Exhibit 4.1


 


EXECUTION COPY


 


 


PROGRESS RAIL SERVICES CORPORATION


and PROGRESS METAL RECLAMATION COMPANY,


as Issuers,


 


PROGRESS RAIL SERVICES HOLDINGS CORP.,


as Parent Guarantor,


 


The Initial Subsidiary Guarantors name herein


 


and


 


THE BANK OF NEW YORK,


as Trustee


 






 


INDENTURE


 






 


Dated as of March 24, 2005


 


7.75% Senior Notes due 2012


 


 




















 


CROSS-REFERENCE TABLE


 


	
  TIA
  Section

  	
   

  	
  Indenture
  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  310

  	
  (a)(l)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.8; 7.10

  
	
   

  	
  (b)

  	
   

  	
  7.8; 7.10; 13.2

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  13.3

  
	
   

  	
  (c)

  	
   

  	
  13.3

  
	
  3l3

  	
  (a)

  	
   

  	
  7.6

  
	
   

  	
  (b)(1)

  	
   

  	
  7.6

  
	
   

  	
  (b)(2)

  	
   

  	
  7.6

  
	
   

  	
  (c)

  	
   

  	
  7.6; 13.2

  
	
   

  	
  (d)

  	
   

  	
  7.6

  
	
  314

  	
  (a)

  	
   

  	
  4.8; 4.10; 13.2

  
	
   

  	
  (b)

  	
   

  	
  10.4

  
	
   

  	
  (c)(l)

  	
   

  	
  7.2; 13.4; 13.5

  
	
   

  	
  (c)(2)

  	
   

  	
  7.2; 13.4; 13.5

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  10.6

  
	
   

  	
  (e)

  	
   

  	
  13.5

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.l(b)

  
	
   

  	
  (b)

  	
   

  	
  7.5

  
	
   

  	
  (c)

  	
   

  	
  7.1

  
	
   

  	
  (d)

  	
   

  	
  6.5; 7.1(c)

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.7

  
	
   

  	
  (c)

  	
   

  	
  9.5

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.8

  
	
   

  	
  (a)(2)

  	
   

  	
  6.9

  
	
   

  	
  (b)

  	
   

  	
  2.4

  
	
  318

  	
  (a)

  	
   

  	
  13.1

  
	
   

  	
  (c)

  	
   

  	
  13.1

  



 






N.A. means Not
Applicable.


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


 


























 


TABLE OF CONTENTS


 


	
  ARTICLE
  I DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  DEFINITIONS

  	
  1

  
	
  1.2

  	
  INCORPORATION BY
  REFERENCE OF TIA

  	
  26

  
	
  1.3

  	
  RULES OF CONSTRUCTION

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II THE SECURITIES

  	
  27

  
	
   

  	
   

  
	
  2.1

  	
  form
  and dating

  	
  27

  
	
  2.2

  	
  execution
  and authentication

  	
  28

  
	
  2.3

  	
  registrar
  and paying agent

  	
  29

  
	
  2.4

  	
  paying
  agent to hold assEts in trust

  	
  30

  
	
  2.5

  	
  holder
  lists

  	
  30

  
	
  2.6

  	
  transfer
  and exchange

  	
  30

  
	
  2.7

  	
  replacement
  securities

  	
  32

  
	
  2.8

  	
  outstanding
  securities

  	
  32

  
	
  2.9

  	
  treasury
  securities

  	
  32

  
	
  2.10

  	
  temporary
  securities

  	
  32

  
	
  2.11

  	
  cancellation

  	
  33

  
	
  2.12

  	
  defaulted
  interest

  	
  33

  
	
  2.13

  	
  CUSIP and ISIN numbers

  	
  33

  
	
  2.14

  	
  restrictive
  legends

  	
  33

  
	
  2.15

  	
  book-entry
  provisions for global security

  	
  36

  
	
  2.16

  	
  special
  transfer provisions

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III REDEMPTION

  	
  40

  
	
   

  	
   

  
	
  3.1

  	
  notices
  to trustee

  	
  40

  
	
  3.2

  	
  selection
  of securities TO be redeemed

  	
  40

  
	
  3.3

  	
  notice of
  redemption

  	
  41

  
	
  3.4

  	
  effect
  of notice of redemption

  	
  42

  
	
  3.5

  	
  deposit
  of redemption price

  	
  42

  
	
  3.6

  	
  securities
  redeemed in part

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV COVENANTS

  	
  42

  
	
   

  	
   

  
	
  4.1

  	
  payment
  of securities

  	
  42

  
	
  4.2

  	
  maintenance
  of office or agency

  	
  43

  
	
  4.3

  	
  limitation
  on restricted payments

  	
  43

  
	
  4.4

  	
  limitation
  on indebtedness and issuance of preferred stock

  	
  46

  
	
  4.5

  	
  corporate
  existence

  	
  49

  
	
  4.6

  	
  payment
  of taxes and other claims

  	
  49

  
	
  4.7

  	
  maintenance
  of properties and insurance

  	
  50

  
	
  4.8

  	
  compliance
  certificate; notice of default

  	
  50

  
	
  4.9

  	
  compliance
  with laws

  	
  51

  
	
  4.10

  	
  reports
  TO holders

  	
  51

  
	
  4.11

  	
  waiver
  of stay, extension or usury laws

  	
  51

  
	
  4.12

  	
  limitation
  on transactions with shareholders and affiliates

  	
  52

  
	
  4.13

  	
  limitation
  on dividend and other payment restrictions affecting subsidiaries

  	
  53

  
	
  4.14

  	
  limitation
  on the issuance and sale of capital stock of restricted subsidiaries

  	
  55

  
	
  4.15

  	
  limitation
  on issuances of guarantees by restricted subsidiaries

  	
  55

  
	
  4.16

  	
  limitation
  on liens

  	
  56

  
	
  4.17

  	
  change
  oF control

  	
  57

  
	
  4.18

  	
  limitation
  on asset sales

  	
  59

  
	
  4.19

  	
  LIMITATION
  ON BUSINESS ACTIVITIES; LIMITATION ON PRE-ACQUISITION ACTIVITIES

  	
  60

  



 


i















 


	
  4.20

  	
  limitation
  on sale and lease back transactions

  	
  61

  
	
  4.21

  	
  future
  guarantors

  	
  61

  
	
  4.22

  	
  suspension
  of certain covenants and agreements

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V SUCCESSOR CORPORATION

  	
  62

  
	
   

  	
   

  
	
  5.1

  	
  merger,
  consolidation and sale of assets

  	
  62

  
	
  5.2

  	
  successor
  corporation substituted

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI DEFAULT AND REMEDIES

  	
  64

  
	
   

  	
   

  
	
  6.1

  	
  events
  of default

  	
  64

  
	
  6.2

  	
  ACCELERATION

  	
  66

  
	
  6.3

  	
  other
  remedies

  	
  67

  
	
  6.4

  	
  waiver
  oF past defaults

  	
  67

  
	
  6.5

  	
  control
  by majority

  	
  67

  
	
  6.6

  	
  limitation
  on suits

  	
  68

  
	
  6.7

  	
  rights
  of holders to receive payment

  	
  68

  
	
  6.8

  	
  collection
  suit by trustee

  	
  68

  
	
  6.9

  	
  trustee
  may file proofs of claim

  	
  69

  
	
  6.10

  	
  priorities

  	
  69

  
	
  6.11

  	
  undertaking
  for costs

  	
  69

  
	
  6.12

  	
  restoration
  of rights and remedies

  	
  70

  
	
  6.13

  	
  rights
  and remedies cumulative

  	
  70

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII TRUSTEE

  	
  70

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  duties
  oF trustee

  	
  70

  
	
  7.2

  	
  rights
  of trustee

  	
  71

  
	
  7.3

  	
  individual
  rights of trusteE

  	
  73

  
	
  7.4

  	
  trustee’s
  disclaimer

  	
  73

  
	
  7.5

  	
  notice
  of default

  	
  74

  
	
  7.6

  	
  reports
  by trustee to holders

  	
  74

  
	
  7.7

  	
  compensation
  and indemnity

  	
  74

  
	
  7.8

  	
  replacement
  of trustee

  	
  75

  
	
  7.9

  	
  successor
  trustee by merger, etc.

  	
  76

  
	
  7.10

  	
  eligibility;
  disqualification

  	
  76

  
	
  7.11

  	
  preferential
  collection of claims against the issuers

  	
  76

  
	
  7.12

  	
  direction
  to trustee

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII DISCHARGE OF INDENTURE; DEFEASANCE

  	
  77

  
	
   

  	
   

  
	
  8.1

  	
  satisfaction
  and discharge

  	
  77

  
	
  8.2

  	
  legal
  defeasance and covenant defeasance

  	
  78

  
	
  8.3

  	
  conditions
  to legal defeasance or covenant defeasance

  	
  79

  
	
  8.4

  	
  application
  of trust money

  	
  80

  
	
  8.5

  	
  repayment
  to the issuers

  	
  80

  
	
  8.6

  	
  reinstatement

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
  81

  
	
   

  	
   

  
	
  9.1

  	
  without
  consent of holders

  	
  81

  
	
  9.2

  	
  with
  consent of holders

  	
  81

  
	
  9.3

  	
  [intentionally
  omitted]

  	
  82

  
	
  9.4

  	
  compliance
  with tia

  	
  82

  
	
  9.5

  	
  revocation
  and effect of consents

  	
  83

  
	
  9.6

  	
  notation
  on or exchange of securities

  	
  83

  
	
  9.7

  	
  trustee
  to sign amendments, etc.

  	
  83

  



 


ii















 


	
  ARTICLE
  X [INTENTIONALLY OMITTED]

  	
  84

  
	
   

  	
   

  
	
  ARTICLE
  XI GUARANTEE OF SECURITIES

  	
  84

  
	
   

  	
   

  
	
  11.1

  	
  unconditional
  note GUARANTEE

  	
  84

  
	
  11.2

  	
  limitations
  on note guarantees

  	
  85

  
	
  11.3

  	
  execution
  and delivery of note guarantee

  	
  86

  
	
  11.4

  	
  release
  of a guarantor

  	
  86

  
	
  11.5

  	
  waiver
  of SUBROGATION

  	
  87

  
	
  11.6

  	
  immediate
  payment

  	
  88

  
	
  11.7

  	
  NO SET-OFF

  	
  88

  
	
  11.8

  	
  obligations
  absolute

  	
  88

  
	
  11.9

  	
  obligations
  continuing

  	
  88

  
	
  11.10

  	
  obligations
  not reduced

  	
  88

  
	
  11.11

  	
  obligations
  reinstated

  	
  89

  
	
  11.12

  	
  obligations
  not affected

  	
  89

  
	
  11.13

  	
  waiver

  	
  90

  
	
  11.14

  	
  NO OBLIGATION TO TAKE
  ACTION AGAINST THE ISSUERS

  	
  90

  
	
  11.15

  	
  dealing
  with the issuers and others

  	
  90

  
	
  11.16

  	
  default
  and enforcement

  	
  91

  
	
  11.17

  	
  amendment,
  etc.

  	
  91

  
	
  11.18

  	
  acknowledgment

  	
  91

  
	
  11.19

  	
  costs
  and EXPENSES

  	
  91

  
	
  11.20

  	
  NO MERGER OR WAIVER;
  CUMULATIVE REMEDIES

  	
  92

  
	
  11.21

  	
  SURVIVAL OF OBLIGATIONS

  	
  92

  
	
  11.22

  	
  note
  guarantee IN addition to other obligations

  	
  92

  
	
  11.23

  	
  severability

  	
  92

  
	
  11.24

  	
  successors
  and assigns

  	
  92

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII [INTENTIONALLY
  OMITTED]

  	
  93

  
	
   

  	
   

  
	
  ARTICLE
  XIII MISCELLANEOUS

  	
  93

  
	
   

  	
   

  
	
  13.1

  	
  TIA CONTROLS

  	
  93

  
	
  13.2

  	
  notices

  	
  93

  
	
  13.3

  	
  communications
  by holders with other holders

  	
  94

  
	
  13.4

  	
  certificate
  and opinion as to conditions precedent

  	
  94

  
	
  13.5

  	
  statements
  required in certificate or opinion

  	
  94

  
	
  13.6

  	
  rules
  by trustee, paying agent, registrar

  	
  95

  
	
  13.7

  	
  legal
  holidays

  	
  95

  
	
  13.8

  	
  governing
  law

  	
  95

  
	
  13.9

  	
  NO ADVERSE
  INTERPRETATION OF OTHER AGREEMENTS

  	
  95

  
	
  13.10

  	
  NO RECOURSE AGAINST
  OTHERS

  	
  95

  
	
  13.11

  	
  successors

  	
  96

  
	
  13.12

  	
  duplicate
  originals

  	
  96

  
	
  13.13

  	
  SEVERABILITY

  	
  96

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
  S-1

  



 


	
  Exhibit A

  	
  -

  	
  Form of Initial Note

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Exchange Note

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Certificate for
  Transfers to Non-QIB Accredited Investors

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Certificate for
  Transfers Pursuant to Regulation S

  	
   

  
	
  Exhibit E

  	
  -

  	
  Guarantee

  	
   

  
	
  Exhibit F

  	
  -

  	
  Form of Supplemental
  Indenture

  	
   

  



 


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


 


iii















 


EXECUTION COPY


 


INDENTURE dated as of March 24, 2005 among PROGRESS RAIL SERVICES CORPORATION, an
Alabama corporation (“Progress Rail”), and PROGRESS METAL RECLAMATION COMPANY, a Kentucky corporation (“Progress
Metal” and together with Progress Rail, collectively the “Issuers”),
PROGRESS RAIL SERVICES HOLDINGS CORP., a
Delaware corporation, as parent guarantor (“Progress Holdings” or the
“Parent”), the Initial Subsidiary Guarantors named herein and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the “Trustee”).


 


The Issuers have duly authorized the creation of an
issue of 7.75% Senior Notes due 2012 and, when and if issued as provided in the
Registration Rights Agreement in an Exchange Offer, 7.75% Senior Exchange Notes
due 2012, and, to provide therefor, the Issuers have duly authorized the
execution and delivery of this Indenture.  All things necessary to make the
Securities, when duly issued and executed by the Issuers and authenticated and
delivered hereunder, the valid and binding obligations of the Issuers and to
make this Indenture a valid and binding agreement of the Issuers have been
done.


 


This Indenture is subject to, and shall be governed
by, the mandatory provisions of the Trust Indenture Act of 1939, as amended,
that are required to be a part of and to govern indentures qualified under the
Trust Indenture Act of 1939, as amended.


 


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


 


ARTICLE
I


 


DEFINITIONS AND INCORPORATION BY
REFERENCE


 


1.1                              
Definitions


 


“Accredited Investor” has the meaning set forth
in Section 2.16(a).


 


“Acquired Indebtedness” means Indebtedness of a
Person existing at the time such Person becomes a Restricted Subsidiary or
Indebtedness of a Restricted Subsidiary assumed in connection with an Asset
Acquisition by such Restricted Subsidiary; provided
such Indebtedness was not Incurred in connection with or in
contemplation of such Person becoming a Restricted Subsidiary or such Asset
Acquisition.


 


“Acquisition” means the acquisition by the
Parent of Progress Rail and Progress Metal as contemplated by the Merger
Agreement and described in the section of the Offering Memorandum entitled “The
Acquisition.”


 


“Acquisition Date” means the date on which the
Acquisition is consummated on substantially the same terms as described in the
Offering Memorandum and as prescribed in the Merger Agreement, which date shall
be the Issue Date in the event that the Acquisition is consummated by the Issue
Date.


 















 


“Actual Knowledge” means the actual fact or
statement of knowing, without any duty to make any investigation with regard
thereto.


 


“Additional Subsidiary Guarantor” means each
person that becomes a Subsidiary Guarantor after the Issue Date pursuant to
Section 4.15 or 4.21.


 


“Adjusted Consolidated Net Income” means, for
any period, the aggregate net income (or loss) of the Parent and its Restricted
Subsidiaries for such period determined in conformity with GAAP; provided that
the following items shall be excluded in computing Adjusted Consolidated Net
Income (without duplication):


 


(1) the net income
(or loss) of any Person that is not a Restricted Subsidiary (except to the
extent of the amount of cash actually distributed by such Person during such
period to the Parent or any Restricted Subsidiary);


 


(2) solely for the
purpose of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.3 herein, the net
income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Parent or any
of its Restricted Subsidiaries or all or substantially all of the property and
assets of such Person are acquired by the Parent or any of its Restricted
Subsidiaries;


 


(3) the net income
of any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of such net
income is not at the time permitted by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary (except to the
extent of the amount of cash actually distributed by such Restricted Subsidiary
during such period to the Parent or any other Restricted Subsidiary);


 


(4) solely for
purposes of calculating the Fixed Charge Coverage Ratio, any gains or losses
(on an after-tax basis) attributable to sales of assets outside the ordinary
course of business of the Parent and its Restricted Subsidiaries;


 


(5) solely for
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.3, any amount paid
or accrued as dividends on preferred stock owned by Persons other than the
Parent and any of its Restricted Subsidiaries;


 


(6) all
extraordinary or non recurring gains or extraordinary or non recurring losses;


 


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


 


(8) income or loss
attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued); and


 


2















 


(9) the impact
resulting from the change in asset valuations required by Statement of
Financial Accounting Standards No. 141 as a result of the consummation of the
Acquisition on the same terms as described in the Offering Memorandum.


 


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


 


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


 


“Agent Members” has the meaning set forth in
Section 2.15(a).


 


“Applicable Premium” means, with respect to a
Note at any Make-Whole Redemption Date, the excess of (A) the present value
(discounted semi-annually) at such Make-Whole Redemption Date of (1) the
redemption price of such Note on April 1, 2008 (as set forth in paragraph 5 of
the Note) plus (2) all required remaining scheduled interest payments due on
such Securities through April 1, 2008, computed using a discount rate equal to
the Treasury Rate plus 50 basis points over (B) the principal amount of such
Note on such Make-Whole Redemption Date. Calculation of the Applicable Premium
shall be made by the Issuer or on behalf of the Issuers by such person as the
Issuers shall designate


 


“Asset Acquisition” means:


 


(1)                                 
an investment by the
Parent or any of its Restricted Subsidiaries in any other Person pursuant to
which such Person shall become a Restricted Subsidiary or shall be merged into
or consolidated with the Parent or any of its Restricted Subsidiaries, or


 


(2)                                 
an acquisition by the
Parent or any of its Restricted Subsidiaries of the property and assets of any
Person other than the Parent or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person.


 


“Asset Disposition” means the sale or other
disposition by the Parent or any of its Restricted Subsidiaries of (1) all or
substantially all of the Capital Stock of any Restricted Subsidiary or (2) all
or substantially all of the assets that constitute a division or line of
business of the Parent or any of its Restricted Subsidiaries.


 


“Asset Sale” means any sale, transfer or other
disposition (including by way of merger or consolidation or Sale Leaseback
Transaction) in one transaction or a series of related transactions by the
Parent or any of its Restricted Subsidiaries to any Person other than the
Parent or any of its Restricted Subsidiaries of:


 


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


 


3















 


(2)                                 
all or substantially
all of the property and assets of an operating unit or business of the Parent
or any of its Restricted Subsidiaries or


 


(3)                                 
any other property
and assets (other than the Capital Stock or other Investment in an Unrestricted
Subsidiary) of the Parent or any of its Restricted Subsidiaries outside the
ordinary course of business of the Parent or such Restricted Subsidiary, and,


 


in
each case, that is not governed by the provisions of this Indenture applicable
to mergers, consolidations and sales of assets of the Parent or the Issuers;
provided that “Asset Sale” shall not include:


 


(a)                                 
sales or other
dispositions of inventory, receivables and other current assets;


 


(b)                                
sales, transfers or
other dispositions of assets constituting a Permitted Investment or Restricted
Payment permitted to be made under Section 4.3 herein;


 


(c)                                 
sales, transfers or
other dispositions of assets with a fair market value not in excess of $3.0
million in any transaction or series of related transactions;


 


(d)                                
any sale, transfer,
assignment or other disposition of any property or equipment that has become
damaged, worn out, obsolete or otherwise unsuitable for use in connection with
the business of the Parent or its Restricted Subsidiaries or


 


(e)                                 
sales or grants of
licenses to use the Parent’s or any Restricted Subsidiary’s patents, trade
secrets, know-how and technology to the extent that such license does not
prohibit the licensor from using the patent, trade secret, know-how or
technology.


 


“Attributable
Debt” in respect of a Sale and Leaseback Transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction, including any period for which such lease has been
extended or may, at the option of the lessor, be extended.  Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.


 


“Average Life”
means, at any date of determination with respect to any debt security, the
quotient obtained by dividing (1) the sum of the products of (a) the number of
years from such date of determination to the dates of each successive scheduled
principal payment of such debt security and (b) the amount of such principal
payment by (2) the sum of all such principal payments.


 


“Banking
Services” means each and any of the following bank services provided to the
Parent or any of its Restricted Subsidiaries by any lender under the Credit
Agreement or any Affiliate of such lender: (a) commercial credit cards,
purchasing cards or similar charge cards, (b) stored value cards and (c)
treasury management services (including, without limitation,


 


4















 


control disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depositary network services).


 


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


 


“Board of
Directors” means, with respect to any Person, the Board of Directors of
such Person or any duly authorized committee of such Board of Directors.
 Unless otherwise indicated, the “Board of Directors” refers to the Board
of Directors of the Parent.


 


“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.


 


“Borrowing Base”
means, as of any date, an amount equal to the sum of (a) 85% of the book value
of accounts receivable owned by the Parent and its Restricted Subsidiaries and
(b) 60% of the book value of all inventory of the Parent and its Restricted
Subsidiaries, all calculated on a consolidated basis and in accordance with
GAAP by reference to the most recently available quarterly or annual
consolidated balance sheet of the Parent and its consolidated Subsidiaries.


 


“Capital Stock”
means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) in equity of such Person, whether outstanding on the Issue Date or
issued thereafter, including, without limitation, all common stock and
preferred stock.


 


“Capitalized
Lease” means, as applied to any Person, any lease of any property (whether
real, personal or mixed) of which the discounted present value of the rental
obligations of such Person as lessee, in conformity with GAAP, is required to
be capitalized on the balance sheet of such Person.


 


“Capitalized
Lease Obligation” means the discounted present value of the rental obligations
under a Capitalized Lease.


 


“Change of Control”
means such time as:


 


(1)                                 
the direct or
indirect sale, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Parent and its
Subsidiaries, taken as a whole, to any “person” (within the meaning of Section
13(d) of the Exchange Act);


 


(2) the adoption
of a plan relating to the liquidation or dissolution of the Parent;


 


(3) (a) prior to
the occurrence of a Public Market, a “person” or “group” (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act), other than any Existing
Stockholder, becomes the ultimate “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) of Voting Stock representing a greater percentage of
the total voting power of the Voting Stock of the Parent, on a fully diluted
basis, than is held by the


 


5















 


Existing Stockholders on
such date and (b) after the occurrence of a Public Market, a “person” or
“group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange
Act), other than any Existing Stockholder, becomes the ultimate “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of more than 35% of
the total voting power of the Voting Stock of the Parent on a fully diluted
basis, and such ownership represents a greater percentage of the total voting
power of the Voting Stock of the Parent, on a fully diluted basis, than is held
by the Existing Stockholders on such date;


 


(4) individuals
who on the Issue Date constituted the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination by the
Board of Directors for election by the Parent’s stockholders was approved by a
vote of at least two-thirds of the members of the Board of Directors then in
office who either were members of the Board of Directors on the Issue Date or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the members of the Board of Directors
then in office; or


 


(5) the Parent
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Parent in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Parent or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where (a) the Voting Stock
of the Parent outstanding immediately prior to such transaction is converted
into or exchanged for (or continues as) Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person constituting a majority of the
outstanding shares of Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance) and (b) immediately after
such transaction, no “person” or “group” (as defined above) other than any
Existing Stockholder, becomes the ultimate beneficial owner (as defined above)
of 35% or more of the voting power of the Voting Stock of the surviving or
transferee Person (unless the Existing Stockholders beneficially own an equal
or greater percentage of such voting power of the Voting Stock than such
Person).


 


“Change of Control Date” has the meaning set
forth in Section 4.17(c).


 


“Change of Control Offer” has the meaning set
forth in Section 4.17(a).


 


“Change of Control Payment Date” has the
meaning set forth in Section 4.17(a).


 


“Commission” means the Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act
or, with respect to the Commission’s duties under the TIA, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the TIA, then the body performing such
duties at such time.


 


“Commodity Agreement” means any forward
contract, commodity swap agreement, commodity option agreement or other similar
agreement or arrangement.


 


6















 


“Consolidated EBITDA” means, for any period,
Adjusted Consolidated Net Income for such period plus, to the extent such
amount was deducted in calculating such Adjusted Consolidated Net Income:


 


(1) Fixed Charges,


 


(2) income taxes,


 


(3) depreciation
expense,


 


(4) amortization
expense,


 


(5) all other
non-cash items (including non-cash asset impairment charges and amortization of
pre-paid cash expenses) reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is,
or is required by GAAP to be, made), less all non-cash items increasing
Adjusted Consolidated Net Income (other than items which represent the reversal
of an accrual or reserve for anticipated cash charges in any prior period), all
as determined on a consolidated basis for the Parent and its Restricted
Subsidiaries in conformity with GAAP; and


 


(6) expenses and
charges resulting from the consummation of the Acquisition on the same terms as
described in the Offering Memorandum;


 


provided that, if any Restricted Subsidiary is not a Wholly
Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount equal to (A)
the amount of the Adjusted Consolidated Net Income attributable to such
Restricted Subsidiary multiplied by (B) the percentage ownership interest in
the income of such Restricted Subsidiary not owned on the last day of such
period by the Parent or any of its Restricted Subsidiaries.


 


“Consolidated Interest Expense” means, for any
period, the aggregate amount of interest in respect of Indebtedness (including,
without limitation, amortization of original issue discount on any Indebtedness
and the interest portion of any deferred payment obligation, calculated in
accordance with the effective interest method of accounting; all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing; the net costs associated with Interest Rate
Agreements; and Indebtedness that is Guaranteed or secured by the Parent or any
of its Restricted Subsidiaries); imputed interest with respect to Attributable
Debt; and all but the principal component of rentals in respect of Capitalized
Lease Obligations, in each case, paid or accrued or scheduled to be paid or to
be accrued by the Parent and its Restricted Subsidiaries during such period;
excluding, however, (1) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (3) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (3) of the definition thereof) and (2) any
premiums, fees and expenses (and any amortization thereof) payable in
connection with the offering of the Securities, all as determined on a
consolidated basis (without taking into account Unrestricted Subsidiaries) in
conformity with GAAP.


 


7















 


“Consolidated Net Worth” means, at any date of
determination, stockholders’ equity as set forth on the most recently available
quarterly or annual consolidated balance sheet of the Parent and its
consolidated Subsidiaries (which shall be as of a date not more than 90 days
prior to the date of such computation), plus, to the extent not included, any
preferred stock of the Parent, less any amounts attributable to Disqualified
Stock or any equity security convertible into or exchangeable for Indebtedness,
the cost of treasury stock and the principal amount of any promissory notes
receivable from the sale of the Capital Stock of the Parent or any of its
consolidated Subsidiaries, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 52).


