and
such deposit will not result in a breach or violation of, or constitute a
default under, the Credit Agreement or any other material agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by
which it is bound;


 


(d)           the Issuer shall have paid all other
sums payable by it hereunder; and


 


(e)           the Issuer shall have delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent providing for or relating to the termination of
the Issuer’s obligations under the Securities and this Indenture have been
complied with. Such Opinion of Counsel shall also state that such satisfaction
and discharge does not result in a default under the Credit Agreement or any
other material agreement or instrument then known to such counsel that binds or
affects the Issuer.


 


Subject to the
next sentence and notwithstanding the foregoing paragraph, the Issuer’s
obligations in Sections 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 7.07, 8.05 and 8.06
shall survive until the Securities are no longer outstanding pursuant to the
last paragraph of Section 2.08. After the Securities are no longer outstanding,
the Issuer’s obligations in Sections 7.07, 8.05 and 8.06 shall survive.


 


After such
delivery or irrevocable deposit, the Trustee upon request shall acknowledge in
writing the discharge of the Issuer’s obligations under the Securities and this
Indenture except for those surviving obligations specified above.


 


SECTION 8.02.                                         Legal
Defeasance and Covenant Defeasance.


 


(a)           The Issuer may, at its option and at
any time, elect to have either paragraph (b) or (c) below applied to all
outstanding Dollar Securities and/or Sterling Securities upon compliance with
the conditions set forth in Section 8.03.


 


(b)           Upon the Issuer’s exercise under
paragraph (a) hereof of the option applicable to this paragraph (b), the Issuer
and the Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.03, be deemed to have been discharged from their obligations
with respect to all outstanding Dollar Securities and/or Sterling Securities on
the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer shall
be deemed to have paid and discharged the entire Indebtedness represented by
the outstanding Dollar Securities and/or Sterling Securities, which shall
thereafter be deemed to be “outstanding” only for the purposes of Section 8.04
hereof and the other Sections of this Indenture (with respect to such
Securities) referred to in (i) and (ii) below, and to have satisfied all its
other obligations under such Dollar Securities


 


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and/or Sterling Securities and
this Indenture (with respect to such Securities) and the Guarantors shall be
deemed to have satisfied all of their obligations under the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder:


 


(i)            the rights of
Holders of outstanding Securities issued hereunder to receive payments in
respect of the principal of, or interest or premium and Additional Interest, if
any, on such Securities when such payments are due from the trust referred to
below;


 


(ii)           the Issuer’s
obligations with respect to the Securities issued thereunder concerning issuing
temporary Securities, registration of Securities, mutilated, destroyed, lost or
stolen Securities and the maintenance of an office or agency for payment and
money for security payments held in trust;


 


(iii)          the rights, powers,
trusts, duties and immunities of the Trustee, and the Issuer’s obligations in
connection therewith; and


 


(iv)          this Article Eight.


 


Subject to
compliance with this Article Eight, the Issuer may exercise its option under
this Section 8.02(b) notwithstanding the prior exercise of its option under
Section 8.02(c) hereof.


 


(c)           Upon the Issuer’s exercise under paragraph
(a) hereof of the option applicable to this paragraph (c), the Issuer and the
Guarantors shall, subject to the satisfaction of the conditions set forth in
Section 8.03 hereof, be released from their obligations under the covenants
contained in Sections 4.03 (with respect to Restricted Subsidiaries only),
4.04, 4.05, 4.06, 4.07 and 4.09 through 4.20 and clauses (3) and (4) of Section
5.01(a) hereof with respect to the outstanding Dollar Securities and/or
Sterling Securities on and after the date the conditions set forth in Section
8.03 are satisfied (hereinafter, “Covenant
Defeasance”), and the
Dollar Securities and/or Sterling Securities shall thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Dollar Securities and/or Sterling
Securities, the Issuer 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 other 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 an Event of Default under Section 6.01 hereof, but, except
as


 


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specified above, the remainder
of this Indenture and such Securities shall be unaffected thereby. In addition,
upon the Issuer’s exercise under paragraph (a) hereof of the option applicable
to this paragraph (c), subject to the satisfaction of the conditions set forth
in Section 8.03 hereof, clauses (3), (4), (5), (6) and (7) of Section 6.01
hereof shall not constitute Events of Default.


 


SECTION 8.03.                                         Conditions
to Legal Defeasance or Covenant Defeasance.


 


The following
shall be the conditions to the application of either Section 8.02(b) or 8.02(c)
hereof to the outstanding Securities:


 


In order to
exercise either Legal Defeasance or Covenant Defeasance:


 


(1)           the Issuer must irrevocably deposit
with the Trustee, in trust, for the benefit of the holders of the applicable
Securities issued thereunder, cash in U.S. Legal Tender or U.K. Legal Tender,
as applicable, non-callable U.S. Government Securities or U.K. Government
Securities, as applicable, or a combination of cash in U.S. Legal Tender or
U.K. Legal Tender, as applicable, and non-callable U.S. Government Securities
or U.K. Government Securities, as applicable, in amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, or interest and premium and Additional
Interest, if any, on the outstanding Securities issued thereunder on the stated
maturity or on the applicable redemption date, as the case may be, and the
Issuer must specify whether the Securities are being defeased to maturity or to
a particular redemption date;


 


(2)           in the case of an election under
Section 8.02(b) hereof, the Issuer has delivered to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that (a) the Issuer 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 will confirm that, the holders of the
respective outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;


 


(3)           in the case of an election under
Section 8.02(c) hereof, the Issuer has delivered to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the holders of the
respective outstanding Securities 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;


 


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(4)           no Default or Event of Default has
occurred and is continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default resulting from the borrowing of funds
or insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;


 


(5)           such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a default
under any material agreement or instrument (other than this Indenture) to which
the Issuer or any of its Restricted Subsidiaries is a party or by which the
Issuer or any of its Restricted Subsidiaries is bound;


 


(6)           the Issuer must deliver to the
Trustee an Officers’ Certificate stating that the deposit was not made by the
Issuer with the intent of preferring the Holders over the other creditors of
the Issuer with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer or others; and


 


(7)           the Issuer must deliver to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
all conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.


 


SECTION 8.04.                                         Application
of Trust Money.


 


The Trustee or
Paying Agent shall hold in trust U.S. Legal Tender or U.K. Legal Tender, as
applicable, and U.S. Government Securities or U.K. Government Securities, as
applicable, deposited with it pursuant to this Article Eight, and shall apply
the deposited U.S. Legal Tender or U.K. Legal Tender, as applicable and the
money from U.S. Government Securities or U.K. Government Securities, as
applicable, in accordance with this Indenture to the payment of principal of
and interest on the Securities. The Trustee shall be under no obligation to
invest said U.S. Legal Tender or U.K. Legal Tender, as applicable, and U.S.
Government Securities or U.K. Government Securities, as applicable, except as
it may agree with the Issuer.


 


The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Legal Tender or U.K. Legal Tender as
applicable, and U.S. Government Securities or U.K. Government Securities, as applicable,
deposited pursuant to Section 8.03 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Securities.


 


Anything in
this Article Eight to the contrary notwithstanding, the Trustee shall deliver
or pay to the Issuer from time to time upon the Issuer’s request any U.S. Legal
Tender or U.K. Legal Tender, as applicable, and U.S. Government Securities or
U.K. Government Securities, as applicable, held by it as provided in Section
8.03 which, in the opinion


 


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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 8.05.                                         Repayment
to the Issuer.


 


Subject to
this Article Eight, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request any excess U.S. Legal Tender or U.K. Legal Tender, as
applicable, and U.S. Government Securities or U.K. Government Securities, as
applicable, held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall
pay to the Issuer upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent, before being required to make any payment,
may at the expense of the Issuer 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 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Issuer. After payment to the Issuer, Holders entitled to such
money must look to the Issuer for payment as general creditors unless an
applicable law designates another Person.


 


SECTION 8.06.                                         Reinstatement.


 


If the Trustee
or Paying Agent is unable to apply any U.S. Legal Tender or U.K. Legal Tender,
as applicable, and U.S. Government Securities or U.K. Government Securities, as applicable, in accordance with this
Article Eight 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 Issuer’s obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Eight until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or
U.K. Legal Tender, as applicable, and U.S. Government Securities or U.K.
Government Securities, as applicable, in accordance with this Article Eight; provided that if
the Issuer has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Issuer shall be subrogated
to the rights of the Holders of such Securities to receive such payment from
the U.S. Legal Tender or U.K. Legal Tender, as applicable, or U.S. Government Securities
or U.K. Government Securities, as applicable, held by the Trustee or Paying
Agent.


 


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ARTICLE NINE


 


AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


SECTION 9.01.                                         Without
Consent of Holders.


 


Subject to
Section 9.03, the Issuer and the Trustee, together, may amend or supplement
this Indenture, the Securities or the Guarantees without notice to or consent
of any Holder:


 


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


 


(2)           to provide for uncertificated Securities
in addition to or in place of certificated Securities;


 


(3)           to provide for the assumption of the
Issuer’s obligations to Holders in the case of a merger or consolidation or
sale of all or substantially all of the Issuer’s assets;


 


(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 under this Indenture of any Holder;


 


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


 


(6)           to add a Guarantee of the Securities,
including, without limitation, by Holdco;


 


provided that the Issuer has delivered to the
Trustee an Opinion of Counsel and an Officers’ Certificate, each stating that
such amendment or supplement complies with the provisions of this Section 9.01.


 


SECTION 9.02.                                         With
Consent of Holders.


 


(a)           Subject to Sections 6.07 and 9.03,
the Issuer and the Trustee, together, with the written consent of the Holder or
Holders of a majority in aggregate principal amount of the outstanding
Securities, may amend or supplement this Indenture or the Securities without
notice to any other Holders. Subject to Sections 6.07 and 9.03, the Holder or
Holders of a majority in aggregate principal amount of then outstanding
Securities may waive compliance with any provision of this Indenture or the
Securities without notice to any other Holders; provided, however, that if any amendment, waiver or other
modification will only affect the Dollar Securities or the Sterling Securities,
only the consent of the Holders of at least a majority


 


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in principal amount of the then
outstanding Dollar Securities or Sterling Securities (and not the consent of at
least a majority of all Securities), as the case may be, shall be required.


 


(b)           Notwithstanding Section 9.02(a),
without the consent of each Holder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not (with respect to any
Securities held by a non-consenting Holder):


 


(1)           reduce the principal amount of
Securities whose Holders must consent to an amendment, supplement or waiver;


 


(2)           reduce the principal of or change the
fixed maturity of any Security or alter the provisions with respect to the
redemption of the Securities (other than provisions of Sections 4.09 and 4.13
and the optional redemption provisions contained in the Securities);


 


(3)           reduce the rate of or change the time
for payment of interest on any Security;


 


(4)           waive a Default or Event of Default
in the payment of principal, or interest or premium, or Additional Interest, if
any, on the Securities (except a rescission of acceleration of the Securities
by the Holders of at least a majority in aggregate principal amount of the
Securities and a waiver of the payment default that resulted from such
acceleration);


 


(5)           make any Security payable in money
other than that stated in the Securities other than to the extent the United
Kingdom adopts the euro;


 


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


 


(7)           waive a redemption payment with
respect to any Security (other than a payment required by one of the provisions
of Section 4.09 or Section 4.13 and the optional redemption provisions
contained in the Securities);


 


(8)           make any change in the preceding
amendment and waiver provisions; or


 


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


 


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


 


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


 


SECTION 9.03.                                         Effect
on Senior Debt.


