Exhibit 4.23


 


EXECUTION COPY


 


RITE AID CORPORATION


 


10.375% Senior Secured Notes due 2016


 






 


INDENTURE


 


Dated as of July 9, 2008


 






 


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


 


as Trustee


 

















 


TABLE OF CONTENTS


 


	
   

  	
  ARTICLE I

  

  Definitions and Incorporation by Reference

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01. Definitions

  	
   

  	
  1

  
	
  SECTION 1.02. Other Definitions

  	
   

  	
  36

  
	
  SECTION 1.03. Incorporation by Reference of Trust Indenture Act

  	
   

  	
  37

  
	
  SECTION 1.04. Rules of Construction

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  

  The Securities

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01. Amount of Securities; Issuable in Series

  	
   

  	
  38

  
	
  SECTION 2.02. Form and Dating

  	
   

  	
  39

  
	
  SECTION 2.03. Execution and Authentication

  	
   

  	
  39

  
	
  SECTION 2.04. Registrar and Paying Agent

  	
   

  	
  39

  
	
  SECTION 2.05. Paying Agent To Hold Money in Trust

  	
   

  	
  40

  
	
  SECTION 2.06. Holder Lists

  	
   

  	
  40

  
	
  SECTION 2.07. Replacement Securities

  	
   

  	
  40

  
	
  SECTION 2.08. Outstanding Securities

  	
   

  	
  41

  
	
  SECTION 2.09. Temporary Securities

  	
   

  	
  41

  
	
  SECTION 2.10. Cancellation

  	
   

  	
  41

  
	
  SECTION 2.11. Defaulted Interest

  	
   

  	
  41

  
	
  SECTION 2.12. CUSIP Numbers

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III

  

  Redemption

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01. Notices to Trustee

  	
   

  	
  42

  
	
  SECTION 3.02. Selection of Securities To Be Redeemed

  	
   

  	
  42

  
	
  SECTION 3.03. Notice of Redemption

  	
   

  	
  42

  
	
  SECTION 3.04. Effect of Notice of Redemption

  	
   

  	
  43

  
	
  SECTION 3.05. Deposit of Redemption Price

  	
   

  	
  43

  
	
  SECTION 3.06. Securities Redeemed in Part

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  

  Covenants

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01. Payment of Securities

  	
   

  	
  44

  
	
  SECTION 4.02. SEC Reports

  	
   

  	
  44

  
	
  SECTION 4.03. Limitation on Debt

  	
   

  	
  44

  
	
  SECTION 4.04. Limitation on Restricted Payments

  	
   

  	
  48

  



 


i

















 


	
  SECTION 4.05. Limitation on Liens

  	
   

  	
  51

  
	
  SECTION 4.06. Limitation on Asset Sales and Specified Collateral
  Dispositions

  	
   

  	
  51

  
	
  SECTION 4.07. Limitation on Restrictions on Distributions from
  Restricted Subsidiaries

  	
   

  	
  55

  
	
  SECTION 4.08. Limitation on Transactions with Affiliates

  	
   

  	
  56

  
	
  SECTION 4.09. Guarantees by Subsidiaries

  	
   

  	
  58

  
	
  SECTION 4.10. Limitation on Sale and Leaseback Transactions

  	
   

  	
  59

  
	
  SECTION 4.11. Designation of Restricted and Unrestricted
  Subsidiaries

  	
   

  	
  60

  
	
  SECTION 4.12. Additional Security Documents

  	
   

  	
  61

  
	
  SECTION 4.13. Change of Control

  	
   

  	
  61

  
	
  SECTION 4.14. Further Instruments and Acts

  	
   

  	
  62

  
	
  SECTION 4.15. Covenant Suspension

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V

  

  Successor Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01. When Company May Merge or Transfer Assets

  	
   

  	
  64

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  

  Defaults and Remedies

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01. Events of Default

  	
   

  	
  66

  
	
  SECTION 6.02. Acceleration

  	
   

  	
  68

  
	
  SECTION 6.03. Other Remedies

  	
   

  	
  69

  
	
  SECTION 6.04. Waiver of Past Defaults

  	
   

  	
  69

  
	
  SECTION 6.05. Control by Majority

  	
   

  	
  69

  
	
  SECTION 6.06. Limitation on Suits

  	
   

  	
  69

  
	
  SECTION 6.07. Rights of Holders to Receive Payment

  	
   

  	
  70

  
	
  SECTION 6.08. Collection Suit by Trustee

  	
   

  	
  70

  
	
  SECTION 6.09. Trustee May File Proofs of Claim

  	
   

  	
  70

  
	
  SECTION 6.10. Priorities

  	
   

  	
  70

  
	
  SECTION 6.11. Undertaking for Costs

  	
   

  	
  71

  
	
  SECTION 6.12. Waiver of Stay or Extension Laws

  	
   

  	
  71

  
	
  SECTION 6.13. Enforcement of Remedies

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII

  

  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01. Duties of Trustee

  	
   

  	
  71

  
	
  SECTION 7.02. Rights of Trustee

  	
   

  	
  73

  
	
  SECTION 7.03. Individual Rights of Trustee

  	
   

  	
  74

  
	
  SECTION 7.04. Trustee’s Disclaimer

  	
   

  	
  74

  
	
  SECTION 7.05. Notice of Defaults

  	
   

  	
  74

  
	
  SECTION 7.06. Reports by Trustee to Holders

  	
   

  	
  74

  



 


ii

















 


	
  SECTION 7.07. Compensation and Indemnity

  	
   

  	
  74

  
	
  SECTION 7.08. Replacement of Trustee

  	
   

  	
  75

  
	
  SECTION 7.09. Successor Trustee by Merger

  	
   

  	
  76

  
	
  SECTION 7.10. Eligibility; Disqualification

  	
   

  	
  76

  
	
  SECTION 7.11. Preferential Collection of Claims Against Company

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII

  

  Discharge of Indenture; Defeasance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01. Discharge of Liability on Securities; Defeasance

  	
   

  	
  77

  
	
  SECTION 8.02. Conditions to Defeasance

  	
   

  	
  78

  
	
  SECTION 8.03. Application of Trust Money

  	
   

  	
  79

  
	
  SECTION 8.04. Repayment to Company

  	
   

  	
  79

  
	
  SECTION 8.05. Indemnity for Government Obligations

  	
   

  	
  79

  
	
  SECTION 8.06. Reinstatement

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX

  

  Amendments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01. Without Consent of Holders

  	
   

  	
  80

  
	
  SECTION 9.02. With Consent of Holders

  	
   

  	
  81

  
	
  SECTION 9.03. Compliance with Trust Indenture Act

  	
   

  	
  86

  
	
  SECTION 9.04. Revocation and Effect of Consents and Waivers

  	
   

  	
  86

  
	
  SECTION 9.05. Notation on or Exchange of Securities

  	
   

  	
  86

  
	
  SECTION 9.06. Trustee To Sign Amendments

  	
   

  	
  86

  
	
  SECTION 9.07. Payment for Consent

  	
   

  	
  86

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X

  

  Miscellaneous

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01. Trust Indenture Act Controls

  	
   

  	
  87

  
	
  SECTION 10.02. Notices

  	
   

  	
  87

  
	
  SECTION 10.03. Communication by Holders with Other Holders

  	
   

  	
  87

  
	
  SECTION 10.04. Certificate and Opinion as to Conditions
  Precedent

  	
   

  	
  88

  
	
  SECTION 10.05. Statements Required in Certificate or Opinion

  	
   

  	
  88

  
	
  SECTION 10.06. When Securities Disregarded

  	
   

  	
  88

  
	
  SECTION 10.07. Rules by Trustee, Paying Agent and Registrar

  	
   

  	
  89

  
	
  SECTION 10.08. Legal Holidays

  	
   

  	
  89

  
	
  SECTION 10.09. Governing Law

  	
   

  	
  89

  
	
  SECTION 10.10. No Recourse Against Others

  	
   

  	
  89

  
	
  SECTION 10.11. Successors

  	
   

  	
  89

  
	
  SECTION 10.12. Multiple Originals

  	
   

  	
  89

  
	
  SECTION 10.13. Table of Contents; Headings

  	
   

  	
  89

  
	
  SECTION 10.14. Waiver of Jury Trial

  	
   

  	
  89

  



 


iii

















 


	
  SECTION 10.15. Force Majeure

  	
   

  	
  90

  



 


Schedule A – Subsidiary Guarantors


 


Exhibit A – Form of Security


 


iv

















 


CROSS-REFERENCE TABLE


 


	
  TIA

  Section

  	
   

  	
   

  	
   

  	
  Indenture

  Section

  
	
  310

  	
   

  	
  (a)(1)

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.08;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  311

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  312

  	
   

  	
  (a)

  	
   

  	
   

  	
  2.06

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  10.03

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  10.03

  
	
  313

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  7.06

  
	
  314

  	
   

  	
  (a)

  	
   

  	
   

  	
  4.02;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  4.09;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  4.09;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.02;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  1.03;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  10.05

  
	
   

  	
   

  	
  (f)

  	
   

  	
   

  	
  4.14

  
	
  315

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.05;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  6.11

  
	
  316

  	
   

  	
  (a)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (last sentence)

  	
   

  	
   

  	
  10.06

  



 


v

















 


	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
   

  	
  6.05

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
   

  	
  6.04

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  6.07

  
	
  317

  	
   

  	
  (a)(1)

  	
   

  	
   

  	
  6.08

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  6.09

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  2.05

  
	
  318

  	
   

  	
  (a)

  	
   

  	
   

  	
  10.01

  



 


N.A. Means Not Applicable.


 


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


 


vi
















 


INDENTURE dated as of July 9, 2008,
among RITE AID CORPORATION, a Delaware corporation (the “Company”), each
of the SUBSIDIARY GUARANTORS named in Schedule A hereto and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., a national banking association, as Trustee
(the “Trustee”).


 


Each party agrees as follows
for the benefit of the other party and for the equal and ratable benefit of the
Holders of the Company’s 10.375% Senior Secured Notes due 2016, to be issued
from time to time, in one or more series as provided in this Indenture (the “Securities”):


 


ARTICLE I


 


Definitions and Incorporation
by Reference


 


SECTION 1.01.  Definitions.


 


“Additional
Assets” means:


 


(a) any Property (other
than cash, cash equivalents and securities) to be owned by the Company or any
Restricted Subsidiary and used in a Related Business; or


 


(b) Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary from any
Person other than the Company or an Affiliate of the Company; provided, however,
that, in the case of this clause (b), such Restricted Subsidiary is primarily
engaged in a Related Business.


 


“Additional Senior Debt”
means any other Debt of the Company Guaranteed by the Subsidiary Guarantors
pursuant to the Senior Subsidiary Guarantee Agreement with such Guarantees
secured by the Senior Collateral on a pari  passu basis with the
Senior Bank Obligations; provided, however, that such Debt is
permitted to be incurred, secured and guaranteed on such basis by this
Indenture and the Second Priority Collateral Documents.


 


“Additional Senior Debt
Documents” means, with respect to any series, issue or class of Additional
Senior Debt, the promissory notes, indentures, Collateral Documents or other
operative agreements evidencing or governing such Debt, as the same may be
amended, restated, supplemented or otherwise modified from time to time.


 


“Additional Senior Debt
Facility” means the indenture or other governing agreement with respect to
any Additional Senior Debt, as the same may be amended, restated, supplemented
or otherwise modified from time to time.


 


“Additional Senior Debt
Obligations” means, with respect to any series, issue or class of
Additional Senior Debt, (a) all principal of and interest (including,


 

















 


without
limitation, any interest which accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim
in any such proceeding) payable with respect to such Additional Senior Debt, (b) all
other amounts payable by the Company to the related Additional Senior Debt
Parties under the related Additional Senior Debt Documents and (c) any
renewals, extensions or Refinancings of the foregoing.


 


“Additional Senior Debt
Parties” means, with respect to any series, issue or class of Additional
Senior Debt, the holders of such indebtedness from time to time, any trustee or
agent therefore under any related Additional Senior Debt Documents and the
beneficiaries of each indemnification obligation undertaken by the Company or
any Obligor under any related Additional Senior Debt Documents, but shall not
include the Obligors or any controlled Affiliates thereof.


 


“Affiliate” of any
specified Person means:


 


(a) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; or


 


(b) any other Person who
is a director or executive officer of:


 


(1) such specified Person;


 


(2) any Subsidiary of such
specified Person; or


 


(3) any Person described
in clause (a) above.


 


For the purposes of this
definition, “control” when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.


 


For purposes of this
definition, The Jean Coutu Group (PJC), Inc. and its Affiliates shall be “Affiliates”
of the Company so long as The Jean Coutu Group (PJC), Inc. beneficially
owns more than 10% of the Voting Stock of the Company.


 


“Asset Sale” means any
sale, lease, transfer, issuance or other disposition (or series of related
sales, leases, transfers, issuances or dispositions) by the Company or any
Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a “disposition”), of:


 


(a) any shares of Capital
Stock of a Restricted Subsidiary (other than directors’ qualifying shares); or


 


2

















 


(b) any other assets of
the Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary,


 


in the case of either clause (a) or
clause (b) above, whether in a single transaction or a series of related
transactions, (i) that have a Fair Market Value in excess of $15.0 million
or (ii) for aggregate consideration in excess of $15.0 million, other
than, in the case of clause (a) or (b) above:


 


(1) any disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Restricted Subsidiary;


 


(2) any disposition that
constitutes a Permitted Investment or Restricted Payment permitted by Section 4.04;


 


(3) any disposition
effected in compliance with Section 5.01(a);


 


(4) a sale of accounts
receivable and related assets of the type specified in the definition of “Qualified
Receivables Transaction” to a Receivables Entity;


 


(5) a transfer of accounts
receivable and related assets of the type specified in the definition of “Qualified
Receivables Transaction” (or a fractional undivided interest therein) by a
Receivables Entity in connection with a Qualified Receivables Transaction; or


 


(6) a sale by the Company
or a Restricted Subsidiary of Property by way of a Sale and Leaseback
Transaction but only if (A) such Property was owned by the Company or a
Restricted Subsidiary on or after the Issue Date, (B) the requirements of
clause (a) of Section 4.10 are satisfied with respect to such Sale
and Leaseback Transaction, (C) the requirements of clauses (a), (b) and
(c) of the first paragraph of Section 4.06 are satisfied as though
such Sale and Leaseback Transaction constituted an Asset Sale and (D) the
aggregate Fair Market Value of such Property, when added to the Fair Market
Value of all other sales of Property pursuant to this clause (6) since the
Issue Date, does not exceed $150 million.


 


“Attributable
Debt” in respect of a Sale and Leaseback Transaction means, at any date of
determination:


 


(a) if such Sale and
Leaseback Transaction is a Capital Lease Obligation, the amount of Debt
represented thereby according to the definition of “Capital Lease Obligation”;
and


 


3

















 


(b) in
all other instances, the greater of:


 


(1) the Fair Market Value
of the Property subject to such Sale and Leaseback Transaction; and


 


(2) the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (in each case
including any period for which such lease has been extended).


 


“Average Life” means, as
of any date of determination, with respect to any Debt or Preferred Stock, the
quotient obtained by dividing:


 


(a) the sum of the product
of the numbers of years (rounded to the nearest one-twelfth of one year) from
the date of determination to the dates of each successive scheduled principal
payment of such Debt or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by


 


(b) the sum of all such
payments.