 


“Credit Agreement” means the Credit Agreement,
dated as of the Acquisition Date, among Progress Holdings, Progress Rail,
Progress Metal, the Initial Subsidiary Guarantors, the Canadian subsidiaries of
Progress Holdings, J.P. Morgan Securities Inc., as sole lead arranger and sole
bookrunner, General Electric Capital Corporation, as administrative agent and
collateral agent, and the other lenders named therein or parties 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, modified, renewed, refunded, replaced or refinanced from time to
time.


 


“Credit Facilities” means, with respect to the
Parent and its Restricted Subsidiaries, one or more debt facilities (including
the Credit Agreement), commercial paper facilities, or indentures providing for
revolving credit loans, term loans, notes or other financing or letters of
credit, or other credit facilities, in each case, as amended, modified,
renewed, refunded, replaced or refinanced from time to time.


 


“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement.


 


“Covenant Defeasance” has the meaning set forth
in Section 8.2(c).


 


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


 


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


 


“Depository” 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.


 


“Disqualified Stock” means any class or series
of Capital Stock of any Person that by its terms or otherwise is (1) required
to be redeemed prior to the date that is 91 days after the Stated Maturity of
the Securities, (2) redeemable at the option of the holder of such class or
series of Capital Stock at any time prior to the date that is 91 days after the
Stated Maturity of the Securities or (3) convertible into or exchangeable for
Capital Stock referred to in clause (1) or (2) above or Indebtedness having a
scheduled maturity prior to the date that is 91 days after the Stated Maturity
of the Securities; provided that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such


 


8















 


Person
to repurchase or redeem such Capital Stock upon the occurrence of an “asset
sale” or “change of control” occurring prior to the date that is 91 days after
the Stated Maturity of the Securities shall not constitute Disqualified Stock
if the “asset sale” or “change of control” provisions applicable to such
Capital Stock are no more favorable to the holders of such Capital Stock than
the provisions contained in Sections 4.18 and 4.17 respectively, in and such
Capital Stock specifically provides that such Person shall not repurchase or
redeem any such stock pursuant to such provision prior to the Issuers’
repurchase of such Notes as are required to be repurchased pursuant to Sections
4.18 and 4.17.


 


“Event of Default” has the meaning set forth in
Section 6.1. 


 


“Excess Proceeds” has the meaning set forth in
Section 4.18.


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any successor statute or statutes thereto.


 


“Exchange Notes” means the 7.75% Senior Notes
due 2012 (the terms of which are identical to the Initial Notes except that the
Exchange Notes shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of the Initial Notes),
to be issued in exchange for the Initial Notes pursuant to the registered
Exchange Offer.


 


“Exchange Offer” means the registration by the
Issuers under the Securities Act pursuant to a registration statement of the
offer by the Issuers to each Holder of the Initial Notes to exchange all the
Initial Notes held by such Holder for the Exchange Notes in an aggregate
principal amount equal to the aggregate principal amount of the Initial Notes
held by such Holder, all in accordance with the terms and conditions of the
Registration Rights Agreement.


 


“Excluded Subsidiary” means (i) DAPCO Rail
Services LLC and its successors, (ii) any Foreign Subsidiary or (iii) any
Person that, following the Acquisition Date, becomes a Subsidiary of the Parent
and the book value of whose total assets, at any date of determination, as set
forth on the most recently available quarterly or annual consolidated balance
sheet does not exceed $5.0 million.


 


“Existing Stockholders” means either or both of
(a) One Equity Partners and/or any Affiliates controlled by One Equity Partners
and (b) any of the executive officers named under the caption
“Management—Directors and Executive Officers” in the Offering Memorandum.


 


“fair market value” means the price that would
be paid in an arm’s length transaction between an informed and willing seller
under no compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined in good faith by the Board of Directors, whose
determination shall be conclusive if evidenced by a resolution of the Board of
Directors.


 


“Fixed Charge Coverage Ratio” means, for any
Person on any Transaction Date, the ratio of (1) the aggregate amount of Consolidated
EBITDA for the then most recent four fiscal quarters prior to such Transaction
Date for which financial statements have been included in the Offering
Memorandum or for which reports have been filed with the Commission or provided
to the Trustee (the “Four Quarter Period”) to (2) the aggregate Fixed
Charges during such Four Quarter Period.  In making the foregoing
calculation:


 


9















 


(A)                             
pro
forma effect
shall be given to any Indebtedness Incurred or repaid during the period (the “Reference
Period”) commencing on the first day of the Four Quarter Period and ending
on the Transaction Date, in each case, as if such Indebtedness had been
Incurred or repaid on the first day of such Reference Period;


 


(B)                               
Consolidated Interest
Expense attributable to interest on any Indebtedness (whether existing or being
Incurred) computed on a pro forma basis
and bearing a floating interest rate shall be computed as if the rate in effect
on the Transaction Date (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the remaining
term of such Indebtedness) had been the applicable rate for the entire period;


 


(C)                               
pro
forma effect
shall be given to Asset Dispositions and Asset Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during such Reference Period as
if they had occurred and such proceeds had been applied on the first day of
such Reference Period; and


 


(D)                              
pro
forma effect
shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person that has
become a Restricted Subsidiary or has been merged with or into the Parent or
any Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided that to the extent that clause
(C) or (D) of this paragraph requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition,
such pro forma calculation shall
be based upon the four full fiscal quarters immediately preceding the
Transaction Date of the Person, or division or line of business of the Person,
that is acquired or disposed for which financial information is available.


 


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


 


(1)                                 
Consolidated Interest
Expense plus


 


(2)                                 
the product of (x)
the amount of all dividend payments on any series preferred stock of such Person
or any of its Restricted Subsidiaries (other than dividends payable solely in
Capital Stock of such Person or such Restricted Subsidiary (other than
Disqualified Stock) or to such Person or a Restricted Subsidiary of such
Person) paid, accrued or scheduled to be paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of
which is one minus the then current effective consolidated federal, state and
local income tax rate of such Person, expressed as a decimal, as determined on
a consolidated basis in accordance with GAAP.


 


“Foreign Subsidiary” means any Subsidiary of
the Parent that is an entity which is a controlled foreign corporation under
Section 957 of the Internal Revenue Code.


 


10















 


“GAAP” means generally accepted accounting
principles in the United States of America as determined by the Public Company
Accounting Oversight Board. All ratios and computations contained or referred
to in the Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of the
Indenture shall be made without giving effect to (1) the amortization of any
expenses incurred in connection with the offering of the Securities and (2)
except as otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.


 


“Global Security” has the meaning set forth in
Section 2.1.


 


“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (1) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm’s length
terms and are entered into in the normal course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (2) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness
of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided that the term “Guarantee” shall not
include endorsements for collection or deposit in the normal course of
business.  The term “Guarantee” used as a verb has a corresponding
meaning.


 


“Guaranteed Indebtedness” has the meaning set
forth in Section 4.15.


 


“Guarantors” means collectively, the Parent and
the Subsidiary Guarantors.


 


“Holder” means a holder of any Securities.


 


“Incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become
liable for or with respect to, or become responsible for, the payment of,
contingently or otherwise, such Indebtedness; provided
that (1) any Indebtedness of a Person existing at the time such Person becomes
a Restricted Subsidiary shall be deemed to be incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary and (2) neither the
accrual of interest nor the accretion of original issue discount nor the
payment of interest in the form of additional Indebtedness (to the extent
provided for when the Indebtedness on which such interest is paid was
originally issued) shall be considered an Incurrence of Indebtedness.


 


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


 


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


 


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


 


11















 


(3)                                 
all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto, but excluding
obligations with respect to letters of credit (including trade letters of
credit) securing obligations (other than obligations described in clause (1) or
(2) above or (5), (6) or (7) below) entered into in the normal course of
business of such Person to the extent such letters of credit are not drawn upon
or, if drawn upon, to the extent such drawing is reimbursed no later than the
third business day following receipt by such Person of a demand for
reimbursement);


 


(4)                                 
all obligations of
such Person to pay the deferred and unpaid purchase price of property or
services, which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services, except Trade Payables;


 


(5)                                 
all Capitalized Lease
Obligations and Attributable Debt;


 


(6)                                 
all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness;


 


(7)                                 
all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person; and


 


(8)                                 
all Disqualified
Stock issued by such Person with the amount of Indebtedness represented by such
Disqualified Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any.


 


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


 


(A)                             
the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP;


 


(B)                               
money borrowed and
set aside at the time of the Incurrence of any Indebtedness in order to prefund
the payment of the interest on such Indebtedness shall not be deemed to be
“Indebtedness” so long as such money is held to secure the payment of such
interest; and


 


(C)                               
Indebtedness shall
not include:


 


 (x)                               
any liability for
federal, state, local or other taxes,


 


12















 


(y)                                
performance, surety
or appeal bonds provided in the normal course of business, or


 


(z)                                  
agreements providing
for indemnification, adjustment of purchase price or similar obligations, or
Guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of the Parent or any of its Restricted Subsidiaries pursuant to
such agreements, in any case, Incurred in connection with the disposition of
any business, assets or Restricted Subsidiary (other than Guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition), so long as the principal amount does not to exceed the gross
proceeds actually received by the Parent or any Restricted Subsidiary in
connection with such disposition.


 


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


 


“Initial Notes” means the 7.75% Senior Notes
due 2012 of the Issuers issued on the Issue Date and authenticated and
delivered under this Indenture pursuant to Section 2.2 and any other notes
(other than Exchange Notes) issued after the Issue Date in accordance with
clause (iii) of the fourth paragraph of Section 2.2.


 


“Initial Subsidiary Guarantors” means each
Restricted Subsidiary of the Parent (other than the Issuers and other than an
Excluded Subsidiary) on the Acquisition Date.


 


“Institutional Accredited Investor” has the
meaning set forth in Section 2.l6(a).


 


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


 


“Interest Rate Agreement” means any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement, option or future contract
or other similar agreement or arrangement.


 


“Investment” in any Person means any direct or
indirect advance, loan or other extension of credit (including, without
limitation, by way of Guarantee or similar arrangement, but excluding advances
to customers or suppliers in the ordinary course of business that are, in
conformity with GAAP, recorded as accounts receivable, prepaid expenses or
deposits on the balance sheet of the Parent or its Restricted Subsidiaries and
endorsements for collection or deposit arising in the ordinary course of
business) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall
include (1) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (2) the retention of the Capital Stock (or any other Investment)
by the Parent or any of its Restricted Subsidiaries of (or in) any Person that
has ceased to be a Restricted Subsidiary, including, without limitation, by
reason of any transaction permitted by clause (3) or (4) of Section 4.14.
 For purposes of the


 


13















 


definition
of “Unrestricted Subsidiary” and Section 4.3, (a) the amount of or a reduction
in an Investment shall be equal to the fair market value thereof at the time
such Investment is made or reduced and (b) in the event the Parent or a
Restricted Subsidiary makes an Investment by transferring assets to any Person
and as part of such transaction receives Net Cash Proceeds, the amount of such
Investment shall be the fair market value of the assets less the amount of Net
Cash Proceeds so received, provided the Net Cash Proceeds are applied in
accordance with Section 4.18 herein.


 


“Issue Date” means March 24, 2005, the date of
original issuance of the Initial Notes.


 


“Issuers” means, collectively, the parties
named as such in the first paragraph of this Indenture and their respective
successors, but excluding their respective subsidiaries.


 


“Investment Grade Ratings” means a rating equal
to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the
equivalent) by S&P.


 


“Legal Defeasance” has the meaning set forth in
Section 8.2(b).


 


“Lien” means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof or any agreement to give any security interest).


 


“Make-Whole Redemption” has the meaning set
forth in paragraph 5 of the Security.


 


“Make-Whole Redemption Date” has the meaning
set forth in paragraph 5 of the Security.


 


“Maturity Date” means April 1, 2012.


 


“Merger Agreement” means the Agreement and Plan
of Merger, dated as of February 17, 2005, as may be amended, among the Parent,
the Issuers, Progress Rail Services Corporation, Progress Metal Reclamation
Company, Progress Fuels and, with respect to certain provisions thereunder,
Progress Energy Inc.


 


“Moody’s” means Moody’s Investors Service, Inc.
and its successors.


 


“Net Cash Proceeds” means (a) with respect to
any Asset Sale, the proceeds of such Asset Sale in the form of cash or cash
equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or cash equivalents and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of:


 


(1) brokerage
commissions and other fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale;


 


(2) provisions for
all taxes (whether or not such taxes will actually be paid or are payable) as a
result of such Asset Sale without regard to the consolidated results of
operations of the Parent and its Restricted Subsidiaries, taken as a whole;


 


14















 


(3) payments made
to repay Indebtedness or any other obligation outstanding at the time of such
Asset Sale that is either (x) secured by a Lien on the property or assets sold
or (y) required to be paid as a result of such sale; and


 


(4) appropriate
amounts to be provided by the Parent or any Restricted Subsidiary as a reserve
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP; and


 


(b)
with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of attorney’s fees,
accountants’ fees, underwriters’ or placement agents’ fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection
with such issuance or sale and net of taxes paid or payable as a result thereof.


 


“Net Proceeds Offer” has the meaning set forth
in Section 4.18.


 


“Net Proceeds Offer Amount” has the meaning set
forth in Section 4.18.


 


“Net Proceeds Offer Payment Date” has the
meaning set forth in Section 4.18.


 


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


 


“Note Guarantee” has the meaning set forth in
Section 11.1.


 


“Obligations” means all obligations for
principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.


 


“Offer to Purchase” means an offer to purchase
Securities by the Issuers from the Holders commenced by mailing a notice to the
Trustee and each Holder stating:


 


(1) the provision
of the Indenture pursuant to which the offer is being made and that all
Securities validly tendered will be accepted for payment on a pro rata basis;


 


(2) the purchase
price and the date of purchase, which shall be a Business Day no earlier than
30 days nor later than 60 days from the date such notice is mailed (except in
the case of a Special Redemption, in which case the date of purchase shall be a
Business day no later than four business days from such mailing date)(the
“Payment Date”);


 


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


 


15















 


(4) that, unless
the Issuers default in the payment of the purchase price, any Security accepted
for payment pursuant to the Offer to Purchase shall cease to accrue interest on
and after the Payment Date;


 


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


 


(6) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the third business day immediately
preceding the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Securities delivered
for purchase and a statement that such Holder is withdrawing his election to
have such Securities purchased; and


 


(7) that Holders
whose Securities are being purchased only in part will be issued new Securities
equal in principal amount to the unpurchased portion of the Securities
surrendered; provided that each
Security purchased and each new Security issued shall be in a principal amount
of $2,000 or integral multiples of $1,000 in excess thereof.


 


On the Payment Date, the Issuers shall (a) accept for
payment on a pro rata basis Securities or portions thereof tendered pursuant to
an Offer to Purchase; (b) deposit with the Paying Agent money sufficient to pay
the purchase price of all Securities or portions thereof so accepted; and (c)
deliver, or cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officers’ Certificate specifying the
Securities or portions thereof accepted for payment by the Issuers. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in
an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued
shall be in a principal amount of $2,000 or integral multiples of $1,000 in
excess of $2,000.  The Issuers shall publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date.  The Trustee
shall act as the Paying Agent for an Offer to Purchase.  The Issuers shall
comply with 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 the event that the Issuers are required to repurchase Securities pursuant to
an Offer to Purchase.  To the extent that the provisions of any securities
laws or regulations conflict with the provisions of the Indenture relating to
an Offer to Purchase, the Issuers shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under such provisions of the Indenture by virtue of such conflict.


 


“Offering Memorandum” means the Offering
Memorandum dated March 17, 2005 relating to the offering of the Initial Notes
issued on the Issue Date.


 


16















 


“Officer” means, with respect to any Person,
the Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Treasurer or the
Secretary of such Person.


 


“Officers’ Certificate” means a certificate
signed by two Officers of each Issuer or of any Guarantor, as applicable.


 


“Offshore Global Securities” has the meaning
provided in Section 2.1.


 


“Offshore Physical Securities” has the meaning
provided in Section 2.1.


 


“One Equity Partners” means One Equity Partners
LLC and its successors.


 


“Opinion of Counsel” means a written opinion
from legal counsel, who may be an employee of the company for whom such opinion
is given.


 


“Parent” means the party named as such in the
first paragraph of this indenture and its successors, but excluding its
subsidiaries.


 


“Paying Agent” has the meaning set forth in
Section 2.3.


 


“Permanent Offshore Global Securities” has the
meaning provided in Section 2.1.


 


“Permitted Business” means the business of
Progress Rail or Progress Metal and their respective Subsidiaries engaged in on
the Issue Date and any other activities that are related, ancillary or
complementary to such business.


 


“Permitted Investments” means:


 


(1)                                 
an Investment in the
Parent or a Restricted Subsidiary or a Person which will, upon the making of
such Investment, become a Restricted Subsidiary or be merged or consolidated
with or into, or transfer or convey all or substantially all its assets to, the
Parent or a Restricted Subsidiary; provided that any Investment in an Excluded
Subsidiary is reasonably related to the business or operations of such Excluded
Subsidiary;


 


(2)                                 
Temporary Cash
Investments;


 


(3)                                 
payroll, travel and
similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses in accordance with GAAP;


 


(4)                                 
stock, obligations or
securities received in satisfaction of judgments;


 


(5)                                 
an Investment in an
Unrestricted Subsidiary consisting solely of an Investment in another Unrestricted
Subsidiary;


 


(6)                                 
Commodity Agreements,
Interest Rate Agreements and Currency Agreements designed solely to protect the
Parent or its Restricted Subsidiaries against fluctuations in commodity prices,
interest rates or foreign currency exchange rates;


 


17















 


(7)                                 
loans and advances to
employees and officers of the Parent and its Restricted Subsidiaries made in
the normal course of business for bona fide business purposes not to exceed
$500,000 in the aggregate at any one time outstanding;


 


(8)                                 
Investments in
securities of trade creditors or customers received:


 


(a)                                 
pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of
such trade creditors or customers; or


 


(b)                                
in settlement of
delinquent obligations of, and other disputes with, customers, suppliers and
others, in each case arising in the ordinary course of business or otherwise in
satisfaction of a judgment;


 


(9)                                 
Investments made by
the Parent or its Restricted Subsidiaries consisting of consideration received
in connection with an Asset Sale made in compliance with Section 4.18; or


 


(10)                           
Investments of a
Person or any of its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary of the Parent or at the time such Person merges or
consolidates with the Parent or any of its Restricted Subsidiaries, in either
case, in compliance with the Indenture; provided that such Investments were not
made by such Person in connection with, or in anticipation or contemplation of,
such Person becoming a Restricted Subsidiary of the Parent or such merger or
consolidation;


 


(11)                           
repurchases of the
Securities; and


 


(12)                           
additional
Investments (including Investments in joint ventures but excluding Investments
in Unrestricted Subsidiaries) not to exceed $10.0 million at any one time
outstanding; provided that, in the event of an Investment in any Person that is
not a Restricted Subsidiary, such Person shall not use the proceeds of such
Investment to purchase, redeem, retire or otherwise acquire for value any
shares of the Capital Stock of the Parent.


 


“Permitted Liens”
means:


 


(1)                                 
Liens for taxes,
assessments, governmental charges or claims that are not yet due or that are
being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made;


 


(2)                                 
statutory and common
law Liens of landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other similar Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made;


 


18















 


(3)                                 
Liens incurred or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security;


 


(4)                                 
Liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers’ acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);


 


(5)                                 
easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
detract from the value of the affected property or materially interfere with
the ordinary course of business of the Parent or any of its Restricted
Subsidiaries;


 


(6)                                 
leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of the Parent and its Restricted Subsidiaries, taken as a whole;


 


(7)                                 
Liens encumbering
property or assets under construction arising from progress or partial payments
by a customer of the Parent or its Restricted Subsidiaries relating to such
property or assets;


 


(8)                                 
any interest or title
of a lessor in the property subject to any Capitalized Lease or operating
lease;


 


(9)                                 
Liens arising from
filing Uniform Commercial Code financing statements regarding leases;


 


(10)                           
Liens on property of,
or on shares of Capital Stock or Indebtedness of, any Person existing at the
time such Person becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Liens do not extend to or cover any property or assets of
the Parent or any Restricted Subsidiary other than the property or assets
acquired;


 


(11)                           
Liens in favor of the
Parent or any Restricted Subsidiary;


 


(12)                           
Liens arising from
the rendering of a final judgment or order against the Parent or any Restricted
Subsidiary that does not give rise to an Event of Default;


 


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


 


(14)                           
Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;


 


(15)                           
Liens encumbering
customary initial deposits and margin deposits, and other Liens that are within
the general parameters customary in the industry and incurred


 


19















 


in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements,
Currency Agreements or Commodity Agreements designed solely to protect the
Parent or any of its Restricted Subsidiaries from fluctuations in interest
rates, currencies or the price of commodities;


 


(16)                           
Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Parent or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with the past practices of the
Parent and its Restricted Subsidiaries prior to the Issue Date;


 


(17)                           
Liens on shares of
Capital Stock of any Unrestricted Subsidiary to secure Indebtedness of such
Unrestricted Subsidiary;


 


(18)                           
Liens on or sales of
receivables;


 


(19)                           
Liens securing
additional Indebtedness of the Parent and its Restricted Subsidiaries in an
aggregate principal amount not to exceed $5.0 million at any one time
outstanding; and


 


(20)                           
Liens securing
Indebtedness permitted under clause (4) of the second paragraph of clause (a)
of Section 4.4 herein, provided that, in the event such Indebtedness is
Incurred for the purpose of defeasing the Securities, such Lien does not cover
any of the cash or cash equivalents that are deposited with the Trustee or
Otherwise to defease the Securities.


 


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


 


“Physical Securities” means permanent
certificated physicals Securities.


 


“Private Placement Legend” means the legend
initially set forth on the Initial Notes in the form set forth in the first
paragraph of Section 2.14.


 


“Public Equity Offering” means an underwritten
primary public offering of common stock of the Parent pursuant to an effective
registration statement under the Securities Act.


 


A “Public Market” shall be deemed to exist if
(i) a Public Equity Offering has been consummated and (ii) at least 15% of the
total issued and outstanding common stock of the Parent has been distributed by
means of an effective registration statement under the Securities Act or sales
pursuant to Rule 144 under the Securities Act.


 


“QIB” means any “qualified institutional
buyer” (as defined under the Securities Act).


 


“Qualified Proceeds” means any of the following
or any combination of the following:


 


(1) Net Cash
Proceeds;


 


20















 


(2) the fair
market value of any assets (other than Investments) that are used or useful in
a Permitted Business; and


 


(3) the fair
market value of any Capital Stock of any Person engaged in a Permitted Business
if:


 


(a)                                 
that Person is or, in
connection with the receipt by the Parent or any Restricted Subsidiary of that
Capital Stock, becomes a Restricted Subsidiary of the Parent; or


 


(b)                                
that Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Parent or any
Restricted Subsidiary of the Parent.


 


“Record Date” means the applicable record date
specified in the Securities.


 


“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.


 


“Registrar” has the meaning set forth in
Section 2.3.


 


“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of March 24, 2005 among the Issuers,
the Parent, the Initial Subsidiary Guarantors, Morgan Stanley & Co.
Incorporated and J.P. Morgan Securities Inc.


 


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


 


“Replacement Assets” means, on any date,
property or assets (other than current assets) of a nature or type or that are
used in a Permitted Business (or an Investment in a Permitted Business).


 


“Required Rating Agencies” means both Moody’s
and S&P or their respective successors; provided
that if either Moody’s or S&P (or their respective successors) is no longer
conducting business or is no longer rating companies in the rail services
industry generally, then Required Rating Agencies means either Moody’s or
S&P (or their respective successor), as applicable.


 


“Responsible Officer” means, when used with
respect to the Trustee, vice president, assistant vice president, assistant
treasurer, associate or any other officer within the corporate trust department
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also shall mean, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility


 


21















 


for the
administration of this Indenture.  “Restricted Subsidiary” means
any Subsidiary of the Parent other than an Unrestricted Subsidiary.


 


“Restricted Payment” has the meaning set forth
in Section 4.3.


 


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


 


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


 


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


 


“S&P” means Standard & Poor’s Ratings
Group, a division of The McGraw-Hill Companies, and its successors.


 


“Sale and Leaseback Transaction” means a
transaction whereby a Person sells or otherwise transfers assets or properties
and then or thereafter leases such assets or properties or any part thereof or
any other assets or properties which such Person intends to use for substantially
the same purpose or purposes as the assets or properties sold or otherwise
transferred.


 


“Securities” means the Initial Notes, the
Exchange Notes and any other notes issued after the Issue Date in accordance
with clause (iii) of the fourth paragraph of Section 2.2 treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.


 


“Securities Act” means the Securities Act of
1933, as amended, or any successor statute or statutes thereto.


 


“Shelf Registration Statement” has the meaning
set forth in Section 2 of the Registration Rights Agreement.


 


“Significant Subsidiary,” means, at any date of
determination, any Restricted Subsidiary that, together with its Subsidiaries,
(1) for the most recent fiscal year of the Parent, accounted for more than 10%
of the consolidated revenues of the Parent and the Subsidiary Guarantors or (2)
as of the end of such fiscal year, was the owner of more than 10% of the consolidated
assets of the Parent and the Subsidiary Guarantors, all as set forth on the
most recently available consolidated financial statements of the Parent for
such fiscal year.


 


“Stated Maturity” means, (1) with respect to
any debt security, the date specified in such debt security as the fixed date
on which the final installment of principal of such debt security is due and
payable and (2) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as the
fixed date on which such installment is due and payable.


 


22






 


 













 


“Subsidiary” means, with respect to any Person,
any corporation, association or other business entity of which more than 50% of
the voting power of the outstanding Voting Stock is owned, directly or
indirectly, by such Person and one or more other Subsidiaries of such Person.


 


“Subsidiary Guarantee” has the meaning set
forth in Section 11.1.


 


“Subsidiary Guarantor” means any Initial
Subsidiary Guarantor and any other Restricted Subsidiary (other than the
Issuers) which provides a Subsidiary Guarantee of the Issuers’ obligations
under the Indenture and the Securities pursuant to Section 4.15 or 4.21 herein.


 


“Surviving Person” has the meaning set forth in
Section 5.1(a)(i).


 


“Suspended Covenants” has the meaning set forth
in Section 4.22(a).


 


“Suspension Condition” has the meaning set
forth in Section 4.22(a).