 


No amendment
of, or supplement or waiver to, this Indenture shall adversely affect the
rights of any holder of Senior Debt under the subordination provisions of this
Indenture (including without limitation the provisions of Article Ten and
Section 11.02 hereof) and the defined terms as used therein without the consent
of such holder or its Representative.


 


SECTION 9.04.                                         Compliance
with TIA.


 


From the date
on which this Indenture is qualified under the TIA, every amendment, waiver or
supplement of this Indenture, the Securities or the Subsidiary Guarantees shall
comply with the TIA as then in effect.


 


SECTION 9.05.                                         Revocation
and Effect of Consents.


 


(a)             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 Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his Security or
portion of his Security by notice to the Trustee or the Issuer received before
the date on which the Trustee receives an Officers’ Certificate certifying that
the Holders of the requisite principal amount of Securities have consented (and
not theretofore revoked such consent) to the amendment, supplement or waiver.


 


(b)             The Issuer 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 at least 30 days prior to the first solicitation of such consent. If a
record date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Securityholders 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 90 days after such record date. The Issuer shall inform the
Trustee in writing of the fixed record date if applicable.


 


(c)             After an amendment, supplement or
waiver becomes effective, it shall bind every Securityholder, unless it makes a
change described in any of clauses (1) through


 


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(8) of Section 9.02(b), in
which case, the amendment, supplement or waiver shall bind only each Holder of
a Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security; provided that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.


 


SECTION 9.06.                                         Notation
on or Exchange of Securities.


 


If an
amendment, supplement or waiver changes the terms of a Security, the Issuer may
require the Holder of the Security to deliver it to the Trustee. The Issuer
shall provide the Trustee with an appropriate notation on the Security about
the changed terms and cause the Trustee to return it to the Holder at the
Issuer’s expense. Alternatively, if the Issuer or the Trustee so determines,
the Issuer in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.


 


SECTION 9.07.                                         Trustee
To Sign Amendments, Etc.


 


The Trustee
shall execute any amendment, supplement or waiver authorized pursuant to this
Article Nine; provided that the
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee’s own rights, duties or
immunities under this Indenture. The Trustee 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 and constitutes the legal, valid and binding obligations of the
Issuer enforceable in accordance with its terms. Such Opinion of Counsel shall
be at the expense of the Issuer.


 


ARTICLE TEN


 


SUBORDINATION OF SECURITIES


 


SECTION 10.01.                                   Securities
Subordinated to Senior Debt.


 


Anything
herein to the contrary notwithstanding, the Issuer, for itself and its
successors, and each Holder, by his or her acceptance of Securities, agrees
that the payment of all Obligations owing to the Holders in respect of the
Securities is subordinated, to the extent and in the manner provided in this
Article Ten, to the prior payment in full in cash or Cash


 


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Equivalents, or such payment
duly provided for to the satisfaction of the holders of Senior Debt, of all
Obligations on Senior Debt (including the Obligations with respect to the
Senior Credit Facility, whether outstanding on the Issue Date or thereafter
incurred). Notwithstanding the foregoing, payments and distributions made
relating to the Securities from the trust established pursuant to Article Eight
shall not be so subordinated in right of payment, so long as (i) the conditions
specified in Article Eight (without any waiver or modification of the
requirement that the deposits pursuant thereto do not conflict with the teens
of the Credit Agreement or any other Senior Debt) are satisfied on the date of
any deposit pursuant to said trust and (ii) such payments and distributions did
not violate the provisions of this Article Ten or Section 11.02 when made.


 


This Article
Ten shall constitute a continuing offer to all Persons who become holders of,
or continue to hold, Senior Debt, and such provisions are made for the benefit
of the holders of Senior Debt and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.


 


SECTION 10.02.                                   Suspension
of Payment When Designated Senior Debt Is in Default.


 


(a)           If
any default occurs and is continuing beyond any applicable grace period and is
continuing when payment is due, whether at maturity, upon any redemption, by
declaration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Senior Debt (a “Payment
Default”), then no
payment or distribution of any kind or character shall be made by or on behalf
of the Issuer or any other Person on its or their behalf with respect to any
Obligations on or relating to the Securities or to acquire any of the
Securities for cash or assets or otherwise unless the default has been cured or
waived; provided, however, that the Issuer may pay the Securities without
regard to the foregoing if the Issuer and the Trustee receive written notice
approving such payment from the representative of the holders of such
Designated Senior Debt.


 


(b)           If
any other event of default (other than a Payment Default) occurs and is
continuing with respect to any Designated Senior Debt (as such event of default
is defined in the instrument creating or evidencing such Designated Senior
Debt) permitting the holders of such Designated Senior Debt then outstanding to
accelerate the maturity thereof (a “Non-payment
Default”) and if the
Representative for the respective issue of Designated Senior Debt gives notice
of the event of default to the Trustee stating that such notice is a payment
blockage notice (a “Payment Blockage Notice”), then during the period (the “Payment Blockage Period”) beginning upon the delivery of such
Payment Blockage Notice and ending on the earlier of the 179th day after such
delivery and the date on which (x) all events of default with respect to all
Designated Senior Debt have been cured or waived or cease to exist, (y) all
Designated Senior Debt with respect to which any such event of default has
occurred and is continuing is discharged or paid in full in cash or cash equivalents, or (z) the Trustee


 


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receives notice thereof from
the Representative for the respective issue of Designated Senior Debt
terminating the Payment Blockage Period, neither the Issuer nor any other
Person on its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on or with respect to the Securities or (y) acquire
any of the Securities for cash or assets or otherwise. Notwithstanding anything
herein to the contrary, (x) in no event will a Payment Blockage Period extend
beyond 179 days from the date the applicable Payment Blockage Notice is
received by the Trustee and (y) only one such Payment Blockage Period may be
commenced within any 360 consecutive days. For
all purposes of this Section 10.02(b), no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Debt shall be, or be made, the basis for the
commencement of a second Payment Blockage Period by the Representative of such
Designated Senior Debt whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of
not less than 90 consecutive days (it being acknowledged that any subsequent
action, or any breach of any financial covenants for a period ending after the
date of commencement of such Payment Blockage Period that, in either case,
would give rise to an event of default pursuant to any provisions under which
an event of default previously existed or was continuing shall constitute a new
event of default for this purpose).


 


(c)           The
foregoing Sections 10.02(a) and (b) shall not apply to payments and distributions
made relating to the Securities from the trust established pursuant to Article
Eight, so long as (i) the conditions specified in Article Eight (without any
waiver or modification of the requirement that the deposits pursuant thereto do
not conflict with the terms of the Credit Agreement or any other Senior Debt) are satisfied on the date of any deposit
pursuant to said trust and (ii) such payments and distributions did not violate
the provisions of this Article Ten when made. In addition, Holders may also
receive and retain Permitted Junior Securities.


 


(d)           In
the event that, notwithstanding the foregoing, any payment shall be received by
the Trustee or any Holder when such payment is prohibited by the foregoing
provisions of this Section 10.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt (pro rata to such holders on the basis of
the respective amount of Senior Debt held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Debt, if any, received from the holders of Senior Debt (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from the Issuer and only amounts included in the
information provided to the Trustee shall be paid to the holders of Senior
Debt.


 


Nothing contained in this Article Ten shall
limit the right of the Trustee or the Holders of Securities to take any action
to accelerate the maturity of the Securities pursuant to Section 6.02 or to
pursue any rights or remedies hereunder; provided
that all Senior Debt


 


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thereafter due or declared to
be due shall first be paid in full in cash or cash equivalents before the
Holders are entitled to receive any payment of any kind or character with
respect to Obligations on the Securities.


 


SECTION 10.03.       Securities
Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation or

Reorganization of the Issuer.


 


(a)           Upon
any payment or distribution of assets of the Issuer of any kind or character,
whether in cash, assets or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of the Issuer or
in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Issuer or its assets, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Debt shall
first be paid in full in cash or cash equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, before any
payment or distribution of any kind or character is made on account of any
Obligations on or relating to the Securities, or for the acquisition of any of
the Securities for cash or assets or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding,
any payment or distribution of assets of the Issuer of any kind or character, whether
in cash, assets or securities, to which the Holders or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
the Issuer or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders or
by the Trustee under this Indenture if received by them, directly to the
holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining unpaid
until all such Senior Debt has been paid in full in cash or cash equivalents
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of Senior Debt.


 


(b)           To
the extent any payment of Senior Debt (whether by or on behalf of the Issuer,
as proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be
paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated
and outstanding as if such payment had not occurred.


 


It is further
agreed that any diminution (whether pursuant to court decree or otherwise,
including without limitation for any of the reasons described in the preceding
sentence) of the Issuer’s obligation to make any distribution or payment
pursuant to any Senior


 


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Debt, except to the extent such
diminution occurs by reason of the repayment (which has not been disgorged or
returned) of such Senior Debt in cash or cash equivalents, shall have no force
or effect for purposes of the subordination provisions contained in this
Article Ten, with any turnover of payments as otherwise calculated pursuant to
this Article Ten to be made as if no such diminution had occurred.


 


(c)           In
the event that, notwithstanding the foregoing, any payment or distribution of
assets of the Issuer of any kind or character, whether in cash, assets or
securities, shall be received by any Holder when such payment or distribution
is prohibited by this Section 10.03, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt (pro rata to such holders on the basis of
the respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Debt.


 


(d)           The
consolidation of the Issuer with, or the merger of the Issuer with or into,
another corporation, partnership, trust or limited liability company or the
liquidation or dissolution of the Issuer following the conveyance or transfer
of all or substantially all of its assets, to another corporation, partnership,
trust or limited liability company upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, assume the Issuer’s obligations
hereunder in accordance with Article Five hereof.


 


SECTION 10.04.                                   Payments
May Be Made Prior to Dissolution.


 


Nothing
contained in this Article Ten or elsewhere in this Indenture shall prevent (i)
the Issuer, except under the conditions described in Sections 10.02 and 10.03,
from making payments at any time for the purpose of making payments of
principal of and interest on the Securities, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual
knowledge by the Trustee that a given payment would be prohibited by Section
10.02 or 10.03, the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of, and interest on, the
Securities to the Holders entitled thereto unless at least two Business Days
prior to the date upon which such payment would otherwise become due and
payable a Responsible Officer of the Trustee shall have actually received the
written notice provided for in the first sentence of Section 10.02(b) or in
Section 10.07 (provided that, notwithstanding the foregoing,
the Holders receiving any payments made in contravention of Section 10.02
and/or 10.03 (and the respective such payments) 


 


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shall otherwise be subject to
the provisions of Section 10.02 and Section 10.03). The Issuer shall give
prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Issuer, although any delay or failure to
give any such notice shall have no effect on the subordination provisions
contained herein.


 


SECTION 10.05.                                   Holders
To Be Subrogated to Rights of Holders of Senior Debt.