 


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


 


“Board of Directors”
means the board of directors of the Company or any duly authorized and constituted
committee thereof.


 


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


 


“Business Day” means any
day other than a Saturday, a Sunday or a day on which banking institutions in
The City of New York, New York are authorized or obligated by law, regulation, executive
order or governmental decree to close.


 


“Capital Lease Obligations”
means any obligation under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP; and the amount of Debt
represented by such obligation shall be the capitalized amount of such
obligations determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty. For purposes of Section 4.05, a
Capital Lease Obligation shall be deemed secured by a Lien on the Property
being leased.


 


“Capital Stock” means,
with respect to any Person, any shares or other equivalents (however
designated) of any class of corporate stock or partnership interests 


 


4

















 


or any other
participations, rights, warrants, options or other interests in the nature of
an equity interest in such Person, including Preferred Stock, but excluding any
debt security convertible or exchangeable into such equity interest.


 


“Capital Stock Sale Proceeds”
means the aggregate cash proceeds received by the Company from the issuance or
sale (other than to a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees) by the Company of its Capital Stock (other than
Disqualified Stock) after February 12, 2003, net of attorneys’ fees,
accountants’ fees, underwriters’ or placement agents’ fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.


 


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


 


(a) if any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act or any successor provisions to either of the foregoing), including any group
acting for the purpose of acquiring, holding, voting or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act (other
than one or more Permitted Holders), becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 40% or
more of the total voting power of the Voting Stock of the Company (for purposes
of this clause (a), such person or group shall be deemed to beneficially own
any Voting Stock of a corporation held by any other corporation (the “parent
corporation”) so long as such person or group beneficially owns, directly
or indirectly, in the aggregate a majority of the total voting power of the
Voting Stock of such parent corporation); or


 


(b) the sale, transfer,
assignment, lease, conveyance or other disposition, directly or indirectly, of
all or substantially all the assets of the Company and the Restricted
Subsidiaries, considered as a whole (other than a disposition of such assets as
an entirety or virtually as an entirety to a Wholly Owned Restricted
Subsidiary) shall have occurred, or the Company merges, consolidates or
amalgamates with or into any other Person or any other Person merges,
consolidates or amalgamates with or into the Company, in any such event pursuant
to a transaction in which the outstanding Voting Stock of the Company is
reclassified into or exchanged for cash, securities or other Property, other
than any such transaction where:


 


(1) the outstanding Voting
Stock of the Company is reclassified into or exchanged for other Voting Stock
of the Company or for Voting Stock of the surviving corporation; and


 


(2) the holders of the
Voting Stock of the Company immediately prior to such transaction own, directly
or indirectly, not less than a majority of the Voting Stock of the Company or
the surviving corporation 


 


5

















 


immediately
after such transaction and in substantially the same proportion as before the
transaction; or


 


(c) during any period of
two consecutive years commencing after the Issue Date, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election or appointment by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by a
vote of not less than three-fourths of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or


 


(d) the shareholders of
the Company shall have approved any plan of liquidation or dissolution of the
Company.


 


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


 


“Collateral”  means all the collateral described in the
Collateral Documents.


 


“Collateral Disposition”
means (a) any sale, transfer or other disposition of Collateral (including
any property or assets that would constitute Collateral but for the release of the
Senior Lien and the Second Priority Lien with respect thereto in connection
with such sale, transfer or other disposition), or (b) any casualty or
other insured damage or Condemnation with respect to Collateral.


 


“Collateral Documents”
means (a) the Senior Collateral Documents and (b) the Second Priority
Collateral Documents.


 


“Collateral Subsidiary
Guarantor” means any Subsidiary of the Company that is a party to the
Senior Subsidiary Guarantee Agreement or the Second Priority Subsidiary
Guarantee Agreement.


 


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


 


“Commodity Price Protection
Agreement” means, in respect of a Person, any forward contract, commodity
swap agreement, commodity option agreement or other similar agreement or
arrangement designed to protect such Person against fluctuations in commodity
prices.


 


“Company” means the
Person named as the “Company” in the first paragraph of this Indenture until a
successor Person shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Company” shall mean such 


 


6

















 


successor
Person and, for purposes of any provision contained herein and expressly
required by the TIA, each other obligor on the indenture securities.


 


“Condemnation” means any
action or proceeding for the taking of any assets of the Company or its
Subsidiaries, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any similar
public improvement or condemnation proceeding.


 


“Consolidated
Interest Coverage Ratio” means, as of any date of determination, the ratio
of:


 


(a) the aggregate amount
of EBITDA for the most recent four consecutive fiscal quarters for which
internal financial statements are available prior to such determination date to


 


(b) Consolidated Interest
Expense for such four fiscal quarters;


 


provided, however, that:


 


(1) if


 


(A) since the beginning of
such period the Company or any Restricted Subsidiary has Incurred any Debt that
remains outstanding or Repaid any Debt; or


 


(B) the transaction giving
rise to the need to calculate the Consolidated Interest Coverage Ratio is an
Incurrence or Repayment of Debt,


 


Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma basis to
such Incurrence or Repayment as if such Debt was Incurred or Repaid on the
first day of such period; provided that, in the event of any such
Repayment of Debt, EBITDA for such period shall be calculated as if the Company
or such Restricted Subsidiary had not earned any interest income actually
earned during such period in respect of the funds used to Repay such Debt, and


 


(2) if


 


(A) since the beginning of
such period the Company or any Restricted Subsidiary shall have made any Asset
Sale or an Investment (by merger or otherwise) in any Restricted Subsidiary (or
any Person which becomes a Restricted Subsidiary) or an acquisition of Property
which constitutes all or substantially all of an operating unit of a business;


 


7

















 


(B) the transaction giving
rise to the need to calculate the Consolidated Interest Coverage Ratio is such
an Asset Sale, Investment or acquisition; or


 


(C) since the beginning of
such period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the
beginning of such period) shall have made such an Asset Sale, Investment or
acquisition, EBITDA for such period shall be calculated after giving pro forma
effect to such Asset Sale, Investment or acquisition as if such Asset Sale,
Investment or acquisition occurred on the first day of such period.


 


If any Debt bears a floating
rate of interest and is being given pro forma effect, the interest expense
payable with respect to such Debt shall be calculated as if the base interest
rate in effect for such floating rate of interest on the date of determination
had been the applicable base interest rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Debt if such Interest
Rate Agreement has a remaining term in excess of 12 months). In the event the
Capital Stock of any Restricted Subsidiary is sold during the period, the Company
shall be deemed, for purposes of clause (1) above, to have Repaid during
such period the Debt of such Restricted Subsidiary to the extent the Company
and its continuing Restricted Subsidiaries are no longer liable for such Debt
after such sale.


 


“Consolidated Interest
Expense” means, for any period, the total interest expense of the Company
and its consolidated Restricted Subsidiaries (excluding the non-cash interest
expense related to (x) litigation reserves, (y) closed store
liability reserves and (z) self-insurance reserves), plus, to the extent
not included in such total interest expense, and to the extent Incurred by the
Company or its Restricted Subsidiaries, and without duplication:


 


(a) interest expense
attributable to Capital Lease Obligations;


 


(b) amortization of debt
discount and debt issuance cost, including commitment fees;


 


(c) capitalized interest;


 


(d) non-cash interest
expense other than expenses under clauses (x), (y) and (z) above;


 


(e) commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers
acceptance financing;


 


(f) net costs associated
with Hedging Obligations (including amortization of fees but excluding costs
associated with forward contracts for inventory in the ordinary course of business);


 


8

















 


(g) Disqualified Stock
Dividends;


 


(h) Preferred Stock
Dividends;


 


(i) interest Incurred in
connection with Investments in discontinued operations;


 


(j) interest accruing on
any Debt of any other Person to the extent such Debt is Guaranteed by the
Company or any Restricted Subsidiary; and


 


(k) the cash contributions
to any employee stock ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Debt Incurred by such plan
or trust;


 


provided,
however, that any program fees or liquidity fees on unused amounts
related to any Qualified Receivables Transaction shall not be included in
Consolidated Interest Expense unless otherwise required by GAAP.


 


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


 


(a) any net income (loss)
of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that:


 


(1) subject to the
exclusion contained in clause (d) below, the Company’s equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(c) below); and


 


(2) the Company’s equity
in a net loss of any such Person other than an Unrestricted Subsidiary for such
period shall be included in determining such Consolidated Net Income;


 


(b) [Intentionally
omitted];


 


(c) any net income (loss)
of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions, directly or indirectly, to the Company, except that:


 


(1) subject to the
exclusion contained in clause (d) below, the Company’s equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the 


 


9

















 


aggregate
amount of cash distributed by such Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to
another Restricted Subsidiary, to the limitation contained in this clause); and


 


(2) the Company’s equity
in a net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income;


 


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


 


(e) any extraordinary gain
or loss;


 


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


 


(g) any non-cash
compensation expense realized for grants of performance shares, stock options
or other rights to officers, directors and employees of the Company or any
Restricted Subsidiary; provided that such shares, options or other
rights can be redeemed at the option of the holder only for Capital Stock of
the Company (other than Disqualified Stock);


 


(h) store closing costs;


 


(i) non-cash charges or
credits that relate to use of the last-in-first-out method of accounting for
inventory; and


 


(j) loss on debt
modifications.


 


Notwithstanding the foregoing,
for purposes of Section 4.04 only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of assets from Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted by Section 4.04
pursuant to clause (c)(4) thereof.


 


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


 


“corporation” means a
corporation, association, company, limited liability company, joint-stock company,
partnership or business trust.


 


10
















 


“Credit
Facilities” means, with respect to the Company or any Restricted
Subsidiary, one or more debt or commercial paper facilities with banks or other
institutional lenders (including the Senior Credit Facilities), providing for
revolving credit loans, term loans, receivables or inventory financing
(including through the sale of receivables or inventory to such lenders or to
special purpose, bankruptcy remote entities formed to borrow from such lenders
against such receivables or inventory), or trade letters of credit, in each
case together with Refinancings thereof on any basis so long as such
Refinancing constitutes Debt.


 


“Currency
Exchange Protection Agreement” means, in respect of a Person, any foreign
exchange contract, currency swap agreement, currency option or other similar
agreement or arrangement designed to protect such Person against fluctuations
in currency exchange rates.


 


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


 


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


 


(a) the
principal of and premium (if any) in respect of:


 


(1) debt
of such Person for money borrowed; and


 


(2) debt
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable;


 


(b) all
Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale and Leaseback Transactions entered into by such Person;


 


(c) all
obligations of such Person issued or assumed as the deferred purchase price of
Property, all conditional sale obligations of such Person and all obligations
of such Person under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business);


 


(d) all
obligations of such Person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (a) through (c) above) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by such
Person of a demand for reimbursement following payment on the letter of
credit);


 


(e) the
amount of all obligations of such Person with respect to the Repayment of any
Disqualified Stock or, with respect to any Subsidiary of such Person, any
Preferred Stock (but excluding, in each case, any accrued dividends);


 


11

















 


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


 


(g) all
obligations of the type referred to in clauses (a) through (f) of
other Persons secured by any Lien on any Property of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such Property or the amount of
the obligation so secured; and


 


(h) to
the extent not otherwise included in this definition, Hedging Obligations of
such Person.


 


The amount of
Debt of any Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability,
upon the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date. The amount of Debt represented by a
Hedging Obligation shall be equal to:


 


(1) zero
if such Hedging Obligation has been Incurred pursuant to clause (g) or (h) of
the second paragraph of Section 4.03; or


 


(2) the
notional amount of such Hedging Obligation if not Incurred pursuant to such
clauses.


 


“Debt
Issuances” means, with respect to the Company or any Restricted Subsidiary,
one or more issuances of Debt evidenced by notes, debentures, bonds or other
similar securities or instruments.


 


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


 


“Depositary”
means, with respect to any Securities, a clearing agency that is registered as
such under the Exchange Act and is designated by the Company to act as
Depositary for such Securities (or any successor securities clearing agency so
registered).


 


“Disqualified
Stock” means, with respect to any Person, any Capital Stock that by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable, in either case at the option of the holder thereof)
or otherwise:


 


(a) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise;


 


(b) is or
may become redeemable or repurchaseable at the option of the holder thereof, in
whole or in part; or


 


12

















 


(c) is
convertible or exchangeable at the option of the holder thereof for Debt or
Disqualified Stock;


 


on or prior
to, in the case of clause (a), (b) or (c), the first anniversary of the
Stated Maturity of the Securities.


 


“Disqualified
Stock Dividends” means all dividends with respect to Disqualified Stock of
the Company held by Persons other than a Wholly Owned Restricted Subsidiary.
The amount of any such dividend shall be equal to the quotient of such dividend
divided by the difference between one and the maximum statutory federal income
tax rate (expressed as a decimal number between 1 and 0) then applicable to the
Company.


 


“EBITDA”
means, for any period, an amount equal to, for the Company and its consolidated
Restricted Subsidiaries:


 


(a) sum
of Consolidated Net Income for such period, plus the following to the extent
reducing Consolidated Net Income for such period:


 


(1) the
provision for taxes based on income or profits or utilized in computing net
loss;


 


(2) Consolidated
Interest Expense and non-cash interest expense related to litigation reserves,
closed store liability reserves and self-insurance reserves, to the extent
excluded from Consolidated Interest Expense;


 


(3) depreciation;


 


(4) amortization
of intangibles;


 


(5) non-cash
impairment charges;


 


(6) any
expenses or charges (other than depreciation or amortization expense) related
to any Equity Offering, Permitted Investment, acquisition, disposition,
recapitalization or the Incurrence of Debt permitted to be Incurred by the
Indenture (including a refinancing thereof) (whether or not successful),
including (i) such fees, expenses or charges related to the offering of
Credit Facilities, Qualified Receivables Transactions or Debt Issuances and
other Debt and (ii) any amendment or other modification of Credit
Facilities, Qualified Receivables Transactions or Debt Issuances and, in each
case, deducted (and not added back) in computing Consolidated Net Income;


 


(7) the
amount of any restructuring charges, integration costs or other business
optimization expenses or reserves deducted (and not added back) in such period
in computing Consolidated Net Income, including any one-time costs (including
costs related to the closure and/or 


 


13

















 


consolidation of stores) incurred in connection with acquisitions on or
after June 4, 2007;


 


(8) the
amount of net cost savings projected by the Company in good faith to be
realized as a result of specified actions taken or initiated during or prior to
such period (calculated on a pro forma basis
as though such cost savings had been realized on the first day of such period),
net of the amount of actual benefits realized during such period from such
actions; provided that (x) such cost savings are reasonably
identifiable and factually supportable, (y) such actions are taken no
later than 36 months after June 4, 2007 and (z) the aggregate amount
of cost savings added pursuant to this clause (8) shall not exceed $150.0
million for any four consecutive quarter period (which adjustments may be
incremental to pro forma cost savings
adjustments made pursuant to the definition of “Consolidated Interest Coverage
Ratio”); and


 


(9) any
other non-cash items (other than any such non-cash item to the extent that it
represents an accrual of or reserve for cash expenditures in any future
period), minus


 


(b) all
non-cash items increasing Consolidated Net Income for such period (other than
any such non-cash item to the extent that it will result in the receipt of cash
payments in any future period).


 


Notwithstanding
the foregoing clause (a), the provision for taxes and the depreciation,
amortization and non-cash items of a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its shareholders.