 


“Tax Sharing Agreement” means any tax sharing
agreement or arrangement between the Parent or any Restricted Subsidiary and
one or more other Persons, as the same may be amended from time to time,
provided that (x) in no event shall the amount paid by the Parent and the
Restricted Subsidiaries to such other Person or Persons pursuant to all such
agreements and/or arrangements exceed a reasonable estimate of the amount that
the Parent would be required to pay for taxes (including interest, penalties
and additions to tax and including estimated taxes) were it to file a
consolidated, combined, unitary or similar tax return for itself and its
Subsidiaries as if were the common parent (or analogous person) with respect to
a consolidated, combined, unitary or similar tax group and (y) in the event
that such reasonable estimate exceeds the actual amount that the Parent would
have been required to pay, such other Person or Persons are required to repay
the excess to the Parent or Restricted Subsidiaries within a reasonable period
after the later of the date on which such excess is determined and the date on
which such other Person or Persons receives any refund related to such excess.


 


“Temporary Cash Investment” means any of the
following:


 


(1)                                 
direct obligations of
the United States of America or any agency thereof or obligations fully and
unconditionally guaranteed by the United States of America or any agency
thereof, in each case, maturing within one year unless such obligations are
deposited by the Issuers (x) to defease any Indebtedness or (y) in a collateral
or escrow account or similar arrangement to prefund the payment of interest on
any indebtedness;


 


(2)                                 
time deposit
accounts, certificates of deposit, banker’s acceptances and money market
deposits maturing within 270 days of the date of acquisition thereof issued by
a bank or trust company which is organized under the laws of the United States
of America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $100 million (or the foreign
currency equivalent thereof) and has outstanding debt which is rated “A” (or
such similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) or any money market fund sponsored by a registered broker dealer or mutual
fund distributor;


 


23












 


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


 


(4)                                 
commercial paper,
maturing not more than one year after the date of acquisition, issued by a
corporation (other than an Affiliate of the Parent) organized and in existence
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of “P-1” (or higher) according
to Moody’s or “A-1” (or higher) according to S&P;


 


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


 


(6)                                 
any mutual fund that
has at least 95% of its assets continuously invested in investments of the
types described in clauses (1) through (5) above.


 


“Temporary Offshore Global Securities” has the
meaning set forth in Section 2.1.


 


“TIA” or “Trust Indenture Act” 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 9.4.


 


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


 


“Transaction Date” means, with respect to the
Incurrence of any Indebtedness, the date such Indebtedness is to be Incurred
and, with respect to any Restricted Payment, the date such Restricted Payment
is to be made.


 


“Treasury Rate” means with respect to a
Make-Whole Redemption Date, the yield to maturity at the time of computation 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
Make-Whole 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 Make-Whole Redemption Date to April 1, 2008; provided, however, that if the period from such Make-Whole
Redemption Date to April 1, 2008 is not equal to the constant maturity of the
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from such Make-Whole Redemption Date to April 1, 2008 is less than one year,
the weekly average


 


24












 


yield
on actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.


 


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


 


“Unrestricted Subsidiary” means (1) any
Subsidiary of the Parent (other than the Issuers) that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (2) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Parent) other than either Issuer to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Parent or any Restricted Subsidiary; provided
that (A) any Guarantee by the Parent or any Restricted Subsidiary of
any Indebtedness of the Subsidiary being so designated shall be deemed an
“Incurrence” of such Indebtedness and an “Investment” by the Parent or such
Restricted Subsidiary (or both, if applicable) at the time of such designation,
(B) either (I) the Subsidiary to be so designated has total assets of $1,000 or
less or (II) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.3, and (C) if applicable, the
Incurrence of Indebtedness and the Investment referred to in clause (A) of this
proviso would be permitted under Sections 4.4 and 4.3 respectively. The Board
of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that (a) no
Default or Event of Default shall have occurred and be continuing at the time
of or after giving effect to such designation and (b) all Liens and
Indebtedness of such Unrestricted Subsidiary outstanding immediately after such
designation would, if Incurred at such time, have been permitted to be Incurred
(and shall be deemed to have been Incurred) for all purposes of the Indenture.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers’ Certificate certifying that
such designation complied with the foregoing provisions.


 


“U.S. Global Securities” has the meaning
provided in Section 2.1.


 


“U.S. Government Obligations” means securities
that are (1) direct obligations of the
United States of America for the 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 States of America the 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 Parent thereof at any time prior to the Stated Maturity of
the Securities, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a 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.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.


 


25












 


“U.S. Physical Securities” means the Securities
issued in the form of permanent certificated Securities in registered form in
substantially the form set forth in Exhibit A to Institutional Accredited
Investors which are not QIBs (excluding Non-U.S. Persons) who purchased
Securities pursuant to Regulation D of the Securities Act.


 


“Voting Stock” means with respect to any
Person, Capital Stock of any class or kind ordinarily having the power to vote
for the election of directors, managers or other voting members of the
governing body of such Person.


 


“Wholly Owned” means, with respect to any
Subsidiary of any Person, the ownership of all of the outstanding Capital Stock
of such Subsidiary (other than any director’s qualifying shares or Investments
by foreign nationals mandated by applicable law) by such Person or one or more
Wholly Owned Subsidiaries of such Person.


 


1.2                              
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.


 


“indenture to be
qualified” means this Indenture.


 


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


 


“obligor”
on the Indenture securities means the Issuers, any Guarantor or any other
obligor on the Securities.


 


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


 


1.3                              
Rules of Construction.


 


Unless the context otherwise requires:


 


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


 


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


 


(3)                                 
“or” is not
exclusive;


 


(4)                                 
“including”
means including without limitation;


 


26












 


(5)                                 
words in the singular
include the plural, and words in the plural include the singular;


 


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


 


(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)                                 
all ratios and
computations based on GAAP contained in this Indenture shall be computed in
accordance with the definition of GAAP set forth in Section 1.1.


 


(9)                                 
all references to
Sections or Articles refer to Sections or Articles in this Indenture unless
otherwise indicated.


 


ARTICLE
II


 


THE
SECURITIES


 


2.1                              
Form and Dating.


 


The Initial Notes and the Trustee’s related
certificate of authentication shall be substantially in the form of Exhibit
A and the Exchange Notes and the Trustee’s certificate of authentication
shall be substantially in the form of Exhibit B. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Issuers and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its authentication.


 


The terms and provisions contained in the Securities,
annexed hereto as Exhibits A and B, the Parent Guarantee and the
Subsidiary Guarantees (including those executed pursuant to Section 4.15 or
4.21 subsequent to the Issue Date), if any, annexed hereto as Exhibit E,
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Issuers, the Guarantors, if any, and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.


 


Securities offered and sold in reliance on Rule 144A
shall be issued initially in the form of one or more permanent global
Securities in registered form, substantially in the form set forth in Exhibit A
(the “U.S. Global Securities”), registered in the name of the nominee of
Depository, deposited with the Trustee, as custodian for the Depository, duly
executed by the Issuers and authenticated by the Trustee as hereinafter
provided, and shall bear the legends set forth in Section 2.14.  The
aggregate principal amount of the U.S. Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.


 


Securities issued in exchange for interests in the
U.S. Global Securities pursuant to Section 2.15 or 2.16 may be issued in the
form of Physical Securities (“U.S. Physical Securities”) and shall bear
the first legend set forth in Section 2.14.


 


27












 


Securities offered and sold in offshore transactions
in reliance on Regulation S shall be issued initially in the form of one or
more temporary global Securities in registered form, substantially in the form
set forth in Exhibit A (the “Temporary Offshore Global Securities”),
registered in the name of the nominee of the Depository, deposited with the
Trustee, as custodian for the Depository, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided, and shall bear the
legends set forth in Section 2.14. At any time on or after the 41st
day after the Issue Date, upon receipt by the Trustee, Registrar and the
Issuers of a certificate substantially in the form of Exhibit D-l hereto, the
owner of a beneficial interest in a Temporary Offshore Global Security may
exchange such interest for an equivalent interest in one or more permanent
global Securities in registered form substantially in the form set forth in
Exhibit A (the “Permanent Offshore Global Securities”; and together with
the Temporary Offshore Global Securities, the “Offshore Global Securities”),
duly executed by the Issuers and authenticated by the Trustee which shall be
deposited with the Trustee, as custodian for the Depository or its nominee, and
the Registrar shall reflect on its books and records the date and a decrease in
the principal amount of the Temporary Offshore Global Securities in an amount
equal to the principal amount of the beneficial interest in the Temporary
Offshore Global Securities exchanged for Permanent Offshore Global Securities.
The aggregate principal amount of the Offshore Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.


 


Securities issued in exchange for interests in the
Permanent Offshore Global Securities pursuant to Section 2.15 may be issued in
the form of permanent Physical Securities in registered form (the “Offshore
Physical Securities”).


 


The U.S. Global Securities and the Offshore Global
Securities are sometimes referred to herein as the “Global Securities.”


 


2.2                              
Execution and
Authentication.


 


Two Officers, or an Officer and an Assistant
Secretary, of each of the Issuers shall sign, or one Officer shall sign and one
Officer or an Assistant Secretary of each of the Issuers (each of whom shall,
in each case, have been duly authorized by all requisite corporate actions)
shall attest to, the Securities for each of the Issuers by manual or facsimile
signature.


 


If an 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 nevertheless be
valid.


 


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


 


The Trustee shall authenticate (i) Initial Notes for
original issue on the Issue Date in the aggregate principal amount not to
exceed $200.0 million, (ii) Exchange Notes and (iii) subject to compliance with
Sections 4.4 and 10.2(d), one or more series of Securities for original issue
after the Issue Date (such Securities to be substantially in the form of Exhibit
A) in an unlimited amount, in each case, upon written orders of the Issuers
in the form of an Officers’ Certificate,


 


28












 


which
Officers’ Certificate shall, in the case of any issuance pursuant to clause
(iii) above, certify that such issuance is in compliance with Section 4.4.
 In addition, each such Officers’ Certificate shall specify the amount of
Securities to be authenticated, the date on which the Securities are to be
authenticated, whether the Securities are to be Initial Notes issued under
clause (i) of the preceding sentence, Exchange Notes or Initial Notes issued
under clause (iii) of the preceding sentence and the aggregate principal amount
of Securities outstanding on the date of authentication, and shall further
specify the amount of such Securities to be issued as a Global Security or
Physical Securities. Such Securities shall initially be in the form of one or
more Global Securities, which (i) shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, the Securities to be
issued, (ii) shall be registered in the name of the Depository for such Global
Security or Securities or its nominee and (iii) shall be held by the Trustee as
custodian for the Depository or pursuant to the Depository’s instruction. All
Securities issued under this Indenture shall vote and consent together on all
matters as one class and no series of Securities shall have the right to vote
or consent as a separate class on any matter.


 


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


 


The Securities shall be issuable only in registered
form without coupons in denominations of $2,000 and integral multiples of
$1,000 above $2,000.


 


2.3                              
Registrar and Paving
Agent.


 


The Issuers shall maintain an office or agency in the
Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (“Registrar”),
(b) Securities may be presented or surrendered for payment (“Paying Agent”)
and (c) notices and demands to or upon the Issuers in respect of the Securities
and this Indenture may be served. The Issuers 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 Issuers of their
obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York, for such purposes. The Issuers may act as their own Registrar
or Paying Agent except that for the purposes of Articles III and VIII and
Sections 4.17, 4.18 and 4.23, neither the Issuers nor any Affiliate of the
Issuers shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Issuers, 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. The Issuers hereby initially appoint the
Trustee as Registrar and Paying Agent until such time as the Trustee has
resigned or a successor has been appointed.


 


29












 


The Issuers shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Issuers shall notify the Trustee, in advance, of the name and address of any such
Agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee
shall act as such.


 


2.4                              
Paying Agent to Hold
Assets in Trust.


 


The Issuers shall require each Paying Agent other than
the Trustee to agree in writing that, subject to Article X, each Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all assets held
by the Paying Agent for the payment of principal of, premium, if any, or
interest on, the Securities (whether such assets have been distributed to it by
the Issuers or any other obligor on the Securities), and shall notify the
Trustee of any Default or Event of Default by the Issuers (or any other obligor
on the Securities) in making any such payment. If either of the Issuers or a
Subsidiary acts as Paying Agent, it shall segregate such assets and hold them
as a separate trust fund. The Issuers at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default or payment Event of Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee
and to account for any assets distributed. Upon distribution to the Trustee of
all assets that shall have been delivered by the Issuers to the Paying Agent,
the Paying Agent shall have no further liability for such assets.


 


2.5                              
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 Issuers shall
furnish to the Trustee on or before each Interest Payment Date and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.


 


2.6                              
Transfer and Exchange.


 


(a)                                
Subject to the
provisions of Sections 2.15 and 2.16, 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 register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however,
that the Securities surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Issuers and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registrations of transfers and exchanges, the Issuers 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 Issuers may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon


 


30












 


exchanges or transfers
pursuant to Section 2.2, 2.10, 3.6, 4.17, 4.18, 4.23 or 9.6). 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 III, except the unredeemed portion of any
Security being redeemed in part, and (iii) during an Offer to Purchase made
pursuant to Section 4.17, 4.18 or 4.23 if such Security is tendered pursuant to
such Offer to Purchase and not withdrawn. A Global Security may be transferred,
in whole but not in part, in the manner provided in this Section 2.6(a),
only to a nominee of the Depository for such Global Security, or to the
Depository, or a successor Depository for such Global Security selected or
approved by the Issuers, or to a nominee of such successor Depository.


 


(b)                           
If at any time the
Depository for the Global Security or Securities notifies the Issuers that it
is unwilling or unable to continue as Depository for such Global Security or
Securities or the Issuers become aware that the Depository has ceased to be a
clearing agency registered under the Exchange Act, the Issuers shall appoint a
successor Depository with respect to such Global Security or Securities. If a
successor Depository for such Global Security or Securities has not been
appointed within 90 days after the Issuers receive such notice of becomes aware
of such ineligibility, the Issuers shall execute, and the Trustee, upon receipt
of an Officers’ Certificate for the authentication and delivery of Physical Securities,
shall authenticate and deliver, Physical Securities, in an aggregate principal
amount at maturity equal to the principal amount at maturity of the Global
Security representing such Securities, in exchange for such Global Security.
The Issuers shall reimburse the Registrar, the Depository and the Trustee for
expenses they incur in documenting such exchanges and issuances of Securities.


 


The Issuers may at
any time and in their sole discretion determine that the Securities shall no
longer be represented by such Global Security or Securities. In such event the
Issuers shall execute, and the Trustee, upon receipt of a written order for the
authentication and delivery of Physical Securities in exchange in whole or in
part for such Global Security or Securities accompanied by an Officers’
Certificate, shall authenticate and deliver Physical Securities in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities in exchange for such Global Security or Securities.


 


In any exchange provided for in any of the preceding
two paragraphs, the Issuers shall execute and the Trustee shall authenticate
and deliver Physical Securities in authorized denominations. Upon the exchange
of a Global Security for Physical Securities, such Global Security shall be
cancelled by the Trustee. Physical Securities issued in exchange for a Global
Security pursuant to this Section 2.6(b) shall be registered in such names and
in such authorized denominations as the Depository for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
Persons in whose names such Securities are so registered.


 


None of the Issuer, the Trustee, any Paying Agent or
the Registrar shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.


 


31












 


2.7                              
Replacement Securities.


 


If a mutilated Security is surrendered to the Trustee
or if the Holder of a Security claims that the Security has been lost, destroyed
or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate
a replacement Security if the Trustee’s requirements are met. If required by
the Trustee or the Issuers, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Issuers and the Trustee, to
protect the Issuers, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. The Issuers may charge such Holder for
their reasonable out-of-pocket expenses in replacing a Security pursuant to
this Section 2.7, including reasonable fees and expenses of counsel.


 


Every replacement Security is an additional obligation
of the Issuers and shall be entitled to the benefits of this Indenture.


 


2.8                              
Outstanding Securities.


 


Securities outstanding at any time are all the
Securities that have been authenticated by the Trustee except those cancelled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
either of the Issuers, any Guarantor or any of their respective Subsidiaries or
Affiliates holds the Security.


 


If a Security is replaced pursuant to Section 2.7
(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 or a protected
purchaser. A mutilated Security ceases to be outstanding upon surrender of such
Security and replacement thereof pursuant to Section 2.7. If the principal
amount of any Security is considered paid under Section 4.1, it ceases to be
outstanding and interest ceases to accrue.


 


If on a Redemption Date or the Maturity Date the
Paying Agent (other than either of the Issuers or a Subsidiary) holds U.S.
Legal Tender sufficient to pay all of the principal, premium, if any, and
interest due on the Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.


 


2.9                              
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 Issuers, any of their Subsidiaries or any of
their respective 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 has Actual Knowledge are so owned shall be disregarded.


 


2.10                       
Temporary Securities.


 


Until definitive Securities are ready for delivery,
the Issuers 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 Issuers consider
appropriate for temporary Securities, as evidenced by execution of such
temporary Securities by the Issuers.


 


32












 


Without
unreasonable delay, the Issuers 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.


 


2.11                       
Cancellation.


 


The Issuers at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent (other than either of the Issuers or a
Subsidiary), and no one else, shall cancel and shall dispose of all Securities
surrendered for registration of transfer, exchange, payment or cancellation.
Subject to Section 2.7, the Issuers may not issue new Securities to replace
Securities that they have paid or delivered to the Trustee for cancellation. If
the Issuers 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 2.11.


 


2.12                       
Defaulted Interest.


 


If the Issuers default in a payment of interest on the
Securities, they shall, unless the Trustee fixes another record date pursuant
to Section 6.10, pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, in any lawful manner. The Issuers
may pay the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Issuers 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 Issuers 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.


 


2.13                       
CUSIP and ISIN Numbers.


 


The Issuers in issuing the Securities may use “CUSIP”
and “ISIN” numbers, and if so, the Trustee shall use the CUSIP numbers
in notices of redemption or exchange 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 the CUSIP and ISIN numbers printed in the
notice or on the Securities, and that reliance may be placed only on the other
identification numbers printed on the Securities and that any such redemption
or exchange shall not be affected by any defect or omission of such CUSIP and
ISIN numbers. The Issuers shall promptly notify the Trustee of any change in
CUSIP or ISIN number.


 


2.14                       
Restrictive Legends.


 


Unless and until a Security is exchanged for an
Exchange Note or sold in connection with an effective registration statement
under the Securities Act pursuant to the Registration Rights Agreement, the
U.S. Global Securities, U.S. Physical Securities and Temporary Offshore Global


 


33












 


Securities
shall bear the following legend set forth below (the “Private Placement
Legend”) on the face thereof:


 


THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(l), (2),(3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED
INVESTOR”), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN
RULE 144(k) UNDER THE SECURITIES ACT AFTER THE ORIGINAL ISSUANCE OF THESE
SECURITIES, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS
OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES OF LESS THAN $100,000 AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUERS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN
THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AFTER THE
ORIGINAL ISSUANCE OF THESE SECURITIES, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER


 


34












 


MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUERS SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND
“UNITED STATES PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.


 


The Temporary Offshore Global Securities shall bear
the following legend set forth on the face thereof:


 


THIS SECURITY IS A
TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD
APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON
OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH
INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), BENEFICIAL INTERESTS HEREIN ARE
NOT EXCHANGEABLE FOR PHYSICAL SECURITIES OTHER THAN IN ACCORDANCE WITH THE
TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S
UNDER THE SECURITIES ACT.


 


Each Global Security shall also bear the following
legend on the face thereof:


 


UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITORY OR
NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS


 


35












 


WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. 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 SECTION 2.16 OF THE
INDENTURE GOVERNING THIS SECURITY.


 


2.15                       
Book-Entry Provisions
for Global Security.


 


(a)                                 
Each Global Security
initially shall (i) be registered in the name of the Depository or the nominee
of such Depository, (ii) be delivered to the Trustee as custodian for such
Depository and (iii) bear legends as set forth in Section 2.14.


 


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


 


(b)                                
Transfers of Global
Securities shall be limited to transfers in whole, but not in part, to the
Depository, its successors or their respective nominees. Interests of
beneficial owners in any Global Security may be transferred or, subject to
Section 2.1, exchanged for Physical Securities in accordance with the rules and
procedures of the Depository and the provisions of Section 2.16. In addition,
U.S. Physical Securities and Offshore Physical Securities shall be transferred
to all beneficial owners in exchange for their beneficial interests in U.S.
Global Securities or Offshore Global Securities, as the case may be, (i) in
accordance with Section 2.6 or (ii) if an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depository
or the Trustee to issue Physical Securities.


 


(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 such Global Security
in an amount equal to the principal amount of the beneficial interest in such
Global Security to be transferred, and the Issuers shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Securities or
Offshore Physical Securities, as the case may be, of like tenor and amount.


 


(d)                                
In connection with
the transfer of U.S. Global Securities or Offshore Global Securities, in whole,
to beneficial owners pursuant to paragraph (b), the U.S. Global Securities or
the Offshore Global Securities, as the case may be, shall be deemed to be
surrendered to the


 


36












 


Trustee
for cancellation, and the Issuers shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in such U.S. Global Securities or
Offshore Global Securities, as the case may be, an equal aggregate principal
amount of U.S. Physical Securities or Offshore Physical Securities, as the case
may be, 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) or (c) shall bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Section 2.14.


 


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


 


2.16                       
Special Transfer
Provisions.


 


(a)                                 
Transfers to
Non-QIB Institutional Accredited Investors. 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 (as defined in
Rule 501(a)(l), (2), (3) or (7) under the Securities Act) (an “Accredited
Investor” or an “Institutional Accredited Investor”) which is not a
QIB (excluding Non-U.S. Persons):


 


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 the
proposed transferee has delivered to the Registrar a certificate substantially
in the form of Exhibit C hereto and if such transfer is in respect of an
aggregate principal amount of Securities of less than $100,000, the proposed
transferee has delivered to the Registrar and the Issuers an opinion of counsel
acceptable to the Issuers that such transfer is in compliance with the
Securities Act and such other certifications, legal opinions or other
information that the Trustee may reasonably request in order to confirm that
such transaction is being made pursuant to an exemption from or in a
transaction not subject to the registration requirements of the Securities Act;
and


 


ii.                                      
if the proposed
transferor is an Agent Member holding a beneficial interest in a U.S. Global
Security, the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears a
Private Placement Legend, upon receipt by the Registrar of (x) the certificate
and opinion, if any, required by paragraph (i) above and (y) instructions given
in accordance with the Depository’s and the Registrar’s procedures, whereupon
(a) the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the applicable U.S. Global Security in an
amount equal to the principal amount of the beneficial interest in such U.S.
Global Security to be transferred, and an increase in the applicable Global
Security to which the beneficial interest is to be transferred or shall
authenticate and deliver one or more U.S. Physical Securities of like tenor and
amount.


 


37












 


(b)                                
Transfers to OIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Security to a
QIB (excluding transfers to Non-U.S. Persons, which shall be governed by clause
(e)):


 


i.                                         
if the Security to be
transferred consists of (x) either Offshore Physical Securities prior to the
removal of the Private Placement Legend or U.S. Physical Securities, the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
Security stating, or has otherwise advised the Issuers and the Registrar in
writing, that the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided for on the form
of Security stating, or has otherwise 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 or (y) an interest in the U.S. Global Securities, the transfer of such
interest may be effected only through the book entry system maintained by the
Depository; and


 


ii.                                      
if the proposed
transferee is an Agent Member, and the Securities to be transferred consist of
U.S. Physical Securities which after transfer are to be evidenced by an
interest in a U.S. Global Security, upon receipt by the Registrar of
instructions given in accordance with the Depository’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 applicable U.S. Global Security in
an amount equal to the principal amount of the U.S. Physical Securities to be
transferred, and the Trustee shall cancel the U.S. Physical Securities so
transferred.


 


(c)                                 
Transfers of
Interests in the Temporary Offshore Global Securities. The following provisions shall apply
with respect to registration of any proposed transfer of an interest in a
Temporary Offshore Global Securities:


 


i.                                         
The Registrar shall
register the transfer of any Temporary Offshore Global Security if the proposed
transferee is a QIB and the proposed transferor has checked the box provided
for on the form of Security stating, or has otherwise advised the Issuers and
the Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise 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


 


38












 


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.


 


ii.                                      
If the proposed
transferee is an Agent Member, upon receipt by the Registrar of the documents
referred to in clause (i)(y) above and instructions given in accordance with
the Depository’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
U.S. Global Securities in an amount equal to the principal amount of the
Temporary Offshore Global Securities to be transferred, and the Trustee shall
decrease the amount of the Temporary Offshore Global Securities.


 


(d)                                
Transfers of
Interests in the Permanent Offshore Global Securities or Unlegended Offshore
Physical Securities.
The following provisions shall apply with respect to any transfer of interests
in Permanent Offshore Global Securities or unlegended Offshore Physical
Securities. The Registrar shall register the transfer of any such Security
without requiring any additional certification.


 


(e)                                 
Transfers to
Non-U.S. Persons at Any Time. The following provisions shall apply with respect to
any transfer of a Security to a Non-U.S. Person:


 


i.                                         
prior to the 41st day
after the date on which such Security is originally issued, the Registrar shall
register any proposed transfer of a Security to a Non-U.S. Person upon receipt
of a certificate substantially in the form of Exhibit D hereto from the
proposed transferor.


 


ii.                                      
on and after the 41st
day after the date on which such Security is originally issued, the Registrar
shall register any proposed transfer to any Non-U.S. Person if the Security to
be transferred is a U.S. Physical Security or an interest in U.S. Global
Securities, upon receipt of a certificate substantially in the form of Exhibit
D hereto from the proposed transferor; and on or after the 41st day after the
date on which such Security is originally issued, the Registrar shall register
any proposed transfer of any Offshore Physical Security or Permanent Offshore
Global Security without requiring any certification.


 


iii.                                   
(a) if the proposed
transferor is an Agent Member holding a beneficial interest in the U.S. Global
Securities, upon receipt by the Registrar of (x) the documents, if any,
required by paragraph (i) or (ii) and (y) instructions in accordance with the
Depository’s and the Registrar’s procedures, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the U.S.
Global Securities in an amount equal to the principal amount of the beneficial
interest in the U.S. Global Securities to be transferred, and (b) if the
proposed transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depository’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 Offshore Global Securities in an
amount equal to the principal amount of the U.S. Physical Securities or the
U.S. Global Securities, as the case may be, to be transferred, and the Trustee
shall cancel the U.S. Physical Security, if any, so transferred or decrease the
amount of the U.S. Global Security.


 


39












 


(f)                                   
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) the transferee certifies that it is not an Affiliate of the Issuers
and the requested transfer is after the second anniversary of the later of (a)
the date on which such Securities are originally issued and (b) the last date
on which the Issuers or an Affiliate of the Issuers were the owner of such
Securities (or any predecessor Securities) or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder or (ii) the circumstance contemplated by paragraph (d) or (e)(ii) of
this Section 2.16 exists or (iii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Issuer 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.


 


(g)                                
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 shall transfer such Security
only as provided in this Indenture.


 


The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15 or
this Section 2.16 in accordance with its customary procedures. The Issuers
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,
prior written notice to the Registrar.