 


Subject to the
payment in full in cash or cash equivalents of all Senior Debt, the Holders of
the Securities shall be subrogated to the rights of the holders of Senior Debt
to receive payments or distributions of cash, assets or securities of the
Issuer applicable to the Senior Debt until the Securities shall be paid in
full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Debt by or on behalf of the Issuer,
or by or on behalf of the Holders by virtue of this Article Ten, which
otherwise would have been made to the Holders shall, as between the Issuer and
the Holders, be deemed to be a payment by the Issuer to or on account of the
Senior Debt, it being understood that the provisions of this Article Ten are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Debt, on the other hand.


 


SECTION 10.06.                                   Obligations
of the Issuer Unconditional.


 


Nothing
contained in this Article Ten or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Issuer, its creditors
other than the holders of Senior Debt, and the Holders, the obligation of the
Issuer, which is absolute and unconditional, to pay to the Holders the
principal of and any interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Issuer other
than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Holder of any Security or the Trustee on its behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, in respect of cash, assets or
securities of the Issuer received upon the exercise of any such remedy.


 


SECTION 10.07.                                   Notice
to Trustee.


 


The Issuer
shall give prompt written notice to the Trustee of any fact known to the Issuer
which would prohibit the making of any payment to or by the Trustee in respect
of the Securities pursuant to the provisions of this Article Ten, although any
delay or failure to give any such notice shall have no effect on the
subordination provisions contained herein. Regardless of anything to the
contrary contained in this Article Ten or elsewhere in this Indenture, the
Trustee shall not be charged with knowledge of the existence of any default or
event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from the Issuer, or from a
holder of Senior Debt or a Representative therefor and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in


 


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the absence of actual knowledge
to the contrary) that no such facts exist. The Trustee shall be entitled to
rely on the delivery to it of any notice pursuant to this Section 10.07 to
establish that such notice has been given by a holder of Senior Debt (or a
trustee thereof).


 


In the event
that the Trustee determines in good faith that any evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article Ten, the Trustee may
request such Person to furnish evidence to the satisfaction of the Trustee as
to the amounts of Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Ten, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.


 


SECTION 10.08.                                   Reliance
on Judicial Order or Certificate of Liquidating Agent.


 


Upon any
payment or distribution of assets of the Issuer referred to in this Article
Ten, the Trustee, subject to the provisions of Article Seven hereof, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Debt and other Indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Ten.


 


SECTION 10.09.                                   Trustee’s
Relation to Senior Debt.


 


The Trustee
and any agent of the Issuer or the Trustee shall be entitled to all the rights
set forth in this Article Ten with respect to any Senior Debt which may at any
time be held by it in its individual or any other capacity to the same extent
as any other holder of Senior Debt and nothing in this Indenture shall deprive
the Trustee or any such agent of any of its rights as such holder.


 


With respect
to the holders of Senior Debt, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in
this Article Ten, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt.


 


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Whenever a
distribution is to be made or a notice given to holders or owners of Senior
Debt, the distribution may be made and the notice may be given to their
Representative, if any.


 


SECTION 10.10.                                   Subordination
Rights Not Impaired by Acts or Omissions of the Issuer or Holders of Senior
Debt.


 


No right of
any present or future holders of any Senior Debt to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Issuer
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.


 


Without in any
way limiting the generality of the foregoing paragraph, the holders of Senior
Debt may, at any time and from time to time, without the consent of or notice
to the Trustee, without incurring responsibility to the Trustee or the Holders
and without impairing or releasing the subordination provided in this Article
Ten or the obligations hereunder of the Holders to the holders of the Senior
Debt, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt, or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the payment or collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Issuer and any other
Person.


 


SECTION 10.11.                                   Securityholders
Authorize Trustee To Effectuate Subordination of Securities.


 


Each Holder by
its acceptance of them authorizes and expressly directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate, as
between the holders of Senior Debt and the Holders, the subordination provided
in this Article Ten, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation
or reorganization of the Issuer (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the
business and assets of the Issuer, the filing of a claim for the unpaid balance
of its Securities and accrued interest in the form required in those
proceedings.


 


If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of the Senior Debt or their Representative
are or is hereby authorized to have the right to file and are or is hereby
authorized to file an appropriate claim for and on


 


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behalf of the Holders of said
Securities. Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Senior Debt or their Representative to authorize or consent
to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior
Debt or their Representative to vote in respect of the claim of any Holder in
any such proceeding.


 


SECTION 10.12.                                   This
Article Ten Not To Prevent Events of Default.


 


The failure to
make a payment on account of principal of or interest on the Securities by
reason of any provision of this Article Ten will not be construed as preventing
the occurrence of an Event of Default.


 


SECTION 10.13.                                   Trustee’s
Compensation Not Prejudiced.


 


Nothing in
this Article Ten will apply to amounts due to the Trustee (other than payments
of Obligation owing to Holders in respect of Securities) pursuant to other sections
of this Indenture.


 


ARTICLE ELEVEN


 


GUARANTEES


 


SECTION 11.01.                                   Unconditional
Guarantee.


 


Subject to the
provisions of this Article Eleven, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably guarantees, on a senior subordinated
basis to each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Securities or the obligations of the
Issuer or any other Guarantors to the Holders or the Trustee hereunder or
thereunder: (a) (x) the due and punctual payment of the principal of, premium,
if any, and interest on the Securities when and as the same shall become due
and payable, whether at maturity, upon redemption or repurchase, by
acceleration or otherwise, (y) the due and punctual payment of interest on the
overdue principal and (to the extent permitted by law) interest, if any, on the
Securities and (z) the due and punctual payment and performance of all other
obligations of the Issuer and all other obligations of the other Guarantors
(including under the Guarantees), in each case, to the Holders or the Trustee
hereunder or thereunder (including amounts due the Trustee under Section 7.07
hereof), all in accordance with the terms hereof and thereof (collectively, the
“Guarantee
Obligations”); and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, the due
and punctual payment and performance of Guarantee Obligations in


 


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accordance with the terms of
the extension or renewal, whether at maturity, upon redemption or repurchase,
by acceleration or otherwise. Failing payment when due of any amount so
guaranteed, or failing performance of any other obligation of the Issuer to the
Holders under this Indenture or under the Securities, for whatever reason, each
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the
Securities shall constitute an event of default under the Subsidiary
Guarantees, and shall entitle the Holders to accelerate the obligations of the
Guarantors thereunder in the same manner and to the same extent as the
obligations of the Issuer.


 


Each of the
Guarantors hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, any
release of any other Guarantor, the recovery of any judgment against the
Issuer, any action to enforce the same, whether or not a Guarantee is affixed
to any particular Security, or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each of
the Guarantors hereby waives the benefit of diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Issuer, any right to require a proceeding first against the Issuer,
protest, notice and all demands whatsoever and covenants that its Subsidiary
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and the Guarantee. The
Guarantee is a guarantee of payment and not of collection. If any Holder or the
Trustee is required by any court or otherwise to return to the Issuer or to any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Issuer or such Guarantor, any amount paid by the
Issuer or such Guarantor to the Trustee or such Holder, the Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders of Securities and the Trustee, on the other hand, (a) subject to this
Article Eleven, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of the Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of the Guarantee.


 


SECTION 11.02.                                   Subordination
of Guarantee.


 


The
obligations of each Guarantor under its Guarantee pursuant to this Article
Eleven shall be junior and subordinated to the prior payment in full in cash
or Cash Equivalents of the Senior Debt of such Guarantor on the same basis as
the Securities are junior and subordinated to Senior Debt of the Issuer. For
the purposes of the foregoing sentence, the Trustee and the Holders shall have
the right to receive and/or retain payments by any of the


 


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Guarantors only at such times
as they may receive and/or retain payments in respect of the Securities
pursuant to this Indenture, including Article Ten hereof.


 


SECTION 11.03.                                   Limitation
on Guarantor Liability.


 


Each
Guarantor, and by its acceptance of Securities, each Holder, hereby confirms
that it is the intention of all such parties that the Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to
any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such Guarantor
under its Guarantee and this Article Eleven shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article Eleven,
result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent transfer or conveyance.


 


SECTION 11.04.                                   Execution
and Delivery of Subsidiary Guarantee for Future Guarantors.


 


To further
evidence its Guarantee set forth in Section 11.01, each Subsidiary and other
Person that is required to become a Guarantor hereby agrees to execute a
supplement to this Indenture or a Guarantee, substantially in the form of Exhibit
H hereto, and deliver it to the Trustee. Such Guarantee or supplement to
this Indenture shall be executed on behalf of each Guarantor by either manual
or facsimile signature of one Officer or other person duly authorized by all
necessary corporate action of each Guarantor who shall have been duly
authorized to so execute by all requisite corporate action. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is
not affixed to any particular Security.


 


Each of the
Guarantors hereby agrees that its Guarantee set forth in Section 11.01 shall
remain in full force and effect notwithstanding any failure to endorse on each
Security a notation of such Guarantee.


 


If an Officer
of a Guarantor whose signature is on this Indenture or a Guarantee no longer
holds that office at the time the Trustee authenticates the Security on which
such Guarantee is endorsed or at any time thereafter, such Guarantor’s
Guarantee of such Security shall nevertheless be valid.


 


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


 


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SECTION 11.05.                                   Release
of a Guarantor.


 


The Guarantee
of a Guarantor will be released:


 


(1)           (a) upon the sale,
disposition or other transfer (including through merger or consolidation) of
all of the Capital Stock (or any sale, disposition or other transfer of Capital
Stock following which the applicable Guarantor is no longer a Restricted
Subsidiary), or all or substantially all the assets, of the applicable
Guarantor if such sale, disposition or other transfer is made in compliance
with the applicable provisions of this Indenture,


 


(b)           if the Issuer designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.11 and the definition of “Unrestricted Subsidiary,”
or


 


(c)           in the case of any Restricted
Subsidiary which after the Issue Date is required to guarantee the Securities
pursuant to Section 4.16, upon the release or discharge of the guarantee by such
Restricted Subsidiary of Indebtedness of the Issuer or any Restricted
Subsidiary of the Issuer or such Restricted Subsidiary or the
repayment of the Indebtedness or Disqualified Stock, in each case, which
resulted in the obligation to guarantee the Securities; and


 


(2) in the case of clause (1)(a) above, if such Guarantor is released
from its guarantee, if any, of, and all pledges and security, if any, granted
in connection with, the Credit Agreement and any other Indebtedness of the
Issuer or any Restricted Subsidiary;


 


provided, however, in any case that any
such termination shall occur only to the extent that all obligations of such
Guarantor under all of its Guarantees of any Indebtedness of the Issuer or any
Indebtedness of any other Guarantor shall also terminate upon such release and none of its Equity
Interests are pledged for the benefit of any holder of any Indebtedness of the
Issuer or any Indebtedness of any Restricted Subsidiary of the Issuer.


 


The Trustee shall execute an appropriate instrument prepared by the
Issuer evidencing the release of a Guarantor from its obligations under its
Guarantee upon receipt of a request by the Issuer or such Guarantor accompanied
by an Officers’ Certificate and an Opinion of Counsel certifying as to the
compliance with this Section 11.05; provided, however, that
the legal counsel delivering such Opinion of Counsel may rely as to matters of
fact on one or more Officers’ Certificates of the Issuer.