 


“8.125% Notes”
means the Company’s 8.125% Senior Secured Notes due 2010 issued under the
Indenture dated as of April 22, 2003, as supplemented, among the Company,
the Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as
successor trustee, and outstanding on the Issue Date.


 


“Equipment
Financing Transaction” means any arrangement (together with any Refinancing
thereof) with any Person pursuant to which the Company or any Restricted
Subsidiary Incurs Debt secured by a Lien on equipment or equipment related
property of the Company or any Restricted Subsidiary.


 


“Equity
Offering” means (a) an underwritten offering of common stock of the
Company by the Company pursuant to an effective registration statement under
the Securities Act or (b) so long as the Company’s common stock is, at the
time, listed or 


 


14

















 


quoted on a national securities exchange (as such term is defined in
the Exchange Act), an offering of common stock by the Company in a transaction
exempt from or not subject to the registration requirements of the Securities
Act.


 


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


 


“Exchange
Act” means the Securities Exchange Act of 1934.


 


“Expansion
Capital Expenditure” means any capital expenditure incurred by the Company
or any Restricted Subsidiary in developing, relocating, integrating, remodeling
and refurbishing a warehouse, distribution center, store or other facility
(other than ordinary course maintenance) for carrying on the business of the
Company and its Restricted Subsidiaries that the Board of Directors determines
in good faith will enhance the income generating ability of the warehouse,
distribution center, store or other facility.


 


“Fair
Market Value” means, with respect to any Property, the price that could be
negotiated in an arm’s-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Pressure or compulsion shall not
include sales of Property conducted in compliance with the requirements of a
regulatory authority in connection with an acquisition or merger permitted by
the Indenture. Fair Market Value shall be determined, except as otherwise
provided:


 


(a) if
such Property has a Fair Market Value equal to or less than $25.0 million, by
any Officer of the Company; or


 


(b) if
such Property has a Fair Market Value in excess of $25.0 million, by a majority
of the Board of Directors and evidenced by a Board Resolution, dated within 30
days of the relevant transaction, delivered to the Trustee.


 


“Foreign
Subsidiary” means any Subsidiary of the Company which (a) is organized
under the laws of any jurisdiction outside of the United States, (b) is
organized under the laws of Puerto Rico or the U.S. Virgin Islands, (c) has
substantially all its operations outside of the United States, (d) has
substantially all its operations in Puerto Rico or the U.S. Virgin Islands, or (e) does
not own any material assets other than Capital Stock of one or more
Subsidiaries of the type described in (a) through (d) above.


 


“GAAP”
means United States generally accepted accounting principles as in effect on February 12,
2003, including those set forth:


 


(a) in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants;


 


(b) in
the statements and pronouncements of the Financial Accounting Standards Board;


 


(c) in
such other statements by such other entity as approved by a significant segment
of the accounting profession; and


 


15

















 


(d) the rules and
regulations of the Commission governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the Commission.


 


“Guarantee”
means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt of any other Person and any obligation, direct
or indirect, contingent or otherwise, of such Person:


 


(a) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise); or


 


(b) entered
into for the purpose of assuring in any other manner the obligee against loss
in respect thereof (in whole or in part);


 


provided,
however, that the term “Guarantee” shall not include:


 


(1) endorsements
for collection or deposit in the ordinary course of business; or


 


(2) a
contractual commitment by one Person to invest in another Person for so long as
such Investment is reasonably expected to constitute a Permitted Investment
under clause (b) of the definition of “Permitted Investment”.


 


The term “Guarantee”
used as a verb has a corresponding meaning. The term “Guarantor” shall
mean any Person Guaranteeing any obligation.


 


“Hedging
Obligation” of any Person means any obligation of such Person pursuant to
any Interest Rate Agreement, Currency Exchange Protection Agreement, Commodity
Price Protection Agreement or any other similar agreement or arrangement.


 


“Holder”
means a Person in whose name a Security is registered in the Security Register.


 


“Incur”
means, with respect to any Debt or other obligation of any Person, to create,
issue, incur (by merger, conversion, exchange or otherwise), extend, assume,
Guarantee or become liable in respect of such Debt or other obligation or the
recording, as required pursuant to GAAP or otherwise, of any such Debt or obligation
on the balance sheet of such Person (and “Incurrence” and “Incurred”
shall have meanings correlative to the foregoing); provided, however,
that a change in GAAP that results in an obligation of such Person that exists
at such time, and is not theretofore classified as Debt, becoming Debt shall
not be deemed an Incurrence of such Debt; provided further, however,
that any Debt or other obligations of a Person existing at the time such Person



 


16

















 


becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary; and provided further, however, that solely
for purposes of determining compliance with Section 4.03, amortization of
debt discount shall not be deemed to be the Incurrence of Debt; provided
that in the case of Debt sold at a discount, the amount of such Debt Incurred
shall at all times be the aggregate principal amount at Stated Maturity.


 


“Indenture”
means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively.


 


“Independent
Financial Advisor” means an investment banking firm of national standing or
any third party appraiser of national standing; provided that such firm
or appraiser is not an Affiliate of the Company.


 


“Intercreditor
Agreement” means the Amended and Restated Collateral Trust and
Intercreditor Agreement, dated as of June 27, 2001, as amended and
restated as of May 28, 2003, as amended as of September 22, 2004, as
amended as of September 30, 2005, as amended as of November 8, 2006,
as amended as of June 4, 2007, among the Company, the Subsidiary
Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent
and each Second Priority Representative, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Interest
Rate Agreement” means, for any Person, any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement designed to protect against fluctuations in interest rates.


 


“Investment”
by any Person means any direct or indirect loan (other than advances to
customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of such Person), advance or other extension of
credit or capital contribution (by means of transfers of cash or other Property
to others or payments for Property or services for the account or use of
others, or otherwise) to, or Incurrence of a Guarantee of any obligation of, or
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
securities or evidence of Debt issued by, any other Person. For purposes of
Sections 4.04 and 4.11, and the definition of “Restricted Payment”, “Investment”
shall include the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent “Investment” in an Unrestricted Subsidiary of an amount (if
positive) equal to:


 


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


 


17

















 


(b) the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation.


 


In determining
the amount of any Investment made by transfer of any Property other than cash,
such Property shall be valued at its Fair Market Value at the time of such
Investment.


 


“Investment
Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s and BBB- (or the equivalent) by S&P, without regard
to outlook.


 


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


 


“Lien”
means, with respect to any Property of any Person, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).


 


“Moody’s”
means Moody’s Investors Service, Inc. or any successor to the rating
agency business thereof.


 


“Net
Available Cash” from any Asset Sale means cash payments received therefrom
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of:


 


(a) all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP, as a consequence of such
Asset Sale;


 


(b) all
payments made on any Debt that is secured by any Property subject to such Asset
Sale, in accordance with the terms of any Lien upon or other security agreement
of any kind with respect to such Property, or which must by its terms, or in
order to obtain a necessary consent to such Asset Sale, or by applicable law,
be repaid out of the proceeds from such Asset Sale;


 


(c) all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale; and


 


18

















 


(d) the
deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the Property
disposed in such Asset Sale and retained by the Company or any Restricted
Subsidiary after such Asset Sale.


 


“Obligors”
means the Company, the Subsidiary Guarantors and any other Person who is liable
for any of the Secured Obligations.


 


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


 


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


 


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


 


“Original
Securities” has the meaning specified in Section 2.01.


 


“Permitted
Holder” means (a) Leonard Green & Partners L.P. or any of its
Affiliates and (b), The Jean Coutu Group (PJC) Inc. or any of its Affiliates.


 


“Permitted
Investment” means any Investment by the Company or a Restricted Subsidiary
in:


 


(a) (1) the
Company, (2) any Restricted Subsidiary or (3) any Person that will,
upon the making of such Investment, become a Restricted Subsidiary;


 


(b) any
Person if as a result of such Investment such Person is merged or consolidated
with or into, or transfers or conveys all or substantially all its Property to,
the Company or a Restricted Subsidiary;


 


(c) cash
and Temporary Cash Investments;


 


(d) receivables
owing to the Company or a Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Company or such Restricted
Subsidiary deems reasonable under the circumstances;


 


(e) payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business;


 


(f) loans
and advances to employees made in the ordinary course of business in accordance
with applicable law consistent with past practices of the 


 


19

















 


Company or such Restricted Subsidiary, as the case may be; provided
that such loans and advances do not exceed $25.0 million at any one time
outstanding;


 


(g) stock,
obligations or other securities received in settlement of debts created in the
ordinary course of business and owing to the Company or a Restricted Subsidiary
or in satisfaction of judgments;


 


(h) any
Person to the extent such Investment represents the non-cash portion of the
consideration received in connection with an Asset Sale consummated in compliance
with Section 4.06;


 


(i) Hedging
Obligations permitted under clause (g), (h) or (i) of the second
paragraph of Section 4.03;


 


(j) any
Person if the Investments are outstanding on the Issue Date and not otherwise
described in clauses (a) through (i) above;


 


(k) Investments
in Unrestricted Subsidiaries or joint venture entities (including purchasing
cooperatives) that do not exceed $15.0 million outstanding at any one time in
the aggregate;


 


(l) other
Investments that do not exceed $10.0 million outstanding at any one time in the
aggregate;


 


(m) Investments
in any entity, formed by the Company or a Restricted Subsidiary, organized
under Section 501(c)(3) of the Code, that do not exceed an aggregate
amount of $10.0 million in any fiscal year; and


 


(n) any
assets, Capital Stock or other securities to the extent acquired in exchange
for shares of Capital Stock of the Company (other than Disqualified Stock).


 


“Permitted
Liens” means:


 


(a) Liens
to secure Debt permitted to be Incurred under clause (a), (b), (d), (l) or
(s) (with respect to clause (d)) of the second paragraph of Section 4.03;
provided, however, that:


 


(1) if
such Debt is Incurred pursuant to such clause (b) (other than pursuant to
a Sale and Leaseback Transaction, a Capital Lease Obligation or by a
Receivables Entity in a Qualified Receivables Transaction) or clause (l), a
second priority Lien (subject to Permitted Liens) upon the Property (if such
Property does not otherwise constitute Second Priority Collateral at such time)
subject to such Lien is concurrently granted as security for the Securities
such that such Property also constitutes Second Priority Collateral subject to
the Second Priority Collateral Documents, except to the extent such Property
constitutes cash or cash equivalents 


 


20

















 


securing only letter of credit obligations under Credit Facilities
following a default under such Credit Facilities; and


 


(2) if
such Debt is Incurred pursuant to such clause (d) or (s) (with
respect to clause (d)), a second priority Lien (subject to Permitted Liens)
upon the Property subject to such Lien is concurrently granted as security for
the Securities such that such Property constitutes Second Priority Collateral
subject to the Second Priority Lien and the Securities are secured by such Lien
equally and ratably (or prior to) such Debt pursuant to the Second Priority
Collateral Documents;


 


(b) Liens
to secure Debt permitted to be Incurred under clause (e), (q) or (r) of
the second paragraph of Section 4.03; provided that any such Lien
may not extend to any Property of the Company or any Restricted Subsidiary,
other than the Property acquired, developed, constructed or leased with the
proceeds of such Debt and any improvements or additions to such Property;


 


(c) Liens
for taxes, assessments or governmental charges or levies on the Property of the
Company or any Restricted Subsidiary if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision that
shall be required in conformity with GAAP shall have been made therefor;


 


(d) Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens, on the Property of the Company or any Restricted
Subsidiary arising in the ordinary course of business and securing payment of
obligations that are not more than 60 days past due or are being contested in
good faith and by appropriate proceedings;


 


(e) Liens
on the Property of the Company or any Restricted Subsidiary Incurred in the
ordinary course of business to secure performance of obligations with respect
to statutory or regulatory requirements, performance or return-of-money bonds,
surety bonds or other obligations of a like nature and Incurred in a manner
consistent with industry practice, in each case which are not Incurred in
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of Property and which do not in the
aggregate impair in any material respect the use of Property in the operation
of the business of the Company and the Restricted Subsidiaries taken as a whole;


 


(f) Liens
on Property at the time the Company or any Restricted Subsidiary acquired such
Property, including any acquisition by means of a merger or consolidation with
or into the Company or any Restricted Subsidiary; provided, however,
that any such Lien may not extend to any other Property of the Company or any
Restricted Subsidiary; provided further, however, that
such Liens shall not have been Incurred in anticipation of or in connection
with the 


 


21

















 


transaction or series of transactions pursuant to which such Property
was acquired by the Company or any Restricted Subsidiary;


 


(g) Liens
on the Property of a Person at the time such Person becomes a Restricted
Subsidiary; provided, however, that any such Lien may not extend
to any other Property of the Company or any other Restricted Subsidiary that is
not a direct Subsidiary of such Person; provided further, however,
that any such Lien was not Incurred in anticipation of or in connection with
the transaction or series of transactions pursuant to which such Person became
a Restricted Subsidiary;


 


(h) pledges
or deposits by the Company or any Restricted Subsidiary under workmen’s
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for the
payment of Debt) or leases to which the Company or any Restricted Subsidiary is
party, or deposits to secure public or statutory obligations of the Company or
any Restricted Subsidiary, or deposits for the payment of rent, in each case
Incurred in the ordinary course of business;


 


(i) utility
easements, building restrictions and such other encumbrances or charges against
real Property as are of a nature generally existing with respect to properties
of a similar character;


 


(j) Liens
arising out of judgments or awards against the Company or a Restricted
Subsidiary with respect to which the Company or the Restricted Subsidiary shall
then be proceeding with an appeal or other proceeding for review and which do
not give rise to an Event of Default;


 


(k) leases
or subleases of real property granted by the Company or a Restricted Subsidiary
to any other Person in the ordinary course of business and not materially
impairing the use of the real property in the operation of the business of the
Company or the Restricted Subsidiary;


 


(l) licenses
of intellectual property in the ordinary course of business;


 


(m) Liens
existing on the Issue Date not otherwise described in clauses (a) through (l) above;


 


(n) Liens
on the Property of the Company or any Restricted Subsidiary to secure any
Refinancing, in whole or in part, of any Debt secured by Liens referred to in
clause (a) (but only to the extent it relates to clause (a) or (d) referred
to therein), (b) (other than Liens securing Debt Incurred pursuant to
clause (r) referred to therein), (f), (g), or (m) above; provided,
however, that (1) in the case of clause (a) or (b) above,
the proviso to such clause remains satisfied and (2) any such Lien shall
be limited to all or part of the same Property that secured the original Lien
(together with improvements and accessions to such Property) and the aggregate
principal amount of Debt that is secured by such Lien shall not be increased to
an amount greater than the sum of:


 


22














 


(A) the
outstanding principal amount, or, if greater, the committed amount, of the Debt
secured by Liens described under clause (b) (except as referred to above),
(f), (g), or (m) above, as the case may be, at the time the original Lien
became a Permitted Lien under this Indenture; and


 


(B) an
amount necessary to pay any fees and expenses, including premiums and
defeasance costs, incurred by the Company or such Restricted Subsidiary in
connection with such Refinancing; and


 


(o) Liens
not otherwise permitted by clauses (a) through (n) above encumbering
assets that have an aggregate Fair Market Value not in excess of $5.0 million.