 


ARTICLE
III


 


REDEMPTION


 


3.1                              
Notices to Trustee.


 


If the Issuers elect or are required to redeem
Securities pursuant to Paragraph 5, 6 or 9 of the Securities, they shall notify
the Trustee in writing of the Redemption Date, the Redemption Price and the
principal amount of the applicable Securities to be redeemed. The Issuers 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), together with an Officers’ Certificate stating
that such redemption shall comply with the conditions contained herein and with
the information specified in Section 3.3.


 


3.2                              
Selection of Securities
To Be Redeemed.


 


In the event that less than all of the Securities are
to be redeemed at any time, selection of such Securities for redemption shall
be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which such Securities are listed or,
if such Securities are not then listed on a national securities exchange, on a pro rata basis, by lot or


 


40












 


by
such method as the Trustee shall deem fair and appropriate; provided, however, that no Securities of a principal amount
of $2,000 or less shall be redeemed in part; and provided further, that
if a partial redemption is made, selection of the Securities or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate (subject to the procedures of
the Depository).


 


3.3                              
Notice of Redemption.


 


At least 30 days but not more than 60 days before a
Redemption Date, the Issuers shall mail or cause to be mailed a notice of
redemption by first class mail, postage prepaid, to each Holder whose
Securities are to be redeemed at its registered address. At the Issuers’
request, sent at least 35 days before a Redemption Date (unless a shorter
period shall be acceptable to the Trustee), the Trustee shall give the notice
of redemption in the Issuers’ name and at the Issuers’ expense. Each notice of
redemption shall identify the Securities to be redeemed and shall state:


 


(a)                                 
the Redemption Date;


 


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


 


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


 


(d)                                
that Securities
called for redemption must be surrendered to the Paying Agent to collect the
Redemption Price plus accrued interest, if any;


 


(e)                                 
that, unless the
Issuers default 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 and accrued interest, if any, upon surrender to the Paying
Agent of the Securities redeemed;


 


(f)                                   
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;


 


(g)                                
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;


 


(h)                                
the Paragraph of the
Securities pursuant to which the Securities are to be redeemed; and


 


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


 


41












 


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.


 


3.4                              
Effect of Notice of
Redemption.


 


Once notice of redemption is mailed in accordance with
Section 3.3, 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.


 


3.5                              
Deposit of Redemption
Price.


 


On or before 11:00 a.m. New York time on the
Redemption Date, the Issuers shall deposit with the Paying Agent U.S. Legal
Tender in immediately available funds sufficient to pay the Redemption Price
plus accrued interest, if any, of all Securities to be redeemed on that date.


 


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


 


3.6                              
Securities Redeemed in
Part.


 


Upon surrender of a Security that is to be redeemed in
part only, the Trustee shall upon written instruction from the Issuers
authenticate for the Holder a new Security or Securities in a principal amount
equal to the unredeemed portion of the Security surrendered.


 


ARTICLE
IV


 


COVENANTS


 


4.1                              
Payment of Securities.


 


The Issuers, jointly and severally, shall pay the
principal of, premium, if any, and interest on the Securities in the manner
provided in the Securities. An installment of principal of, premium, if any, or
interest on the Securities shall be considered paid on the date it is due if
the Trustee or Paying Agent holds on that date U.S. Legal Tender in immediately
available funds designated for and sufficient to pay the installment. If either
of the Issuers or any Subsidiary of either Issuer acts as Paying Agent, an
installment of principal, premium, if any, or interest shall be considered paid
on the date it is due if the entity acting as Paying Agent complies with the


 


42












 


second
sentence of Section 2.4. Interest on the Securities shall be computed on the
basis of a 360-day year comprised of twelve 30-day months. As provided in
Section 6.9, upon any bankruptcy or reorganization procedure relative to either
Issuer, the Trustee shall serve as Paying Agent, if any, for the Securities.


 


4.2                              
Maintenance of Office or
Agency.


 


The Issuers, jointly and severally, shall maintain in
the Borough of Manhattan, The City of New York, the office or agency required
under Section 2.3. The Issuers shall give prompt written notice to the Trustee
of the location, and any change in the location, of such office or agency. If
at any time the Issuers 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 13.2.


 


The Issuers 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 Issuers shall 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.


 


The Issuers hereby initially designate the Trustee at
its address c/o The Bank of New York, One Wall Street - 27th Floor, New York,
NY 10286, Attention: Corporate Trust Division, as such office of the Issuers in
accordance with Section 2.3.


 


4.3                              
Limitation on Restricted
Payments.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, (1) declare or pay any
dividend or make any distribution on or with respect to its Capital Stock (other than (x)
dividends or distributions payable solely in shares of its Capital Stock (other
than Disqualified Stock) or in options, warrants or other rights to acquire
shares of such Capital Stock and (y) pro rata dividends or distributions on
common stock of Restricted Subsidiaries held by minority stockholders) held by
Persons other than the Parent or any of its Restricted Subsidiaries, (2)
purchase, call for redemption or redeem, retire or otherwise acquire for value
any shares of Capital Stock (including options, warrants or other rights to
acquire such shares of Capital Stock) of (A) the Parent, either Issuer or any
Subsidiary Guarantor held by any Person or (B) a Restricted Subsidiary (other
than an Issuer or a Subsidiary Guarantor) held by any Affiliate of the Parent
(other than a Wholly Owned Restricted Subsidiary) or any holder (or any
Affiliate of such holder) of 5% or more of the Capital Stock of the Parent, (3)
make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for
value, of Indebtedness of either Issuer that is subordinated in right of
payment to the Securities or any Indebtedness of the Parent or a Subsidiary
Guarantor that is subordinated in right of payment to the relevant Note
Guarantee (in each case, other than intercompany Indebtedness owed to the
Parent, either Issuer or any Subsidiary Guarantor) or (4) make any Investment,
other than a Permitted Investment, in any Person (such payments or any other
actions described in clauses (1) through (4) above being collectively “Restricted
Payments”) if, at the time of, and after giving effect to, the proposed
Restricted Payment:


 


43












 


(1)                                 
a Default or Event of
Default shall have occurred and be continuing,


 


(2)                                 
the Parent could not
Incur at least $1.00 of Indebtedness under the first paragraph of clause (a) of
Section 4.4, or


 


(3)                                 
the aggregate amount
of all Restricted Payments made after the Issue Date would exceed the sum of:


 


(A)                             
50% of the aggregate
amount of the Adjusted Consolidated Net Income (or, if the Adjusted
Consolidated Net Income is a loss, minus 100% of the amount of such loss)
accrued on a cumulative basis during the period (taken as one accounting
period) beginning on the first day of the fiscal quarter immediately following
the Acquisition Date and ending on the last day of the last fiscal quarter
preceding the Transaction Date for which reports have been filed with the
Commission or provided to the Trustee, plus


 


(B)                               
the aggregate
Qualified Proceeds received by the Parent after the Acquisition Date as a
capital contribution or from the issuance and sale of its Capital Stock (other
than Disqualified Stock) to a Person who is not a Subsidiary of the Parent,
including an issuance or sale permitted by the Indenture of Indebtedness of the
Parent for cash subsequent to the Acquisition Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the Parent,
or from the issuance to a Person which is not a Subsidiary of the Parent of any
options, warrants or other rights to acquire Capital Stock of the Parent (in
each case, exclusive of any Disqualified Stock or any options, warrants or
other rights that are redeemable at the option of the holder, or are required
to be redeemed, prior to the Stated Maturity of the Securities) plus


 


(C)                               
an amount equal to
the net reduction in Investments (other than reductions in Permitted
Investments) in any Person resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of assets, in
each case, to the Parent or any Restricted Subsidiary or from the Qualified
Proceeds from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation of Adjusted
Consolidated Net Income), from the release of any Guarantee or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of “Investments”), not to
exceed, in each case, the amount of Investments previously made by the Parent
or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.


 


The foregoing provision shall not be violated by
reason of:


 


(1)                                 
the payment of any
dividend or redemption of any Capital Stock within 60 days after the related
date of declaration or call for redemption if, at said date of declaration or
call for redemption, such payment or redemption would comply with the preceding
paragraph;


 


44












 


(2)                                 
the redemption,
repurchase, defeasance or other acquisition or retirement for value of
Indebtedness that is subordinated in right of payment to the Securities or any
Note Guarantee, including premium, if any, and accrued interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under subclause (3) of
the second paragraph of clause (a) of Section 4.4;


 


(3)                                 
the repurchase,
redemption or other acquisition of Capital Stock of the Parent, either Issuer or
a Subsidiary Guarantor (or options, warrants or other rights to acquire such
Capital Stock) in exchange for, or out of the proceeds of a capital
contribution or a substantially concurrent offering of, shares of Capital Stock
(other than Disqualified Stock) of the Parent (or options, warrants or other
rights to acquire such Capital Stock); provided
that such options, warrants or other rights are not redeemable at
the option of the holder, or required to be redeemed, prior to the Stated
Maturity of the Securities;


 


(4)                                 
the making of any
principal payment or the repurchase, redemption, retirement, defeasance or
other acquisition for value of Indebtedness which is subordinated in right of
payment to the Securities or any Note Guarantee in exchange for, or out of the
proceeds of a capital contribution or a substantially concurrent offering of,
shares of the Capital Stock (other than Disqualified Stock) of the Parent (or
options, warrants or other rights to acquire such Capital Stock); provided that such options, warrants or
other rights are not redeemable at the option of the holder, or required to be
redeemed, prior to the Stated Maturity of the Securities;


 


(5)                                 
payments or
distributions, to dissenting stockholders required by applicable law, pursuant
to or in connection with a consolidation, merger or transfer of assets of the
Parent or either Issuer that complies with the provisions of the Indenture
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of the Parent or such Issuer, as applicable;


 


(6)                                 
Investments acquired
as a capital contribution to, or in exchange for, or out of the proceeds of a
substantially concurrent offering of, Capital Stock (other than Disqualified
Stock) of the Parent;


 


(7)                                 
the repurchase of
Capital Stock of the Parent deemed to occur upon the exercise of options or
warrants if such Capital Stock represents all or a portion of the exercise
price thereof and related withholding tax (not in excess of $1.0 million in any
calendar year);


 


(8)                                 
the declaration or
payment of dividends on Capital Stock (other than Disqualified Stock) of the
Parent in an aggregate annual amount not to exceed 6% of the Net Cash Proceeds
received by the Parent after the Acquisition Date from the sale of such Capital
Stock;


 


(9)                                 
the repurchase or
other acquisition of Capital Stock of the Parent or any of its Subsidiaries
from employees, former employees, directors or former directors of the Parent
or any of its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals purchase or
sell, or are granted the option to purchase or sell, such Capital Stock;


 


45












 


provided, however, that the aggregate amount of such repurchases and
other acquisitions shall not exceed $5.0 million in any calendar year;


 


(10)                           
dividends or payments
to any Person other than the Parent or a Restricted Subsidiary pursuant to any
Tax Sharing Agreement; or


 


(11)                           
Restricted Payments
in an amount which, when taken together with all other Restricted Payments made
pursuant to this clause (11), do not exceed $10.0 million,


 


provided that, except in the case of clauses (1) and (3), no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.


 


Each Restricted Payment permitted pursuant to the
preceding paragraph (other than the Restricted Payment referred to in clause
(2), (7) or (10) thereof or an exchange of Capital Stock for Capital Stock or
Indebtedness referred to in clause (3) or (4) thereof or an Investment acquired
as a capital contribution or in exchange for Capital Stock referred to in
clause (6) thereof) shall be included in calculating whether the conditions of
clause (C) of the first paragraph of this Section 4.3 have been met with
respect to any subsequent Restricted Payments, and the Net Cash Proceeds from
any issuance of Capital Stock referred to in clause (3), (4) or (6) of the
preceding paragraph shall not be included in such calculation. In the event the
proceeds of an issuance of Capital Stock of the Parent are used for the
redemption, repurchase or other acquisition of the Securities, or Indebtedness
that is pari passu with the
Securities or the Subsidiary Guarantee, then the Net Cash Proceeds of such
issuance shall be included in clause (C) of the first paragraph of this Section
4.3 only to the extent such proceeds are not used for such redemption,
repurchase or other acquisition of Indebtedness.


 


For purposes of determining compliance with this
Section 4.3, (x) the amount, if other than in cash, of any Restricted Payment
shall be determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution and (y)
in the event that a Restricted Payment meets the criteria of more than one of
the types of Restricted Payments described in the above clauses, including the
first paragraph of this Section 4.3, the Parent, in its sole discretion, may
order and classify, and from time to time may reclassify, such Restricted
Payment if it would have been permitted at the time such Restricted Payment was
made and at the time of such reclassification.


 


4.4                              
Limitation on
Indebtedness and Issuance of Preferred Stock.


 


(a)                                 
The Parent shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Securities, the Note Guarantees, the Exchange
Notes and the related Note Guarantees and other Indebtedness existing on the
Issue Date) and the Parent shall not permit any of its Restricted Subsidiaries
to issue any preferred stock; provided,
however, that the Parent may Incur Indebtedness (including, without
limitation, Acquired Indebtedness) and any Restricted Subsidiary may Incur
Indebtedness (including, without limitation, Acquired Indebtedness) or issue
preferred stock if, after giving effect to the Incurrence of such Indebtedness
or issuance of preferred stock and the receipt and application of the proceeds
therefrom, the Fixed Charge Coverage Ratio would be greater than 2.0:1.0.


 


46












 


Notwithstanding the foregoing, the Parent and any
Restricted Subsidiary (except as specified below) may Incur each and all of the
following:


 


(1)                                 
the incurrence by the
Parent and any Restricted Subsidiary of additional Indebtedness and letters of
credit under the Credit Facilities in an aggregate principal amount at any one
time outstanding under this clause (1) (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Parent
and such Restricted Subsidiary thereunder) (together with refinancings thereof)
not to exceed the greater of (x) $220.0 million less any amount of such
Indebtedness permanently repaid as provided under Section 4.18 herein and (y)
the Borrowing Base;


 


(2)                                 
Indebtedness owed (A)
to the Parent, either Issuer or any Subsidiary Guarantor or (B) to any other
Restricted Subsidiary; provided that
(x) any event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Parent or another
Restricted Subsidiary) shall be deemed, in each case, to constitute an
Incurrence of such Indebtedness not permitted by this clause (2) and (y) if the
Parent, either Issuer or any Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness must be
expressly subordinated in right of payment to the Securities, in the case of
the Issuer, or the Note Guarantee, in the case of the Parent or a Subsidiary
Guarantor;


 


(3)                                 
Indebtedness issued
in exchange for, or the net proceeds of which are used to refinance or refund,
then outstanding Indebtedness (other than Indebtedness outstanding under
clauses (1), (2), (5), (6), (7), (8), (10), (11), (12) and (13) and any
refinancings thereof) in an amount not to exceed the amount so refinanced or
refunded (plus premiums, accrued interest, fees and expenses); provided that (a) Indebtedness the
proceeds of which are used to refinance or refund the Securities or
Indebtedness that is pari passu with,
or subordinated in right of payment to, the Securities or a Note Guarantee
shall only be permitted under this clause (3) if (x) in case the Securities are
refinanced in part or the Indebtedness to be refinanced is pari passu with the Securities or a Note
Guarantee, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is outstanding, is
expressly made pari passu with,
or subordinate in right of payment to, the remaining Securities or the Note
Guarantee, or (y) in case the Indebtedness to be refinanced is subordinated in
right of payment to the Securities or a Note Guarantee, such new Indebtedness,
by its terms or by the terms of any agreement or instrument pursuant to which
such new Indebtedness is issued or remains outstanding, is expressly made
subordinate in right of payment to the Securities or the Note Guarantee at
least to the extent that the Indebtedness to be refinanced is subordinated to
the Securities or the Note Guarantee, (b) such new Indebtedness, determined as
of the date of Incurrence of such new Indebtedness, does not mature prior to
the Stated Maturity of the Indebtedness to be refinanced or refunded, and the Average
Life of such new Indebtedness is at least equal to the remaining Average Life
of the Indebtedness to be refinanced or refunded and (c) such new Indebtedness
is Incurred by the Parent, either Issuer or a Subsidiary Guarantor or by the
Restricted Subsidiary that is the obligor on the Indebtedness to be refinanced
or refunded;


 


47






 


 










 


(4)          
Indebtedness of the
Parent or either Issuer, to the extent the net proceeds thereof are promptly
(A) used to purchase Securities tendered in an Offer to Purchase made as a
result of a Change in Control or (B) deposited to defease the Securities as
described under Sections 8.1 or 8.2 and 8.3;


 


(5)          
Guarantees of the
Securities and Guarantees of Indebtedness of the Parent or any of its
Restricted Subsidiaries by any other Restricted Subsidiary of the Parent; provided the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.15
herein;


 


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


 


(7)          
Indebtedness in
respect of performance bonds, bankers’ acceptances, workers’ compensation
claims, surety or appeal bonds and payment obligations in connection with
self-insurance or similar obligations (and letters of credit in respect
thereof);


 


(8)          
Indebtedness Incurred
to finance the cost (including the cost of improvement or construction) to
acquire real or personal property (including acquisitions by way of Capitalized
Lease Obligations and acquisitions of the Capital Stock of a Person that
becomes a Restricted Subsidiary, to the extent of the fair market value of the
real or personal property so acquired, plus goodwill associated therewith) by
the Parent or a Restricted Subsidiary after the Issue Date; provided, however, that the aggregate principal amount of
such Indebtedness outstanding at any time (together with any refinancing
thereof) may not exceed $15.0 million;


 


(9)          
the incurrence by the
Parent or any of its Restricted Subsidiaries of Acquired Indebtedness; provided that the Fixed Charge Coverage
Ratio immediately after giving pro forma effect to such incurrence would be
greater than the Fixed Charge Coverage Ratio immediately prior to such
incurrence;


 


(10)        
obligations under
Commodity Agreements, Currency Agreements and Interest Rate Agreements designed
primarily to protect the Parent or its Restricted Subsidiaries against
fluctuations in commodity prices, foreign currency exchange rates or interest
rates and that do not increase the Indebtedness of the obligor outstanding at
any time other than as a result of fluctuations in commodity prices, foreign
currency exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder;


 


(11)        
Indebtedness of any
Foreign Subsidiary in an aggregate principal amount outstanding at any time
(together with refinancings thereof) not to exceed $5.0 million;


 


(12)        
Acquired Indebtedness
in connection with the consummation of the Acquisition on substantially the
same terms as described in the Offering Memorandum;


 


48












 


(13)        
obligations relating
to Banking Services; and


 


(14)        
additional
Indebtedness of the Parent, either Issuer or any Subsidiary Guarantor (in
addition to Indebtedness permitted under clauses (1) through (13) above) in an
aggregate principal amount outstanding at any time (together with refinancings
thereof) not to exceed $25.0 million, less any amount of such Indebtedness
permanently repaid as provided under Section 4.18 herein.


 


(b)           Notwithstanding any other provision of
Section 4.4, the maximum amount of Indebtedness that may be outstanding
pursuant to this Section 4.4 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of
fluctuations in the exchange rates of currencies.


 


(c)           For purposes of determining any
particular amount of Indebtedness under this Section 4.4, (x) Indebtedness
Incurred under the Credit Agreement on the Acquisition Date shall be treated as
Incurred pursuant to subclause (1) of the second paragraph of clause (a) of
this Section 4.4, (y) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (z) any Liens
granted pursuant to the equal and ratable provisions referred to in
Section 4.16 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.4, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described above (other than Indebtedness referred to in clause (x) of the
preceding sentence), including under the first paragraph of clause (a), the
Parent, in its sole discretion, may classify, and from time to time may
reclassify, such item of Indebtedness.


 


(d)           The Obligors shall not Incur any
Indebtedness if such Indebtedness is subordinate in right of payment to any
other Indebtedness unless such Indebtedness is also subordinate in right of
payment to the Securities (in the case of the Issuers) or the Note Guarantees
(in the case of the Parent or any Subsidiary Guarantor), in each case, to the
same extent.


 


4.5         
Corporate Existence.


 


Except as otherwise permitted by Article V, the
Parent shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and the corporate, partnership
or other existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the rights (charter and statutory) and material franchises of the Parent and
each of its Restricted Subsidiaries; provided,
however, that neither
the Parent nor any Restricted Subsidiary shall be required to preserve any such
right or franchise or in the case of any Restricted Subsidiary, its existence,
if (in each case) the Board of Directors of the Parent shall determine that the
loss thereof is not, and will not be, adverse in any material respect to the
Holders.


 


4.6         
Payment of Taxes and Other Claims.


 


The Parent shall 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
Subsidiaries or upon the income, profits or property of it or any of its
Restricted Subsidiaries and (b) all lawful claims for labor, materials and
supplies which, in


 


49












 


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
Parent shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, (i) the
applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate provision has been made or (ii) where the
failure to effect such payment or discharge is not adverse in any material
respect to the Holders.


 


4.7         
Maintenance of Properties and Insurance.


 


(a)           The parent shall cause all material
properties owned 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, taken as a whole, 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 4.7
shall prevent the Parent 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 Parent or any such Restricted
Subsidiary desirable in the conduct of the business of the Parent or any such Restricted
Subsidiary, and if such discontinuance or disposal is not adverse in any
material respect to the Holders; provided
further that nothing in this Section 4.7 shall prevent the
Parent or any of its Restricted Subsidiaries from discontinuing or disposing of
any properties to the extent otherwise permitted by this Indenture.


 


(b)           The Parent 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, in the
Parent’s reasonable judgment, customarily carried by similar businesses of
similar size, including property and casualty loss, workers’ compensation and interruption
of business insurance.


 


4.8         
Compliance Certificate; Notice of Default.


 


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


 


50












 


(b)           The annual financial statements delivered
pursuant to Section 4.10 shall be accompanied by a written report of the
Parent’s independent accountants (who shall be a firm of established national
reputation) that in conducting their audit of such financial statements nothing
has come to their attention that would lead them to believe that the Parent or
any of its Restricted Subsidiaries has violated any provisions of
Article IV, V or VI of this Indenture insofar as they relate to accounting
matters or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.


 


(c)           The Parent shall deliver to the Trustee,
in the event that any Officer becomes aware of any Default or Event or Default
in the performance of any covenant, agreement or condition contained in this
Indenture, an Officers’ Certificate specifying the Default or Event of Default
and describing its status with particularity.


 


4.9         
Compliance with Laws.


 


The Parent shall comply, and shall cause each of its
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 for such noncompliances as would not in the
aggregate have a material adverse effect on the financial condition or results
of operations of the Parent and its Subsidiaries taken as a whole.


 


4.10       
Reports to Holders.


 


Whether or not the Parent is then required to file
reports with the Commission, the Parent shall file with the Commission all such
reports and other information as it would be required to file with the
Commission by Section 13(a) or 15(d) under the Securities Exchange Act of
1934 if it were subject thereto (provided,
however, that the
deadline for filing the Parent’s first quarterly report shall be the date
occurring 30 days after the deadline by which it would otherwise be required to
file such report if it were subject thereto). The Parent shall supply to the
Trustee and to each Holder who so requests or shall supply to the Trustee for
forwarding to each such Holder who so requests, without cost to such Holder,
copies of such reports and other information. In addition, at all times prior
to the earlier of the date of consummation of the Exchange Offer or
effectiveness of the Shelf Registration Statement and the date that is 360 days
after the Issue Date, the Parent shall, at its cost, deliver to each Holder of
the Securities quarterly and annual reports substantially equivalent to those
which would be required by the Exchange Act. In addition, at all times prior to
the Registration, upon the request of any Holder or any prospective purchaser
of the Securities designated by a Holder, the Parent shall supply to such
Holder or such prospective purchaser the information required under Rule 144A
under the Securities Act.


 


Anything to the contrary herein notwithstanding, any
failure to file, supply or deliver by any given date shall be deemed cured when
such filing, supplying or delivering has occurred.


 


51












 


4.11       
Waiver of Stay, Extension or Usury Laws.


 


Each of the Parent, each Issuer and each Subsidiary
Guarantor, if any, covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Parent, such Issuer or such
Subsidiary Guarantor from paying all or any portion of the principal of,
premium, if any, and/or interest on the Securities or the Note Guarantee of the
Parent or such Subsidiary Guarantor as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture, and (to the extent that it may lawfully do so)
each hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.


 


4.12       
Limitation on Transactions with Shareholders and Affiliates.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, enter into, renew or extend
any transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any
holder (or any Affiliate of such holder) of 5% or more of any class of Capital
Stock of the Parent or with any Affiliate of the Parent, except upon fair and
reasonable terms no less favorable to the Parent or such Restricted Subsidiary
than could be obtained, at the time of such transaction or, if such transaction
is pursuant to a written agreement, at the time of the execution of the
agreement providing therefor, in a
comparable arm’s length transaction with a Person that is not such a holder or
an Affiliate.


 


The foregoing limitation does not limit, and shall not
apply to:


 


(1)          
transactions (A)
approved by a majority of the disinterested members of the Board of Directors
or (B) for which the Parent or a Restricted Subsidiary delivers to the Trustee
a written opinion of a nationally recognized investment banking, accounting,
valuation or appraisal firm stating that the transaction is fair to the Parent
or such Restricted Subsidiary from a financial point of view;


 


(2)          
any transaction
solely between the Parent and any of its Restricted Subsidiaries or solely
between or among Restricted Subsidiaries;


 


(3)          
the payment of reasonable
and customary regular fees to directors of the Parent or any of its Restricted
Subsidiaries who are not its employees and indemnification arrangements entered
into by the Parent or any of its Restricted Subsidiaries consistent with past
practices of the Parent or such Restricted Subsidiary;


 


(4)          
the entering into of,
and making of payments in connection with any Tax Sharing Agreement;


 


(5)          
any sale of shares of
Capital Stock (other than Disqualified Stock) of the Parent;


 


(6)          
any Permitted
Investments or any Restricted Payments not prohibited by Section 4.3;


 


52












 


(7)          
any agreement as in
effect or entered into as of the Issue Date (as disclosed in the Offering
Memorandum) or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) and any replacement agreement
thereto so long as any such amendment or replacement agreement is not more
disadvantageous to the Parent or such Restricted Subsidiary, as applicable, in
any material respect than the original agreement as in effect on the Issue
Date;


 


(8)          
the issuance of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to or the funding of, employment arrangements, stock options and stock
ownership plans or similar employee benefit plans approved by the Board of
Directors in good faith and loans to employees of the Parent and its
Subsidiaries which are approved by the Board of Directors in good faith;


 


(9)          
transactions with
customers, clients, suppliers, or purchasers or sellers of goods or services,
in each case, on ordinary business terms and otherwise in compliance with the
terms of this Indenture, which are fair to the Parent or its Restricted
Subsidiaries, in the reasonable determination of the Board of Directors of the
Parent or the senior management thereof, or are on terms at least as favorable
as could reasonably have been obtained at such time from an unaffiliated party;


 


(10)        
(x) the payment by
the Parent or either Issuer to any Affiliate of the Parent of management fees
of not more than $2.0 million (other than a payment described in clause (11))
or (y) the reimbursement to any such Affiliate of related expenses of not more
than $500,000, in the case of (x) or (y), in the aggregate in any calendar
year, as invoiced by such Affiliate;


 


(11)        
the payment of a
transaction fee of $4.0 million by the Parent to One Equity Partners in
connection with the consummation of the Acquisition on the Acquisition Date and
the offering of the Securities on the Issue Date; or


 


(12)        
any transaction with
a joint venture or similar entity which would be subject to this covenant
solely because the Parent or a Restricted Subsidiary of the Parent owns an
equity interest in or otherwise controls such joint venture or similar entity.