 


Except as set forth in Articles Four and Five and this Section 11.05,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor with or into the Issuer or another
Guarantor or shall prevent any sale or


 


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conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Issuer or
another Guarantor.


 


SECTION 11.06.                                   Waiver
of Subrogation.


 


Until this
Indenture is discharged and all of the Securities are discharged and paid in
full, each Guarantor hereby irrevocably waives and agrees not to exercise any
claim or other rights which it may now or hereafter acquire against the Issuer
that arise from the existence, payment, performance or enforcement of the
Issuer’s obligations under the Securities or this Indenture and such Guarantor’s
obligations under the Guarantee and this Indenture, in any such instance
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, and any right to participate in any
claim or remedy of the Holders against the Issuer, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Issuer,
directly or indirectly, in cash or other assets or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence
and any amounts owing to the Trustee or the Holders under the Securities, this
Indenture, or any other document or instrument delivered under or in connection
with such agreements or instruments, shall not have been paid in full, such
amount shall have been deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Trustee or the Holders
and shall forthwith be paid to the Trustee for the benefit of itself or such
Holders to be credited and applied to the obligations in favor of the Trustee or
the Holders, as the case may be, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.06 is knowingly made in contemplation of such benefits.


 


SECTION 11.07.                                   Immediate
Payment.


 


Each Guarantor
agrees to make immediate payment to the Trustee on behalf of the Holders of all
Guarantee Obligations owing or payable to the respective Holders upon receipt
of a demand for payment therefor by the Trustee to such Guarantor in writing.


 


SECTION 11.08.                                   No
Setoff.


 


Each payment
to be made by a Guarantor hereunder in respect of the Guarantee Obligations
shall be payable in the currency or currencies in which such Guarantee
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.


 


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SECTION 11.09.                                   Guarantee
Obligations Absolute.


 


Subject to the
provisions of Section 11.02, the obligations of each Guarantor hereunder are
and shall be absolute and unconditional and any monies or amounts expressed to
be owing or payable by each Guarantor hereunder which may not be recoverable
from such Guarantor on the basis of a Guarantee shall be recoverable from such
Guarantor as a primary obligor and principal debtor in respect thereof.


 


SECTION 11.10.                                   Guarantee
Obligations Continuing.


 


The
obligations of each Guarantor hereunder shall be continuing and shall remain in
full force and effect until all such obligations have been paid and satisfied
in full. Each Guarantor agrees with the Trustee that it will from time to time
deliver to the Trustee suitable acknowledgments of this continued liability
hereunder and under any other instrument or instruments in such form as counsel
to the Trustee may advise and as will prevent any action brought against it in
respect of any default hereunder being barred by any statute of limitations now
or hereafter in force and, in the event of the failure of a Guarantor so to do,
it hereby irrevocably appoints the Trustee the attorney and agent of such
Guarantor to make, execute and deliver such written acknowledgment or
acknowledgments or other instruments as may from time to time become necessary
or advisable, in the judgment of the Trustee on the advice of counsel, to fully
maintain and keep in force the liability of such Guarantor hereunder.


 


SECTION 11.11.                                   Guarantee
Obligations Not Reduced.


 


The
obligations of each Guarantor hereunder shall not be satisfied, reduced or
discharged solely by the payment of such principal, premium, if any, interest,
fees and other monies or amounts as may at any time prior to discharge of this
Indenture pursuant to Article Eight be or become owing or payable under or by
virtue of or otherwise in connection with the Securities or this Indenture.


 


SECTION 11.12.                                   Guarantee
Obligations Reinstated.


 


The
obligations of each Guarantor hereunder shall continue to be effective or shall
be reinstated, as the case may be, if at any time any payment which would
otherwise have reduced the obligations of any Guarantor hereunder (whether such
payment shall have been made by or on behalf of the Issuer or by or on behalf
of a Guarantor) is rescinded or reclaimed from any of the Holders upon the
insolvency, bankruptcy, liquidation or reorganization of the Issuer or any
Guarantor or otherwise, all as though such payment had not been made. If demand
for, or acceleration of the time for, payment by the Issuer or any other
Guarantor is stayed upon the insolvency, bankruptcy, liquidation or
reorganization of the Issuer or such Guarantor, all such Indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
each Guarantor as provided herein.


 


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SECTION 11.13.                                   Guarantee
Obligations Not Affected.


 


The
obligations of each Guarantor hereunder shall not be affected, impaired or
diminished in any way by any act, omission, matter or thing whatsoever,
occurring before, upon or after any demand for payment hereunder (and whether
or not known or consented to by any Guarantor or any of the Holders) which, but
for this provision, might constitute a whole or partial defense to a claim
against any Guarantor hereunder or might operate to release or otherwise
exonerate any Guarantor from any of its obligations hereunder or otherwise
affect such obligations, whether occasioned by default of any of the Holders or
otherwise, including, without limitation:


 


(a)           any limitation of status or power,
disability, incapacity or other circumstance relating to the Issuer or any
other Person, including any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, winding-up or other
proceeding involving or affecting the Issuer or any other Person;


 


(b)           any irregularity,
defect, unenforceability or invalidity in respect of any indebtedness or other
obligation of the Issuer or any other Person under this Indenture, the
Securities or any other document or instrument;


 


(c)           any failure of the
Issuer or any other Guarantor, whether or not without fault on its part, to
perform or comply with any of the provisions of this Indenture, the Securities
or any Guarantee, or to give notice thereof to a Guarantor;


 


(d)           the taking or
enforcing or exercising or the refusal or neglect to take or enforce or
exercise any right or remedy from or against the Issuer or any other Person or
their respective assets or the release or discharge of any such right or
remedy;


 


(e)           the granting of
time, renewals, extensions, compromises, concessions, waivers, releases,
discharges and other indulgences to the Issuer or any other Person;


 


(f)            any change in the
time, manner or place of payment of, or in any other term of, any of the
Securities, or any other amendment, variation, supplement, replacement or
waiver of, or any consent to departure from, any of the Securities or this
Indenture, including, without limitation, any increase or decrease in the
principal amount of or premium, if any, or interest on any of the Securities;


 


(g)           any change in the
ownership, control, name, objects, businesses, assets, capital structure or
constitution of the Issuer or a Guarantor;


 


(h)           any merger or amalgamation of the
Issuer or a Guarantor with any Person or Persons;


 


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(i)            the occurrence of any change in the
laws, rules, regulations or ordinances of any jurisdiction by any present or
future action of any governmental authority or court amending, varying,
reducing or otherwise affecting, or purporting to amend, vary, reduce or
otherwise affect, any of the Guarantee Obligations or the obligations of a
Guarantor under its Guarantee; and


 


(j)            any other circumstance, including
release of the Guarantor pursuant to Section 11.05 (other than by complete,
irrevocable payment) that might otherwise constitute a legal or equitable
discharge or defense of the Issuer under this Indenture or the Securities or of
a Guarantor in respect of its Guarantee hereunder.


 


SECTION 11.14.                                   Waiver.


 


Without in any
way limiting the provisions of Section 11.01, each Guarantor hereby waives
notice of acceptance hereof, notice of any liability of any Guarantor
hereunder, notice or proof of reliance by the Holders upon the obligations of
any Guarantor hereunder, and diligence, presentment, demand for payment on the
Issuer, protest, notice of dishonor or non-payment of any of the Guarantee
Obligations, or other notice or formalities to the Issuer or any Guarantor of
any kind whatsoever.


 


SECTION 11.15.                                   No
Obligation To Take Action Against the Issuer.


 


Neither the
Trustee nor any other Person shall have any obligation to enforce or exhaust
any rights or remedies against the Issuer or any other Person or any property
of the Issuer or any other Person before the Trustee is entitled to demand
payment and performance by any or all Guarantors of their liabilities and
obligations under their Guarantees or under this Indenture.


 


SECTION 11.16.                                   Dealing
with the Issuer and Others.


 


The Holders,
without releasing, discharging, limiting or otherwise affecting in whole or in
part the obligations and liabilities of any Guarantor hereunder and without the
consent of or notice to any Guarantor, may


 


(a)           grant time, renewals, extensions,
compromises, concessions, waivers, releases, discharges and other indulgences
to the Issuer or any other Person;


 


(b)           take or abstain from taking security
or collateral from the Issuer or from perfecting security or collateral of the
Issuer;


 


(c)           release, discharge, compromise,
realize, enforce or otherwise deal with or do any act or thing in respect of
(with or without consideration) any and all collateral,


 


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mortgages or
other security given by the Issuer or any third party with respect to the
obligations or matters contemplated by this Indenture or the Securities;


 


(d)           accept compromises or arrangements
from the Issuer;


 


(e)           apply all monies at any time received
from the Issuer or from any security upon such part of the Guarantee
Obligations as the Holders may see fit or change any such application in whole
or in part from time to time as the Holders may see fit; and


 


(f)            otherwise deal with, or waive or
modify their right to deal with, the Issuer and all other Persons and any
security as the Holders or the Trustee may see fit.


 


SECTION 11.17.                                   Default
and Enforcement.


 


If any
Guarantor fails to pay in accordance with Section 11.07 hereof, the Trustee may
proceed in its name as trustee hereunder in the enforcement of the Subsidiary
Guarantee of any such Guarantor and such Guarantor’s obligations thereunder and
hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.


 


SECTION 11.18.                                   Amendment,
Etc.


 


No amendment,
modification or waiver of any provision of this Indenture relating to any
Guarantor or consent to any departure by any Guarantor or any other Person from
any such provision will in any event be effective unless it is signed by such
Guarantor and the Trustee.


 


SECTION 11.19.                                   Acknowledgment.


 


Each
Guarantor, if any, hereby acknowledges communication of the terms of this
Indenture and the Securities and consents to and approves of the same.


 


SECTION 11.20.                                   Costs
and Expenses.


 


Each Guarantor
shall pay on demand by the Trustee any and all costs, fees and expenses
(including, without limitation, legal fees on a solicitor and client basis)
incurred by the Trustee, its agents, advisors and counsel or any of the Holders
in enforcing any of their rights under any Guarantee.


 


SECTION 11.21.                                   No
Merger or Waiver; Cumulative Remedies.


 


No Guarantee
shall operate by way of merger of any of the obligations of a Guarantor under
any other agreement, including, without limitation, this Indenture. No failure


 


128





















 


to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, remedy, power
or privilege hereunder or under this Indenture or the Securities, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or under this Indenture or the Securities
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
in the Guarantee and under this Indenture, the Securities and any other
document or instrument between a Guarantor and/or the Issuer and the Trustee
are cumulative and not exclusive of any rights, remedies, powers and privilege
provided by law.


 


SECTION 11.22.                                   Survival
of Guarantee Obligations.


 


Without
prejudice to the survival of any of the other obligations of each Guarantor
hereunder, the obligations of each Guarantor under Section 11.01 shall survive
the payment in full of the Guarantee Obligations and shall be enforceable
against such Guarantor without regard to and without giving effect to any
defense, right of offset or counterclaim available to or which may be asserted
by the Issuer or any Guarantor.


 


SECTION 11.23.                                   Guarantee
in Addition to Other Guarantee Obligations.


 


The
obligations of each Guarantor under its Guarantee and this Indenture are in
addition to and not in substitution for any other obligations to the Trustee or
to any of the Holders in relation to this Indenture or the Securities and any
guarantees or security at any time held by or for the benefit of any of them.