 


“Permitted
Refinancing Debt” means any Debt that Refinances any other Debt, including
any successive Refinancings, so long as:


 


(a) such
Debt is in an aggregate principal amount (or if Incurred with original issue
discount, an aggregate issue price) not in excess of the sum of:


 


(1) the
aggregate principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding of the Debt being Refinanced; and


 


(2) an
amount necessary to pay any fees and expenses, including premiums and
defeasance costs, related to such Refinancing;


 


(b) the
Average Life of such Debt is equal to or greater than the Average Life of the
Debt being Refinanced;


 


(c) the
Stated Maturity of such Debt is no earlier than the Stated Maturity of the Debt
being Refinanced; and


 


(d) the
new Debt shall not be senior in right of payment to the Debt that is being
Refinanced;


 


provided,
however, that Permitted Refinancing Debt shall not include:  (x) Debt of a Subsidiary that is not a
Subsidiary Guarantor that Refinances Debt of the Company or a Subsidiary
Guarantor, or (y) Debt of the Company or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.


 


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


 


23

















 


“Preferred
Stock” means any Capital Stock of a Person, however designated, which
entitles the holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares of any other
class of Capital Stock issued by such Person.


 


“Preferred
Stock Dividends” means all dividends with respect to Preferred Stock of
Restricted Subsidiaries held by Persons other than the Company or a Wholly
Owned Restricted Subsidiary. The amount of any such dividend shall be equal to
the quotient of such dividend divided by the difference between one and the
maximum statutory federal income rate (expressed as a decimal number between 1
and 0) then applicable to the issuer of such Preferred Stock.


 


“pro forma”
means, unless the context otherwise requires, with respect to any calculation
made or required to be made pursuant to the terms hereof, a calculation
performed in accordance with Article 11 of Regulation S-X promulgated
under the Securities Act, as interpreted in good faith by the Board of
Directors after consultation with the independent certified public accountants
of the Company, or otherwise a calculation made in good faith by the Board of
Directors after consultation with the independent certified public accountants
of the Company, as the case may be.


 


“Property”
means, with respect to any Person, any interest of such Person in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible,
including Capital Stock in, and other securities of, any other Person. For
purposes of any calculation required pursuant to this Indenture, the value of any
Property shall be its Fair Market Value.


 


“Prospectus
Supplement” means the prospectus supplement dated
                  ,
2008 to the prospectus dated June 26, 2008, relating to the offering and
sale of the Securities.


 


“Public
Debt” means obligations of the Company or of a Subsidiary Guarantor
evidenced by bonds, debentures, notes and similar instruments issued in a
manner and pursuant to documentation customary in the market for obligations
publicly traded or traded in the high yield bond or other private placement or
similar market primarily among financial institutions (other than any such
obligations that are traded primarily among commercial banks).


 


“Purchase
Money Debt” means Debt Incurred to finance the acquisition, development,
construction or lease by the Company or a Restricted Subsidiary of Property,
including additions and improvements thereto, where the maturity of such Debt
does not exceed the anticipated useful life of the Property being financed; provided,
however, that such Debt is Incurred within 24 months after the
completion of the acquisition, development, construction or lease of such
Property by the Company or such Restricted Subsidiary.


 


24

















 


“Qualified
Consideration” means, with respect to any Asset Sale (or any other
transaction or series of related transactions required to comply with clause (b) of
the first paragraph of Section 4.06), any one or more of (a) cash or
cash equivalents, (b) notes or obligations that are converted into cash
(to the extent of the cash received) within 180 days of such Asset Sale, (c) equity
securities listed on a national securities exchange (as such term is defined in
the Exchange Act) and converted into cash (to the extent of the cash received)
within 180 days of such Asset Sale, (d) the assumption by the purchaser of
liabilities of the Company or any Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Securities) as a result of which
the Company and the Restricted Subsidiaries are no longer obligated with
respect to such liabilities, (e) Additional Assets or (f) other
Property; provided that the aggregate Fair Market Value of all Property
received since the Issue Date by the Company and its Restricted Subsidiaries
pursuant to Asset Sales (or such other transactions) that is used to determine
Qualified Consideration pursuant to this clause (f) does not exceed the
greater of $100.0 million and 5% of Total Assets.


 


“Qualified
Receivables Transaction” means any transaction or series of transactions
that may be entered into by the Company or any of its Subsidiaries pursuant to
which the Company or any of its Subsidiaries may sell, convey or otherwise
transfer to:


 


(a) a
Receivables Entity (in the case of a transfer by the Company or any of its
Subsidiaries); and


 


(b) any
other Person (in the case of a transfer by a Receivables Entity),


 


or may grant a security interest in, any
accounts receivable (whether now existing or arising in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing those accounts receivable, all
contracts and all Guarantees or other obligations in respect of those accounts
receivable, proceeds of those accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable; provided that:


 


(1) if
the transaction involves a transfer of accounts receivable with Fair Market
Value equal to or greater than $25.0 million, the Board of Directors shall have
determined in good faith that the Qualified Receivables Transaction is
economically fair and reasonable to the Company and the Receivables Entity;


 


(2) all
sales of accounts receivable and related assets to or by the Receivables Entity
are made at Fair Market Value; and


 


(3) the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the Board of Directors).


 


25

















 


“Rating
Agencies” means Moody’s and S&P.


 


“Real
Estate Financing Transaction” means any arrangement with any Person
pursuant to which the Company or any Restricted Subsidiary Incurs Debt secured
by a Lien on real property of the Company or any Restricted Subsidiary and
related personal property together with any Refinancings thereof.


 


“Receivables
Entity” means a Wholly Owned Subsidiary of the Company (or another Person
formed for the purposes of engaging in a Qualified Receivables Transaction with
the Company in which the Company or any Subsidiary of the Company makes an
Investment and to which the Company or any Subsidiary of the Company transfers
accounts receivable and related assets) which engages in no activities other
than in connection with the financing of accounts receivable of the Company and
its Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities
incidental or related to that business, and (with respect to any Receivables
Entity formed after the Issue Date) which is designated by the Board of
Directors (as provided below) as a Receivables Entity and:


 


(a) no
portion of the Debt or any other obligations (contingent or otherwise) of
which:


 


(1) is
Guaranteed by the Company or any Subsidiary of the Company (excluding
Guarantees of obligations (other than the principal of, and interest on, Debt)
pursuant to Standard Securitization Undertakings);


 


(2) is
recourse to or obligates the Company or any Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings; or


 


(3) subjects
any property or asset of the Company or any Subsidiary of the Company, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings;


 


(b) with
which neither the Company nor any Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms which the
Company reasonably believes to be no less favorable to the Company or the
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Company; and


 


(c) to
which neither the Company nor any Subsidiary of the Company has any obligation
to maintain or preserve the entity’s financial condition or cause the entity to
achieve certain levels of operating results other than pursuant to Standard
Securitization Undertakings.


 


Any
designation of this kind by the Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to the 


 


26

















 


designation
and an Officers’ Certificate certifying that the designation complied with the
foregoing conditions.  For the avoidance
of doubt, Rite Aid Funding I and Rite Aid Funding II are designated
Receivables Entities without any further action on the part of the Company.


 


“Receivables
Facility” means the Receivables Financing Agreement dated as of September 21,
2004 (as such may be further amended, modified, supplemented or Refinanced from
time to time),  among Rite Aid Funding
II, the Investors named therein, the Banks named therein, Citicorp North
America Inc., as Program Agent, Rite Aid Headquarters Funding Inc., as
Collection Agent, the Originators named therein and JPMorgan Chase Bank, as
trustee. For the avoidance of doubt, the Receivables Facility, as in effect on
the Issue Date, constitutes a Qualified Receivables Transaction without any
further action on behalf of the Company.


 


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


 


“Related
Business” means any business that is related, ancillary or complementary to
the businesses of the Company and the Restricted Subsidiaries on the Issue
Date.


 


“Repay”
means, in respect of any Debt, to repay, prepay, repurchase, redeem, legally
defease or otherwise retire such Debt. “Repayment” and “Repaid”
shall have correlative meanings. For purposes of Section 4.06 and the
definition of “Consolidated Interest Coverage Ratio,” Debt shall be considered
to have been Repaid only to the extent the related loan commitment, if any,
shall have been permanently reduced in connection therewith.


 


“Representatives”
means each of the Senior Collateral Agent and the Second Priority
Representatives.


 


“Restricted
Payment” means:


 


(a) any
dividend or distribution (whether made in cash, securities or other Property)
declared or paid on or with respect to any shares of Capital Stock of the
Company or any Restricted Subsidiary (including any payment in connection with
any merger or consolidation with or into the Company or any Restricted
Subsidiary), except for any dividend or distribution that is made solely to the
Company or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, to the other shareholders of such
Restricted Subsidiary on a pro rata basis or on a basis that results in the
receipt by the Company or a Restricted Subsidiary of dividends or distributions
of greater value than it would receive on a pro rata basis) or any dividend or
distribution payable solely in shares of Capital Stock (other than Disqualified
Stock) of the Company;


 


27

















 


(b) the
purchase, repurchase, redemption, acquisition or retirement for value of any
Capital Stock of the Company or any Restricted Subsidiary (other than from the
Company or a Restricted Subsidiary);


 


(c) the
purchase, repurchase, redemption, acquisition or retirement for value, prior to
the date for any scheduled maturity, sinking fund or amortization or other
installment payment, of any Subordinated Obligation (other than the purchase,
repurchase or other acquisition of any Subordinated Obligation purchased in
anticipation of satisfying a scheduled maturity, sinking fund or amortization
or other installment obligation, in each case due within one year of the date
of acquisition);


 


(d) any
Investment (other than Permitted Investments) in any Person; or


 


(e) the
issuance, sale or other disposition of Capital Stock of any Restricted
Subsidiary to a Person other than the Company or another Restricted Subsidiary
if the result thereof is that such Restricted Subsidiary shall cease to be a
Restricted Subsidiary, in which event the amount of such “Restricted Payment”
shall be the Fair Market Value of the remaining interest, if any, in such
former Restricted Subsidiary held by the Company and the other Restricted
Subsidiaries.


 


Notwithstanding
the foregoing, no payment or other transaction permitted by clause (c) or (f) of
the second paragraph of Section 4.08 will be considered a Restricted
Payment.


 


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


 


“S&P”
means Standard & Poor’s Ratings Service or any successor to the rating
agency business thereof.


 


“Sale and
Leaseback Transaction” means any direct or indirect arrangement relating to
Property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such Property to another Person and the Company or a
Restricted Subsidiary leases it from such Person.


 


“Second
Priority Collateral” means all the “Second Priority Collateral” as defined
in any Second Priority Collateral Documents and shall also include the
mortgaged properties described in the Senior Credit Facility and the proceeds
thereof.


 


“Second
Priority Collateral Documents” means the Second Priority Subsidiary
Security Agreement, the Second Priority Subsidiary Guarantee Agreement, the
Second Priority Indemnity, Subrogation and Contribution Agreement, the
Intercreditor Agreement and each of the mortgages, security agreements and
other instruments and documents executed and delivered by any Subsidiary
Guarantor pursuant to any of the foregoing for purposes of providing collateral
security or credit support for any Second Priority Debt Obligation or
obligation under the Second Priority Subsidiary Guarantee Agreement (including,
in each case, any schedules, exhibits or annexes 


 


28

















 


thereto), in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Second
Priority Collateral Trustee” means Wilmington Trust Company, in its capacity
as collateral trustee under the Intercreditor Agreement and the Second Priority
Collateral Documents, and its successors.


 


“Second
Priority Debt” means the Securities, the 7.5% Notes due 2017 and any other
Debt of the Company Guaranteed by the Subsidiary Guarantors pursuant to the
Second Priority Subsidiary Guarantee Agreement with such Guarantee secured on a
pari  passu basis by the Second Priority Collateral; provided,
however, that such Debt is permitted to be incurred, secured and
guaranteed on such basis by each Senior Debt Document and each Second Priority
Debt Document.


 


“Second
Priority Debt Documents” means (a) with respect to the Securities,
this Indenture and the Securities and (b) with respect to any other
series, issue or class of Second Priority Debt, the promissory notes,
indentures, Collateral Documents or other operative agreements evidencing or
governing such Debt, in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Second
Priority Debt Facility” means the indenture or other governing agreement
with respect to any Second Priority Debt.


 


“Second
Priority Debt Obligations” means, with respect to any series, issue or
class of Second Priority Debt, (a) all principal of and interest (including,
without limitation, any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim
in any such proceeding) payable with respect to such Second Priority Debt, (b) all
other amounts payable by the Company to the related Second Priority Debt
Parties under the related Second Priority Debt Documents and (c) any
renewals, extensions or Refinancings thereof of the foregoing.


 


“Second
Priority Debt Parties” means, with respect to any series, issue or class of
Second Priority Debt, the holders of such indebtedness from time to time, any
trustee or agent therefor under any related Second Priority Debt Documents and
the beneficiaries of each indemnification obligation undertaken by the Company
or any Obligor under any related Second Priority Debt Documents, but shall not
include the Obligors or any controlled Affiliates thereof (unless any such
Obligor or controlled Affiliate is a holder of such Second Priority Debt, a
trustee or agent therefor or beneficiary of such an indemnification obligation
named as such in a Second Priority Debt Document).


 


“Second
Priority Indemnity, Subrogation and Contribution Agreement” means the
Second Priority Indemnity, Subrogation and Contribution Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, among the Company, the
Subsidiary Guarantors and the Second Priority Collateral Trustee, as the same
may be amended, restated, supplemented or otherwise modified from time to time.


 


29

















 


“Second
Priority Instructing Group” means Second Priority Representatives with
respect to Second Priority Debt Facilities under which at least a majority of
the then aggregate amount of Second Priority Debt Obligations are outstanding.


 


“Second
Priority Lien” means the liens on the Second Priority Collateral in favor
of the Second Priority Debt Parties under the Second Priority Collateral Documents.


 


“Second
Priority Representative” means, in respect of a Second Priority Debt
Facility, the Trustee and the trustee, administrative agent, security agent or
similar agent under each other Second Priority Debt Facility, as the case may
be, and each of their successors in such capacities.


 


“Second
Priority Subsidiary Guarantee Agreement” means the Second Priority
Subsidiary Guarantee Agreement, dated as of June 27, 2001, as amended and
restated as of May 28, 2003, made by the Subsidiary Guarantors (including
any additional Subsidiary Guarantor becoming party thereto after May 28,
2003) in favor of the Second Priority Collateral Trustee for the benefit of the
Second Priority Debt Parties, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Second
Priority Subsidiary Security Agreement” means the Second Priority
Subsidiary Security Agreement, dated as of June 27, 2001, as amended and
restated as of May 28, 2003, made by the Subsidiary Guarantors (including
any additional Subsidiary Guarantor becoming party thereto after May 28,
2003) in favor of the Second Priority Collateral Trustee for the benefit of the
Second Priority Debt Parties, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Secured
Debt” means indebtedness for money borrowed which is secured by a mortgage,
pledge, lien, security interest or encumbrance on property of the Company or
any Restricted Subsidiary, but shall not include guarantees arising in
connection with the sale, discount, guarantee or pledge of notes, chattel
mortgages, leases, accounts receivable, trade acceptances and other paper
arising, in the ordinary course of business, out of installment or conditional
sales to or by, or transactions involving title retention with, distributors,
dealers or other customers, of merchandise, equipment or services.


 


“Secured
Obligations” means the Senior Obligations, the Second Priority Debt
Obligations and any other Debt or obligations related to such Debt that is
secured by a Lien on any Collateral.