 


Notwithstanding the foregoing, any transaction or
series of related transactions covered by the first paragraph of this
Section 4.12, and not covered by clauses (2) through (12) of this paragraph, (a) the aggregate amount
of which exceeds $5,0 million in value, must be approved or determined to be
fair in the manner provided for in clause (1)(A) or (B) above and (b) the
aggregate amount of which exceeds $20.0 million in value must be determined to
be fair in the manner provided for in clause (1)(B) above.


 


4.13       
Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (1) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Parent or any other Restricted Subsidiary,
(2) repay any Indebtedness owed to the


 


53












 


Parent or any other
Restricted Subsidiary, (3) make loans or advances to the Parent or any other
Restricted Subsidiary or (4) transfer any of its property or assets to the
Parent or any other Restricted Subsidiary.


 


The foregoing provisions shall not restrict any
encumbrances or restrictions:


 


(1)          
existing under the
Credit Agreement as in effect on the Acquisition Date or the Indenture or any
other agreements as in effect on the Issue Date, and any extensions,
refinancings, renewals or replacements of such agreements; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals on replacements
taken as a whole are no more restrictive in any material respect than those
encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced;


 


(2)          
existing under or by
reason of applicable law;


 


(3)          
existing with respect
to any Person or the property or assets of such Person acquired by the Parent
or any Restricted Subsidiary, existing at the time of such acquisition and not
incurred in contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other than
such Person or the property or assets of such Person so acquired and any
extensions, refinancings, renewals or replacements thereof; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
taken as a whole are no more restrictive in any material respect than those
encumbrances or restrictions that are then in effect and that are being extended,
refinanced, renewed or replaced;


 


(4)          
in the case of clause
(4) of the first paragraph of this section 4.13:


 


(A)         
that restrict in a
customary manner the subletting, assignment or transfer of any property or
asset that is a lease, license, conveyance or contract or similar property or
asset,


 


(B)          
existing by virtue of
any transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Parent or any Restricted Subsidiary not
otherwise prohibited by the Indenture,


 


(C)          
arising or agreed to
in the normal course of business, not relating to any Indebtedness, and that do
not, individually or in the aggregate, detract from the value of property or
assets of the Parent or any Restricted Subsidiary in any manner material to the
Parent or any Restricted Subsidiary, or


 


(D)         
arising under
purchase money obligations for property acquired in the normal course of
business or Capitalized Lease Obligations;


 


(5)          
with respect to a
Restricted Subsidiary and its Subsidiaries and imposed pursuant to an agreement
that has been entered into for the sale or disposition of all or


 


54












 


substantially all of the Capital Stock of, or property
and assets of, such Restricted Subsidiary and its Subsidiaries;


 


(6)          
arising from
customary provisions in joint venture agreements and other similar agreements
entered into in the normal course of business;


 


(7)          
on cash or other
deposits or net worth imposed by customers under contracts entered into in the
normal course of business; or


 


(8)          
arising under
agreements governing Indebtedness Incurred by a Foreign Subsidiary in
accordance with subclause (11) of the second paragraph of clause (a) of
Section 4.4.


 


Nothing contained in this Section 4.13 shall
prevent the Parent or any Restricted Subsidiary from (1) creating, incurring,
assuming or suffering to exist any Liens otherwise permitted in
Section 4.16 or (2) restricting the sale or other disposition of property
or assets of the Parent or any of its Restricted Subsidiaries that secure
Indebtedness of the Parent or any of its Restricted Subsidiaries.


 


4.14       
Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries.


 


The Parent shall at all times own 100% of the Voting
Stock of each Issuer. Subject to the immediately preceding sentence, the Parent
shall not sell, and shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell, any shares of Capital Stock of a Restricted
Subsidiary (including options, warrants or other rights to purchase shares of
such Capital Stock) except:


 


(1)          
to the Parent or a
Wholly Owned Restricted Subsidiary;


 


(2)          
issuances of
director’s qualifying shares or sales to foreign nationals of shares of Capital
Stock of Restricted Subsidiaries that are Foreign Subsidiaries, to the extent
required by applicable law;


 


(3)          
if, immediately after
giving effect to such issuance or sale, such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such issuance or sale would have been
permitted to be made under Section 4.3 if made on the date of such
issuance or sale; or


 


(4)          
sales of common stock
(including options, warrants or other rights to purchase shares of such common
stock) of a Restricted Subsidiary, provided that the Parent or such Restricted
Subsidiary applies the Net Cash Proceeds of any such sale in accordance with
Section 4.18.


 


4.15       
Limitation on Issuances of Guarantees by Restricted Subsidiaries.


 


Neither the Parent nor any Issuer shall permit any
Restricted Subsidiary which is not the Issuer or a Subsidiary Guarantor,
directly or indirectly, to Guarantee any Indebtedness (“Guaranteed
Indebtedness”) of the Parent or any other Restricted Subsidiary (other than
an


 


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Excluded Subsidiary)
unless such Restricted Subsidiary (i) executes and delivers to the Trustee a
supplemental indenture in the form attached as Exhibit F hereto pursuant
to which such subsidiary shall unconditionally guarantee all of the Issuers’
obligations under the Securities and this Indenture, (ii) executes and delivers
to the Trustee a guarantee in the form attached as Exhibit E hereto and
(iii) delivers to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable obligation
of such Restricted Subsidiary.


 


After the execution of a supplemental indenture
pursuant to this Section 4.15, such Restricted Subsidiary party thereto
shall be a Subsidiary Guarantor for all purposes of this Indenture.


 


If the Guaranteed Indebtedness is (A) pari passu in right of payment with the
Securities or any Subsidiary Guarantee, then the Guarantee of such Guaranteed
Indebtedness shall be pari passu in
right of payment with, or subordinated to, the Subsidiary Guarantee or (B)
subordinated in right of payment to the Securities or any Subsidiary Guarantee,
then the Guarantee of such Guaranteed Indebtedness shall be subordinated in
right of payment to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Securities or the Subsidiary
Guarantee.


 


Notwithstanding the foregoing, any Subsidiary
Guarantee by a Restricted Subsidiary may provide by its terms that it shall be
automatically and unconditionally released and discharged upon any:


 


(1)          
sale, exchange or
transfer, to any Person not a Subsidiary of the Parent, of all of the Parent’s
and each Restricted Subsidiary’s Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture) or upon the designation of such Restricted
Subsidiary as an Unrestricted Subsidiary in accordance with the terms of this
Indenture; or


 


(2)          
the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under
such Guarantee.


 


4.16       
Limitation on Liens.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien on
any of its assets or properties of any character (including any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary) without making
effective provision for all of the Securities and all other amounts due under
this Indenture to be directly secured equally and ratably with (or, if the
obligation or liability to be secured by such Lien is subordinated in right of
payment to the Securities, prior to) the obligation or liability secured by
such Lien.


 


The foregoing limitation does not apply to:


 


(1)          
Liens existing on the
Issue Date;


 


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(2)          
Liens granted on or
after the Issue Date on any assets or Capital Stock of the Parent or its
Restricted Subsidiaries created in favor of the Holders;


 


(3)          
Liens with respect to
the assets of a Restricted Subsidiary granted by such Restricted Subsidiary to
the Parent or a Wholly Owned Restricted Subsidiary to secure Indebtedness owing
to the Parent or such other Wholly Owned Restricted Subsidiary;


 


(4)          
Liens securing
Indebtedness which is Incurred to refinance secured Indebtedness which is
permitted to be Incurred under subclause (3) of the second paragraph of clause
(a) of Section 4.4; provided that
such Liens do not extend to or cover any property or assets of the Parent or
any Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced;


 


(5)          
Liens to secure
Indebtedness under subclauses (1) and (13) of the second paragraph of clause
(a) of Section 4.4;


 


(6)          
Liens (including
extensions and renewals thereof) upon real or personal property acquired after
the Issue Date; provided that (a) such Lien is created solely for the purpose
of securing Indebtedness Incurred, in accordance with Section 4.4, to
finance the cost (including the cost of improvement or construction) of the
item of property or assets subject thereto and such Lien is created prior to,
at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property, (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any
improvements on such item;


 


(7)          
Liens on cash set
aside at the time of the Incurrence of any Indebtedness, or government
securities purchased with such cash, in either case, to the extent that such
cash or government securities pre-fund the payment of interest on such
Indebtedness and are held in a collateral or escrow account or similar
arrangement to be applied for such purpose; or


 


(8)          
Permitted Liens.


 


4.17        Change of Control.


 


(a)           Upon the occurrence of a Change of
Control, the Issuers shall be obligated to make an offer to purchase (the “Change
of Control Offer”), and shall purchase, on a business day (the “Change
of Control Payment Date”) as described below, all or a portion of the then
outstanding Securities at a purchase price equal to 101.0% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon to the Change
of Control Payment Date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date). The Change of Control Offer shall remain open for at least 20 business
days and until the close of business on the Change of Control Payment Date.


 


(b)           Prior to the mailing of the notice
referred to below, but in any event within 30 days following any Change of
Control, the Issuers shall, unless consents are obtained, repay all


 


57












 


indebtedness then
outstanding which by its terms would prohibit such Note repurchase, either
prior to or concurrently with such Note repurchase.


 


The Issuers shall first comply with the covenant in
the immediately preceding sentence before being required to repurchase
Securities pursuant to the provisions described below. The Issuers’ failure to
comply with the covenant described in the second preceding sentence (and any
failure to send the notice referred to in clause (c) below because same is
prohibited by the second preceding sentence) may (with notice and lapse of
time) constitute an Event of Default described in clause (d) of
Section 6.1 but shall not constitute an Event of Default described in
clause (a) of Section 6.1.


 


(c)           Within 30 days following the date upon
which a Change of Control occurs (the “Change of Control Date”), the
Issuers shall send, by first class mail, a notice to each Holder, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. The notice to the Holders shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Change of
Control Offer. Such notice shall state:


 


(1)          
that the Change of
Control Offer is being made pursuant to this Section 4.17 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, which shall be a business day, that is not earlier than 30 days or later
than 60 days from the date such notice is mailed, other than as may be required
by law;


 


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


 


(4)          
that, unless the
Issuers default 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;


 


(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, telex, 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.


 


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The Issuers shall not be required to make a Change of
Control Offer upon a Change of Control if any other Person makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.17 applicable to a Change of
Control Offer made by the Issuers and purchases all Securities validly tendered
and not withdrawn under such Change of Control Offer. This covenant and other
provisions contained in this Indenture relating to the Issuers’ obligation to
make a Change of Control Offer may be waived or modified with the written
consent of the Holders of a majority in principal amount of Securities.


 


On or before the Change of Control Payment Date, the
Issuers shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
U.S. Legal Tender in immediately available funds sufficient to pay the purchase
price plus accrued interest, if any, of all Securities so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers’
Certificate stating the Securities or portions thereof being purchased by the
Issuers. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price plus accrued interest,
if any, and upon written order of the Issuers accompanied by an Officers’
Certificate, the Trustee shall promptly authenticate and mail to such Holders
new Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Any Securities not so accepted shall be promptly mailed
by the Issuers to the Holder thereof. For purposes of this Section 4.17,
the Trustee shall act as the Paying Agent.


 


Any amounts remaining with the Paying Agent after the
purchase of Securities pursuant to a Change of Control Offer shall be returned
by the Trustee to the Issuers.


 


The Issuers shall comply with the requirements of Rule
14e-l under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Securities pursuant to a Change of Control Offer. To the
extent the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.17, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.17 by virtue thereof.


 


4.18       
Limitation on Asset Sales.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, consummate any Asset Sale, unless (1) the
consideration received by the Parent or such Restricted Subsidiary is at least
equal to the fair market value of the assets sold or disposed of and (2) at
least 75% of the consideration received consists of (a) cash or Temporary Cash
Investments, (b) the assumption of unsubordinated Indebtedness of the Parent,
either Issuer or any Subsidiary Guarantor or Indebtedness of any other
Restricted Subsidiary (in each case, other than Indebtedness owed to the Parent
or any Affiliate of the Parent), provided that
the Parent, either Issuer, such Subsidiary Guarantor or such other Restricted
Subsidiary is irrevocably and unconditionally released in writing from all
liability under such Indebtedness, or (c) Replacement Assets.


 


For the purposes of this provision, any securities,
notes or other obligations received by the Parent or any of its Restricted
Subsidiaries from the transferee that are converted by the


 


59












 


Parent or any of its
Restricted Subsidiaries into cash or Temporary Cash Investments within 60 days
of their receipt by the Parent or any of its Restricted Subsidiaries shall be
deemed to be cash, but only to the extent of the cash or Temporary Cash
Investments received.


 


The Parent shall, or shall cause the relevant
Restricted Subsidiary to:


 


(1)          
within twelve months
after the date of receipt of any Net Cash Proceeds from an Asset Sale,


 


(A)         
apply an amount equal
to such Net Cash Proceeds to permanently repay unsubordinated Indebtedness of
the Parent, either Issuer or any Subsidiary Guarantor or Indebtedness of any
other Restricted Subsidiary, in each case, owing to a Person other than the
Parent, either Issuer or any Affiliate of the Parent, or


 


(B)          
invest an equal amount,
or the amount not so applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within 12 months after the date of such
agreement) in Replacement Assets or reduce revolving credit Indebtedness used
to finance Replacement Assets within 12 months prior to such Asset Sale, and


 


(2)          
apply (no later than
the end of the 12-month period referred to in clause (1)) any excess Net Cash
Proceeds (to the extent not applied pursuant to clause (1)) as provided in the
following paragraphs of this Section 4.18.


 


The amount of such excess
Net Cash Proceeds required to be applied (or to be committed to be applied)
during such 12-month period as set forth in clause (1) of the preceding
sentence and not applied as so required by the end of such period shall
constitute “Excess Proceeds.”


 


If, as of the first day of any calendar month, the
aggregate amount of Excess Proceeds not theretofore subject to an Offer to
Purchase pursuant to this Section 4.18 totals at least $10.0 million, the
Issuers must commence, not later than the fifteenth business day of such month,
and consummate, as soon as reasonably practicable thereafter, an Offer to
Purchase from the Holders (and, if required by the terms of any Indebtedness
that is pari passu with the Securities (“Pari Passu Indebtedness”), from
the holders of such Pari Passu Indebtedness) on a pro rata basis an aggregate
principal amount of Securities (and Pari Passu Indebtedness) equal to the
Excess Proceeds on such date, at a purchase price equal to 100% of their
principal amount, plus, in each case, accrued interest (if any) to the Payment
Date. To the extent that any Excess Proceeds remain after consummation of an
Offer to Purchase pursuant to this Section 4.18, the Issuers may use those
Excess Proceeds for any purpose not otherwise prohibited by the Indenture and
the amount of Excess Proceeds shall be reset to zero.


 


4.19       
Limitation on Business Activities; Limitation on Pre-Acquisition
Activities.


 


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


 


Anything in this Indenture to the contrary
notwithstanding, at any time prior to the Acquisition Date, the Parent shall
not, and shall not permit any Restricted Subsidiary to:


 


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(1)          
incur any
Indebtedness;


 


(2)          
make any Restricted
Payment;


 


(3)          
make any Investment
that would be a Permitted Investment (other than a Permitted Investment
described in clause (2) of the definition thereof);


 


(4)          
consummate any Asset
Sale;


 


(5)          
create, incur, assume
or suffer to exist any Lien on any of its assets or properties (other than a
Lien permitted under clause (2) of the second paragraph of Section 4.16);
or


 


(6)          
purchase any property
or assets or make any capital expenditure,


 


in
each case, other than as contemplated by the Merger Agreement.


 


4.20       
Limitation on Sale and Leaseback Transactions.


 


The Parent shall not, and shall not permit any
Restricted Subsidiary to, enter into any Sale and Leaseback Transaction
involving any of its assets or properties whether now owned or hereafter
acquired; provided, however, that the Parent or any Restricted
Subsidiary may enter into a Sale and Leaseback Transaction if:


 


(a)           the consideration received in such Sale
and Leaseback Transaction is at least equal to the fair market value of the
property so sold or otherwise transferred, as determined by a resolution of the
Board of Directors;


 


(b)           the Parent or such Restricted Subsidiary,
as applicable, would be permitted to grant a Lien to secure Indebtedness under
Section 4.16 in the amount of the Attributable Debt in respect of such
Sale Leaseback Transaction;


 


(c)           prior to and after giving effect to the
Attributable Debt in respect of such Sale and Leaseback Transaction, the Parent
and such Restricted Subsidiary comply with Section 4.4 hereof; and


 


(d)           the Parent or such Restricted Subsidiary
applies the proceeds received from such sale in accordance with
Section 4.18 hereof.


 


4.21       
Future Guarantors.


 


(a)           If the Parent organizes or acquires any
Restricted Subsidiary (other than an Excluded Subsidiary) on or after the
Acquisition Date, the Parent shall: (i) execute and deliver to the Trustee a
supplemental indenture in the form attached as Exhibit F hereto pursuant
to which such new subsidiary shall unconditionally guarantee all of the
Issuers’ obligations under the Securities and this Indenture, (ii) execute and
deliver to the Trustee a guarantee in the form attached as Exhibit E
hereto and (iii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
new Restricted


 


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Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such new
Restricted Subsidiary.


 


(b)           After the execution of a supplemental
indenture pursuant to clause (a) or (b) of this Section 4.21, such new
Restricted Subsidiary party thereto shall be a Subsidiary Guarantor for all
purposes of this Indenture.


 


4.22       
Suspension of Certain Covenants and Agreements.


 


(a)           During any period of time that the
Securities maintain an Investment Grade Rating from the Required Rating
Agencies (the foregoing conditions being referred to collectively as the “Suspension
Condition”), the Parent and the Restricted Subsidiaries shall not be
subject to Sections 4.3, 4.4, 4.12, 4.13, 4.14, 4.18 and 4.20 and clause (d) of
Section 6.1(d)) (collectively, the “Suspended Covenants”).


 


(b)           If the Parent, the Issuers and the
Restricted Subsidiaries are not subject to the Suspended Covenants with respect
to the Securities for any period of time pursuant to Section 4.22(a) and,
subsequently, a Required Rating Agency withdraws its rating or downgrades the
rating assigned to the Securities so that the Securities no longer have
Investment Grade Ratings from the Required Rating Agencies, then the Parent,
the Issuers and the Restricted Subsidiaries shall thereafter again be subject
to the Suspended Covenants with respect to any incurrences, actions or other
events undertaken by the Parent, either Issuer or any Restricted Subsidiary
from that time forward, and compliance with the Suspended Covenants with
respect to Restricted Payments made after the time of such withdrawal or
downgrade shall be calculated in accordance with the terms of Section 4.3
hereof as though such covenant had been in effect during the entire period of
time from the Issue Date.


 


ARTICLE V


SUCCESSOR CORPORATION


 


5.1         
Merger, Consolidation and Sale of Assets.


 


(a)           Neither the Parent nor either Issuer
shall consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it
unless:


 


(1)          
the Parent or such
Issuer, as applicable, shall be the continuing Person, or the Person (if other
than the Parent or such Issuer) formed by such consolidation or into which the
Parent or such Issuer is merged or that acquired or leased such property and
assets (the “Surviving Person”) shall be a corporation organized and
validly existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental indenture
(which, in the case of the Acquisition, shall be the Supplemental Indenture),
executed and delivered to the Trustee, all of the obligations of the Parent or
such Issuer, as applicable, under the Indenture, the Securities and the
Registration Rights Agreement;


 


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(2)          
immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing;


 


(3)          
immediately after
giving effect to such transaction on a pro forma basis, the Parent (or the
Surviving Person, if applicable) shall have a Consolidated Net Worth equal to
or greater than the Consolidated Net Worth of the Parent immediately prior to
such transaction;


 


(4)          
immediately after
giving effect to such transaction on a pro forma basis the Parent (or the
Surviving Person, if applicable) could Incur at least $1.00 of Indebtedness
under the first paragraph of part (a) of Section 4.4 hereof;


 


(5)          
each Subsidiary
Guarantor, unless such Subsidiary Guarantor is the Person with which the Parent
or such Issuer, as applicable, has entered into a transaction under this
Article 5, shall have, by supplemental indenture amending its Subsidiary
Guarantee, confirmed that its Subsidiary Guarantee shall apply to the
obligations of the Parent or such Issuer, as applicable, or the Surviving
Person in accordance with the Securities and this Indenture; and


 


(6)          
the Parent or such
Issuer, as applicable, shall have delivered to the Trustee an officers’
certificate (attaching the arithmetic computations to demonstrate compliance
with clauses (3) and (4) of this paragraph) and an opinion of counsel, in each
case, stating that such transaction and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of the Indenture, that all conditions
precedent in the Indenture relating to such transaction have been satisfied and
that such supplemental indenture is enforceable;


 


provided,
however, that
clauses (3) and (4) above do not apply if, in the good faith determination of
the Board of Directors of the Parent or such Issuer, as applicable, whose
determination shall be evidenced by a Board Resolution, the principal purpose
of such transaction is to change the state of incorporation of the Parent or such
Issuer and any such transaction shall not have as one of its purposes the
evasion of the foregoing limitations. In addition, clauses (3) and (4) above do
not apply to the Acquisition.


 


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


 


(c)           No Subsidiary Guarantor shall consolidate
with, merge with or into, or sell, convey, transfer, lease or otherwise dispose
of all or substantially all of its property and assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it
unless:


 


(1)          
it shall be the
continuing Person, or the Person (if other than it) formed by such
consolidation or into which it is merged or that acquired or leased such
property and assets shall expressly assume, by a supplemental indenture,
executed and delivered to the


 


63












 


Trustee, all of such
Subsidiary Guarantor’s obligations under its Subsidiary Guarantee and the
Registration Rights Agreement;


 


(2)          
immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing; and


 


(3)          
the Parent shall have
delivered to the Trustee an officers’ certificate and an opinion of counsel,
each stating that such transaction and such supplemental indenture comply with
the applicable provisions of the Indenture, that all conditions precedent in
this Indenture relating to such transaction have been satisfied and that such
supplemental indenture is enforceable.


 


The foregoing requirements of this paragraph (b) shall
not apply to (x) a consolidation or merger of any Subsidiary Guarantor with and
into the Parent, either Issuer or any other Subsidiary Guarantor, so long as
the Parent, such Issuer or such Subsidiary Guarantor, as applicable, survives
such consolidation or merger or (y) the sale, exchange or transfer, to any
Person not a Subsidiary of the Parent, of all of the Parent’s and each
Restricted Subsidiary’s Capital Stock in, or all or substantially all of the
assets of, a Subsidiary Guarantor in compliance with Section 4.18 hereof.


 


Any merger or consolidation of a Subsidiary Guarantor
with and into the Parent, either Issuer (with the Parent or either Issuer being
the surviving entity) or another Subsidiary Guarantor that is a Wholly Owned
Restricted Subsidiary of the Parent need only comply with clause (vi) of this
Section 5.1(a).


 


5.2         
Successor Corporation Substituted.


 


Upon any consolidation, combination or merger or any
transfer (other than by way of lease) of all or substantially all of the assets
of the Parent, either Issuer or any Subsidiary Guarantor in accordance with
Section 5.1 in which the Parent, either Issuer or any Subsidiary
Guarantor, as applicable, is not the continuing corporation, the successor
Person formed by such consolidation or into which the Parent, either Issuer or
such Subsidiary Guarantor, as the case may be, is merged or to which such
conveyance or transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Parent, either Issuer or such Subsidiary
Guarantor, as the case may be, under this Indenture and the Securities or any
Subsidiary Guarantee, as applicable, with the same effect as if such Surviving
Person had been named as such, and each such Parent, either Issuer or the
Subsidiary Guarantors as shall have been substituted for shall be released and
discharged from its obligations hereunder.


 


ARTICLE VI


DEFAULT AND REMEDIES


 


6.1         
Events of Default.


 


Each of the following shall be an “Event of Default”:


 


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(a)          
default in the
payment of principal of (or premium, if any, on) any Note when the same becomes
due and payable at maturity, upon acceleration, redemption or otherwise;


 


(b)          
default in the
payment of interest on any Note when the same becomes due and payable, and such
default continues for a period of 30 days;


 


(c)          
(i) default in the
performance or breach of the provisions of this Indenture applicable to
mergers, consolidations and transfers of all or substantially all of the assets
of the Parent, either Issuer or any Subsidiary Guarantor, (ii) the failure by
the Issuers to make or consummate an Offer to Purchase in accordance with the
provisions under Sections 4.17 or 4.18 hereof or to redeem the Securities in
accordance with the provisions under Section 4.23 hereof or (iii) the
failure of Progress Rail, Progress Metal and the Initial Subsidiary Guarantors
to execute a Supplemental Indenture upon consummation of the Acquisition;


 


(d)          
the Parent, either
Issuer or any Subsidiary Guarantor defaults in the performance of or breaches
any other covenant or agreement in the Indenture or under the Securities (other
than a default specified in clause (a), (b) or (c) above) and such default or
breach continues for a period of 30 consecutive days after written notice by
the Trustee or the Holders of 25% or more in aggregate principal amount of the
Securities;


 


(e)          
there occurs with
respect to any issue or issues of Indebtedness of the Parent, either Issuer,
any Subsidiary Guarantor or any Significant Subsidiary haying an outstanding
principal amount of $15.0 million or more in the aggregate for all such issues
of all such Persons, whether such Indebtedness now exists or shall hereafter be
created, (i) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (ii) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended within 30 days of such payment default;


 


(f)           
any final judgment or
order (not covered by insurance or a third party indemnity pursuant to an
executed written agreement) for the payment of money in excess of $15.0 million
in the aggregate for all such final judgments or orders against all such
Persons (treating any deductibles, self-insurance or retention as not so
covered) shall be rendered against the Parent, either Issuer, any Subsidiary
Guarantor or any Significant Subsidiary and shall not be paid or discharged,
and there shall be any period of 30 consecutive days following entry of the
final judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all such
Persons to exceed $15.0 million during which a stay of enforcement of such
final judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect;


 


(g)          
a court having
jurisdiction in the premises enters a decree or order for (A) relief in respect
of the Parent, either Issuer or any Significant Subsidiary in an


 


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involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Parent, either Issuer or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Parent, either Issuer or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Parent, either Issuer or any Significant Subsidiary and, in each case, such
decree or order shall remain unstayed and in effect for a period of 30
consecutive days;


 


(h)          
the Parent, either
Issuer or any Significant Subsidiary (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Parent, such Issuer or such Significant Subsidiary or for all
or substantially all of the property and assets of the Parent, such Issuer or
such Significant Subsidiary or (C) effects any general assignment for the benefit
of creditors; or


 


(i)           
the Parent or any
Subsidiary Guarantor repudiates its obligations under its Subsidiary Guarantee
or, except as permitted by the Indenture, any Subsidiary guarantee is
determined to be unenforceable or invalid or shall for any reason cease to be
in full force and effect.