 


SECTION 11.24.                                   Severability.


 


Any provision
of this Article Eleven which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction unless its removal would
substantially defeat the basic intent, spirit and purpose of this Indenture and
this Article Eleven.


 


SECTION 11.25.                                   Successors
and Assigns.


 


Each Guarantee
shall be binding upon and inure to the benefit of each Guarantor and the
Trustee and the other Holders and their respective successors and permitted
assigns, except that no Guarantor may assign any of its obligations hereunder
or thereunder.


 


129





















 


ARTICLE TWELVE


 


MISCELLANEOUS


 


SECTION 12.01.                                   TIA
Controls.


 


If any
provision of this Indenture limits, qualifies, or conflicts with another
provision which is required or deemed to be included in this Indenture by the
TIA, such required or deemed provision shall control.


 


SECTION 12.02.                                   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 nationally
recognized overnight courier service, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:


 


if to the
Issuer:


 


WMG
Acquisition Corp.


c/o Warner
Music Group, Inc.


75 Rockefeller
Plaza,


New York, NY
10019


Attention:
General Counsel


 


Telephone:                 (212)
275-2030


Facsimile:                         (212)
258-3092


 


with a copy
to:


 


Simpson
Thacher & Bartlett LLP


425 Lexington
Avenue


New York, NY
10017


Attention:
Edward P. Tolley III


 


Telephone:                 (212)
455-2000


Facsimile:                         (212)
455-2502


 


130





















 


if to the
Trustee:


 


Wells Fargo
Bank, National Association


Corporate
Trust Department


Sixth Street
and Marquette Avenue


N9303-120


Minneapolis,
MN 55179


Attention:
Jeffery Rose


 


Telephone:                 (612)
667-0337


Facsimile:                         (612)
667-9825


 


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


 


Any notice or
communication mailed to a Securityholder shall be mailed to him by first class
mail or other equivalent means at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.


 


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


 


SECTION 12.03.                                   Communications
by Holders with Other Holders.


 


Securityholders
may communicate pursuant to TIA § 312(b) with other Securityholders with
respect to their rights under this Indenture, the Securities or the Subsidiary
Guarantees. The Issuer, the Trustee, the Registrar and any other Person shall
have the protection of TIA § 312(c).


 


SECTION 12.04.                                   Certificate
and Opinion as to Conditions Precedent.


 


Upon any
request or application by the Issuer to the Trustee to take any action under
this Indenture, the Issuer shall furnish to the Trustee at the request of the
Trustee:


 


131





















 


(1)           an Officers’ Certificate, in form and
substance satisfactory to the Trustee, stating that, in the opinion of the
signers, all conditions precedent to be performed or effected by the Issuer, if
any, provided for in this Indenture relating to the proposed action have been
complied with; and


 


(2)           an Opinion of
Counsel stating that, in the opinion of such counsel, any and all such
conditions precedent have been complied with.


 


SECTION 12.05.                                   Statements
Required in Certificate or Opinion.


 


Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture, other than 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
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with or satisfied; and


 


(4)           a statement as to
whether or not, in the opinion of each such Person, such condition or covenant
has been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or
certificates of public officials.


 


SECTION 12.06.                                   Rules
by Trustee, Paying Agent, Registrar.


 


The Trustee,
Paying Agent or Registrar may make reasonable rules for its functions.


 


SECTION 12.07.                                   Legal
Holidays.


 


If a payment
date is not a Business Day, payment may be made on the next succeeding day that
is a Business Day.


 


132





















 


SECTION 12.08.                                   Governing
Law.


 


This Indenture, the Securities and the
Guarantees, if any, will be governed by and construed in accordance with the
laws of the State of New York.


 


SECTION 12.09.                                   No
Adverse Interpretation of Other Agreements.


 


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


 


SECTION 12.10.                                   No
Recourse Against Others.


 


No director,
officer, employee, incorporator or stockholder of the Issuer or any direct or
indirect parent corporation or of any Guarantor, as such, shall have any
liability for any obligations of the Issuer or the Guarantors under the
Securities or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. Such waiver and release are
part of the consideration for issuance of the Securities.


 


SECTION 12.11.                                   Successors.


 


All agreements
of the Issuer in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successor.


 


SECTION 12.12.                                   Duplicate
Originals.


 


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


 


SECTION 12.13.                                   Severability.


 


In case any
one or more of the provisions in this Indenture or in the Securities 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 12.14.                                   Currency
of Account; Conversion of Currency; Foreign Exchange Restrictions.


 


(a)           U.S.
Dollars are the sole currency of account
and payment for all sums payable by the Issuer and the Guarantors under
or in connection with the Dollar Securities,


 


133





















 


the Guarantees of the Dollar
Securities or this Indenture to the extent it relates to the Dollar Securities,
including damages related thereto, and pounds sterling are the sole currency of
account and payment for all sums payable by the Issuer and the Guarantors under
or in connection with the Sterling Securities, the Guarantees of the Sterling
Securities or this Indenture to the extent it relates to the Sterling
Securities, including damages related thereto. Any amount received or recovered
in a currency other than U.S. Dollars by a Holder of Dollar Securities or
pounds sterling by a Holder of Sterling Securities (whether as a result of, or
of the enforcement of, a judgment or order of a court of any jurisdiction, in
the winding-up or dissolution of the Issuer or otherwise) in respect of any sum
expressed to be due to it from the Issuer shall only constitute a discharge to the Issuer to the
extent of the U.S. Dollar or pounds sterling amount, as the case may be, which
the recipient is able to purchase with the amount so received or recovered in
that other currency on the date of that receipt or recovery (or, if it is not
practicable to make that purchase on that date, on the first date on which it
is practicable to do so). If that U.S. Dollar or pounds sterling amount is less
than the U.S. Dollar or pounds sterling amount expressed to be due to the
recipient under the applicable Securities, the Issuer shall indemnify it
against any loss sustained by it as a result as set forth in Section 12.14(b).
In any event, the Issuer and the Guarantors shall indemnify the recipient
against the cost of making any such purchase. For the purposes of this Section
12.14, it will be sufficient for the Holder of a Security to certify in a
satisfactory manner (indicating sources of information used) that it would have
suffered a loss had an actual purchase of U.S. Dollars or pounds sterling, as
the case may be, been made with the amount so received in that other currency
on the date of receipt or recovery (or, if a purchase of U.S. Dollars or pounds
sterling, as applicable, on such date had not been practicable, on the first
date on which it would have been practicable, it being required that the need
for a change of date be certified in the manner mentioned above). The
indemnities set forth in this Section 12.14 constitute separate and independent
obligations from other obligations of the Issuer and the Guarantors, shall give
rise to a separate and independent cause of action, shall apply irrespective of
any indulgence granted by any Holder of the Securities and shall continue in
full force and effect despite any other judgment, order, claim or proof for a
liquidated amount in respect of any sum due under the Securities.


 


(b)           The Issuer and the Guarantors,
jointly and severally, covenant and agree that the following provisions shall
apply to conversion of currency in the case of the Securities, the Guarantees
and this Indenture:


 


(1)           (A)          If for the purpose of obtaining
judgment in, or enforcing the judgment of, any court in any country, it becomes
necessary to convert into a currency (the “Judgment Currency”) an
amount due in any other currency (the “Base Currency”),
then the conversion shall be made at the rate of exchange prevailing on the
Business Day before the day on which the judgment is given or the order of
enforcement is made, as the case may be (unless a court shall otherwise
determine).


 


134





















 


(B)           If there is a change
in the rate of exchange prevailing between the Business Day before the day on
which the judgment is given or an order of enforcement is made, as the case may
be (or such other date as a court shall determine), and the date of receipt of
the amount due, the Issuer and the Guarantors will pay such additional (or, as
the case may be, such lesser) amount, if any, as may be necessary so that the
amount paid in the Judgment Currency when converted at the rate of exchange
prevailing on the date of receipt will produce the amount in the Base Currency
originally due.


 


(2)           In the event of the
winding-up of the Issuer or any Guarantor at any time while any amount or
damages owing under the Securities, the Guarantees and this Indenture, or any
judgment or order rendered in respect thereof, shall remain outstanding, the
Issuer and the Guarantors shall indemnify and hold the Holders and the Trustee
harmless against any deficiency arising or resulting from any variation in
rates of exchange between (i) the date as of which the U.S. Dollar Equivalent
or equivalent amount in pounds sterling, as applicable, of the amount due or
contingently due under the Securities, the Guarantees and this Indenture (other
than under this subsection (b)(2)) is calculated for the purposes of such
winding-up and (ii) the final date for the filing of proofs of claim in such
winding-up. For the purpose of this subsection (b)(2), the final date for the
filing of proofs of claim in the winding-up of the Issuer or any Guarantor
shall be the date fixed by the liquidator or otherwise in accordance with the
relevant provisions of applicable law as being the latest practicable date as
at which liabilities of the Issuer or such Guarantor may be ascertained for
such winding-up prior to payment by the liquidator or otherwise in respect
thereto.


 


(c)           The obligations contained in
subsections (a), (b)(1)(B) and (b)(2) of this Section 12.14 shall constitute
separate and independent obligations from the other obligations of the Issuer
and the Guarantors under this Indenture, shall give rise to separate and
independent causes of action against the Issuer and the Guarantors, shall apply
irrespective of any waiver or extension granted by any Holder or the Trustee or
either of them from time to time and shall continue in full force and effect
notwithstanding any judgment or order or the filing of any proof of claim in
the winding-up of the Issuer or any Guarantor for a liquidated sum in respect
of amounts due hereunder (other than under subsection (b)(2) above) or under
any such judgment or order. Any such deficiency as aforesaid shall be deemed to
constitute a loss suffered by the Holders or the Trustee, as the case may be,
and no proof or evidence of any actual loss shall be required by the Issuer or
any Guarantor or the liquidator or otherwise or any of them. In the case of
subsection (b)(2) above, the amount of such deficiency shall not be deemed to
be reduced by any variation in rates of exchange occurring between the said
final date and the date of any liquidating distribution.


 


(d)           The term “rate(s) of exchange” shall
mean the rate of exchange quoted by Reuters at 10:00 a.m. (New York time) for
spot purchases of the Base Currency with the


 


135





















 


Judgment Currency other than
the Base Currency referred to in subsections (b)(1) and (b)(2) above and
includes any premiums and costs of exchange payable.


 


136





















 


SIGNATURES


 


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


 


	
   

  	
  WMG ACQUISITION CORP.,

  as the Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Robinson

  
	
   

  	
   

  	
  Name: Paul
  Robinson

  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By each of
  the Subsidiaries listed on Schedule I hereto:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  Robinson

  
	
   

  	
   

  	
  Name: Paul
  Robinson

  Title: Vice President

  



 





















 


	
   

  	
  WELLS FARGO
  BANK,

  NATIONAL ASSOCIATION,

    as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank
  McDonald

  
	
   

  	
   

  	
  Name: Frank
  McDonald

  Title: Vice President

  



 


S-2


















EXHIBIT A


 


[FORM OF INITIAL DOLLAR SECURITY]


 


WMG ACQUISITION CORP.

7 3/8% Senior Subordinated Notes due 2014


 


CUSIP No.     


ISIN No.     


 


	
  No.