 


“Securities”
means the Securities, as designated in the first paragraph of this Indenture.


 


“Securities
Act” means the Securities Act of 1933, as it may be amended and any
successor act thereto.


 


30

















 


“Senior
Bank” means a “Bank” as defined in the Senior Credit Facility.


 


“Senior
Bank Obligations” means (a) the principal of each loan made under the
Senior Credit Facility, (b) all reimbursement and cash collateralization obligations
in respect of letters of credit issued under the Senior Credit Facility, (c) all
monetary obligations of the Company or any Subsidiary under each Senior Hedging
Agreement (as defined in the Senior Credit Facility) entered into (1) prior
to September 30, 2005 with any counterparty that was a Senior Bank (or an
Affiliate thereof) on September 30, 2005 or (2) on or after September 30,
2005 with any counterparty that was a Senior Bank (or an Affiliate thereof) at
the time such Senior Hedging Agreement was entered into, (d) all interest
on the loans, letter of credit reimbursement and other obligations under the
Senior Credit Facility or such Senior Hedging Agreements (including, without
limitation, any interest which accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company or any Subsidiary Guarantor, whether or not
allowed or allowable as a claim in such proceeding), (e) all other amounts
payable by the Company under the Senior Debt Documents and (f) all
increases, renewals, extensions and Refinancings of the foregoing.


 


“Senior
Bank Parties” means each party to the Senior Credit Facility from time to
time other than any Obligor, each counterparty to a Senior Interest Rate
Agreement, the beneficiaries of each indemnification obligation undertaken by
the Company or any other Obligor under any Senior Debt Document, and the
successors and permitted assigns of each of the foregoing.


 


“Senior
Collateral” means all the “Senior Collateral” as defined in any Senior
Collateral Document and shall also include the mortgaged properties described
in the Senior Credit Facility and the proceeds thereof.


 


“Senior
Collateral Agent” means Citicorp North America, Inc., in its capacity
as senior collateral processing agent under the Senior Collateral Documents,
and its successors.


 


“Senior
Collateral Documents” means the Senior Mortgages, the Senior Subsidiary
Security Agreement, the Senior Subsidiary Guarantee Agreement, the Senior
Indemnity, Subrogation and Contribution Agreement, the Intercreditor Agreement
and each of the mortgages, security agreements and other instruments and
documents executed and delivered by any Subsidiary Guarantor pursuant to any of
the foregoing or pursuant to the Senior Credit Facility or any Additional
Senior Debt Facility or for purposes of providing collateral security or credit
support for any Senior Bank Obligation or Additional Senior Debt Obligation or
obligation under the Senior Subsidiary Guarantee Agreement (including, in each
case, any schedules, exhibits or annexes thereto), as the same may be amended,
restated, supplemented or otherwise modified from time to time.


 


“Senior
Credit Facility” means the Senior Credit Agreement dated as of June 27,
2001, as amended and restated as of August 4, 2003, as amended and
restated as 


 


31

















 


of September 22, 2004, as amended and restated as of September 30,
2005, as amended and restated as of November 8, 2006, as amended and
restated as of June 4, 2007 (as may be further amended, modified,
supplemented or Refinanced from time to time), among the Company, the Lenders
as defined therein from time to time party thereto, Citicorp North America, Inc.,
as administrative agent and collateral processing agent, Bank of America, N.A.,
as syndication agent, and JPMorgan Chase Bank, N.A., Wells Fargo Foothill, LLC,
and General Electric Capital Corporation, as co-documentation agents.


 


“Senior
Debt Documents” means (a) the Senior Credit Facility, each “Loan
Document” as defined in the Senior Credit Facility, each Senior Interest Rate
Agreement and the Senior Collateral Documents and (b) any Additional
Senior Debt Documents.


 


“Senior
Facilities” means the Senior Credit Facility and any Additional Senior Debt
Facilities.


 


“Senior
Indemnity, Subrogation and Contribution Agreement” means the Senior
Indemnity, Subrogation and Contribution Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, as further amended and
restated as of September 22, 2004, among the Company, the Subsidiary
Guarantors (including Subsidiary Guarantors becoming party thereto after June 27,
2001) and the Senior Collateral Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


“Senior
Lien” means the liens on the Senior Collateral in favor of the Senior Bank
Parties under the Senior Collateral Documents.


 


“Senior
Mortgages” means the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to the Senior Credit Facility.


 


“Senior
Obligations” means the Senior Bank Obligations and any Additional Senior
Debt Obligations.


 


“Senior
Secured Parties” means the Senior Bank Parties and any Additional Senior
Debt Parties.


 


“Senior
Subsidiary Guarantee Agreement” means the Senior Subsidiary Guarantee
Agreement, made by the Subsidiary Guarantors (including Subsidiary Guarantors
that become parties thereto after June 27, 2001) in favor of the Senior
Collateral Agent for the benefit of the Senior Secured Parties, as the same may
be amended, restated, supplemented or otherwise modified from time to time.


 


“Senior
Subsidiary Security Agreement” means the Senior Subsidiary Security Agreement,
made by the Subsidiary Guarantors (including Subsidiary Guarantors that become
parties thereto after June 27, 2001) in favor of the Senior Collateral
Agent for the benefit of the Senior Secured Parties, as the same may be
amended, restated, supplemented or otherwise modified from time to time.


 


32














 


“7.5% Notes
due 2017” means the Company’s 7.5% Senior Secured Notes due 2017, issued
under the indenture dated as of February 21, 2007, among the Company, the
Subsidiary Guarantors, The Bank of New York Trust Company, N.A., as trustee,
and outstanding on the Issue Date.


 


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


 


“Specified
Collateral Disposition” means any Collateral Disposition (other than a
Collateral Disposition occurring following the occurrence of a Triggering
Event) in respect of which all or a portion of the resulting proceeds are
required by the terms of any Second Priority Debt Obligations to be used or allocated
to Repay such Second Priority Debt Obligations.


 


“Standard
Securitization Undertakings” means representations, warranties, covenants
and indemnities entered into by the Company or any Subsidiary of the Company
which are customary in an accounts receivable securitization transaction
involving a comparable company, including those in the Receivables Facility as
in effect on the Issue Date.


 


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


 


“Subordinated
Obligation” means any Debt of the Company or any Subsidiary Guarantor
(whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities or the applicable
Subsidiary Guarantee pursuant to a written agreement to that effect.


 


“Subsidiary”
means, in respect of any Person, any corporation, company (including any
limited liability company), association, partnership, joint venture or other
business entity of which a majority of the total voting power of the Voting
Stock is at the time owned or controlled, directly or indirectly, by:


 


(a) such
Person;


 


(b) such
Person and one or more Subsidiaries of such Person; or


 


(c) one
or more Subsidiaries of such Person.


 


“Subsidiary
Guarantee” means a Guarantee by a Subsidiary Guarantor of the Company’s
obligations with respect to the Securities pursuant to the Second Priority
Subsidiary Guarantee Agreement or otherwise on the terms set forth in this
Indenture.


 


33

















 


“Subsidiary
Guarantor” means each Subsidiary that is a party to the Second Priority
Subsidiary Guarantee Agreement as of the Issue Date and any other Person that
Guarantees the Securities pursuant to Section 4.09.


 


“Temporary
Cash Investments” means any of the following:


 


(a) Investments
in U.S. Government Obligations maturing within 365 days of the date of
acquisition thereof;


 


(b) Investments
in time deposit accounts, certificates of deposit, money market deposits
maturing within 90 days of the date of acquisition thereof issued by a bank or
trust company organized under the laws of the United States of America or any
state thereof having capital, surplus and undivided profits aggregating in
excess of $500 million and whose long-term debt is rated “A-3” or “A-” or
higher according to Moody’s or S&P (or such similar equivalent rating by at
least one “nationally recognized statistical rating organization” (as defined
in Rule 436 under the Securities Act));


 


(c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) entered into with:


 


(1) a
bank meeting the qualifications described in clause (b) above; or


 


(2) any
primary government securities dealer reporting to the Market Reports Division
of the Federal Reserve Bank of New York;


 


(d) Investments
in commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America 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 (or such
similar equivalent rating by at least one “nationally recognized statistical
rating organization” (as defined in Rule 436 under the Securities Act));


 


(e) direct
obligations (or certificates representing an ownership interest in such
obligations) of any state of the United States of America (including any agency
or instrumentality thereof) for the payment of which the full faith and credit
of such state is pledged and which are not callable or redeemable at the issuer’s
option; provided that:


 


(1) the
long-term debt of such state is rated “A-3” or “A-” or higher according to
Moody’s or S&P (or such similar equivalent rating by at least one “nationally
recognized statistical rating organization” (as defined in Rule 436 under
the Securities Act)); and


 


(2) such
obligations mature within 180 days of the date of acquisition thereof; and


 


34

















 


(f) money
market funds at least 95% of the assets of which constitute Temporary Cash
Equivalents of the kinds described in clauses (a) through (e) of this
definition.


 


“Total
Assets” means the total assets of the Company and the Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP as
shown on the most recent consolidated balance sheet of the Company.


 


“Triggering
Event” at any time has the meaning set forth in the Intercreditor
Agreement.


 


“Trust
Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed, except as provided
in Section 9.03; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act”
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.


 


“Trustee”
means the Person named as the “Trustee” in the first paragraph of this
Indenture until a successor Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Trustee” shall mean such
successor Trustee.


 


“Trust
Officer” means any officer within the Corporate Trust department of the
Trustee (or any successor group of the Trustee) with direct responsibility for
the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.


 


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


 


“Unrestricted
Subsidiary” means:


 


(a) any
Subsidiary of the Company that is designated after the Issue Date as an
Unrestricted Subsidiary as permitted or required pursuant to Section 4.11
and is not thereafter redesignated as a Restricted Subsidiary as permitted
pursuant thereto; and


 


(b) any
Subsidiary of an Unrestricted Subsidiary.


 


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


 


“Voting
Stock” of any Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally 


 


35

















 


entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.


 


“Wholly
Owned Restricted Subsidiary” means, at any time, a Restricted Subsidiary
all the Voting Stock of which (except directors’ qualifying shares) is at such
time owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.


 


SECTION 1.02.  Other
Definitions.


 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Affiliate Transaction”

  	
   

  	
  4.08

  
	
  “Asset Sales Prepayment Offer”

  	
   

  	
  4.06

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Change of Control Offer”

  	
   

  	
  4.13(a)

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.13(b)

  
	
  “Change of Control Purchase Price”

  	
   

  	
  4.13(a)

  
	
  “covenant defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Global Security”

  	
   

  	
  Appendix A

  
	
  “legal defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Legal Holiday”

  	
   

  	
  10.08

  
	
  “Offer Amount”

  	
   

  	
  4.06

  
	
  “Offer Period”

  	
   

  	
  4.06

  
	
  “OID”

  	
   

  	
  2.01

  
	
  “Original Securities”

  	
   

  	
  2.01

  
	
  “Paying Agent”

  	
   

  	
  2.04

  
	
  “Registrar”

  	
   

  	
  2.04

  
	
  “Reversion Date”

  	
   

  	
  4.15(b)

  
	
  “Securities Custodian”

  	
   

  	
  Appendix A

  
	
  “Shelf Registration Statement

  	
   

  	
  Appendix A

  
	
  “Surviving Person”

  	
   

  	
  5.01(a)(1)

  
	
  “Suspension Period”

  	
   

  	
  4.15(b)

  



 


36

















 


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


 


“Commission”
means the SEC.


 


“indenture
securities” means the Securities.


 


“indenture
security holder” means a Holder.


 


“indenture to
be qualified” means this Indenture.


 


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


 


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


 


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


 


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


 


(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;


 


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


 


(6) unsecured
Debt shall not be deemed to be subordinate or junior to secured Debt merely by
virtue of its nature as unsecured Debt;


 


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


 


(8) the
principal amount of any Preferred Stock shall be the greater of (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock.


 


37

















 


ARTICLE
II


 


The Securities


 


SECTION 2.01.  Amount of
Securities; Issuable in Series.  The
aggregate principal amount of Securities which may be authenticated and delivered
under this Indenture is unlimited.  All
Securities shall be identical in all respects other than issue prices and
issuance dates.  The Securities may be
issued in one or more series; provided, however, that any
Securities issued with original issue discount (“OID”) for Federal
income tax purposes shall not be issued as part of the same series as any
Securities that are issued with a different amount of OID or are not issued
with OID.  All Securities of any one
series shall be substantially identical except as to denomination.


 


Subject to Section 2.03,
the Trustee shall authenticate Securities for original issue on the Issue Date
in the aggregate principal amount of $470,000,000 (the “Original Securities”).  With respect to any Securities issued after
the Issue Date (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, Original
Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06), there shall be
established in or pursuant to a Board Resolution, and subject to Section 2.03,
set forth, or determined in the manner provided in an Officers’ Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of such Securities:


 


(1) whether such Securities shall be
issued as part of a new or existing series of Securities and, if issued as part
of a new series, the title of such Securities (which shall distinguish the
Securities of the series from Securities of any other series);


 


(2) the aggregate principal amount of
such Securities to be authenticated and delivered under this Indenture, which
may be issued for an unlimited aggregate principal amount (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the same series pursuant to Section 2.07,
2.08, 2.09 or 3.06 and except for Securities which, pursuant to Section 2.03,
are deemed never to have been authenticated and delivered hereunder);


 


(3) the issue price and issuance date of
such Securities, including the date from which interest payable with respect to
such Securities shall accrue; and


 


(4) if applicable, that such Securities
shall be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective depositories for such Global
Securities; the form of any legend or legends that shall be borne by any such
Global Security in addition to or in lieu of that set forth in Exhibit 1
and any circumstances in which any such Global Security may be exchanged in
whole or in part for Securities registered; and any transfer of such Global
Security in whole or in part 


 


38

















 


may be registered in the name or names of Persons other than the
depository for such Global Security or a nominee thereof.


 


SECTION 2.02.  Form and
Dating.  The Securities of each
series and the Trustee’s certificate of authentication shall be substantially
in the form of Exhibit 1 which is hereby incorporated in and expressly
made a part of this Indenture.  The
Securities of each series may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is subject, if
any, or usage; provided that any such notation, legend or endorsement is
in a form reasonably acceptable to the Company. 
Each Security shall be dated the date of its authentication.  The terms of the Securities of each series
set forth in Exhibit 1 are part of the terms of this Indenture.


 


SECTION 2.03.  Execution
and Authentication.  An Officer (and
for purposes of this Section 2.03, the term Officer shall include any Vice
President of the Company authorized by the Board of Directors) shall sign the
Securities for the Company by manual or facsimile signature.


 


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


 


At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the
Trustee for authentication, together with a written order of the Company in the
form of an Officers’ Certificate for the authentication and delivery of such
Securities, and the Trustee in accordance with such written order of the
Company shall authenticate and deliver such Securities.


 


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


 


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


 


SECTION 2.04.  Registrar
and Paying Agent.  The Company shall
maintain an office or agency in the City of New York where Securities may be
presented for registration of transfer or for exchange (the “Registrar”)
and an office or agency in the City of New York where Securities may be
presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the
Securities and of their transfer and exchange. 
The Company may have one or more co-registrars and one or more
additional paying agents.  The term “Paying
Agent” includes any additional paying agent.


 


39

















 


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


 


The Company
initially appoints the Trustee as Registrar and Paying Agent in connection with
the Securities.