 


If, pursuant to clause (d) above, the Holders of at
least 25% of the then outstanding principal amount of Securities notify the
Issuers as specified in such clause, such Holders shall similarly notify the
Trustee. Any notice given pursuant to clause (d) above or the immediately
preceding sentence shall be given by registered or certified mail, return
receipt requested.


 


6.2         
Acceleration.


 


If an Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.1 above with respect to the
Parent or either Issuer) shall occur and be continuing, the Trustee or the
Holders of at least 25% in principal amount of outstanding Securities may
declare the principal of, premium, if any, and accrued interest on all the
Securities to be due and payable by notice in writing to the Issuers (and the
Trustee if given by the Holders) specifying the respective Event of Default and
that it is a “notice of acceleration,” and the same shall become
immediately due and payable. If an Event of Default specified in clause (e) of
Section 6.1 above with respect to the Parent or either Issuer occurs and
is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if the event of default triggering such Event of Default
pursuant to clause (e) shall be remedied or cured by the Parent, the relevant
Issuer, the relevant Subsidiary Guarantor or the relevant Significant
Subsidiary or waived by the holders of the relevant Indebtedness within 60 days
after the declaration of acceleration with respect thereto.


 


If an Event of Default specified in clause (g) or (h)
of Section 6.1 above with respect to the Parent or either Issuer occurs
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


 


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and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.


 


At any time after a declaration of acceleration with
respect to the Securities as described in the preceding paragraph, the Holders
of a majority in principal amount of the Securities may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal, premium, if any, or interest that has
become due solely because of the acceleration, (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal and premium if any, which has become due otherwise than by
such declaration of acceleration, has been paid, (iv) if the Issuers have paid
the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances, and any other amounts due to the Trustee
under Section 7.7 and (v) in the event of the cure or waiver of an Event
of Default of the type described in clause (g) or (h) of Section 6.1, 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 Event of Default or impair any right
consequent thereto.


 


6.3         
Other Remedies.


 


If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of, premium, if any, or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture or, subject to the terms thereof, the Security Documents and the
Intercreditor Agreement.


 


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


 


6.4         
Waiver of Past Defaults.


 


Subject to Sections 2.9, 6.2, 6.7 and 9.2, the Holders
of not less than a majority in principal amount of the outstanding Securities
by notice to the Trustee may waive an existing Default or Event of Default and
its consequences, except a Default or Event of Default in the payment of
principal of, premium, if any, or interest on any Security as specified in
clauses (a) and (b) of Section 6.1. The Parent shall deliver to the
Trustee an Officers’ Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such consents.
When a Default or Event of Default is waived, it is cured and ceases.


 


6.5         
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 7.1, however, the


 


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Trustee may refuse to
follow any direction that conflicts with any law or this Indenture, that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders not joining in the giving of such direction or that may involve the
Trustee in personal liability, and may take any other action it deems proper
that is not inconsistent with any such direction received from Holders of
Securities.


 


6.6         
Limitation on Suits.


 


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


 


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


 


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


 


(3)          
such Holder or
Holders offer the Trustee indemnity satisfactory to the Trustee against any
costs, liability or expense;


 


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


 


(5)          
during such 60-day
period, the Holders of a majority in aggregate principal amount of the
outstanding Securities do not give the Trustee a direction that 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.


 


6.7         
Rights of Holders To Receive Payment.


 


Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of principal of, premium, if any,
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.


 


6.8         
Collection Suit by Trustee.


 


If an Event of Default in payment of principal,
premium, if any, or interest specified in clause (a) or (b) of Section 6.1
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Issuers or any other obligor on the
Securities for the whole amount of principal, premium, if any, and accrued
interest and fees remaining unpaid, together with interest on overdue principal
and premium, if any, 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,


 


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disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due to
the Trustee under Section 7.7.


 


6.9         
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 reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due to the Trustee under Section 7.7) and the
Holders allowed in any judicial proceedings relating to the Issuers, their
creditors or their property and shall be entitled and empowered to participate
as a member, voting or otherwise, of any official committee appointed for such matter,
to collect and receive any monies or other securities or property payable or
deliverable upon the conversion or exchange of the Securities or upon any such
claims and to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. 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.


 


6.10       
Priorities.


 


If the Trustee collects any money or property pursuant
to this Article VI, it shall pay out the money or property in the
following order:


 


First: to the Trustee for
amounts due under Section 7.7;


 


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 and premium, if any, 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
Issuers or, if applicable, the Guarantors as their respective interests may
appear.


 


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


 


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


 


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


 


6.12       
Restoration of Rights and Remedies.


 


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


 


6.13       
Rights and Remedies Cumulative.


 


Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or wrongfully taken
Securities in Section 2.7, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.


 


ARTICLE VII


 


TRUSTEE


 


7.1         
Duties of Trustee.


 


(a)           If an Event of 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 an Event
of Default, 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 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 certificates or
opinions specifically required by any provision hereof to be furnished to it,
the Trustee shall


 


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examine the certificates
and opinions to determine whether or not they conform to the requirements of
this Indenture, but need not verify the contents thereof.


 


(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:


 


(i)           
This paragraph does
not limit the effect of paragraph (b) of this Section 7.1.


 


(ii)          
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.


 


(iii)         
The Trustee shall not
be liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.5.


 


(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)           Every provision of this Indenture that in
any way relates to the Trustee is subject to this Section 7.1.


 


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


 


(g)           If the Trustee shall receive conflicting
or inconsistent requests from two or more groups of Holders, each representing
less than a majority of the aggregate principal amount of Securities then
outstanding, the Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provision of this Indenture.


 


7.2         
Rights of Trustee.


 


Subject to Section 7.1:


 


(a)          
The Trustee may
conclusively rely 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 13.5.
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.


 


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(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 and the advice or opinion of such counsel as to matters of
law shall be full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.


 


(f)           
The Trustee shall 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 Issuers, to examine the books, records, and premises
of the Issuers, personally or by agent or attorney, at the expense of the
Issuers and shall incur no liability of any kind by reason of such inquiry or
investigation.


 


(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 charged with knowledge of any Default or Event of Default, of the identity
of any Restricted Subsidiary or the existence of any Change of Control or Asset
Sale unless either (i) a Responsible Officer shall have Actual Knowledge
thereof or (ii) the Trustee shall have received written notice thereof from
either of the Issuers or any Holder.


 


(k)          
Delivery of reports,
information and documents to the Trustee under Section 4.10 is for
informational purposes only and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers’
compliance with any of the covenants hereunder.


 


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(l)           
The Trustee shall not
be responsible for the computation of any interest payments or redemption
amounts payable with respect to the Securities.


 


(m)         
The Trustee shall not
be responsible for the filing of original or continuation financing statements
or the recordation, amendment, or other filing of any security interests,
liens, financing statements, or other similar documents, nor of the contents
thereof.


 


(n)          
In no event shall the
Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond the Trustee’s control,
including, but not limited to, acts of God, flood, war (whether declared or
undeclared), terrorism, fire, riot, embargo, government action, including any
laws, ordinances, regulations, governmental action or the like which delay,
restrict or prohibit the providing of the services contemplated by this
Indenture.


 


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


 


(p)          
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 each agent, custodian and other Person employed to act hereunder.


 


(q)          
The Trustee may
request that the Parent or the Subsidiary Guarantors, as the case may be,
deliver a certificate setting forth the names of the individuals and/or titles
of officers authorized at such time to take specified actions pursuant to this
Indenture.


 


7.3         
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
Parent, its Subsidiaries (including the Issuers and any Subsidiary Guarantors)
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.


 


7.4         
Trustee’s Disclaimer.


 


The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, any Subsidiary
Guarantee or the Securities, it shall not be accountable for the Issuers’ use
of the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuers 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.


 


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7.5         
Notice of Default.


 


If a Default or an Event of Default occurs and is
continuing and the Trustee has Actual Knowledge thereof based on receipt of
actual notice of such Default or Event of Default, the Trustee shall mail to
each Holder notice of the uncured Default or Event of Default within 90 days
after such Default or Event of Default occurs. Except in the case of a Default
or an Event of Default in payment of principal of, premium, if any, 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 Net Proceeds Offer Payment Date pursuant to a Net Proceeds Offer,
the Trustee may withhold the notice if and so long as 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.


 


7.6         
Reports by Trustee to Holders.


 


Within 60 days after each June 15, beginning with
the first June 15 following the date of this Indenture, 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 Issuers and filed with the Commission and each
securities exchange, if any, on which the Securities are listed.


 


The Issuers 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).


 


7.7         
Compensation and Indemnity.


 


The Issuers, jointly and severally, agree to pay to
the Trustee, from time to time, reasonable compensation 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 Issuers shall jointly and
severally reimburse the Trustee upon request for all reasonable disbursements,
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 Issuers and the Guarantors, jointly and severally,
shall indemnify the Trustee and its agents, employees, officers, stockholders
and directors for, and hold them harmless against, any loss, liability, claim,
damage or expense (including reasonable attorneys’ fees and expenses) 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 cost and expense
of enforcing this Indenture and the Securities against the Issuers or the
Holders (including this Section 7.7) including 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


 


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hereunder. The Trustee
shall notify the Issuers promptly of any claim asserted against the Trustee or
any of its agents, employees, officers, stockholders and directors for which it
may seek indemnity, provided that any failure to so notify the Issuers shall
not relieve the Issuers of their indemnity obligations hereunder. The Issuers
may, subject to the approval of the Trustee, 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 Issuers shall jointly and severally pay the reasonable fees and
expenses of such counsel; provided, however, that the Issuers shall not be required to
pay such fees and expenses if, subject to the approval of the Trustee, it
assumes the Trustee’s defense and there is no conflict of interest between the
Issuers 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 Issuers need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Neither the Issuers nor the Guarantors need reimburse any expense
or indemnify against any loss or liability to the extent determined to have
been caused by the Trustee through its own negligence, bad faith or willful
misconduct.


 


To secure the Issuers’ payment obligations in this
Section 7.7, the Trustee shall have a senior claim and Lien prior to the
Securities against all money or property held or collected by the Trustee, in
its capacity as Trustee.


 


When the Trustee incurs expenses or renders services
after an Event of Default specified in clause (vi) or (vii) of Section 6.1
occurs, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Bankruptcy Law and shall be
paid to the extent allowed under any Bankruptcy Law.


 


Notwithstanding any other provision in this Indenture,
the foregoing provisions of this Section 7.7 shall survive the
satisfaction and discharge of this Indenture or the appointment of a successor
Trustee.


 


7.8         
Replacement of Trustee.


 


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


 


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


 


(2)          
the Trustee is
adjudged bankrupt or insolvent;


 


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


 


(4)          
the Trustee becomes
incapable of acting.


 


If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Issuers shall notify each
Holder of such event and shall promptly appoint a successor


 


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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 Issuers.


 


A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Issuers. Promptly after
that, the retiring Trustee shall transfer, after payment of all sums then owing
to the Trustee pursuant to Section 7.7, all property held by it as Trustee
to the successor Trustee, subject to the Lien provided in Section 7.7, 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 Issuers 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.


 


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 7.8, the Issuers’ obligations under Section 7.7 shall
continue for the benefit of the retiring Trustee.


 


7.9         
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 VII.


 


7.10       
Eligibility; Disqualification.


 


This Indenture shall always have a Trustee who
satisfies the requirement of TIA §§ 310(a)(1), 310(a)(2) and 310(a)(5).
The Trustee shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition. 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)(l) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Issuers are outstanding, if the requirements for such exclusion set forth
in TIA § 310(b)(l) are met. The provisions of TIA § 310 shall apply
to the Issuers and any other obligor of the Securities.


 


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7.11       
Preferential Collection of Claims Against the Issuers.


 


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.


 


7.12       
Direction to Trustee.


 


The Trustee is directed to execute, deliver and
perform its obligations under the Security Documents and the Intercreditor
Agreement.


 


ARTICLE VIII


DISCHARGE OF INDENTURE; DEFEASANCE


 


8.1         
Satisfaction and Discharge.


 


The Issuers may terminate their obligations under the
Securities and this Indenture, except those obligations referred to in the
penultimate paragraph of this Section 8.1, 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 in immediately available funds has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in trust by the
Issuers and thereafter repaid to the Issuers, as provided in Section 8.5)
have been delivered to the Trustee for cancellation and the Issuers have paid
all sums payable by them hereunder, or if:


 


(1)          
either:


 


(A)         
all of the Securities
theretofore authenticated and delivered (except lost, stolen or destroyed
Securities which have been replaced or paid and Securities for whose payment
money has theretofore been deposited in trust by the Issuers and thereafter
repaid to the Issuers) have been delivered to the Trustee for cancellation, or


 


(B)          
all Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable pursuant to an optional redemption notice or otherwise or will become
due and payable within one year, and the Issuers have irrevocably deposited or
caused to be deposited with the Trustee funds in an amount sufficient to pay
and discharge the entire indebtedness on the Securities not theretofore
delivered to the trustee for cancellation, for principal of, premium, if any,
and interest on the Securities to the date of deposit together with irrevocable
instructions from the Issuers directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be; and


 


(2)          
the Issuers have paid
all other sums payable under the Indenture by the Issuers.


 


Subject to the next sentence and notwithstanding the
foregoing paragraph, the Issuers’ obligations in Sections 2.5, 2.6, 2.7, 2.8,
4.1, 4.2, 7.7, 8.5 and 8.6 shall survive until the


 


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Securities are no longer
outstanding pursuant to the last paragraph of Section 2.8. After the
Securities are no longer outstanding, the Issuers’ obligations in Sections 7.7,
8.5 and 8.6 shall survive such satisfaction and discharge.


 


After such delivery or irrevocable deposit, the
Trustee, upon delivery of an Officers’ Certificate and an Opinion of Counsel
stating that all conditions precedent under the Indenture relating to the
satisfaction and discharge of the Indenture have been complied with, shall
acknowledge in writing the discharge of the Issuers’ obligations under the
Securities and this Indenture except for those surviving obligations specified
above.


 


8.2         
Legal Defeasance and Covenant Defeasance.


 


(a)           The Issuers may, at their option by Board
Resolutions of the Boards of Directors of the Issuers, at any time, elect to
have either clause (b) or (c) below applied to all outstanding Securities upon
compliance with the conditions set forth in Section 8.3.


 


(b)           Upon the Issuers’ exercise under clause
(a) hereof of the option applicable to this paragraph (b), the Issuers and any
Guarantor shall, subject to the satisfaction of the conditions set forth in
Section 8.3, be deemed to have been discharged from their respective
obligations with respect to all outstanding Securities and the corresponding
Subsidiary Guarantees, if any, on the date the conditions set forth below are
satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be “outstanding” only for the purposes of
Section 8.4 and the other Sections of this Indenture referred to in (i)
and (ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, 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 to receive solely from the trust fund described in Section 8.4,
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due, (ii) the Issuers’ obligations with respect to such Securities
under Article II and Section 4.2, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Issuers’ obligations in
connection therewith and (iv) this Article VIII. Subject to compliance
with this Article VIII, the Issuers may exercise their option under this
paragraph (b) notwithstanding the prior exercise of its option under paragraph
(c) hereof.


 


(c)           Upon the Issuers’ exercise under
paragraph (a) hereof of the option applicable to this clause (c), the Issuers
and each Guarantor, if any, shall, subject to the satisfaction of the
conditions set forth in Section 8.3, be released from their obligations,
if any, under the covenants contained in Sections 4.3 and 4.4, Sections 4.12
through 4.16, Sections 4.18 through 4.20, Section 4.22 and Sections
5.1(a)(3) and 5.1(a)(4) with respect to the outstanding Securities and the
corresponding Subsidiary Guarantee, if any, on and after the date the
conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”),
and the 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


 


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such Securities shall not
be deemed outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Securities, the Issuers
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.1(d), but, except as
specified above, the remainder of this Indenture and such Securities shall be unaffected
thereby. In addition, upon the Issuers’ exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), subject to the satisfaction of the
conditions set forth in Section 8.3 hereof, Section 6.1(c) shall not
constitute an Event of Default with respect to Sections 5.l(a)(3) and
5.1(a)(4), Section 6.1(d) shall not constitute an Event of Default with
respect to any other covenants or agreements in this Indenture or the
Securities and Sections 6.l(e) and 6.1(f) shall not constitute Events of
Default.


 


8.3         
Conditions to Legal Defeasance or Covenant Defeasance.


 


The following shall be the conditions to the
application of either Section 8.2(b) or 8.2(c) to the outstanding
Securities:


 


In order to exercise either Legal Defeasance or
Covenant Defeasance:


 


(A)         
the Issuers have
deposited with the Trustee, in trust, money and/or U.S. Government Obligations
that through the payment of interest and principal in respect thereof in
accordance with their terms shall provide money in an amount sufficient to pay
the principal of, premium, if any, and accrued interest on the Securities on
the Stated Maturity of such payments in accordance with the terms of the
Indenture and Securities;


 


(B)          
the Issuers have
delivered to the Trustee, (1) either (x) an Opinion of Counsel to the effect
that Holders will not recognize income, gain or loss for federal income tax
purposes as a result of the Issuers’ exercise of their option under this
Section 8.1 and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred, which Opinion of
Counsel must be based upon (and accompanied by a copy of) a ruling of the
Internal Revenue Service to the same effect unless there has been a change in
applicable federal income tax law after the Issue Date such that a ruling is no
longer required or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned Opinion of
Counsel and (2) an Opinion of Counsel to the effect that the creation of the
defeasance trust does not violate the Investment Company Act of 1940 and after
the passage of 123 days following the deposit, the trust fund will not be
subject to the effect of Section 547 of the United States Bankruptcy Code
or Section 15 of the New York Debtor and Creditor Law;


 


(C)          
immediately after
giving effect to such deposit on a pro forma basis, no Event of Default, or
event that after the giving of notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing on the date of such


 


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deposit or during the
period ending on the 123rd day after the date of such deposit, and such deposit
shall not result in a breach or violation of, or constitute a default under,
any other agreement or instrument to which the Parent, the Issuers or any of
their Subsidiaries is a party or by which the Parent, the Issuers or any of their
Subsidiaries is bound; and


 


(D)         
if at such time the
Notes are listed on a national securities exchange, the Issuers have delivered
to the Trustee an Opinion of Counsel to the effect that the Notes will not be
delisted as a result of such deposit, defeasance and discharge.


 


8.4         
Application of Trust Money.


 


The Trustee or Paying Agent shall hold in trust U.S.
Legal Tender or U.S. Government Obligations deposited with it pursuant to this
Article VIII, and shall apply the deposited U.S. Legal Tender and the
money from U.S. Government Obligations in accordance with this Indenture to the
payment of principal of, premium, if any, and interest on the Securities.


 


The Issuers 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.S. Government Obligations deposited pursuant to
Section 8.3 hereof or the principal, premium, if any, 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 VIII to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuers from time to
time upon the Issuers’ request any U.S. Legal Tender or U.S. Government
Obligations held by it as provided in Section 8.3 which, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.


 


8.5         
Repayment to the Issuers.


 


The Trustee and the Paying Agent shall pay to the
Issuers upon request any money held by them for the payment of principal,
premium, if any, 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 Issuers 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 shall
be repaid to the Issuers. After payment to the Issuers, Holders entitled to
such money must look to the Issuers for payment as general creditors unless an
applicable law designates another Person.


 


8.6         
Reinstatement.


 


If the Trustee or Paying Agent is unable to apply any
U.S. Legal Tender or U.S. Government Obligations in accordance with this
Article VIII 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 Issuers’ obligations under this


 


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


 


ARTICLE IX


AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


9.1         
Without Consent of Holders.


 


The Parent, the Issuers, any Subsidiary Guarantors and
the Trustee, together, may amend or supplement this Indenture, the Securities
and any Note Guarantee without notice to or consent of any Holder to:


 


(1)          
cure any ambiguity,
defect or inconsistency in the Indenture;


 


(2)          
comply with the
provisions of Section 4.15, 4.21 or Article V hereof;


 


(3)          
comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act;


 


(4)          
evidence and provide
for the acceptance of appointment by a successor Trustee;


 


(5)          
add a Subsidiary
Guarantor or to secure the Securities;


 


(6)          
provide for the
execution of the Supplemental Indenture by Progress Rail, Progress Metal and
the Initial Subsidiary Guarantors; or


 


(7)          
make any change that,
in the good faith opinion of the Board of Directors, docs not materially and
adversely affect the rights of any Holder.


 


provided
that such Parent,
Issuer or Subsidiary Guarantor 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 9.1.


 


9.2         
With Consent of Holders.


 


Subject to Section 6.7, the Parent, the Issuers,
the Subsidiary Guarantors, if any, and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Securities or any Note Guarantee, may amend or
supplement this Indenture, the Securities or the Note Guarantees without notice
to any other Holders. Subject to Section 6.7, the Holder or Holders of a
majority in aggregate principal amount of the outstanding Securities may waive
compliance by the Issuers with any provision of


 


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this Indenture, the
Securities or any Note Guarantee without notice to any other Holder. Without the
consent of each Holder affected, however, no amendment, supplement or waiver,
including a waiver pursuant to (and to the extent provided in)
Section 6.4, may:


 


(1)          
change the Stated
Maturity of the principal of, or any installment of interest on, any Security;


 


(2)          
reduce the principal
amount of, or premium, if any, or interest on, any Security;


 


(3)          
change the optional
redemption dates or optional redemption prices of the Securities from that
stated under paragraph 5 of the Securities;


 


(4)          
change the place or
currency of payment of principal of, or premium, if any, or interest on, any
Security;


 


(5)          
impair the right to
institute suit for the enforcement of any payment on or after the Stated
Maturity (or, in the case of a redemption, on or after the Redemption Date) of
any Security;


 


(6)          
waive a default in
the payment of principal of, premium, if any, or interest on the Security;


 


(7)          
release any
Subsidiary Guarantor from its Subsidiary Guarantee, except as provided in this
Indenture;


 


(8)          
amend or modify any
of the provisions of this Indenture in any manner which subordinates the
Securities issued hereunder in right of payment to any other Indebtedness of
the Issuers or which subordinates any Note Guarantee in right of payment to any
other Indebtedness of the Parent or the Subsidiary Guarantor issuing such Note
Guarantee; or


 


(9)          
reduce the percentage
or aggregate principal amount of outstanding Securities, the consent of whose
Holders is necessary for waiver of compliance with certain provisions of this
Indenture or for waiver of certain defaults.


 


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.


 


After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Issuers shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.


 


9.3         
[Intentionally Omitted].


 


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9.4         
Compliance with TIA.


 


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


 


9.5         
Revocation and Effect of Consents.


 


Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a 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 Issuers 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.


 


The Issuers 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. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.


 


After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it makes a change described in
any of clauses (i) through (vii) of Section 9.2, 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, premium, if any, 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.


 


9.6         
Notation on or Exchange of Securities.


 


If an amendment, supplement or waiver changes the terms
of a Security, the Issuers may require the Holder of the Security to deliver it
to the Trustee. The Issuers 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 Issuers’ expense. Alternatively, if the Issuers
or the Trustee so determines, the Issuers 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.


 


9.7         
Trustee to Sign Amendments, Etc.


 


The Trustee shall execute any amendment, supplement or
waiver authorized pursuant to this Article IX; provided that the
Trustee may, but shall not be obligated to, execute any such


 


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amendment, supplement or
waiver which affects the Trustee’s own rights, duties or immunities under this
Indenture. The Trustee shall be provided with, and shall be fully protected in
relying upon, an Opinion of Counsel and an Officers’ Certificate each complying
with Sections 13.4 and 13.5 and stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article IX is authorized
or permitted by this Indenture and constitutes the legal, valid and binding
obligations of the Issuers enforceable in accordance with its terms. Such
Opinion of Counsel shall be at the joint and several expense of the Issuers.


 


ARTICLE X


[INTENTIONALLY OMITTED]


 


ARTICLE XI


GUARANTEE OF SECURITIES


 


11.1       
Unconditional Note Guarantee.


 


Subject to the provisions of this Article Eleven,
the Parent, each of the Initial Subsidiary Guarantors and, upon the execution
and delivery of a Subsidiary Guarantee pursuant to Section 4.15 or 4.21,
each Additional Subsidiary Guarantor shall hereby, jointly and severally,
unconditionally and irrevocably guarantee, on an unsubordinated basis (such
guarantee by the Parent to be referred to as the “Parent Guarantee,” by
the Subsidiary Guarantors to be referred to herein as the “Subsidiary
Guarantees” and by the Parent Guarantee and the Subsidiary Guarantees
collectively to be referred to as the “Note Guarantees”) 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 Issuers or any other
Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest on the Securities shall be duly and
punctually paid in full when due, whether at maturity, upon redemption at the
option of Holders pursuant to the provisions of the Securities relating thereto,
by acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other
obligations of the Issuers or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including amounts due the Trustee under
Section 7.7 hereof) and all other obligations shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
maturity, by acceleration, or otherwise. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Issuers 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 Note
Guarantees, and shall entitle the Holders of Securities to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Issuers.


 


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The Parent, each of the Initial Subsidiary Guarantors
and, upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor shall hereby
agree 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 of the Securities with respect to any provisions hereof or thereof, any
release of any other Guarantor, the recovery of any judgment against the
Issuers, any action to enforce the same, whether or not a Note 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.
The Parent, each of the Initial Subsidiary Guarantors and, upon the execution
and delivery of a Subsidiary Guarantee pursuant to Section 4.15 or 4.21,
each Additional Subsidiary Guarantor shall hereby waive the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of either Issuer, any right to require a
proceeding first against either Issuer, protest, notice and all demands
whatsoever and covenants that its Note Guarantee shall not be discharged except
by complete performance of the obligations contained in the Securities, this
Indenture and the Note Guarantees. Each Note 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 either Issuer or to any Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
such Issuer or such Guarantor, any amount paid by such Issuer or such Guarantor
to the Trustee or such Holder, each Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. The Parent, each of
the Initial Subsidiary Guarantors and, upon the execution and delivery of a
Subsidiary Guarantee pursuant to Section 4.15 or 4.21, each Additional
Subsidiary Guarantor shall hereby further agree 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 VI hereof for the
purposes of the Note Guarantees, 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 VI hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of the Note Guarantees.


 


No Affiliate, stockholder, officer, director, limited
liability company member or employee, past, present or future, of any
Guarantor, as such, shall have any personal liability under such Guarantor’s
Note Guarantee by reason of his, her or its status as such Affiliate,
stockholder, officer, director, limited liability company member or employee.
Each Holder, by accepting the Securities, waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.


 


11.2       
Limitations on Note Guarantees.


 


The obligations of any Guarantor under its Note
Guarantee shall be limited to the maximum amount which, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its Note
Guarantee or pursuant to its contribution obligations under this Indenture,
shall result in the obligations of such Guarantor under the Note Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Guarantor that makes a payment or


 


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distribution under a Note
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata, based on the net
assets of each Guarantor, determined in accordance with GAAP.