  	
  $[

  	
  ]

  



 


WMG
ACQUISITION CORP., a Delaware corporation (the “Company,” which term includes
any successor corporation), for value received promises to pay to CEDE &
CO. or its registered assigns, the principal sum of [                      ]
dollars ($[                      ])
on April 15, 2014.


 


Interest
Payment Dates: April 15 and October 15, commencing October 15, 2004.


 


Record Dates:
April 1 and October 1.


 


Reference is
made to the further provisions of this Dollar Security contained herein, which
will for all purposes have the same effect as if set forth at this place.


 


A-1





















 


IN WITNESS
WHEREOF, the Company has caused this Security to be signed manually or by
facsimile by its duly authorized officers.


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-2





















 


CERTIFICATE OF AUTHENTICATION


 


This is one of
the 7 3/8% Senior Subordinated Notes due 2014 described in the within-mentioned
Indenture.


 


	
  Dated:

  	
  WELLS FARGO
  BANK,

  NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  



 


A-3





















 


(Reverse of Dollar Security)

WMG Acquisition Corp.


 


7 3/8% Senior Subordinated Notes due 2014


 


[Insert the Global Security Legend, if applicable pursuant to the provisions of the Indenture]


 


[Insert the Private
Placement Legend, if applicable
pursuant to the provisions of the
Indenture]


 


Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.


 


SECTION 1.  Interest. WMG Acquisition Corp., a
Delaware corporation (the “Company”), promises to pay interest on the
principal amount of this Dollar Security at 7 3/8% per annum from April 8, 2004
until maturity. The Company will pay interest semiannually on April 15 and
October 15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an “Interest
Payment Date”). Interest
on the Dollar Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance; provided that
if there is no existing Default in the payment of interest, and if this Dollar
Security is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be October 15, 2004. The Company shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand to the extent lawful at the interest rate applicable to the Dollar
Securities; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30 day months.


 


SECTION 2.  Method of Payment. The Company will pay
interest on the Dollar Securities (except defaulted interest) to the Persons
who are registered Holders of Dollar Securities at the close of business on the
April 1 or October 1 next preceding the Interest Payment Date, even if such
Dollar Securities are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.13 of the Indenture with
respect to defaulted interest. The Dollar Securities will be issued in
denominations of $5,000 and integral multiples of $1,000. The Company shall pay
principal, premium, if any and interest on the Dollar Securities in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts (“U.S. Legal Tender”). Principal, premium, if any, and
interest on the Dollar Securities will be payable at the office or agency of
the Company maintained for such purpose or, at the option of the


 


A-4





















 


Company, payment of interest
may be made by check mailed to the Holders at their respective addresses set
forth in the register of Holders; provided that
all payments of principal, premium and interest with respect to Dollar
Securities the Holders of which have given wire transfer instructions to the
Company prior to the Record Date will be required to be made by wire transfer
of immediately available funds to the accounts specified by the Holders
thereof. Until otherwise designated by the Company, the Company’s office or
agency in New York will be the office of the Trustee maintained for such
purpose.


 


SECTION 3. Paying
Agent and Registrar. Initially, Wells Fargo Bank, National Association, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any Affiliate may act in any such capacity.


 


SECTION 4. Indenture
and Subordination. The Company issued the Securities under an Indenture
dated as of April 8, 2004 (“Indenture”) between the Company and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”).
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of such terms. To the extent any
provision of this Security conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling. The
payment of the Securities will, to the extent set forth in the Indenture, be
subordinated in right of payment to the prior payment in full in cash or Cash
Equivalents of all Senior Debt.


 


SECTION 5. Optional
Redemption. (a) The Securities may be redeemed, in whole or in part, at any
time prior to April 15, 2009, at the option of the Company upon not less than
30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as of,
and accrued and unpaid interest and Additional Interest, if any, to, the
applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).


 


For purposes
of the preceding paragraph, the following terms will have the following
definitions:


 


“Applicable
Premium” means, with respect to any Security on any applicable
redemption date, the greater of:


 


(1)           1.0% of the then outstanding
principal amount of the Security; and


 


(2)           the excess of:


 


(a)           the present value at
such redemption date of (i) the redemption price of the Security at April 15,
2009, as applicable (such redemption price being set forth in the table
appearing under paragraph (b)) plus (ii) all required


 


A-5





















 


interest
payments due on the Dollar Security through April 15, 2009, as applicable
(excluding accrued but unpaid interest), computed using a discount rate equal
to the Treasury Rate as of such redemption date plus 50 basis points; over


 


(b)           the then outstanding
principal amount of the Security.


 


“Treasury Rate” means,
as of the applicable redemption date, the yield to maturity as of such
redemption date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two business
days prior to such redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from such redemption date to April 15, 2009; provided, however, that
if the period from such redemption date to April 15, 2009 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used.


 


(b)           On or after April 15, 2009, the
Dollar Securities will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Additional Interest
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 15 of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  103.688

  	
  %

  
	
  2010

  	
   

  	
  102.458

  	
  %

  
	
  2011

  	
   

  	
  101.229

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


SECTION 6. Optional
Redemption upon Equity Offering. At any time on or prior to April 15, 2007,
the Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Dollar Securities issued under the Indenture (calculated
after giving effect to the issuance of Additional Dollar Securities) at a
redemption price equal to 107.375% of the principal amount thereof, plus
accrued and unpaid interest and Additional Interest thereon, if any, to the
redemption date, with the net cash proceeds of Equity Offerings; provided
that (i) at least 65% of the aggregate principal amount of Dollar
Securities issued under the Indenture (calculated after giving effect to the
issuance of Additional Dollar Securities) remains outstanding immediately after
the occurrence of such redemption (excluding Dollar Securities held by the Company
and its Subsidiaries) and (ii) such redemption shall occur within 90 days of
the date of the closing of such Equity Offering (disregarding the date of the
closing of any over-allotment option
with respect thereto).


 


A-6





















 


SECTION 7. Mandatory
Redemption. For the avoidance of doubt, an offer to purchase pursuant to
Section 8 hereof shall not be deemed a redemption. The Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Securities.


 


SECTION 8. Offers
To Purchase. The Indenture provides that upon the occurrence of a Change of
Control or an Asset Sale and subject to further limitations contained therein,
the Company shall make an offer to purchase outstanding Securities in
accordance with the procedures set forth in the Indenture.


 


SECTION 9. Notice
of Redemption. Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address. Dollar
Securities in denominations larger than $5,000 may be redeemed in part. If any
Security is to be redeemed in part only, the notice of redemption that relates
to such Security shall state the portion of the principal amount thereof to be
redeemed. A new Security in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Security. On and after the redemption date interest ceases to accrue
on Securities or portions thereof called for redemption.


 


SECTION 10. Denominations,
Transfer, Exchange. The Dollar Securities are in registered form without
coupons in denominations of $5,000 and integral multiples of $1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company or the Registrar is not required to
transfer or exchange any Security selected for redemption. Also, the Company or
the Registrar is not required to transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.


 


SECTION 11. Persons
Deemed Owners. The registered Holder of a Security may be treated as its
owner for all purposes.


 


SECTION 12. Amendment,
Supplement and Waiver. Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or compliance with any provision may
be waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency
in the Indenture, provide for uncertificated Securities in addition to
certificated Securities, comply with any requirements of the Commission in
connection with the qualification of the Indenture under the TIA, or make any
change that does not adversely affect the rights of any Holder of a Security; provided, however, that
if any amendment,


 


A-7





















 


waiver or other modification
will only affect the Dollar Securities or the Sterling Securities, only the
consent of the Holders of at least a majority in principal amount of the then
outstanding Dollar Securities or Sterling Securities (and not the consent of at
least a majority of all Securities), as the case may be, shall be required.


 


SECTION 13. Defaults
and Remedies. If a Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities generally may declare all the Securities to be due and payable
immediately. Notwithstanding the foregoing, in the case of a Default arising
from certain events of bankruptcy or insolvency as set forth in the Indenture,
with respect to the Company, all outstanding Securities will become due and
payable without further action or notice. Holders of the Securities may not
enforce the Indenture or the Securities except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing Default (except a Default relating to the payment of principal
or interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Securities waive any Default and its consequences under the Indenture except a
continuing Default in the payment of interest on, or the principal of the
Securities or in respect of certain covenants set forth in the Indenture.


 


SECTION 14. Restrictive
Covenants. The Indenture contains certain covenants that, among other
things, limit the ability of the Company and its Restricted Subsidiaries to
make restricted payments, to incur indebtedness, to create liens, to sell
assets, to permit restrictions on dividends and other payments by Restricted
Subsidiaries of the Company, to consolidate, merge or sell all or substantially
all of its assets or to engage in transactions with affiliates. The limitations
are subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.


 


SECTION 15. No
Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Company or any direct or indirect parent corporation or any
Guarantor, as such, shall have any liability for any obligations of the Company
or the Guarantors under the Securities, the Indenture, the Guarantors’ Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Securities by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Securities.


 


SECTION 16. Trustee
Dealings with the Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


A-8





















 


SECTION 17. Authentication.
This Security shall not be valid until authenticated by the manual signature of
the Trustee or an authenticating agent.


 


SECTION 18. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), 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).


 


SECTION 19. Additional
Rights of Holders of Restricted Global Securities  and Restricted
Definitive Securities. Pursuant to, but subject to the exceptions in, the
Registration Rights Agreement, the Company and the Guarantors, if any, will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Security shall have the right to exchange this Initial Security for a 7 3/8%
Senior Subordinated Note due 2014 of the Company which shall have been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects to this Initial Security (except that such
note shall not be entitled to Additional Interest). The Holders shall be
entitled to receive certain Additional Interest in the event such exchange
offer is not consummated or the Securities are not offered for resale and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.(a)


 










(a)           This
Section not to appear on Exchange Securities.


 


SECTION 20. Guarantees.
The Securities will be entitled to the benefits of certain Guarantees made for
the benefit of the Holders. Reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.


 


SECTION 21. 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 Securities and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.


 


SECTION 22. Governing
Law. This Security shall be governed by,
and construed in accordance with, the laws of the State of New York


 


The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture.


 


 


A-9





















 


ASSIGNMENT FORM


 


I or we assign
and transfer this Security to:


 


	
   

  
	
  (Insert assignee’s social security or tax I.D. number)

  
	
   

  
	
   

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

  



 


and
irrevocably appoint:


 


Agent to
transfer this Security on the books of the Company. The Agent may substitute
another to act for him.


 


	
  Date:

  	
   

  	
  Your Signature:  

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
						



 


 


SIGNATURE GUARANTEE


 


Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 





















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Security purchased by the Company pursuant to Section 4.09
or Section 4.13 of the Indenture, check the appropriate box:


 


Section 4.09 o      Section 4.13 o


 


If you want to
elect to have only part of this Security purchased by the Company pursuant to
Section 4.09 or Section 4.13 of the Indenture, state the amount: $


 


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

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

  	
   

  
	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
  Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor program reasonably acceptable to the Trustee)

  	
   

  
								



 


2





















 


EXHIBIT B


 


[FORM OF INITIAL STERLING SECURITY]


 


WMG ACQUISITION CORP.

8 1/8% Senior Subordinated Notes due 2014


 


CUSIP No.


ISIN No.


Common Code


	
  No.