 


SECTION 2.05.  Paying
Agent To Hold Money in Trust.  Prior
to each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due.  The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by
the Company in making any such payment. 
If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund.  The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent.  Upon complying with this Section 2.05,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.


 


SECTION 2.06.  Holder
Lists.  The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders. 
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee, in writing at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders.


 


SECTION 2.07.  Replacement
Securities.  If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company,
such Holder shall furnish an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee, the Paying Agent,
the Registrar and any co-registrar from any loss which any of them may suffer
if a Security is replaced.  The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.


 


Every
replacement Security is an additional obligation of the Company.


 


40

















 


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


 


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


 


If the Paying
Agent segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, then on and after that
date such Securities (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.


 


SECTION 2.09.  Temporary
Securities.  Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities.  Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.


 


SECTION 2.10.  Cancellation.  The Company at any time may deliver
Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment.  The
Trustee and no one else shall cancel and dispose of (subject to the record
retention requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancellation and deliver a
certificate of such disposal to the Company upon its request therefor unless
the Company directs the Trustee to deliver canceled Securities to the
Company.  The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.


 


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


 


SECTION 2.12.  CUSIP
Numbers.  The Company in issuing the
Securities may use “CUSIP” numbers (if then generally in use) and, if so, the
Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to
Holders; provided, 


 


41

















 


however,
that neither the Company nor the Trustee shall have any responsibility for any
defect in the “CUSIP” number that appears on any Security, check, advice of
payment or redemption notice, and any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.


 


ARTICLE
III


 


Redemption


 


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


 


The Company
shall give each notice to the Trustee provided for in this Section 3.01 at
least 45 days before the redemption date unless the Trustee consents to a
shorter period.  Such notice shall be
accompanied by an Officers’ Certificate from the Company to the effect that
such redemption will comply with the conditions herein.


 


SECTION 3.02.  Selection
of Securities To Be Redeemed.  If
fewer than all the Securities are to be redeemed pursuant to paragraph 5 of the
Securities, the Trustee shall select the Securities to be redeemed pro rata or
by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances.  The Trustee shall make the selection from
outstanding Securities not previously called for redemption.  The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000.  Securities and portions of them
the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000.  Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.  The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.


 


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


 


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


 


(1) the redemption date;


 


(2) the redemption price;


 


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


 


42

















 


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


 


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


 


(6) that, unless the Company defaults in
making such redemption payment, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date, and
the only remaining right of the Holders is to receive payment of the redemption
price upon surrender to the Paying Agent; and


 


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


 


At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name
and at the Company’s expense.  In such
event, the Company shall provide the Trustee with the information required by
this Section 3.03 at least 40 days before the redemption date and at
least five days prior to the Trustee giving the notice of redemption.


 


SECTION 3.04.  Effect of
Notice of Redemption.  Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice.  Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date that is on or prior to the date of
redemption).  Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.


 


SECTION 3.05.  Deposit of
Redemption Price.  Prior to or on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest, if any (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date that
is on or prior to the date of redemption), on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
that have been delivered by the Company to the Trustee for cancellation.


 


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


 


43














 


ARTICLE
IV


 


Covenants


 


SECTION 4.01.  Payment of
Securities.  The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture.  Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due.


 


The Company
shall pay interest on overdue principal at the rate per annum specified
therefor in the Securities, and it shall pay interest on overdue installments
of interest at the rate borne by the Securities, to the extent lawful.


 


SECTION 4.02.  SEC
Reports.  Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall file with the Commission and
provide the Trustee with such annual and quarterly reports and such
information, documents and other reports as are specified in Sections 13 and 15(d) of
the Exchange Act and applicable to a U.S. corporation subject to such Sections,
such information, documents and reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections; provided, however, that the Company shall not be
so obligated to file such information, documents and reports with the
Commission if the Commission does not permit such filings; provided  further,
however, that the Company shall be required also to provide to Holders
any such information, documents or reports that are not so filed.  The Company shall also comply with the other
provisions of TIA § 314(a). 
Notwithstanding anything herein to the contrary, the Company will not be
deemed to have failed to comply with any of its obligations hereunder for
purposes of clause (d) of Section 6.01 until 120 days after
the date any report hereunder is due. 
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).


 


SECTION 4.03.  Limitation
on Debt.  The Company shall not, and
shall not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Debt unless, after giving effect to the application of the proceeds
thereof, no Default or Event of Default would occur as a consequence of such
Incurrence and no Default or Event of Default would be continuing following
such Incurrence and application of proceeds and either:


 


(1) such
Debt is Debt of the Company or a Subsidiary Guarantor and after giving effect
to the Incurrence of such Debt and the application of the proceeds thereof, the
Consolidated Interest Coverage Ratio would be greater than 2.00 to 1.00; or


 


44

















 


(2) such
Debt is Permitted Debt.


 


The term “Permitted
Debt” is defined to include the following:


 


(a) the
Securities issued on the Issue Date and Debt of Subsidiary Guarantors,
including any future Guarantor, evidenced by guarantees relating to the Securities
issued on the Issue Date;


 


(b) Debt
of the Company or a Subsidiary Guarantor (including Guarantees thereof) (1) under
any Credit Facilities, (2) Incurred pursuant to a Real Estate Financing
Transaction, a Sale and Leaseback Transaction or an Equipment Financing
Transaction, (3) Incurred in respect of Capital Lease Obligations, (4) Incurred
pursuant to Debt Issuances or (5) Incurred by a Receivables Entity,
whether or not a Subsidiary Guarantor, in a Qualified Receivables Transaction
that is not recourse to the Company or any other Restricted Subsidiary (except
for Standard Securitization Undertakings); provided that the aggregate
principal amount of all such Debt in clauses (1) through (5) hereof
at any one time outstanding shall not exceed the greater of (A) $3,500
million, which amount shall be permanently reduced by the amount of Net
Available Cash used to Repay Debt under the Credit Facilities, and not
subsequently reinvested in Additional Assets or used to purchase Securities or
Repay other Debt, pursuant to Section 4.06 and (B) the sum of the
amount equal to (i) 60% of the book value of the inventory (determined
using the first-in-first-out method of accounting) of the Company and the
Restricted Subsidiaries and (ii) 85% of the book value of the accounts
receivables of the Company and the Restricted Subsidiaries, including any
Receivables Entity that is a Restricted Subsidiary;


 


(c) [Intentionally
omitted];


 


(d) Debt
of the Company outstanding on the Issue Date and evidenced by the 7.5% Notes due
2017 and of Subsidiary Guarantors, including any future Guarantor, evidenced by
guarantees relating to the 7.5% Notes due 2017;


 


(e) Debt
Incurred after the Issue Date in respect of Purchase Money Debt; provided
that the aggregate principal amount of such Debt does not exceed 80% of the
Fair Market Value (on the date of the Incurrence thereof) of the Property
acquired, constructed, developed or leased, including additions and
improvements thereto;


 


(f) Debt
of the Company owing to and held by any consolidated Restricted Subsidiary and
Debt of a Restricted Subsidiary owing to and held by the Company or any
consolidated Restricted Subsidiary; provided, however, that any
subsequent issue or transfer of Capital Stock or other event that results in
any such consolidated Restricted Subsidiary ceasing to be a consolidated
Restricted Subsidiary or any subsequent transfer of any such Debt (except to
the Company or a consolidated Restricted Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Debt by the issuer thereof;


 


(g) Debt
under Interest Rate Agreements entered into by the Company or a Restricted
Subsidiary for the purpose of limiting interest rate risk of the financial
management of the Company or such Restricted Subsidiary and not for speculative



 


45

















 


purposes; provided that
the obligations under such agreements are directly related to payment
obligations on Debt otherwise permitted by the terms of this Section 4.03;


 


(h) Debt
under Currency Exchange Protection
Agreements entered into by the Company or a Restricted Subsidiary for
the purpose of limiting currency exchange rate risks directly related to
transactions entered into by the Company or such Restricted Subsidiary and not
for speculative purposes;


 


(i) Debt
under Commodity Price Protection Agreements entered into by the Company or a
Restricted Subsidiary in the financial management of the Company or that
Restricted Subsidiary and not for speculative purposes;


 


(j) Debt
in connection with one or more standby letters of credit, banker’s acceptance,
performance or surety bonds or completion guarantees issued by the Company or a
Restricted Subsidiary or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;


 


(k) Debt
outstanding on the Issue Date not otherwise described in clauses (a) through
(j) above or clause (q) below;


 


(l) other
Debt of the Company or a Subsidiary Guarantor (including Guarantees thereof) in
an aggregate principal amount outstanding at any one time not to exceed $600
million;


 


(m) Debt
of a Restricted Subsidiary outstanding on the date on which that Restricted
Subsidiary was acquired by the Company or otherwise became a Restricted
Subsidiary (other than Debt Incurred as consideration in, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of transactions pursuant to which that Restricted
Subsidiary became a Subsidiary of the Company or was otherwise acquired by the
Company); provided that at the time that Restricted Subsidiary was
acquired by the Company or otherwise became a Restricted Subsidiary and after
giving effect to the Incurrence of that Debt, the Company would have been able to
Incur $1.00 of additional Debt pursuant to clause (1) of the first
paragraph of this Section 4.03;


 


(n) Debt
arising from the honoring by a bank or other financial institution of a check
or draft or other similar instrument inadvertently drawn against insufficient
funds; provided that such Debt is extinguished within five Business Days
of its Incurrence;


 


(o) endorsements
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business;


 


(p) [Intentionally
omitted];


 


(q) Debt
in respect of Sale and Leaseback Transactions or Real Estate Financing
Transactions involving only real property (and the related personal property)
owned by the Company or a Subsidiary Guarantor on or after the Issue Date in an



 


46

















 


aggregate principal amount
outstanding at any one time not to exceed $150.0 million; provided that
such Sale and Leaseback Transactions or Real Estate Financing Transactions may
involve Property other than real property (and the related personal property)
owned on or after the Issue Date to the extent the portion of the Debt related
to such Property is permitted by another provision of this Section 4.03 at
the time of Incurrence;


 


(r) Debt
in respect of Sale and Leaseback Transactions that are not Capital Lease
Obligations Incurred to finance the acquisition, construction and development
of Property after the Issue Date, including additions and improvements thereto;
provided that any reclassification of such Debt as a Capital Lease
Obligation shall be deemed an Incurrence of such Debt;


 


(s) Permitted
Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause (1) of
the first paragraph of this Section 4.03 and clauses (a), (d), (e),
(k), (m) and (q) above; and


 


(t) Debt
arising from agreements of the Company or any Restricted Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, Incurred or assumed in connection with the disposition of any
business, assets or a Subsidiary, other than Guarantees of Debt incurred by any
Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition; provided, however,
that (1) such Debt is not reflected on the balance sheet of the Company or
any Restricted Subsidiary (contingent obligations referred to in a footnote or
footnotes to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on such balance sheet for purposes of
this clause (1)) and (2) the maximum assumable liability in respect
of such Debt will at no time exceed the gross proceeds including non-cash
proceeds (the fair market value of such non-cash proceeds being measured at the
time received and without giving effect to any subsequent changes in value)
actually received by the Company or such Restricted Subsidiary in connection
with such disposition.


 


Notwithstanding
anything to the contrary contained in this Section 4.03, the Company shall
not permit any Restricted Subsidiary that is not a Subsidiary Guarantor to
Incur any Debt pursuant to this Section 4.03 if the proceeds thereof are
used, directly or indirectly, to Refinance any Debt of the Company or any
Subsidiary Guarantor.  In addition, the
Company shall not, and shall not permit any Subsidiary Guarantor to, Incur,
directly or indirectly, any Senior Obligation that is subordinate or junior in
right of payment (without regard to any security interest) to any other Debt of
the Company or any Subsidiary Guarantor.


 


For purposes
of determining compliance with this Section 4.03, (1) in the event
that an item of Debt meets the criteria of more than one of the types of Debt
described herein, the Company, in its sole discretion, will classify such item
of Debt at the time of Incurrence and only be required to include the amount
and type of such Debt in one of the above clauses, (2) the Company will be
entitled at the time of such Incurrence to divide and classify an item of Debt
in more than one of the types of Debt 


 


47

















 


described herein and (3) with respect to Debt permitted under
clause (k) of this Section 4.03 in respect of Sale and Leaseback
Transactions that are not Capital Lease Obligations on the Issue Date, any
reclassification of such Debt as a Capital Lease Obligation shall not be deemed
an Incurrence of such Debt; provided, however, that (A) $250
million of the Securities will be deemed to have been Incurred pursuant to
clause (b) of the second paragraph of this Section 4.03 and any
Permitted Refinancing Debt in respect of such portion of the Securities that is
Secured Debt will be deemed to be Incurred pursuant to either clause (b) or
(l) of the second paragraph of this Section 4.03, (B) all
outstanding Debt evidenced by the 8.125% Notes will be deemed to have been
Incurred pursuant to clause (b) of the second paragraph of this Section 4.03,
(C) all outstanding Debt evidenced by the Receivables Facility will be
deemed to have been Incurred pursuant to clause (b) of the second
paragraph of this Section 4.03, (D) [intentionally omitted], (E) all
outstanding Debt under the Senior Credit Facility immediately following the
Issue Date will be deemed to have been Incurred pursuant to clause (b) of
the second paragraph of this Section 4.03, (F) any Permitted Debt
that is not Secured Debt may later be reclassified as having been Incurred
pursuant to clause (1) of the first paragraph of this Section 4.03,
to the extent such Debt could be Incurred pursuant to such clause at the time
of such reclassification, and (G) any Permitted Debt may later be
reclassified as having been Incurred pursuant to any other clause in the
definition of Permitted Debt to the extent such Debt could be Incurred pursuant
to such clause at the time of such reclassification.