 


11.3       
Execution and Delivery of Note Guarantee.


 


To further evidence the Note Guarantees set forth in
Section 11.1, the Parent, each of the Initial Subsidiary Guarantors and,
upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor hereby agree
that a notation of its Note Guarantee, substantially in the form of Exhibit
E hereto, shall be endorsed on each Security authenticated and delivered by
the Trustee. The Note Guarantee of any Guarantor shall be executed on behalf of
such Guarantor by either manual or facsimile signature of two Officers of such
Guarantor, each of whom, in each case, shall have been duly authorized to so
execute by all requisite corporate action. The validity and enforceability of
any Note Guarantee shall not be affected by the fact that it is not affixed to
any particular Security.


 


The Parent, each of the Initial Subsidiary Guarantors
and, upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor hereby agrees
that its Note Guarantee set forth in Section 11.1 shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of such Note Guarantee.


 


If an Officer of a Guarantor whose signature is on
this Indenture or a Note Guarantee no longer holds that office at the time the
Trustee authenticates the Security on which such Subsidiary Guarantee is
endorsed or at any time thereafter, such Guarantor’s Note 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 Note
Guarantee set forth in this Indenture on behalf of each Guarantor.


 


11.4       
Release of a Guarantor.


 


(a)           Upon the designation of such Subsidiary
Guarantor as an Unrestricted Subsidiary in accordance with the provisions of
this Indenture or the sale or disposition of all of the Capital Stock of a
Subsidiary Guarantor by the Parent or any Restricted Subsidiary of the Parent,
in a transaction or series of related transactions that either (i) does not
constitute an Asset Sale or (ii) constitutes an Asset Sale the Net Cash
Proceeds of which are applied in accordance with Section 4.18, or upon the
consolidation or merger of a Guarantor with or into any Person in compliance
with Article V (in each case, other than to the Parent or an Affiliate of
the Parent), or if any Subsidiary Guarantor is dissolved or liquidated in
accordance with this Indenture, such Guarantor’s Subsidiary Guarantee shall be
automatically discharged and such Subsidiary Guarantor shall be released from
all obligations under this Article Eleven without any further action
required on the part of the Trustee or any Holder. Any Subsidiary Guarantor not
so released or the entity surviving such Subsidiary Guarantor, as applicable,
shall remain or be liable under its Subsidiary Guarantee as provided in this
Article Eleven.


 


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(b)           With respect to any Subsidiary Guarantee
executed and delivered solely pursuant to Section 4.15, such Subsidiary
Guaranty shall be automatically discharged and the Subsidiary Guarantor party
thereto shall be released from all obligations under this Article Eleven
without any further action on the part of the Trustee or any Holder upon the
release or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee under such Section 4.15, except a discharge or
release by or as a result of payment under such Guarantee. Any Subsidiary
Guarantor not so released or the entity surviving such Subsidiary Guarantor, as
applicable, shall remain or be liable under its Subsidiary Guarantee as
provided in this Article Eleven.


 


(c)           The Trustee shall deliver an appropriate
instrument evidencing the release of a Guarantor upon receipt of a request by
the Issuers or such Subsidiary Guarantor accompanied by an Officers’
Certificate and an Opinion of Counsel certifying as to the compliance with this
Section 11.4; 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 such Issuer or the Parent.


 


The Trustee shall execute any documents reasonably
requested by the Issuers or a Guarantor in order to evidence the release of
such Subsidiary Guarantor from its obligations under its Subsidiary Guarantee
endorsed on the Securities and under this Article Eleven.


 


Except as set forth in Articles Four and Five and this
Section 11.4, nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or
into either Issuer or another Guarantor or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to either Issuer or another Guarantor.


 


11.5       
Waiver of Subrogation.


 


Until this Indenture is discharged and all of the
Securities are discharged and paid in full, the Parent, each of the Initial
Subsidiary Guarantors and, upon the execution and delivery of a Subsidiary
Guarantee pursuant to Section 4.15 or 4.21, each Additional Subsidiary
Guarantor, shall hereby irrevocably waive and agrees not to exercise any claim
or other rights which it may now or hereafter acquire against the Issuers that
arise from the existence, payment, performance or enforcement of the Issuers’
obligations under the Securities or this Indenture and such Guarantor’s
obligations under its Note 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 Issuers, 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 Issuers,
directly or indirectly, in cash or other property 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 of Securities 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


 


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accordance with the terms
of this Indenture. The Parent, each of the Initial Subsidiary Guarantors and,
upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor acknowledges
that it shall receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture and that the waiver set forth in
this Section 11.5 is knowingly made in contemplation of such benefits.


 


11.6       
Immediate Payment.


 


The Parent, each of the Initial Subsidiary Guarantors
and, upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor shall hereby
agree to make immediate payment to the Trustee, on behalf of the Holders or
itself, of all Obligations due and owing or payable to the respective Holders
or the Trustee upon receipt of a demand for payment therefor by the Trustee to
such Guarantor in writing.


 


11.7       
No Set-Off.


 


Each payment to be made by a Guarantor hereunder in
respect of the Obligations shall be payable in the currency or currencies in
which such Obligations are denominated, and shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.


 


11.8       
Obligations Absolute.


 


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 Note Guarantee shall be recoverable from such Guarantor
as a primary obligor and principal debtor in respect thereof.


 


11.9       
Obligations Continuing.


 


The obligations of each Guarantor hereunder shall be
continuing and shall remain in full force and effect until all the obligations
have been paid and satisfied in full. The Parent, each of the Initial
Subsidiary Guarantors and, upon the execution and delivery of a Subsidiary
Guarantee pursuant to Section 4.15 or 4.21, each Additional Subsidiary
Guarantor shall hereby agree with the Trustee that it shall from time to time
deliver to the Trustee suitable acknowledgments of its 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 and under
its Note Guarantee.


 


11.10     
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


 


88












 


amounts as may at any
time prior to discharge of this Indenture pursuant to Article VIII be or
become owing or payable under or by virtue of or otherwise in connection with
the Securities or this Indenture.


 


11.11     
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 Issuers 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 either 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 either Issuer is stayed upon the insolvency, bankruptcy, liquidation
or reorganization of such Issuer, all such Indebtedness otherwise subject to demand
for payment or acceleration shall nonetheless be payable by each Guarantor as
provided herein.


 


11.12     
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:


 


(1)          
any limitation of
status or power, disability, incapacity or other circumstance relating to
either Issuer or any other Person, including any insolvency, bankruptcy,
liquidation, reorganization, readjustment, composition, dissolution, winding-up
or other proceeding involving or affecting such Issuer or any other Person;


 


(2)          
any irregularity,
defect, unenforceability or invalidity in respect of any indebtedness or other
obligation of either Issuer or any other Person under this Indenture, the
Securities or any other document or instrument;


 


(3)          
any failure of either
Issuers, whether or not without fault on its part, to perform or comply with
any of the provisions of this Indenture or the Securities, or to give notice
thereof to a Guarantor;


 


(4)          
the taking or
enforcing or exercising or the refusal or neglect to take or enforce or
exercise any right or remedy from or against either Issuer or any other Person
or their respective assets or the release or discharge of any such right or
remedy;


 


(5)          
the granting of time,
renewals, extensions, compromises, concessions, waivers, releases, discharges
and other indulgences to either Issuer or any other Person;


 


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(6)          
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;


 


(7)          
any change in the
ownership, control, name, objects, businesses, assets, capital structure or
constitution of either Issuer or a Guarantor;


 


(8)          
any merger or
amalgamation of either Issuer or a Guarantor with any Person or Persons;


 


(9)          
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 Obligations or the obligations of a Guarantor
under its Note Guarantee; and


 


(10)        
any other
circumstance, including release of a Guarantor pursuant to Section 11.4
(other than by complete, irrevocable payment) that might otherwise constitute a
legal or equitable discharge or defense of either Issuer under this Indenture
or the Securities or of another Guarantor in respect of its Subsidiary
Guarantee hereunder;


 


provided
that the
provisions of this Section 11.12 are not intended to affect in any way any
release of a Guarantor in accordance with the provisions of Section 11.4.


 


11.13      Waiver.


 


Without in any way limiting the provisions of
Section 11.1 hereof, the Parent, each of the Initial Subsidiary Guarantors
and, upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor shall hereby
waive 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
either Issuer, protest, notice of dishonor or non-payment of any of the
Obligations, or other notice or formalities to either Issuer or any Guarantor
of any kind whatsoever.


 


11.14     
No Obligation to Take Action Against the Issuers.


 


Neither the Trustee nor any other Person shall have
any obligation to enforce or exhaust any rights or remedies or to take any
other steps under any security for the Obligations or against either Issuer or
any other Person or any property of such 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 Note Guarantees or under this
Indenture.


 


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11.15     
Dealing with the Issuers and Others.


 


The Holders, without releasing, discharging, limiting
or otherwise affecting in whole or in part the obligations and liabilities of
any Guarantor and without the consent of or notice to any Guarantor, may


 


(1)          
grant time, renewals,
extensions, compromises, concessions, waivers, releases, discharges and other
indulgences to either Issuer or any other Person;


 


(2)          
take or abstain from
taking security or collateral from either Issuer or from perfecting security or
collateral of either Issuer;


 


(3)          
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, mortgages or
other security given by either Issuer or any third party with respect to the
obligations or matters contemplated by this Indenture or the Securities;


 


(4)          
accept compromises or
arrangements from either Issuer;


 


(5)          
apply all monies at
any time received from either Issuer or from any security upon such part of the
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


 


(6)          
otherwise deal with,
or waive or modify their right to deal with, either Issuer and all other
Persons and any security as the Holders or the Trustee may see fit.


 


11.16     
Default and Enforcement.


 


If any Guarantor fails to pay in accordance with
Section 11.6 hereof, the Trustee may proceed in its name as trustee
hereunder in the enforcement of the Note 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.


 


11.17     
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 shall in any event be
effective unless it is signed by such Guarantor and the Trustee.


 


11.18     
Acknowledgment.


 


The Parent, each of the Initial Subsidiary Guarantors
and, upon the execution and delivery of a Subsidiary Guarantee pursuant to
Section 4.15 or 4.21, each Additional Subsidiary Guarantor shall hereby
acknowledge communication of the terms of this Indenture and the Securities and
shall hereby consent to and approves of the same.


 


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11.19     
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 Note
Guarantee.


 


11.20     
No Merger or Waiver; Cumulative Remedies.


 


No Note 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 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 Note Guarantee and under this Indenture, the Securities and any other
document or instrument between a Guarantor and/or either Issuer and the Trustee
are cumulative and not exclusive of any rights, remedies, powers and privilege
provided by law.


 


11.21     
Survival of Obligations.


 


Without prejudice to the survival of any of the other
obligations of any Guarantor hereunder, the obligations of each Guarantor under
Section 11.1 shall survive the payment in full of the Obligations under
the Securities, but only if and to the extent such payment is avoided, and in
such case shall be enforceable against such Guarantor to the same extent as
prior to any such payment and without regard to and without giving effect to
any defense, right of offset or counterclaim available to or which may be
asserted by either Issuer or any Guarantor.


 


11.22     
Note Guarantee in Addition to Other Obligations.


 


The Obligations of each Guarantor under its Note
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.


 


11.23     
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.


 


11.24     
Successors and Assigns.


 


Each Note 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, except as otherwise permitted in this
Indenture.


 


92






 


 










 


ARTICLE XII


 


[INTENTIONALLY OMITTED]


 


ARTICLE XIII


 


MISCELLANEOUS


 


13.1       
TIA Controls.


 


If any provision of this Indenture limits, qualifies,
or conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.


 


13.2       
Notices.


 


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


 


if to the Issuers or a
Guarantor, if any:


 


Progress Railways
Services Holdings, Inc.

1600 Progress Drive

Albertville, Alabama, 35950

Attention:            
President


 


with a copy to:


 


Morgan, Lewis &
Bockius LLP

101 Park Avenue

New York, NY 10178

Attention: Howard Kenny


 


Telephone: 212-309-6000

Telecopy:  212-309-6001


 


if to the Trustee:


 


The Bank of New York

101 Barclay Street, Fl. 8W

New York, NY 10286

Attention: Corporate Trust Administration


 


Telephone: 212-815-5707


 


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if to the Trustee for
presentation of Securities for payment or for registration of transfer or
exchange:


 


The Bank of New York

101 Barclay Street, Fl. 8W

New York, NY 10286

Attention: Corporate Trust Administration


 


Telephone: 212-815-5707


 


Each of the Issuers 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 Issuers and the Trustee,
shall be deemed to have been given or made as of the date so delivered if
personally delivered; when answered back, if telecopied; and 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), except that, with
respect to any mailing, notices to the Trustee shall be deemed effective only
upon receipt.


 


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


 


13.3       
Communications by Holders with Other Holders.


 


Holders may communicate pursuant to TIA
§ 312(b) with other Holders with respect to their rights under this
Indenture or the Securities. The Issuers. the Trustee, the Registrar and any
other Person shall have the protection of TIA § 312(c).


 


13.4       
Certificate and Opinion as to Conditions Precedent.


 


Upon any request or application by the Issuers to the
Trustee to take any action under this Indenture, the Issuers shall furnish to
the Trustee at the request of the Trustee:


 


(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 each of the Issuers, 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.


 


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13.5       
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 4.8, 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; 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.


 


13.6       
Rules by Trustee, Paying Agent, Registrar.


 


The Trustee, Paying Agent or Registrar may make
reasonable rules for its functions.


 


13.7       
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.


 


13.8       
Governing Law.


 


THIS INDENTURE, THE SECURITIES AND ANY NOTE GUARANTEES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.


 


Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Indenture, the Securities or any Subsidiary
Guarantees.


 


13.9       
No Adverse Interpretation of Other Agreements.


 


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


 


95












 


13.10     
No Recourse Against Others.


 


No recourse for the payment of the principal of,
premium, if any, or interest on any of the Securities or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of any Obligor in this Indenture, or in any
of the Securities or Subsidiary Guarantees or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or controlling person of the Parent,
either Issuer or any Subsidiary Guarantor or of any successor Person thereof.
Each Holder, by accepting the Securities, waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.


 


13.11      Successors.


 


All agreements of the Issuers and the Guarantors, if
any, in this Indenture and the Securities and the Subsidiary Guarantees shall
bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successor.


 


13.12     
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.


 


13.13     
Severability.


 


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


 


96












 


SIGNATURES


 


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


 


 


	
   

  	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P. Ainsworth

  
	
   

  	
   

  	
   

  	
  Title:     
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS METAL
  RECLAMATION COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title:      
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS RAIL SERVICES
  HOLDINGS CORP.

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William H.
  Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William H.
  Wangerin, Jr.

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FM INDUSTRIES, INC.

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SOUTHERN MACHINE AND
  TOOL COMPANY

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  William P. Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 












 


	
   

  	
   

  	
  RAILCAR, LTD.

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHEMETRON-RAILWAY
  PRODUCTS, INC.

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P. Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED INDUSTRIES
  CORPORATION

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS VANGUARD
  CORPORATION

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  S&L RAILROAD, LLC

  as Guarantor

  
	
   

  	
   

  	
   

  	
  By:  Progress Rail
  Services Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: President

  



 












 


	
   

  	
   

  	
  KENTUCKIANA RAILCAR
  REPAIR & STORAGE

  
	
   

  	
   

  	
  FACILITY, LLC

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UNITED
  INDUSTRIES CORPORATION,

  AS MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WEST VIRGINIA AUTO
  SHREDDING, INC.

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS RAIL HOLDINGS,
  INC.

  as Guarantor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William P.
  Ainsworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name: William P.
  Ainsworth

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 












 


	
   

  	
   

  	
  THE BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Patricia Gallagher

  	
   

  
	
   

  	
   

  	
   

  	
  Name: PATRICIA
  GALLAGHER

  
	
   

  	
   

  	
   

  	
  Title: VICE PRESIDENT

  



 












 


Exhibit A 


 


[FORM OF INITIAL NOTE]*


 


[FACE OF SECURITY]


 


PROGRESS RAIL SERVICES CORPORATION

PROGRESS METAL RECLAMATION COMPANY


 


73/4% Senior Secured Note due
2012


 


	
  No.

  	
   

  	
  Principal Amount $

  	
   

  
	
  ISIN No.

  	
   

  	
   

  
	
  CUSIP No.

  	
   

  	
   

  



 


PROGRESS RAIL SERVICES CORPORATION, an Alabama
corporation (the “Issuer”), and PROGRESS METAL RECLAMATION COMPANY, a
Kentucky corporation (also an “Issuer” and, together with the other
Issuer, the “Issuers,” which term includes any of their successors under
the Indenture hereinafter referred to), for value received jointly and
severally promise to pay to CEDE & CO. or registered assigns, the
principal sum of TWO HUNDRED MILLION Dollars ($200,000,000) on April 1,
2012.


 


Interest Payment Dates: April 1 and
October 1; commencing October 1, 2005. 


 


Record Dates: March 15 and September 15.


 


Reference is made to the further provisions of this
Security contained herein, which shall for all purposes have the same effect as
if set forth at this place.


 






* Add Private Placement
Legend and, if appropriate, Global Security Legend.


 


A-1












 


IN WITNESS WHEREOF,
the Issuers have caused this Security to be signed manually or by
facsimile by their duly authorized officers.


 


Dated:


 


 


	
   

  	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS METAL
  RECLAMATION COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


A-2












 


[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]


 


This is one of the 7.75% Senior Notes due 2012
described in the within-mentioned Indenture.


 


 


	
   

  	
  The Bank of New York,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  



 


A-3












 


[REVERSE OF SECURITY]


 


PROGRESS RAIL SERVICES CORPORATION

PROGRESS METAL RECLAMATION COMPANY


 


73/4% Senior Note due 2012


 


1.            
Interest.


 


PROGRESS RAIL SERVICES CORPORATION, an Alabama
corporation (an “Issuer”) and PROGRESS METAL RECLAMATION COMPANY, a
Kentucky corporation (also an “Issuer” and together with the other
Issuer, the “Issuers” which term includes any of their respective
successors under the Indenture hereinafter referred to), jointly and severally
promise to pay interest on the principal amount of this Security at the rate
per annum shown above. The Issuers shall pay interest semi-annually on
April 1 and October 1 of each year (the “Interest Payment Date”),
commencing October 1, 2005. Interest on this Security shall accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from and including March 24, 2005. Interest on this Security
shall be computed on the basis of a 360-day year of twelve 30-day months.


 


The Issuers shall pay interest on overdue principal
from time to time on demand at the rate borne by this Security plus 2% and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful.


 


2.            
Method of
Payment.


 


The Issuers jointly and severally agree to pay
interest on the Securities (except defaulted interest) to the Persons who are
the registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Securities are canceled on
registration of transfer or registration of exchange (including pursuant to an
Exchange Offer (as defined in the Indenture)) after such Record Date. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Issuers shall pay principal, premium, if any and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts (“U.S. Legal Tender”). However, the Issuers may pay
principal, premium, if any, and interest by wire transfer of federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder’s
registered address.


 


3.            
Paying Agent
and Registrar.


 


Initially, The Bank of New York (the “Trustee”)
shall act as Paying Agent and Registrar. The Issuers may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders. The Parent, or
any of its Subsidiaries (including the Issuers) may, subject to certain
exceptions, act as Registrar or co-Registrar.


 


A-4












 


4.            
Indenture.


 


The issuers issued the Securities under an Indenture,
dated as of March 24, 2005 (the “Indenture”), among the Issuers,
the Parent, the Subsidiary Guarantors and the Trustee. This Security is one of
a duly authorized issue of Securities of the Issuers designated as their 7.75%
Senior Notes due 2012 (the “Initial Notes”). Capitalized terms herein
are used as defined in the Indenture unless otherwise defined herein. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of them. The Securities are general
obligations of the Issuers unlimited in amount, of which an aggregate principal
amount of $200,000,000 are being issued on the Issue Date.


 


5.            
Optional
Redemption.


 


The Issuers may redeem the Securities, in whole at any
time or in part from time to time, on and after April 1, 2008 upon not
less than 30 nor more than 60 days’ notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on April 1 of the years set forth
below, plus, in each case, accrued and unpaid interest thereon, if any, to the
date of redemption (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date):


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  107.750

  	
  %

  
	
  2009

  	
   

  	
  103.875

  	
  %

  
	
  2010

  	
   

  	
  101.938

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


At any time prior to April 1, 2008, the
Securities may also be redeemed or purchased, by or on behalf of the Issuers,
in whole, or in part, at the Issuers’ option (a “Make-Whole Redemption”),
at a price equal to 100% of the principal amount thereof plus the Applicable
Premium as of, and accrued but unpaid interest, if any, to, the date of
redemption or purchase pursuant to such Make-Whole Redemption (the “Make-Whole
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). Such Make-Whole Redemption may be made upon notice mailed by first class
mail to each Holder’s registered address not less than 30 nor more than 60 days
prior to the Make-Whole Redemption Date. The Issuers may provide in such notice
that payment of such price and performance of the Issuers’ obligations with
respect to such redemption or purchase may be performed by another person.


 


A-5












 


6.            
Optional
Redemption with the Proceeds of Certain Equity Issuances.


 


At any time prior to April 1, 2008, the Issuers
may redeem up to 35% of the principal amount of the Securities with the Net
Cash Proceeds of one or more sales of Capital Stock (other than Disqualified
Stock) of the Parent (to the extent such Net Cash Proceeds have been
contributed to the common equity of the Issuers, in amounts, as between the
Issuers, equal to the portion of the total redemption price paid by each
Issuer) at a redemption price (expressed as a percentage of principal amount)
of 107.75%, plus accrued and unpaid interest to the redemption date; provided that at least 65% of the
aggregate principal amount of the Securities originally issued on the Issue
Date remains outstanding after each such redemption and notice of any such
redemption is mailed within 90 days of each such sale of Capital Stock.


 


7.            
[intentionally
omitted].


 


8.            
Notice of
Redemption.


 


Notice of redemption shall 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 such Holder’s registered address.
Securities in denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $2,000.


 


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 a principal
amount equal to the unredeemed portion thereof shall be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest shall cease to accrue on Securities or portions
thereof called for redemption, subject to the provisions of the Indenture.


 


9.            
[intentionally
omitted].


 


10.          
Change of
Control Offer.


 


Upon the occurrence of a Change of Control, the
Issuers shall be required, as and to the extent set forth in the Indenture, to
offer to purchase all of the outstanding Securities at a purchase price equal
to 101% of the outstanding principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date);


 


11.          
Limitation on
Asset Sales.


 


The Issuers are, subject to certain conditions,
obligated to make an offer to purchase Securities at 100% of their outstanding
principal amount, plus accrued and unpaid interest, if any, thereon to the date
of repurchase with certain Net Cash Proceeds of certain sales or other
dispositions of assets in accordance with the Indenture.


 


A-6












 


12.          
Registration
Rights.


 


Pursuant to the Registration Rights Agreement, the
Issuers shall be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for
the Issuers’ 7.75% Senior Notes due 2012 (the “Exchange Notes”), which
shall have been registered under the Securities Act, in like principal amount
and having terms identical in all material respects to the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.


 


13.          
Denominations;
Transfer; Exchange.


 


The Securities are in registered form, without
coupons, in denominations of $2,000 and integral multiples of $1,000 in excess
of $2,000. A Holder shall register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for redemption,
except the unredeemed portion of any security being redeemed in part.


 


14.          
Persons Deemed
Owners.


 


The registered Holder of a Security shall be treated
as the owner of it for all purposes.


 


15.          
Unclaimed
Funds.


 


If funds for the payment of principal, premium, if
any, or interest remain unclaimed for two years, the Trustee and the Paying
Agent shall repay the funds to the Issuers at their request. After that, all
liability of the Trustee and such Paying Agent with respect to such funds shall
cease.


 


16.          
Discharge
Prior to Redemption or Maturity.


 


The Issuers and any Guarantor may be discharged from
their obligations under the Indenture or the Securities and any Subsidiary
Guarantee except for certain provisions thereof, and may be discharged from
obligations to comply with certain covenants contained in the Indenture and the
Securities and any Note Guarantee, in each case, upon satisfaction of certain
conditions specified in the Indenture.


 


17.          
Amendment;
Supplement; Waiver.


 


Subject to certain exceptions, the Indenture, the
Securities, any Note Guarantee, 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 Event of 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


 


A-7












 


consent of any Holder,
the parties thereto may amend or supplement the Indenture, the Securities and
the Note Guarantees, to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Securities and any Note Guarantee in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.


 


18.          
Restrictive
Covenants.


 


The Indenture contains certain covenants that, among
other things, limit the ability of the Parent 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 Parent to the Parent, 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 Parent must annually report to the Trustee on compliance with
such limitations.


 


19.          
Defaults and
Remedies.


 


If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of
Securities then outstanding may declare all the Securities to be due and
payable immediately in the manner and with the effect provided in the
Indenture. Holders of Securities may not enforce the Indenture, the Securities
or any Note Guarantee except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture, the Securities or the Note Guarantees, if
any, unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. Subject to Section 7.1,
however, the Trustee may refuse to follow any direction that conflicts with any
law or this Indenture, that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction or that may involve the Trustee in personal liability, and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of Securities.


 


20.          
Trustee
Dealings with Issuers.


 


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 Issuers, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


21.          
No Recourse
Against Others.


 


No recourse for the payment of the principal of,
premium, if any, or interest on any of the Securities or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of any Obligor in this Indenture, or in any
of the Securities or Note Guarantees or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or controlling person of the Parent,
either Issuer or any Subsidiary Guarantor or of any successor Person thereof.
Each Holder, by accepting the Securities, waives and releases all such
liability.


 


A-8












 


The
waiver and release are part of the consideration for the issuance of the
Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws.


 


22.          
Authentication.


 


This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.


 


23.          
Abbreviations
and Defined Terms.


 


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


 


24.          
Governing Law.


 


THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


25.          
CUSIP and ISIN
Numbers.


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP and ISIN numbers to be printed on the Securities as a convenience
to the Holders of the Securities. No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only on
the other identification numbers printed hereon.


 


26.          
Indenture.


 


Each Holder, by accepting a Security, agrees to be
bound by all of the terms and provisions of the Indenture, as may be amended
from time to time.


 


The Issuers shall furnish to any Holder of a Security
upon written request and without charge a copy of the Indenture which has the
text of this Security in larger type. Requests may be made to: Progress Rail
Services Holdings Corp., 1600 Progress Drive, Albertville, AL, 35950 Attn: President.


 


A-9












 


ASSIGNMENT FORM


 


	
  I or we assign and
  transfer this Security to

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print or type name,
  address and zip code of assignee or transferee)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Insert Social Security
  or other identifying number of assignee or transferee)

  	
   

  
	
   

  
	
  and irrevocably appoint

  	
   

  	
  agent to transfer this

  
	
  Security on the books
  of the Issuers. The agent may substitute another to act for him.