  	
  £ [

  	
  ]

  



 


WMG
ACQUISITION CORP., a Delaware corporation (the “Company,” which term includes
any successor corporation), for value received promises to pay to HSBC ISSUER
SERVICES COMMON DEPOSITARY NOMINEE (UK) LIMITED or its registered assigns, the
principal sum of [                       ]
pounds sterling (£[                       ])
on April 15, 2014.


 


Interest
Payment Dates: April 15 and October 15 commencing October 15, 2004.


 


Record Dates:
April 1 and October 1.


 


Reference is
made to the further provisions of this Sterling Security contained herein,
which will for all purposes have the same effect as if set forth at this place.


 


B-1





















 


IN WITNESS
WHEREOF, the Company has caused this Security to be signed manually or by
facsimile by its duly authorized officers.


 


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


B-2





















 


CERTIFICATE OF AUTHENTICATION


 


This is one of
the 8 1/8% Senior Subordinated Notes due 2014 described in the within-mentioned
Indenture.


 


	
  Dated:

  	
  WELLS FARGO
  BANK,

  NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  



 


B-3





















 


(Reverse of Sterling Security)


WMG Acquisition Corp.


 


8 1/8% Senior Subordinated Notes due 2014


 


[Insert the Global Security Legend, if
applicable pursuant to the provisions of the Indenture]


 


[Insert the Private Placement Legend,
if applicable pursuant to the
provisions of the Indenture]


 


Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.


 


SECTION 1. Interest.
WMG Acquisition Corp., a Delaware corporation (the “Company”), promises to pay interest on the
principal amount of this Sterling Security at 8 1/8% per annum from April 8,
2004 until maturity. The Company will pay interest semiannually on April 15 and
October 15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an “Interest Payment Date”). Interest on
the Sterling Securities will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of original
issuance; provided that if there
is no existing Default in the payment of interest, and if this Sterling
Security is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be October 15,
2004. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand to the extent lawful at the interest rate
applicable to the Sterling Securities; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30 day months.


 


SECTION 2. Method
of Payment. The Company will pay interest on the Sterling Securities
(except defaulted interest) to the Persons who are registered Holders of
Sterling Securities at the close of business on the April 1 or October 1 next
preceding the Interest Payment Date, even if such Securities are canceled after
such record date and on or before such Interest Payment Date, except as
provided in Section 2.13 of the Indenture with respect to defaulted interest.
The Sterling Securities will be issued in denominations of £5,000 and integral
multiples of £1,000. The Company shall pay principal, premium, if any and
interest on the Sterling Securities in such coin or currency of the United
Kingdom as at the time of payment is legal tender for payment of public and
private debts (“U.K. Legal Tender”). Principal, premium, if any, and
interest on the Sterling Securities will be payable at the office or agency of
the Company maintained for such purpose or, at the option of the Company,
payment of interest may be made by check mailed to the Holders at their
respective addresses set


 


B-4





















 


forth in the register of
Holders; provided that all payments of principal,
premium and interest with respect to Securities the Holders of which have given
wire transfer instructions to the Company prior to the Record Date will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Trustee maintained for such purpose.


 


SECTION 3. PayingAgent and Registrar. Initially, HSBC Bank plc will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any Affiliate may act in any such
capacity.


 


SECTION 4. Indenture
and Subordination. The Company issued the Securities under an Indenture
dated as of April 8, 2004 (“Indenture”) between the Company and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”).
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of such terms. To the extent any
provision of this Security conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling. The
payment of the Securities will, to the extent set forth in the Indenture, be
subordinated in right of payment to the prior payment in full in cash or Cash
Equivalents of all Senior Debt.


 


SECTION 5. Optional
Redemption. (a) The Securities may be redeemed, in whole or in part, at any
time prior to April 15, 2009, at the option of the Company upon not less than
30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as of,
and accrued and unpaid interest and Additional Interest, if any, to, the
applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).


 


For purposes
of the preceding paragraph, the following terms will have the following
definitions:


 


“Applicable
Premium” means, with respect to any Security on any
applicable redemption date, the greater of:


 


(1)           1.0% of the then outstanding
principal amount of the Security; and


 


(2)           the excess of:


 


(a)           the present value at
such redemption date of (i) the redemption price of the Security at April 15,
2009, as applicable (such redemption price being set forth in the table
appearing under paragraph (b)) plus (ii) all required interest payments due on
the Security through April 15, 2009, as applicable (excluding accrued but
unpaid interest), computed using a discount rate equal to the Treasury Rate as
of such redemption date plus 50 basis points; over


 


B-5





















 


(b)           the then outstanding
principal amount of the Security.


 


“Treasury Rate” means
the yield to maturity as of such redemption date of U.K. Government Securities
with a constant maturity (as compiled by the Office for National Statistics and
published in the most recent financial statistics that have become publicly
available at least two business days in London prior to such redemption date
(or, if such financial statistics are no longer published, any publicly
available source of similar market data)) most nearly equal to the period from
such redemption date to April 15, 2009; provided, however, that if the period from
such redemption date to April 15, 2009 is less than one year, the weekly
average yield on actually traded U.K. Government Securities adjusted to a constant maturity of one year shall
be used.


 


(b)           On or after April 15, 2009, the
Sterling Securities will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Additional Interest
thereon, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 15 of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  104.063

  	
  %

  
	
  2010

  	
   

  	
  102.708

  	
  %

  
	
  2011

  	
   

  	
  101.354

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


SECTION 6. Optional
Redemption upon Equity Offering. At any time on or prior to April 15, 2007,
the Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Sterling Securities issued under the Indenture (calculated
after giving effect to the issuance of Additional Sterling Securities) at a
redemption price equal to 108.125% of the principal amount thereof, plus
accrued and unpaid interest and Additional Interest thereon, if any, to the redemption
date, with the net cash proceeds of Equity Offerings; provided that
(i) at least 65% of the aggregate principal amount of Sterling Securities
issued under the Indenture (calculated after giving effect to the issuance of
Additional Sterling Securities) remains outstanding immediately after the
occurrence of such redemption (excluding Sterling Securities held by the
Company and its Subsidiaries) and (ii) such redemption shall occur within 90
days of the date of the closing of such Equity Offering (disregarding the date
of the closing of any over-allotment option with respect thereto).


 


SECTION 7. Mandatory
Redemption. For the avoidance of doubt, an offer to purchase pursuant to
Section 8 hereof shall not be deemed a redemption. The Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Securities.


 


B-6





















 


SECTION 8. Offers
To Purchase. The Indenture provides that upon the occurrence of a Change of
Control or an Asset Sale and subject to further limitations contained therein,
the Company shall make an offer to purchase outstanding Securities in
accordance with the procedures set forth in the Indenture.


 


SECTION 9. Notice
of Redemption. Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at its registered address. Sterling
Securities in denominations larger than £5,000 may be redeemed in part. If any
Security is to be redeemed in part only, the notice of redemption that relates
to such Security shall state the portion of the principal amount thereof to be
redeemed. A new Security in principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of
the original Security. On and after the redemption date interest ceases to
accrue on Securities or portions thereof called for redemption.


 


SECTION 10. Denominations,
Transfer, Exchange. The Sterling Securities are in registered form without
coupons in denominations of £5,000 and integral multiples of £1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company or the Registrar is not required to
transfer or exchange any Security selected for redemption. Also, the Company or
the Registrar is not required to transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.


 


SECTION 11. Persons
Deemed Owners. The registered Holder of a Security may be treated as its
owner for all purposes.


 


SECTION 12. Amendment,
Supplement and Waiver. Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or compliance with any provision may
be waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency
in the Indenture, provide for uncertificated Securities in addition to
certificated Securities, comply with any requirements of the Commission in
connection with the qualification of the Indenture under the TIA, or make any
change that does not adversely affect the rights of any Holder of a Security; provided, however, that
if any amendment, waiver or other modification will only affect the Dollar
Securities or the Sterling Securities, only the consent of the Holders of at
least a majority in principal amount of the then outstanding Dollar Securities
or Sterling Securities (and not the consent of at least a majority of all
Securities), as the case may be, shall be required.


 


B-7





















 


SECTION 13. Defaults
and Remedies. If a Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities generally may declare all the Securities to be due and payable
immediately. Notwithstanding the foregoing, in the case of a Default arising from
certain events of bankruptcy or insolvency as set forth in the Indenture, with
respect to the Company, all outstanding Securities will become due and payable
without further action or notice. Holders of the Securities may not enforce the
Indenture or the Securities except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default relating to the payment of principal or interest) if
it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Securities
waive any Default and its consequences under the Indenture except a continuing
Default in the payment of interest on, or the principal of the Securities or in
respect of certain covenants set forth in the Indenture.


 


SECTION 14. Restrictive
Covenants. The Indenture contains certain covenants that, among other
things, limit the ability of the Company and its Restricted Subsidiaries to
make restricted payments, to incur indebtedness, to create liens, to sell
assets, to permit restrictions on dividends and other payments by Restricted
Subsidiaries of the Company, to consolidate, merge or sell all or substantially
all of its assets or to engage in transactions with affiliates. The limitations
are subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.


 


SECTION 15. No
Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Company or any direct or indirect parent corporation or any
Guarantor, as such, shall have any liability for any obligations of the Company
or the Guarantors under the Securities, the Indenture, the Guarantors’
Subsidiary Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Securities by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Securities.


 


SECTION 16. Trustee
Dealings with the Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


SECTION 17. Authentication.
This Security shall not be valid until authenticated by the manual signature of
the Trustee or an authenticating agent.


 


SECTION 18. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), 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-8





















 


SECTION 19. Additional
Rights of Holders of Restricted Global Securities and Restricted Definitive
Securities. Pursuant to, but subject to the exceptions in, the Registration
Rights Agreement, the Company and the Guarantors, if any, will be obligated to
consummate an exchange offer pursuant to which the Holder of this Security
shall have the right to exchange this Initial Security for a 8 1/8% Senior
Subordinated Note due 2014 of the Company which shall have been registered
under the Securities Act, in like principal amount and having terms identical
in all material respects to this Initial Security (except that such note shall
not be entitled to Additional Interest). The Holders shall be entitled to
receive certain Additional Interest in the event such exchange offer is not
consummated or the Securities are not offered for resale and upon certain other
conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement. (a)


 










(a)           This
Section not to appear on Exchange Securities.


 


SECTION 20. Guarantees.
The Securities will be entitled to the benefits of certain Guarantees made for
the benefit of the Holders. Reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.


 


SECTION 21. CUSIP
Numbers, ISINs and Common Codes. The Company has caused CUSIP numbers and
ISINs and, in the case of the Sterling Securities, Common Codes to be printed
on the Securities and has directed the Trustee to use CUSIP numbers and ISINs
and, in the case of the Sterling Securities, Common Codes in notices of
redemption as a convenience to the Holders. No representation is made as to the
accuracy of such numbers either as printed on the Securities or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.


 


SECTION 22. Governing
Law. This Security shall be governed by,
and construed in accordance with, the laws of the State of New York.


 


The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture.


 


 


B-9





















 


ASSIGNMENT FORM


 


I or we assign
and transfer this Security to:


 


	
   

  
	
  (Insert assignee’s social security or tax I.D. number)

  
	
   

  
	
   

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

  



 


and
irrevocably appoint:


 


Agent to
transfer this Security on the books of the Company. The Agent may substitute
another to act for him.