 


SECTION 4.04.  Limitation
on Restricted Payments.  The Company
shall not make, and shall not permit any Restricted Subsidiary to make,
directly or indirectly, any Restricted Payment if at the time of, and after
giving effect to, such proposed Restricted Payment:


 


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


 


(b) the
Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of
the first paragraph of Section 4.03; or


 


(c) the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made since February 12, 2003 (the amount of any Restricted
Payment, if made other than in cash, to be based upon Fair Market Value) would
exceed an amount equal to the sum of:


 


(1) 50% of the aggregate amount of
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the first fiscal quarter that commenced after February 12,
2003 to the end of the most recent fiscal quarter for which financial
statements have been filed with the Commission (or, if the aggregate amount of
Consolidated Net Income for such period shall be a deficit, minus 100% of such
deficit); plus


 


(2) 100% of Capital Stock Sale Proceeds;
plus


 


48

















 


(3) the sum of:


 


(A) the aggregate net cash proceeds
received by the Company or any Restricted Subsidiary from the issuance or sale
after February 12, 2003 of convertible or exchangeable Debt that has been
converted into or exchanged for Capital Stock (other than Disqualified Stock)
of the Company; and


 


(B) the aggregate amount by which Debt
(other than Subordinated Obligations) of the Company or any Restricted
Subsidiary is reduced on the Company’s consolidated balance sheet after February 12,
2003 upon the conversion or exchange of any Debt (other than convertible or
exchangeable debt issued or sold after February 12, 2003) for Capital
Stock (other than Disqualified Stock) of the Company;


 


excluding, in
the case of clause (A) or (B):


 


(x) any such Debt issued or sold to the
Company or a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any such Subsidiary for the benefit of
their employees; and


 


(y) the aggregate amount of any cash or
other Property distributed by the Company or any Restricted Subsidiary upon any
such conversion or exchange;


 


plus


 


(4) an amount equal to the sum of:


 


(A) the net reduction in Investments in
any Person other than the Company or a Restricted Subsidiary resulting from
dividends, repayments of loans or advances or other transfers of Property made
after February 12, 2003, in each case to the Company or any Restricted
Subsidiary from such Person less the cost of the disposition of such
Investments; and


 


(B) the portion (proportionate to the
Company’s equity interest in such Unrestricted Subsidiary) of the Fair Market
Value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary (provided
that such designation occurs after February 12, 2003);


 


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


 


49

















 


Notwithstanding
the foregoing limitation, the Company may:


 


(a) pay
dividends on its Capital Stock within 60 days of the declaration thereof if, on
said declaration date, such dividends could have been paid in compliance with
this Indenture; provided, however, that at the time of such
payment of such dividend, no other Default or Event of Default shall have
occurred and be continuing (or result therefrom); provided further, however,
that, if declared on or after February 12, 2003, such dividend shall be
included in the calculation of the amount of Restricted Payments;


 


(b) purchase,
repurchase, redeem, legally defease, acquire or retire for value Capital Stock
of the Company or Subordinated Obligations on or after February 12, 2003
in exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any such Subsidiary
for the benefit of their employees); provided, however, that:


 


(1) such
purchase, repurchase, redemption, legal defeasance, acquisition or retirement
shall be excluded in the calculation of the amount of Restricted Payments; and


 


(2) the
Capital Stock Sale Proceeds from such exchange or sale shall be excluded from
the calculation pursuant to clause (c)(2) above;


 


(c) purchase,
repurchase, redeem, legally defease, acquire or retire for value any
Subordinated Obligations on or after February 12, 2003 in exchange for, or
out of the proceeds of the substantially concurrent sale of, Permitted
Refinancing Debt; provided, however, that such purchase,
repurchase, redemption, legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of Restricted Payments;


 


(d) [intentionally
omitted];


 


(e) so
long as no Default or Event of Default has occurred and is continuing the
repurchase or other acquisition on or after February 12, 2003 of shares
of, or options to purchase shares of, Capital Stock of the Company or any of
its Subsidiaries from employees, former employees, directors or former
directors of the Company 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,
shares of such Capital Stock; provided, however, that the
aggregate amount of such repurchases and other acquisitions shall not exceed
$15.0 million; provided further, however, that such
repurchases and other acquisitions shall be included in the calculation of the
amount of Restricted Payments;


 


50

















 


(f) make
payments not to exceed $2.5 million in the aggregate to enable the Company to
make payments to holders of its Capital Stock in lieu of the issuance of
fractional shares of its Capital Stock on or after February 12, 2003; provided,
however, that such payments shall be included in the calculation of the
amount of Restricted Payments; and


 


(g) make
any other Restricted Payments on or after February 12, 2003 not to exceed
an aggregate amount of $40.0 million; provided, however, that
such payments shall be included in the calculation of the amount of Restricted
Payments.


 


SECTION 4.05.  Limitation
on Liens.  The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
suffer to exist, any Lien (other than Permitted Liens) upon any of its Property
(including Capital Stock of a Restricted Subsidiary), whether owned on the
Issue Date or thereafter acquired, or any interest therein or any income or
profits therefrom.  If the Company or any
Subsidiary Guarantor creates any additional Lien upon any Property to secure
any Secured Obligations, it must concurrently grant a second priority Lien
(subject to Permitted Liens) upon such Property as security for the Securities
or Subsidiary Guarantees of the Securities such that the Property subject to
such Lien becomes Second Priority Collateral subject to the Second Priority
Liens, except to the extent such Property constitutes cash or cash
equivalents required to secure only letter of credit obligations under Credit
Facilities following a default under such Credit Facilities.


 


Notwithstanding
anything in the preceding paragraph, (1) the aggregate principal amount of
Senior Obligations constituting Debt and any other Debt secured by a Lien on
the Collateral that shares in the distribution of proceeds of Collateral prior
to the Securities, at any one time outstanding shall not exceed the sum of the
aggregate amount of Debt that at such time may be outstanding at any one time
under clause (b) of Section 4.03 and $200 million; and (2) the
Company shall not, and shall not permit any of its Subsidiaries to, create or
suffer to exist any Lien upon any of the Collateral (including Collateral
consisting of Capital Stock or Debt of any Subsidiary of the Company) now owned
or hereafter acquired by it securing any Public Debt unless the holders of such
Public Debt share in the distribution of proceeds from the foreclosure on
Collateral either (A) on an equal and ratable basis with the holders of
the Senior Obligations or (B) on an equal and ratable basis with the
Holders (and any other obligations that share on an equal and ratable basis
with the Holders).


 


SECTION 4.06.  Limitation
on Asset Sales and Specified Collateral Dispositions.  The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale
unless:


 


(a) the
Company or such Restricted Subsidiary receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Property subject
to such Asset Sale;


 


51

















 


(b) at
least 75% of the consideration paid to the Company or such Restricted
Subsidiary in connection with such Asset Sale is in the form of Qualified
Consideration; and


 


(c) the
Company delivers an Officers’ Certificate to the Trustee certifying that such
Asset Sale complies with the foregoing clauses (a) and (b).


 


The Net
Available Cash (or any portion thereof) from Asset Sales and Specified
Collateral Dispositions may be applied by the Company or a Restricted
Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or
is required by the terms of any Debt):


 


(a) to
Repay the Secured Obligations or any other Debt of the Company or any
Restricted Subsidiary secured by a Lien on Property of the Company or any
Restricted Subsidiary of the Company (excluding, in any such case, any Debt
owed to the Company or an Affiliate of the Company); provided, however,
that to the extent the proceeds from a Specified Collateral Disposition will be
allocated pursuant to the terms of any other Second Priority Debt Obligations
to Repay or provide for the Repayment of such Second Priority Debt Obligations,
a pro rata portion of such proceeds must, to the extent not inconsistent with
the terms of such other Second Priority Debt Obligations, be allocated to Repay
the Securities pursuant to an Asset Sales Prepayment Offer and the full amount
of such allocated portion (1) will be deemed Excess Proceeds and (2) will,
upon such Asset Sales Prepayment Offer, be deemed Allocable Excess Proceeds; or


 


(b) to reinvest
in Additional Assets or Expansion Capital Expenditures (including by means of
an Investment in Additional Assets or Expansion Capital Expenditures by a
Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary); provided, however, that (1) the
Net Available Cash (or any portion thereof) from Asset Sales from the Company
to any Subsidiary must be reinvested in Additional Assets or Expansion Capital
Expenditures of the Company and (2) if the assets that were the subject of
such Asset Sale constituted Collateral, then such Net Available Cash must be
reinvested in Additional Assets that are pledged at the time as Collateral to
secure the Securities or Subsidiary Guarantees of the Securities, subject to
the Collateral Documents, or in Expansion Capital Expenditures to improve
assets that constitute Collateral securing the Securities or Subsidiary
Guarantees of the Securities at the time.


 


Pending
application of Net Available Cash pursuant to this Section 4.06, which
shall not be required in respect of an Asset Sale that is not a Specified
Collateral Disposition if the Net Available Cash from such Asset Sale is less
than $1 million, such Net Available Cash shall be invested in Temporary Cash
Investments or applied to temporarily reduce revolving credit
indebtedness.  If the Net Available Cash
from an Asset Sale that is not a Specified Collateral Disposition equals or
exceeds $1 million, any Net Available Cash from such Asset Sale not applied in
accordance with the preceding paragraph within 270 days from the date of the
receipt of such Net Available Cash or that 


 


52

















 


is not segregated from the general funds of the Company for investment
in identified Additional Assets in respect of a project that shall have been
commenced, and for which binding contractual commitments have been entered
into, prior to the end of such 270-day period and that shall not have been
completed or abandoned shall constitute “Excess Proceeds”; provided,
however, that the amount of any Net Available Cash that ceases to be so
segregated as contemplated above and any Net Available Cash that is segregated
in respect of a project that is abandoned or completed shall also constitute “Excess
Proceeds” at the time any such Net Available Cash ceases to be so segregated or
at the time the relevant project is so abandoned or completed, as applicable; provided
further, however, that the amount of any Net Available Cash that
continues to be segregated for investment and that is not actually reinvested
within 24 months from the date of the receipt of such Net Available Cash shall
also constitute “Excess Proceeds”.


 


When the
aggregate amount of Excess Proceeds exceeds $50.0 million (taking into account
income earned on such Excess Proceeds, if any), the Company will be required to
make an offer to purchase (the “Asset Sales Prepayment Offer”) the
Securities which offer shall be in the amount of the Allocable Excess Proceeds,
on a pro rata basis according to principal amount at maturity, at a purchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the procedures (including prorating
in the event of oversubscription) set forth herein.  To the extent that any portion of the amount
of Net Available Cash remains after compliance with the preceding sentence and
provided that all Holders have been given the opportunity to tender their
Securities for purchase in accordance with this Indenture, the Company or such
Restricted Subsidiary may use such remaining amount for any purpose permitted
by this Indenture and the amount of Excess Proceeds will be reset to zero.


 


The term “Allocable
Excess Proceeds” will mean the product of:


 


(a) the
Excess Proceeds; and


 


(b) a
fraction,


 


(1) the
numerator of which is the aggregate principal amount of the Securities outstanding
on the date of the Asset Sales Prepayment Offer; and


 


(2) the
denominator of which is the sum of the aggregate principal amount of the
Securities outstanding on the date of the Asset Sales Prepayment Offer and the
aggregate principal amount of other Debt of the Company outstanding on the date
of the Asset Sales Prepayment Offer that is pari  passu in right
of payment with the Securities and subject to terms and conditions in respect
of Asset Sales similar in all material respects to this covenant and requiring
the Company to make an offer to purchase such Debt or otherwise repay such Debt
at substantially the same time as the Asset Sales Prepayment Offer.


 


53














 


Within five
Business Days after the Company is obligated to make an Asset Sales Prepayment
Offer as described in the preceding paragraph, the Company shall send a written
notice, by first-class mail, to the Holders, accompanied by such information
regarding the Company and its Subsidiaries as the Company in good faith
believes will enable such Holders to make an informed decision with respect to
such Asset Sales Prepayment Offer.  Such
notice shall state, among other things, the purchase price and the purchase
date (the “Purchase Date”), which shall be, subject to any contrary
requirements of applicable law, a Business Day no earlier than 30 days nor
later than 60 days from the date such notice is mailed.


 


Not later than
the date upon which written notice of an Asset Sales Prepayment Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers’ Certificate as to (a) the amount of the Asset Sales
Prepayment Offer (the “Offer Amount”), (b) the allocation of the
Net Available Cash from the Asset Sales pursuant to which such Prepayment Offer
is being made and (c) the compliance of such allocation with the
provisions of clause (b) of the second paragraph of this Section 4.06.  On or before the Purchase Date, the Company
shall also irrevocably deposit with the Trustee or with the Paying Agent (or,
if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) in Temporary Cash Investments (other than in those
enumerated in such clause (b) of the definition of Temporary Cash
Investments), maturing on the last day prior to the Purchase Date or on the
Purchase Date if funds are immediately available by open of business, an amount
equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section 4.06. 
Upon the expiration of the period for which the Prepayment Offer remains
open (the “Offer Period”), the Company shall deliver to the Trustee for
cancellation the Securities or portions thereof that have been properly
tendered to and are to be accepted by the Company.  The Trustee or the Paying Agent shall, on the
Purchase Date, mail or deliver payment to each tendering Holder in the amount
of the purchase price.  In the event that
the aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section 4.06.


 


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


 


54

















 


only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.


 


At the time
the Company delivers Securities to the Trustee that are to be accepted for
purchase, the Company shall also deliver an Officers’ Certificate stating that
such Securities are to be accepted by the Company pursuant to and in accordance
with the terms of this Section 4.06. 
A Security shall be deemed to have been accepted for purchase at the
time the Trustee or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.


 


The Company
will comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection
with the repurchase of Securities pursuant to this Section 4.06.  To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section 4.06, the
Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 4.06
by virtue thereof.


 


SECTION 4.07.  Limitation
on Restrictions on Distributions from Restricted Subsidiaries.  The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist any consensual restriction on the right of any Restricted
Subsidiary to:


 


(a) pay
dividends, in cash or otherwise, or make any other distributions on or in
respect of its Capital Stock, or pay any Debt or other obligation owed, to the
Company or any other Restricted Subsidiary;


 


(b) make
any loans or advances to the Company or any other Restricted Subsidiary; or


 


(c) transfer
any of its Property to the Company or any other Restricted Subsidiary.


 


The foregoing
limitations will not apply:


 


(1) with respect to clauses (a), (b) and
(c), to restrictions:


 


(A) in effect on the Issue Date;


 


(B) relating to Debt of a Restricted
Subsidiary and existing at the time it became a Restricted Subsidiary if such
restriction was not created in connection with or in anticipation of the
transaction or series of transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company;


 


(C) that result from the Refinancing of
Debt Incurred pursuant to an agreement referred to in clause (1)(A) or (B) above
or in clause (2)(A) or (B) below; provided that such
restriction is no less 


 


55

















 


favorable to the Holders in any material respect, as reasonably
determined by the Board of Directors (as evidenced by a Board Resolution), than
those under the agreement evidencing the Debt so Refinanced;


 


(D) resulting from the Incurrence of any
Debt permitted pursuant to Section 4.03; provided that (i) the
restriction is no less favorable to the Holders in any material respect, as
reasonably determined by the Board of Directors (as evidenced by a Board
Resolution), than the restrictions of the same type contained in this Indenture
and (ii) the Board of Directors determines (as evidenced by a Board
Resolution) in good faith that such restrictions will not impair the ability of
the Company to make payments of principal and interest on the Securities when
due;


 


(E) existing by reason of applicable
law; or


 


(F) any contractual requirements
incurred with respect to Qualified Receivables Transactions relating
exclusively to a Receivables Entity that, in the good faith determination of
the Board of Directors, are customary for Qualified Receivables Transactions;
and


 


(2) with respect to clause (c) only,
to restrictions:


 


(A) relating to Debt that is permitted
to be Incurred and secured pursuant to Sections 4.03 and 4.05 that limit
the right of the debtor to dispose of the Property securing such Debt;


 


(B) encumbering Property at the time
such Property was acquired by the Company or any Restricted Subsidiary, so long
as such restriction relates solely to the Property so acquired and was not
created in connection with or in anticipation of such acquisition;


 


(C) resulting from customary provisions
restricting subletting or assignment of leases or customary provisions in other
agreements that restrict assignment of such agreements or rights thereunder; or


 


(D) customary restrictions contained in
agreements relating to the sale or other disposition of Property limiting the
transfer of such Property pending the closing of such sale.