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


	
  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)

  



 


In connection with any transfer of this Security
occurring prior to the date which is the earlier of (i) the date of the
declaration by the Commission of the effectiveness of a registration statement
under the Securities Act of 1933, as amended (the “Securities Act”),
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and
(ii) March 25, 2007 the undersigned confirms that it has not utilized
any general solicitation or general advertising in connection with the transfer
and that this Security is being transferred:


 


A-10












 


Check One


 


	
  (1)

  	
   

  	
  —

  	
   

  	
  to either of the
  Issuers or a subsidiary thereof; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  —

  	
   

  	
  pursuant to and in
  compliance with Rule 144A under the Securities Act; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  —

  	
   

  	
  to an institutional “accredited
  investor” (as defined in Rule 501(a)(l), (2), (3) or
  (7) under the Securities Act) that has furnished to the Trustee a signed
  letter containing certain representations and agreements (the form of which
  letter can be obtained from the Trustee); or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  —

  	
   

  	
  outside the United
  States to a “foreign person” in compliance with Rule 904 of
  Regulation S under the Securities Act; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  —

  	
   

  	
  pursuant to the
  exemption from registration provided by Rule 144 under the Securities
  Act; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  —

  	
   

  	
  pursuant to an
  effective registration statement under the Securities Act; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  —

  	
   

  	
  pursuant to another
  available exemption from the registration requirements of the Securities Act;

  



 


and unless the box below
is checked, the undersigned confirms that such Security is not being
transferred to an “affiliate” of the Issuers as defined in Rule 144
under the Securities Act of 1933, as amended (an “Affiliate”):


 


o       The transferee is an Affiliate of either
of the Issuers.


 


Unless one of the items is checked, the Trustee shall
refuse to register any of the Securities evidenced by this certificate in the
name of any person other than the registered Holder thereof; provided
that if box (3), (4), (5) or (7) is checked, the Issuers or the
Trustee may require, prior to registering any such transfer of the Securities,
in its sole discretion, such legal opinions, certifications (including an
investment letter in the case of box (3) or (4)) and other information as
the Trustee or the Issuers have reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.


 


A-11












 


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 Section 2.16 of the Indenture shall have been
satisfied.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as name

  appears on the other

  side of this Security)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  



 


TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS
CHECKED


 


The undersigned represents and warrants that it is
purchasing this 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 “qualified institutional buyer” within the meaning of
Rule 144A under the Securities Act and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Issuers as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.


 


	
  Dated:

  	
   

  	
   

  



NOTICE:
To be executed by an executive officer


 


A-12












 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Security purchased
by the Issuers pursuant to Section 4.17 or Section 4.18 of the
Indenture, check the appropriate box:


 


Section 4.17
[        ] Section 4.18
[        ]


 


If you want to elect to have only part of this
Security purchased by the Issuers pursuant to Section 4.17 or
Section 4.18 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)

  	
   

  



 


A-13












 


Exhibit B


 


[FORM OF EXCHANGE NOTE]*


 


[FACE OF SECURITY]


 


PROGRESS RAIL SERVICES CORPORATION

PROGRESS METAL RECLAMATION COMPANY


 


73/4% Senior Note

due 2012


 


CUSIP
No.

ISIN No.


	
  No.

  	
   

  	
  $

  	
   

  



 


 


PROGRESS RAIL SERVICES CORPORATION, an Alabama corporation
(an “Issuer”), and PROGRESS METAL RECLAMATION COMPANY, a Kentucky
corporation (also an “Issuer” and, together with the other Issuer, the “Issuers,”
which term includes any of their successors under the Indenture hereinafter
referred to), for value received jointly and severally promise to pay to
CEDE & CO. or registered assigns, the principal sum of TWO HUNDRED
MILLION Dollars ($200,000,000) on April 1, 2012.


 


Interest Payment Dates:
April 1 and October 1; commencing October 1, 2005.


 


Record Dates:
March 15 and September 15.


 


Reference is made to the further provisions of this
Security contained herein, which shall for all purposes have the same effect as
if set forth at this place


 






* Add
Global Security Legend, if appropriate.


 


B-1












 


IN WITNESS WHEREOF, the Issuers have caused this
Security to be signed manually or by facsimile by their duly authorized
officers.


 


 


Dated:


 


	
   

  	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROGRESS METAL
  RECLAMATION COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


B-2












 


[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]


 


This is one of the 7.75% Senior Notes due 2012
described in the within-mentioned Indenture.


 


 


	
   

  	
  The Bank of New York,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  



 


B-3












 


[REVERSE OF SECURITY]


 


PROGRESS RAIL SERVICES CORPORATION

PROGRESS METAL RECLAMATION COMPANY


 


73/4% Senior Secured Note due
2012


 


1.            
Interest.


 


PROGRESS RAIL SERVICES CORPORATION, an Alabama
corporation (an “Issuer”), and PROGRESS METAL RECLAMATION COMPANY, a
Kentucky corporation (also an “Issuer” and together with the other
Issuer, the “Issuers”) which term includes any of their respective
successors under the Indenture hereinafter referred to), jointly and severally
promise to pay interest on the principal amount of this Security at the rate
per annum shown above. The Issuers shall pay interest semi-annually on
April 1 and October 1 of each year (the “Interest Payment Date”),
commencing October 1, 2005. Interest on this Security shall accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from and including March 24, 2005. Interest on this Security
shall be computed on the basis of a 360-day year of twelve 30-day months.


 


The Issuers shall pay interest on overdue principal
from time to time on demand at the rate borne by this Security plus 2% and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful.


 


2.            
Method of
Payment.


 


The Issuers jointly and severally agree to pay
interest on the Securities (except defaulted interest) to the Persons who are
the registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Securities are canceled on registration
of transfer or registration of exchange (including pursuant to an Exchange
Offer (as defined in the Indenture)) after such Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Issuers shall pay principal, premium, if any and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts (“U.S. Legal Tender”). However, the Issuers may pay
principal, premium, if any, and interest by wire transfer of federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder’s
registered address.


 


3.            
Paying Agent
and Registrar.


 


Initially, The Bank of New York (the “Trustee”)
shall act as Paying Agent and Registrar. The Issuers may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders. The Parent, the
Issuers or any of its Subsidiaries may, subject to certain exceptions, act as
Registrar or co-Registrar.


 


B-4












 


4.            
Indenture.


 


The Issuers issued the Securities under an Indenture,
dated as of March 24, 2005 (the “Indenture” among the Issuers, the
Parent, the Subsidiary Guarantor and the Trustee. This Security is one of a
duly authorized issue of Securities of the Issuers designated as their 7.75%
Senior Notes due 2012 (the “Initial Notes”). Capitalized terms herein
are used as defined in the Indenture unless otherwise defined herein. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) (the “TIA”), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the Indenture
and the TIA for a statement of them. The Securities are general obligations of
the Issuers unlimited in amount, of which an aggregate principal amount of
$200,000,000 are being issued on the Issue Date.


 


5.            
Optional
Redemption.


 


The Issuers may redeem the Securities, in whole at any
time or in part from time to time, on and after April 1, 2008 upon not
less than 30 nor more than 60 days’ notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on April 1 of the years set forth
below, plus, in each case, accrued and unpaid interest thereon, if any, to the
date of redemption (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date):


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  107.750

  	
  %

  
	
  2009

  	
   

  	
  103.875

  	
  %

  
	
  2010

  	
   

  	
  101.938

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


At any time prior to April 1, 2008, the
Securities may also be redeemed or purchased, by or on behalf of the Issuers,
in whole, or in part, at the Issuers’ option (a “Make-Whole Redemption”),
at a price equal to 100% of the principal amount thereof plus the Applicable
Premium as of, and accrued but unpaid interest, if any, to, the date of
redemption or purchase pursuant to such Make-Whole Redemption (the “Make-Whole
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). Such Make-Whole Redemption may be made upon notice mailed by first class
mail to each Holder’s registered address not less than 30 nor more than 60 days
prior to the Make-Whole Redemption Date. The Issuers may provide in such notice
that payment of such price and performance of the Issuers’ obligations with
respect to such redemption or purchase may be performed by another person.


 


B-5












 


6.            
Optional
Redemption with the Proceeds of Certain Equity Issuances.


 


At any time prior to April 1, 2008, the Issuers
may redeem up to 35% of the principal amount of the Securities with the Net
Cash Proceeds of one or more sales of Capital Stock (other than Disqualified
Stock) of the Parent (to the extent such Net Cash Proceeds have been
contributed to the common equity of the Issuers, in amounts, as between the
Issuers, equal to the portion of the total redemption price paid by each
Issuer) at a redemption price (expressed as a percentage of principal amount)
of 107.75%, plus accrued and unpaid interest to the redemption date; provided that at least 65% of the
aggregate principal amount of the Securities originally issued on the Issue
Date remains outstanding after each such redemption and notice of any such
redemption is mailed within 90 days of each such sale of Capital Stock.l.


 


7.            
[intentionally
omitted].


 


8.            
Notice of
Redemption.


 


Notice of redemption shall 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 such Holder’s registered address.
Securities in denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $2,000.


 


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 a principal
amount equal to the unredeemed portion thereof shall be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest shall cease to accrue on Securities or portions
thereof called for redemption, subject to the provisions of the Indenture.


 


9.            
[intentionally
omitted].


 


10.          
Change of
Control Offer.


 


Upon the occurrence of a Change of Control, the
Issuers shall be required, as and to the extent set forth in the Indenture, to
offer to purchase all of the outstanding Securities at a purchase price equal
to 101% of the outstanding principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date);


 


11.          
Limitation on
Asset Sales.


 


The Issuers are, subject to certain conditions,
obligated to make an offer to purchase Securities at 100% of their outstanding
principal amount, plus accrued and unpaid interest, if any, thereon to the date
of repurchase with certain Net Cash Proceeds of certain sales or other
dispositions of assets in accordance with the Indenture.


 


B-6












 


12.          
Registration
Rights.


 


Pursuant to the Registration Rights Agreement, the
Issuers shall be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for
the Issuers’ 7.75% Senior Notes due 2012 (the “Exchange Notes”), which
shall have been registered under the Securities Act, in like principal amount
and having terms identical in all material respects to the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.


 


13.          
Denominations;
Transfer; Exchange.


 


The Securities are in registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000 in excess
of $2,000. A Holder shall register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.


 


14.          
Persons Deemed
Owners.


 


The registered Holder of a Security shall be treated
as the owner of it for all purposes.


 


15.          
Unclaimed
Funds.


 


If funds for the payment of principal, premium, if
any, or interest remain unclaimed for two years, the Trustee and the Paying
Agent shall repay the funds to the Issuers at their request. After that, all liability
of the Trustee and such Paying Agent with respect to such funds shall cease.


 


16.          
Discharge
Prior to Redemption or Maturity.


 


The Issuers and any Guarantor may be discharged from
their obligations under the Indenture or the Securities and any Subsidiary
Guarantee except for certain provisions thereof, and may be discharged from
obligations to comply with certain covenants contained in the Indenture and the
Securities and any Note Guarantee, in each case, upon satisfaction of certain
conditions specified in the Indenture.


 


17.          
Amendment;
Supplement; Waiver.


 


Subject to certain exceptions, the Indenture, the
Securities, any Note Guarantee, 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 Event of 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


 


B-7












 


consent
of any Holder, the parties thereto may amend or supplement the Indenture, the
Securities, and the Note Guarantees, to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities and
any Note Guarantee in addition to or in place of certificated Securities or
comply with any requirements of the Commission in connection with the
qualification of the Indenture under the TIA, or make any other change that
does not materially adversely affect the rights of any Holder of a Security.


 


18.          
Restrictive
Covenants.


 


The Indenture contains certain covenants that, among
other things, limit the ability of the Parent 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 Parent to the Parent, 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 Parent must annually report to the Trustee on compliance with
such limitations.


 


19.          
Defaults and
Remedies.


 


If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of
Securities then outstanding may declare all the Securities to be due and
payable immediately in the manner and with the effect provided in the
Indenture. Holders of Securities may not enforce the Indenture, the Securities
or any Note Guarantee except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture, the Securities or the Note Guarantees, if
any, unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. Subject to Section 7.1,
however, the Trustee may refuse to follow any direction that conflicts with any
law or this Indenture, that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction or that may involve the Trustee in personal liability, and may take
any other action it deems proper that is not inconsistent with any such
direction received from Holders of Securities.


 


20.          
Trustee
Dealings with Issuers.


 


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 Issuers, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.


 


21.          
No Recourse
Against Others.


 


No recourse for the payment of the principal of,
premium, if any, or interest on any of the Securities or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of any Obligor in this Indenture, or in any
of the Securities or Note Guarantees or because of the creation of any
Indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or controlling person of the Parent,
either Issuer or any Subsidiary Guarantor or of any successor Person thereof.
Each Holder, by accepting the Securities, waives and releases all such
liability.


 


B-8












 


The
waiver and release are part of the consideration for the issuance of the
Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws.


 


22.          
Authentication.


 


This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.


 


23.          
Abbreviations
and Defined Terms.


 


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


 


24.          
Governing Law.


 


THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


25.          
CUSIP and ISIN
Numbers.


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP and ISIN numbers to be printed on the Securities as a convenience
to the Holders of the Securities. No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only
the other identification numbers printed hereon.


 


26.          
Indenture.


 


Each Holder, by accepting a Security, agrees to be
bound by all of the terms and provisions of the Indenture, as may be amended
from time to time.


 


The Issuers shall furnish to any Holder of a Security
upon written request and without charge a copy of the Indenture which has the
text of this Security in larger type. Requests may be made to: Progress Rail
Services Holdings Corp., 1600 Progress Drive, Albertville, AL, 35950 Attn:
President.


 


B-9












 


ASSIGNMENT FORM


 


	
  I or we assign and
  transfer this Security to

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print or type name,
  address and zip code of
  assignee or transferee)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Insert Social Security
  or other identifying number of assignee or transferee)

  	
   

  
	
   

  
	
  and irrevocably appoint

  	
   

  	
  agent to transfer this

  
	
  Security on the books
  of the Issuers, The agent may substitute another to act for him.

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


	
  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)

  



 


B-10












 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Security purchased
by the Issuers pursuant to Section 4.17 or Section 4.18 of the Indenture,
check the appropriate box:


 


Section 4.17
[        ]   
Section 4.18 [        ]


 


If you want to elect to have only part of this
Security purchased by the Issuers pursuant to Section 4.17 or
Section 4.18 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)

  	
   

  



 


B-11












 


Exhibit C


 


Form of Certificate to be

Delivered in Connection with

Transfers to Non-OIB Accredited Investors


 


[Date]


 


Attention:


 


	
  Re:

  	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  PROGRESS METAL RECLAMATION COMPANY

  73/4% Senior Notes due 2012

  (the “ Securities”)

  	
   

  



 


Ladies
and Gentlemen:


 


In connection with our proposed purchase of the
Securities of PROGRESS RAIL SERVICES CORPORATION and PROGRESS METAL RECLAMATION
COMPANY (the “Issuers”), we confirm that:


 


1.            
We have received a
copy of the Offering Memorandum (the “Offering Memorandum”), dated
March 17, 2005 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 on pages 1-3 of the Offering
Memorandum and in the section entitled “Transfer Restrictions” of
the 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 (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”).


 


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 or otherwise transfer any Securities prior to the date which is two
years after the original issuance of the Securities, and if such transfer is in
respect of any aggregate principal amount of Securities of less than $100,000,
also


 


C-1












 


furnishes an opinion of
counsel acceptable to the Issuers that such transfer complies with the
Securities Act, we will do so only (i) to the Issuers or any of their
subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a “qualified institutional buyer” (as
defined in Rule 144A under the Securities Act), (iii) inside the
United States to an institutional “accredited investor” (as defined
below) 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 relating
to the Securities), a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Securities, (iv) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (v) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available), or (vi) pursuant
to an effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Securities from us a
notice advising such purchaser that resales of the Securities are restricted as
stated herein.


 


4.            
We understand that,
on any proposed resale of any Securities, we will be required to furnish to the
Trustee and the Issuers such certification, legal opinions and other
information as the Trustee and the Issuers 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.


 


5.            
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.


 


6.            
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, and we are acquiring the Securities not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act.


 


You and the Issuers 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,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


C-2












 


Exhibit D


 


Form of Certificate to Be

Delivered in Connection with

Transfers Pursuant to Regulation S


 


	
  The Bank of New York

  	
  [Date]

  	
   

  



101
Barclay Street - 8th Floor West 


New
York, New York 10286


 


Attention: Corporate
Trust Division


 


 


	
  Re:

  	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  PROGRESS METAL RECLAMATION COMPANY

  73/4% Senior Notes due 2012

  (the “Securities”)

  	
   

  



 


In connection with our proposed sale of
$                   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:


 


(9)          
the offer of the
Securities was not made to a person in the United States;


 


(10)        
either (a) at
the time the buy offer was originated, the transferee was outside the United
States or we and any person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated off-shore securities
market and neither we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;


 


(11)        
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;


 


(12)        
the transaction is
not part of a plan or scheme to evade the registration requirements of the
Securities Act; and


 


(13)        
we have advised the
transferee of the transfer restrictions applicable to the Securities.


 


D-1












 


 


You and the Issuers 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

  



 


D-2












 


Exhibit E


 


GUARANTEE


 


For value received, the undersigned hereby
unconditionally guarantees, as principal obligor and not only as a surety, to
the Holder of this Security the cash payments in United States dollars of
principal of, premium, if any, and interest on this Security in the amounts and
at the times when due and interest on the overdue principal, premium, if any,
and interest, if any, of this Security, if lawful, and the payment or
performance of all other obligations of the Issuers under the Indenture (as
defined below) or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of
this Security, Article Eleven of the Indenture and this Note Guarantee. This
Note Guarantee will become effective in accordance with Article Eleven of the
Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Note Guarantee shall not be affected by the fact that it
is not affixed to any particular Security.


 


Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Indenture dated as of March 24, 2005,
among PROGRESS RAIL SERVICES CORPORATION, an Alabama Corporation (“Progress
Rail”), and PROGRESS METAL RECLAMATION COMPANY, a Kentucky corporation (“Progress
Metal” and together with PROGRESS RAIL, collectively the “Issuers”),
Progress Rail Services Holdings Corp., a Delaware corporation, as parent
guarantor, the Initial Subsidiary Guarantors party thereto and The Bank of New
York, as trustee (the “Trustee”).


 


The obligations of the undersigned to the Holders of
Securities and to the Trustee pursuant to this Note 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 of the Note Guarantee and
all of the other provisions of the Indenture to which this Note Guarantee
relates.


 


THIS NOTE GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The undesigned
Guarantor hereby agrees to submit to the jurisdiction of the courts of the
State of New York in any action or proceeding arising out of or relating to this
Note Guarantee.


 


This Note Guarantee is subject to release upon the
terms set forth in the Indenture.


 


E-1












 


IN WITNESS WHEREOF, the Guarantor has caused its Note
Guarantee to be duly executed.


 


 


	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


E-2












 


EXHIBIT
F


 


FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS


 


Supplemental Indenture (this “Supplemental
Indenture”), dated as of
                                     ,
2005
among                               
(the “Subsidiary Guarantor”), a subsidiary of Progress Rail Services
Holdings Corp, a Delaware corporation (the “Parent”) and The Bank of New
York (or its permitted successor), as trustee under the Indenture referred to
below (the “Trustee”).


 


W I T N E S S E T H


 


WHEREAS, PROGRESS RAIL SERVICES CORPORATION, an
Alabama corporation (an “Issuer”) and PROGRESS METAL RECLAMATION
COMPANY, a Kentucky corporation (also an “Issuer” and together with the other
Issuer the “Issuers”), the Parent, as guarantor, and the Initial
Subsidiary Guarantors party thereto have heretofore executed and delivered to
the Trustee an indenture (the “Indenture”), dated as of March 24, 2005
providing for the issuance of 73/4% Senior Notes due 2012
(the “Notes”);


 


WHEREAS, the
Indenture provides that under certain circumstances the Subsidiary Guarantor
shall execute and deliver to the Trustee a supplemental indenture pursuant to
which the Subsidiary Guarantor shall unconditionally guarantee all of the
Issuers obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the “Subsidiary Guarantee”); and


 


WHEREAS, pursuant
to Section 9.1 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.


 


NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Subsidiary Guarantor and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:


 


1.            
Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.


 


2.            
Agreement to
Guarantee.


 


(a)          
The Subsidiary
Guarantor, along with all other Subsidiary Guarantors, jointly and severally,
and fully and unconditionally, guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Issuers hereunder or thereunder,
that:


 


(i)           
the principal of,
premium, if any, and interest, if any, on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or


 


F-1












 


otherwise, and interest
on the overdue principal of, premium, if any, and interest, if any, on the
Notes, if lawful (subject in all cases to any applicable grace period provided
herein), and all other obligations of the Issuers to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and the principal of, premium, if
any, and interest, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of, premium, if any, and interest, if any, on the Notes,
if lawful (subject in all cases to any applicable grace period provided
herein);


 


(ii)          
in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, 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. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors shall be jointly and severally obligated to pay the same
immediately. The Subsidiary Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.


 


(b)          
The Subsidiary
Guarantor hereby agrees that, to the maximum extent permitted under applicable
law, its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Issuers, any action to enforce the same or any other
circumstance that might otherwise constitute a legal or equitable discharge or
defense of a Subsidiary Guarantor.


 


(c)          
The Subsidiary
Guarantor, subject to Section 6.6 of the Indenture, hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuers, any right to require a proceeding
first against the Issuers, protest, notice and all demands whatsoever and
covenants that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.


 


(d)          
The Subsidiary
Guarantor agrees that if any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Parent, or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Issuers
or the Guarantors, any amount paid by any of them to the Trustee or such
Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect.


 


(e)          
The Subsidiary
Guarantor agrees that the Subsidiary Guarantor shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.


 


(f)           
The Subsidiary
Guarantor agrees that, as between the Issuers and the Parent, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the


 


F-2












 


obligations guaranteed
hereby may be accelerated as provided in Article Six of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Six of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantors for the purpose of this Subsidiary Guarantee.


 


(g)          
The Subsidiary
Guarantor shall have the right to seek contribution from any non-paying
Subsidiary Guarantor so long as the exercise of such right does not impair the
rights of Holders under the Subsidiary Guarantee.


 


(h)          
The Subsidiary
Guarantor confirms, pursuant to Section 11.1 of the Indenture, that it is the
intention of such Subsidiary Guarantor that its Subsidiary Guarantee not
constitute (i) 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 its Subsidiary
Guarantee or (ii) an unlawful distribution under any applicable state law
prohibiting shareholder distributions by an insolvent subsidiary to the extent
applicable to its Subsidiary Guarantee, and, to effectuate the foregoing
intention, agrees hereby irrevocably that the obligations of such Subsidiary
Guarantor will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Subsidiary Guarantor that
are relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under Article Eleven of the Indenture, result in the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance or such an unlawful
shareholder distribution.


 


3.            
Execution and
Delivery. The
Subsidiary Guarantor agrees that the Subsidiary Guarantees shall remain in full
force and effect notwithstanding any failure to endorse on each Note a notation
of such Subsidiary Guarantee.


 


4.            
Guaranteeing
Subsidiary May Consolidate, Etc., on Certain Terms.


 


(a)          
A Subsidiary
Guarantor may not sell or otherwise dispose of all or substantially all of its
assets, or consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person) another Person, other than the
Parent or another Subsidiary Guarantor, unless immediately after giving effect
to that transaction, no Default or Event of Default exists; and


 


either:


 


(i)           
the Person acquiring
the property in any such sale or disposition or the Person formed by or surviving
any such consolidation or merger (if other than the Subsidiary Guarantor) is a
corporation or limited liability company organized or existing under the laws
of the United States, any state thereof or the District of Columbia and assumes
all obligations of that Subsidiary Guarantor under the Indenture, its
Subsidiary Guarantee


 


F-3












 


and the Registration Rights Agreement pursuant to a
supplemental indenture reasonably satisfactory to the Trustee; or


 


(ii)          
such sale or other
disposition or consolidation or merger complies with Section 4.18 of the
Indenture.


 


(b)          
In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed
upon the Notes and the due and punctual performance of all of the covenants and
conditions of the Indenture to be performed by a Subsidiary Guarantor, such
successor Person shall succeed to and be substituted for a Subsidiary Guarantor
with the same effect as if it had been named herein as a Subsidiary Guarantor.
Such successor Person thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Issuers and delivered to
the Trustee. All the Subsidiary Guarantees so issued shall in all respects have
the same legal rank and benefit under the Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of
the Indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.


 


(c)          
Except as set forth
in Articles 4 and 5 of the Indenture, and notwithstanding clauses (i) and (ii)
of Section 4(a) above, nothing contained in the Indenture or in any of the
Notes shall prevent any consolidation or merger of a Subsidiary Guarantor with
or into the Parent or another Subsidiary Guarantor, or shall prevent any sale
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Parent or another Subsidiary Guarantor.


 


5.            
Release.


 


(a)          
Any Subsidiary
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee, (i) in connection with any sale or other disposition of all of the
Capital Stock of that Subsidiary Guarantor to a Person that is not (either
before or after giving effect to such transaction) an Affiliate of the Parent,
if the sale of all such Capital Stock of that Subsidiary Guarantor complies
with Section 4.14 of the Indenture; (ii) if the Parent properly designates that
Subsidiary Guarantor as an Unrestricted Subsidiary under the Indenture or (iii)
solely the case of a Subsidiary Guarantee created pursuant to Section 4.15 of
the Indenture, upon the release or discharge of the Guarantee which resulted in
the creation of such Subsidiary Guarantee pursuant to Section 4.15 of the Indenture,
except a discharge or release by or as a result of payment under such
Guarantee. Upon delivery by the Parent to the Trustee of an Officers’
Certificate and an Opinion of Counsel to the effect that one of the foregoing
requirements has been satisfied and the conditions to the release of a
Subsidiary Guarantor under this Section 5 have been satisfied, the Trustee
shall execute any documents reasonably required in order to evidence the
release of such Subsidiary Guarantor from its obligations under its Subsidiary
Guarantee.


 


(b)          
Any Subsidiary
Guarantor not released from its obligations under its Subsidiary Guarantee
shall remain liable for the full amount of principal of and interest and
Liquidated


 


F-4












 


Damages, if any, on the
Notes and for the other obligations of any Subsidiary Guarantor under the
Indenture as provided in Article Ten of the Indenture.


 


6.            
No Recourse
Against Others.
Pursuant to Section 11.1 of the Indenture, no director, officer, employee,
incorporator or stockholder of the Subsidiary Guarantor shall have any
liability for any obligations of such Subsidiary Guarantor under the Notes, the
Indenture, the Subsidiary Guarantees or for any claim based on, in respect of,
or by reason of, such Obligations or their creation.


 


7.            
NEW YORK LAW TO
GOVERN. THE LAW
OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
INDENTURE.


 


8.            
Counterparts. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.


 


9.            
Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.


 


10.          
Trustee. The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Subsidiary Guarantor and the
Parent.


 


[SIGNATURE PAGE FOLLOWS]


 


F-5












 


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


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF GUARANTEEING
  SUBSIDIARY]

  
	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NAME OF GUARANTEEING
  SUBSIDIARY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
  ]

  	
  ,

  
	
   

  	
  AS TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


F-6