 


	
  Date:

  	
   

  	
  Your Signature:  

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
						



 


SIGNATURE GUARANTEE


 


Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 





















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Security purchased by the Company pursuant to Section 4.09
or Section 4.13 of the Indenture, check the appropriate box:


 


Section 4.09 o      Section 4.13 o


 


If you want to
elect to have only part of this Security purchased by the Company pursuant to
Section 4.09 or Section 4.13 of the Indenture, state the amount: £


 


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

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

  	
   

  
	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
  Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor program reasonably acceptable to the Trustee)

  	
   

  
								



 





















 


EXHIBIT C-1


 


[FORM OF LEGEND FOR DOLLAR 144A SECURITIES AND

OTHER DOLLAR SECURITIES THAT ARE RESTRICTED SECURITIES]


 


The Securities evidenced hereby have not been
registered under the United States Securities Act of 1933, as amended (the “Securities
Act”), and may not be offered, sold, pledged or otherwise transferred except
(a) (1) to a person who the seller reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act
purchasing for its own account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A, (2) in an
offshore transaction complying with Rule 903 or Rule 904 of Regulation S under
the Securities Act, (3) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available), (4) to an
institutional accredited investor in a transaction exempt from the registration
requirements of the Securities Act or (5) pursuant to an effective registration
statement under the Securities Act and (b) in accordance with all applicable
securities laws of the United States and other jurisdictions.


 


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EXHIBIT C-2


 


[FORM OF LEGEND FOR STERLING 144A SECURITIES AND

OTHER STERLING SECURITIES THAT ARE RESTRICTED SECURITIES]


 


THIS SECURITY (OR ITS PREDECESSOR) HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. 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 (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT
OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A OR (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE
CASE OF RULE 144A SECURITIES: TWO YEARS] [IN THE
CASE OF REGULATION S SECURITIES: 40 DAYS] AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT 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 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 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 RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM


 


C-2-1





















 


PRINCIPAL
AMOUNT OF THE SECURITIES OF THE POUNDS STERLING EQUIVALENT OF $250,000, 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, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT 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 (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.


 


Each Definitive Sterling Security shall bear the following additional
legend:


 


IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.


 


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[FORM OF ASSIGNMENT FOR 144A SECURITIES

AND OTHER SECURITIES THAT ARE RESTRICTED SECURITIES]


 


I or we assign
and transfer this Security to:


 


	
   

  
	
  (Insert assignee’s social security or tax I.D. number)

  
	
   

  
	
   

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

  



 


and
irrevocably appoint:


 


Agent to
transfer this Security on the books of the Issuers. The Agent may substitute
another to act for him.


 


[Check One]


 


o (a) this Security is
being transferred in compliance with the exemption from registration under the
Securities Act provided by Rule 144A thereunder.


 


or


 


o (b) this Security is
being transferred other than in accordance with (a) above and documents are
being furnished which comply with the conditions of transfer set forth in this
Security and the Indenture.


 


If none of the
foregoing boxes is checked, the Trustee or Registrar shall not be obligated to
register this Security 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 Sections 2.16 and 2.17 of the Indenture shall have been
satisfied.


 


	
  Date:

  	
   

  	
  Your Signature: 

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name

  appears on the face of this Security)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
					



 


SIGNATURE GUARANTEE


 


Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 


C-2-3





















 


TO BE COMPLETED BY TRANSFEROR IF (a) ABOVE IS CHECKED


 


The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act, and, accordingly, the Transferor hereby further certifies that
the beneficial interest or certificated Security is being Transferred to a
Person that the Transferor reasonably believed and believes is purchasing the
beneficial interest or certificated Security for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional
buyer” within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A and such Transfer is in compliance with any
applicable securities laws of any state of the United States. Upon consummation
of the proposed Transfer in accordance with the terms of the Indenture, the
Transferred beneficial interest or certificated Security will be subject to the
restrictions on transfer enumerated on the Rule 144A Securities and/or the
certificated Security and in the Indenture and the Securities Act.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:

  	
  To be
  executed by an executive officer

  



 


C-2-4





















 


EXHIBIT D


 


[FORM
OF LEGEND FOR REGULATION S SECURITY]


 


This Security has not been registered under the U.S. Securities Act of
1933, as amended (the “Act”), and, unless so registered, may not be offered,
sold or otherwise transferred within the United States or to, or for the
account or benefit of, U.S. Persons unless registered under the Act or except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Act.


 


In
connection with any transfer, the holder will deliver to the Registrar and
Transfer Agent such certificates and other information as such Transfer Agent
may reasonably require to confirm that the transfer complies with the foregoing
restrictions.


 


D-1





















 


[FORM
OF ASSIGNMENT FOR REGULATION S SECURITY]


 


I or we assign and transfer
this Security to:


 


	
   

  
	
  (Insert assignee’s social security or tax I.D. number)

  
	
   

  
	
   

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

  



 


and irrevocably appoint:


 


Agent to transfer this
Security on the books of the Issuers. The Agent may substitute another to act
for him.


 


[Check
One]


 


o (a) this Security is being transferred in
compliance with the exemption from registration under the Securities Act
provided by Regulation S thereunder.


 


or


 


o (b) this Security is being transferred other
than in accordance with (a) above and documents are being furnished which
comply with the conditions of transfer set forth in this Security and the
Indenture.


 


If none of the foregoing
boxes is checked, the Trustee or Registrar shall not be obligated to register
this Security 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 Sections 2.16 and 2.17 of the Indenture shall have been satisfied.


 


	
  Date:

  	
   

  	
  Your Signature: 

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name
  appears on the face of this Security)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
					



 


SIGNATURE
GUARANTEE


 


Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.


 


D-2





















 


TO
BE COMPLETED BY TRANSFEROR IF (a) ABOVE IS CHECKED


 


The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (iv) if the proposed
Transfer is being made prior to the expiration of the restricted period under
Regulation S, the Transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an initial purchaser). Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the Transferred beneficial interest or certificated Security will be
subject to the restrictions on Transfer enumerated on the Regulation S
Securities and/or the certificated Security and in the Indenture and the
Securities Act.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:

  	
  To be
  executed by an executive officer

  



 


D-3





















 


EXHIBIT E-1


 


[FORM
OF LEGEND FOR GLOBAL DOLLAR SECURITY]


 


 


Any Global Security
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:


 


This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Security is not exchangeable for Securities 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 Security
(other than a transfer of this Security 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 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.


 


E-1-1





















 


EXHIBIT E-2


 


[FORM
OF LEGEND FOR GLOBAL STERLING SECURITY]


 


UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF [            ]
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN A NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF
[            ] (AND
ANY PAYMENT IS MADE TO SUCH ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF
[            ]),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN INTEREST
HEREIN.


 


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


 


E-2-1





















 


EXHIBIT F


 


Form of Certificate To Be

Delivered in Connection with

Transfers to Non-01B Accredited Investors


 


[          ], [     ]


 


Wells Fargo Bank, National Association


Sixth Street and Marquette Avenue


N9303-120


Minneapolis, MN 55179


 


 


Ladies and Gentlemen:


 


In connection
with our proposed purchase of U.S. Dollar-denominated 7 3/8% Senior
Subordinated Notes due 2014 and Sterling-denominated 8 1/8% Senior Subordinated
Notes due 2014 (the “Securities”) of WMG ACQUISITION CORP., a Delaware
corporation (“the Issuer”), we confirm that:


 


1.             We
have received a copy of the Offering Memorandum (the “Offering Memorandum”),
dated April 1, 2004, relating to the Securities 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 such Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.


 


2.             We
understand that any subsequent transfer of the Securities is subject to certain
restrictions and conditions set forth in the Indenture relating to the
Securities (the “Indenture”) as described in the Offering Memorandum and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the “Securities Act”),
and all applicable State securities laws.


 


3.             We
understand that the offer and sale of the Securities have not been registered
under the Securities Act, and that the Securities 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 any Securities, we will do so only (i) to the Issuer 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


 


F-1





















 


“accredited investor” (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Securities (the form of which letter can be obtained from
the Trustee), (iv) outside the United States in accordance with Regulation S
promulgated under the Securities Act to non-U.S. persons, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), (vi) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if the
Issuer so requests) or (vii) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.


 


4.             We
are not acquiring the Securities for or on behalf of, and will not transfer the
Securities to, any pension or welfare plan (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended) or plan (as
defined in Section 4975 of the Internal Revenue Code of 1986, as amended),
except as permitted in the section entitled “Notice to Investors” of the
Offering Circular.


 


5.             We
understand that, on any proposed resale of any Securities, we will be required
to furnish to the Trustee and the Issuer such certification, legal opinions and
other information as the Trustee and the Issuer may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Securities purchased by us will bear a legend to
the foregoing effect.


 


6.             We
are an institutional “accredited investor” (as defined in Rule 501(a)(l), (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 Securities, 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 Securities purchased by us for our 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.


 


F-2





















 


You, the Issuer, the Trustee and others 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
proceeding or official inquiry with respect to the matters covered hereby.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


F-3





















 


EXHIBIT G


 


Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S


 


Wells Fargo Bank, National
Association


Sixth Street and Marquette
Avenue


N9303-120


Minneapolis, MN 55179


 


Re:                               WMG
Acquisition Corp. (“the Issuer”) U.S. Dollar-denominated 7 3/8% Senior
Subordinated Notes due 2014 and Sterling-denominated 8 1/8% Senior Subordinated
Notes due 2014 (the “Securities”)


 


Ladies and Gentlemen:


 


In connection
with our proposed sale of $[       ] or
£[      ] aggregate principal amount of the
Securities, 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 Securities 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 offshore securities market and neither we nor any
person acting on our behalf knows that the transaction has been prearranged
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 Securities.


 


G-1





















 


You, the Issuer and counsel
for the Issuer 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 Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  



 


G-2





















 


EXHIBIT H


 


GUARANTEE


 


Each of the undersigned (the
“Guarantors”) hereby jointly and severally unconditionally guarantees, to the
extent set forth in the Indenture dated as of April 8, 2004 by and among WMG
Acquisition Corp., a Delaware corporation, as issuer (the “Company”), the
Guarantors, as guarantors, and Wells Fargo Bank, National Association, as
Trustee (as amended, restated or supplemented from time to time, the “Indenture”),
and subject to the provisions of the Indenture, (a) the due and punctual
payment of the principal of, and premium, if any, and interest on the
Securities, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on overdue principal of, and premium and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Issuer to the Holders or the Trustee, all in accordance with the terms set
forth in Article Eleven of the Indenture, and (b) in case of any extension of
time of payment or renewal of any Securities 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, whether at stated maturity, by
acceleration or otherwise.


 


The
obligations of the Guarantors to the Holders and to the Trustee pursuant to
this Guarantee and the Indenture are expressly set forth in Article Eleven of
the Indenture, and reference is hereby made to the Indenture for the precise
terms and limitations of this Guarantee. Each Holder of the Security to which
this Guarantee is endorsed, by accepting such Security, agrees to and shall be
bound by such provisions.


 


[Signatures
on Following Pages]


 


H-1





















 


IN WITNESS
WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a
duly authorized officer.


 


	
   

  	
  [                                             ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


H-2