 


SECTION 4.08.  Limitation
on Transactions with Affiliates.  The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business or enter into or suffer to exist any transaction
or series of transactions (including the purchase, sale, transfer, assignment,
lease, conveyance or exchange of any Property or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an “Affiliate
Transaction”), unless:


 


56

















 


(a) the
terms of such Affiliate Transaction are:


 


(1) set forth in writing;


 


(2) in the best interest of the Company
or such Restricted Subsidiary, as the case may be; and


 


(3) no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable arm’s-length transaction with a Person that is not an
Affiliate of the Company;


 


(b) if
such Affiliate Transaction involves aggregate payments or value to the
Affiliate in excess of $25.0 million in any 12-month period, the Board of
Directors (including a majority of the disinterested members of the Board of
Directors) approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clauses (a)(2) and (3) of
this Section 4.08 as evidenced by a Board Resolution promptly delivered to
the Trustee; and


 


(c) if
such Affiliate Transaction involves aggregate payments or value to the
Affiliate in excess of $75.0 million in any 12-month period, the Company
obtains a written opinion from an Independent Financial Advisor to the effect
that the consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to the Company and the
Restricted Subsidiaries, taken as a whole.


 


Notwithstanding
the foregoing limitation, the Company or any Restricted Subsidiary may enter
into or suffer to exist the following:


 


(a) any
transaction or series of transactions between the Company and one or more
Restricted Subsidiaries or between two or more Restricted Subsidiaries; provided
that no more than 5% of the total voting power of the Voting Stock (on a fully
diluted basis) of any such Restricted Subsidiary is owned by an Affiliate of
the Company (other than a Restricted Subsidiary);


 


(b) any
Restricted Payment permitted to be made pursuant to Section 4.04 or any
Permitted Investment (other than pursuant to clauses (a)(3), (b), (g), (h),
(i), (k) or (l) of the definition of “Permitted Investment”);


 


(c) the
payment of compensation (including amounts paid pursuant to employee benefit
plans) for the personal services of and related indemnities provided to
officers, directors, consultants and employees of the Company or any of the
Restricted Subsidiaries, so long as the Board of Directors in good faith shall
have approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation to be fair consideration
therefor;


 


(d) loans
and advances to employees made in the ordinary course of business in accordance
with applicable law and consistent with the past practices 


 


57

















 


of the Company or such Restricted Subsidiary, as the case may be; provided
that such loans and advances do not exceed $25.0 million in the aggregate at
any one time outstanding;


 


(e) any
transaction effected as part of a Qualified Receivables Transaction or any
transaction involving the transfer of accounts receivable of the type specified
in the definition of “Credit Facilities” and permitted under clause (b) of
Section 4.03;


 


(f) payments
of customary fees by the Company or any of its Restricted Subsidiaries to
Leonard Green & Partners L.P. or any of its Affiliates made for any
corporate advisory services or financial advisory, financing, underwriting or
placement services or in respect of other investment banking activities
including, without limitation, in connection with acquisitions or divestitures,
which are approved by a majority of the Board of Directors in good faith;


 


(g) if
such Affiliate Transaction is with any Person solely in its capacity as a
holder of Debt or Capital Stock of the Company or any of its Restricted
Subsidiaries, where such Person is treated no more favorably than any other
holder of such Debt or Capital Stock of the Company or any of its Restricted
Subsidiaries; and


 


(h) any
agreement as in effect on the Issue Date or any amendment thereto (so long as
such amendment is not disadvantageous to the Holders in any material respect)
or any transaction contemplated thereby.


 


SECTION 4.09.  Guarantees
by Subsidiaries.  (a) The
Company shall cause each Subsidiary that becomes or is a Collateral Subsidiary
Guarantor or an obligor with respect to any of the Secured Obligations (except
a Foreign Subsidiary that becomes an obligor solely in respect of Debt or other
obligations of itself or another Foreign Subsidiary), in each case, to become a
Subsidiary Guarantor by becoming a party to this Indenture, the Second Priority
Subsidiary Guarantee Agreement and the Intercreditor Agreement, if such
Subsidiary is not already a Subsidiary Guarantor party thereto, and delivering
evidence thereof to the Trustee at the time such Person becomes a Collateral
Subsidiary Guarantor or such an obligor.


 


(b) The
Company shall not permit any Restricted Subsidiary that is not a Subsidiary
Guarantor to Guarantee the payment of any Debt or Capital Stock of the Company
(other than Guarantees permitted pursuant to clauses (j) or (o) of
Section 4.03), except that a Restricted Subsidiary that is not a
Subsidiary Guarantor may Guarantee Debt of the Company; provided that:


 


(1) such Debt and the Debt represented
by such Guarantee is permitted by Section 4.03;


 


(2) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee of 


 


58

















 


payment of the Securities by such Restricted Subsidiary and such
Guarantee of Debt of the Company:


 


(A) unless
such Debt is a Subordinated Obligation, shall be pari  passu
(or subordinate) in right of payment to and on substantially the same terms as
(or less favorable to such Debt than) such Restricted Subsidiary’s Guarantee
with respect to the Securities; and


 


(B) if
such Debt is a Subordinated Obligation, shall be subordinated in right of
payment to such Restricted Subsidiary’s Guarantee with respect to the
Securities to at least the same extent as such Debt is subordinated to the
Securities.


 


(c) Upon
any Subsidiary becoming a Subsidiary Guarantor as described above, such
Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect
that:


 


(1) such Guarantee of the Securities has
been duly executed and authorized; and


 


(2) such Guarantee of the Securities
constitutes a valid, binding and enforceable obligation of such Subsidiary,
except insofar as enforcement thereof may be limited by bankruptcy, insolvency
or similar laws (including all laws relating to fraudulent transfers) and
except insofar as enforcement thereof is subject to general principles of
equity.


 


In addition,
no Subsidiary Guarantor shall Guarantee, directly or indirectly, (1) any
Debt of the Company that is subordinate or junior in right of payment (without
regard to any security interest) to any other Debt of the Company unless such
Guarantee is expressly subordinate in right of payment to the Subsidiary
Guarantee of such Subsidiary Guarantor or (2) any Debt of the Company
other than Senior Obligations unless such Guarantee is expressly subordinate in
right of payment (without regard to any security interest) to or ranks pari passu with, the Subsidiary
Guarantee of such Subsidiary Guarantor.


 


SECTION 4.10.  Limitation
on Sale and Leaseback Transactions. 
The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into any Sale and Leaseback Transaction with respect to any Property
unless:


 


(a) the
Company or such Restricted Subsidiary would be entitled to:


 


(1) Incur Debt in an amount equal to the
Attributable Debt with respect to such Sale and Leaseback Transaction pursuant
to Section 4.03; and


 


59

















 


(2) create a Lien on such Property
securing such Attributable Debt without also securing the Securities or the
applicable Subsidiary Guarantee pursuant to Section 4.05; and


 


(b) such
Sale and Leaseback Transaction is effected in compliance with Section 4.06;
provided that such Sale and Leaseback Transaction constitutes an Asset
Sale.


 


SECTION 4.11.  Designation
of Restricted and Unrestricted Subsidiaries.  The Board of Directors may designate any
Subsidiary of the Company to be an Unrestricted Subsidiary if:


 


(a) the
Subsidiary to be so designated does not own any Capital Stock or Debt of, or
own or hold any Lien on any Property of, the Company or any other Restricted
Subsidiary and is not required to be a Subsidiary Guarantor pursuant to this
Indenture; and


 


(b) either:


 


(1) the Subsidiary to be so designated
has total assets of $1,000 or less; or


 


(2) such designation is effective
immediately upon such entity becoming a Subsidiary of the Company.


 


Unless so
designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary
of the Company will be classified as a Restricted Subsidiary; provided, however,
that such Subsidiary shall not be designated a Restricted Subsidiary and shall
be automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (x) and (y) of the second
immediately following paragraph will not be satisfied after giving pro forma
effect to such classification as a Restricted Subsidiary or if such Person is a
Subsidiary of an Unrestricted Subsidiary.


 


Except as
provided in the first sentence of the preceding paragraph, no Restricted Subsidiary
may be redesignated as an Unrestricted Subsidiary.  In addition, neither the Company nor any
Restricted Subsidiary shall at any time be directly or indirectly liable for
any Debt that provides that the holder thereof may (with the passage of time or
notice or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity upon the occurrence of a
default with respect to any Debt, Lien or other obligation of any Unrestricted
Subsidiary (including any right to take enforcement action against such
Unrestricted Subsidiary).


 


The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if, immediately after giving pro forma effect to such designation, (x) the
Company could Incur at least $1.00 of additional Debt pursuant to clause (1) of
the first paragraph of Section 4.03 and (y) no Default or Event of
Default shall have occurred and be continuing or would result therefrom.


 


60

















 


Any such
designation or redesignation by the Board of Directors will be evidenced to the
Trustee by filing with the Trustee a Board Resolution giving effect to such
designation or redesignation and an Officers’ Certificate that:


 


(a) certifies
that such designation or redesignation complies with the foregoing provisions;
and


 


(b) gives
the effective date of such designation or redesignation,


 


such filing
with the Trustee to occur within 45 days after the end of the fiscal quarter of
the Company in which such designation or redesignation is made (or, in the case
of a designation or redesignation made during the last fiscal quarter of the
Company’s fiscal year, within 90 days after the end of such fiscal year).


 


SECTION 4.12.  Additional
Security Documents.  From and after
the Issue Date, if the Company or any Subsidiary of the Company executes and
delivers in respect of any Property of such Person any mortgages, deeds of
trust, security agreements, pledge agreements or similar instruments to secure Debt
or other obligations that at the time constitute Secured Obligations (except
for a Foreign Subsidiary that does so solely in respect of Debt or other
obligations of itself or another Foreign Subsidiary), then the Company shall,
or shall cause such Subsidiary to, execute and deliver substantially identical
mortgages, deeds of trust, security agreements, pledge agreements or similar
instruments in order to vest in the Second Priority Collateral Trustee a
perfected second priority security interest, subject only to Permitted Liens
and the Intercreditor Agreement, in such Property for the benefit of the Second
Priority Collateral Trustee on behalf of the holders of the Securities, among
others, and thereupon all provisions of this Indenture relating to the Collateral
will be deemed to relate to such Property to the same extent and with the same
force and effect.


 


SECTION 4.13.  Change of
Control.  (a)  Upon the
occurrence of a Change of Control, each Holder shall have the right to require
the Company to repurchase all or any part of such Holder’s Securities pursuant
to the offer described below (the “Change of Control Offer”) at a
purchase price (the “Change of Control Purchase Price”) equal to 101.0%
of the principal amount thereof, plus accrued and unpaid interest, if any, to,
but not including, the purchase date (subject to the right of holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).  If the purchase date is
on or after a record date and on or before the relevant interest payment date,
the accrued and unpaid interest, if any, will be paid to the person or entity
in whose name the Security is registered at the close of business on that
record date, and no additional interest will be payable to Holders whose
Securities shall be subject to purchase.


 


(b) Within
30 days following any Change of Control, the Company shall (1) cause a
notice of the Change of Control Offer to be sent at least once to the Dow Jones
News Service or similar business news service in the United States and (2) send,
by first-class mail, with a copy to the Trustee, to each Holder, at such Holder’s
address appearing in the Security Register, a notice stating:  (A) that a Change of Control Offer is 


 


61

















 


being made pursuant to this Section 4.13
and that all Securities timely tendered will be accepted for payment; (B) the
Change of Control Purchase Price and the purchase date, which shall be, subject
to any contrary requirements of applicable law, a Business Day no earlier than
30 days nor later than 60 days from the date such notice is mailed (the “Change
of Control Payment Date”); (C) the circumstances and relevant facts
regarding the Change of Control (including, to the extent reasonably
practicable, information with respect to pro forma historical income, cash flow
and capitalization after giving effect to the Change of Control); and (D) the
procedures that Holders must follow in order to tender their Securities (or
portions thereof) for payment and the procedures that Holders must follow in
order to withdraw an election to tender Securities (or portions thereof) for
payment.


 


(c) Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company or its agent
at the address specified in the notice at least three Business Days prior to
the Change of Control Payment Date. 
Holders shall be entitled to withdraw their election if the Trustee or
the Company receives not later than one Business Day prior to the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security that
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing its election to have such Security purchased.


 


(d) On or
prior to the Change of Control Payment Date, the Company shall irrevocably
deposit with the Trustee or with the Paying Agent (or, if the Company or any of
its Wholly Owned Subsidiaries is acting as the Paying Agent, segregate and hold
in trust) in cash an amount equal to the Change of Control Purchase Price
payable to the Holders entitled thereto, to be held for payment in accordance
with the provisions of this Section 4.13. 
On the Change of Control Payment Date, the Company shall deliver to the
Trustee the Securities or portions thereof that have been properly tendered to
and are to be accepted by the Company for payment.  The Trustee or the Paying Agent shall, on the
Change of Control Payment Date, mail or deliver payment to each tendering
Holder of the Change of Control Purchase Price. 
In the event that the aggregate Change of Control Purchase Price is less
than the amount delivered by the Company to the Trustee or the Paying Agent,
the Trustee or the Paying Agent, as the case may be, shall deliver the excess
to the Company immediately after the Change of Control Payment Date.


 


(e) The
Company will comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection
with the purchase of Securities pursuant to this Section 4.13.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.13,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 4.13
by virtue thereof.


 


SECTION 4.14.  Further
Instruments and Acts.  Upon request
of the Trustee or as necessary, the Company shall execute and deliver such
further instruments 


 


62

















 


and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.


 


SECTION 4.15.  Covenant
Suspension.  (a)  During any
period of time that:


 


(1) the Securities have Investment Grade
Ratings from both Rating Agencies and


 


(2) no Default or Event of Default has
occurred and is continuing,


 


the Company
and the Restricted Subsidiaries will not be subject to the following Sections
of this Indenture: Section 4.03, Section 4.04, Section 4.06, Section 4.07,
Section 4.08, clauses (a)(1) and (b) of Section 4.10,
clause (x) of the fourth paragraph (and such clause (x) as
referred to in the second paragraph) of Section 4.11, and clause (a)(5) of
Section 5.01 (collectively, the “Suspended Covenants”).


 


(b) Solely
for the purpose of determining the amount of permitted Liens under Section 4.05
during any Suspension Period (as defined below) and without limiting the
Company’s or any Restricted Subsidiary’s ability to Incur Indebtedness during
any Suspension Period, to the extent that calculations in Section 4.05
refer to Section 4.03, such calculations shall be made as though Section 4.03
remains in effect during the Suspension Period. 
In the event that the Company and the Restricted Subsidiaries are not
subject to the Suspended Covenants for any period of time as a result of
paragraph (a) of this Section 4.15 and, on any subsequent date (the “Reversion
Date”), one or both of the Rating Agencies withdraws its ratings or
downgrades the ratings assigned to the Securities below the required Investment
Grade Ratings or a Default or Event of Default occurs and is continuing, then
the Company and the Restricted Subsidiaries will thereafter again be subject to
the Suspended Covenants. The period of time between the Suspension Date and the
Reversion Date is referred to as the “Suspension Period.”  Notwithstanding that the Suspended Covenants
may be reinstated, no Default will be deemed to have occurred as a result of a
failure to comply with the Suspended Covenants during the Suspension Period. On
the Reversion Date, all Debt Incurred during the Suspension Period will be classified
to have been Incurred pursuant to clause (1) of the first paragraph or one
of the clauses set forth in the second paragraph of Section 4.03 (to the
extent such Debt would be permitted to be Incurred thereunder as of the
Reversion Date and after giving effect to Debt Incurred prior to the Suspension
Period and outstanding on the Reversion Date). 
To the extent such Debt would not be permitted to be Incurred pursuant
to clause (1) of the first paragraph or one of the clauses set forth in
the second paragraph of Section 4.03, such Debt will be deemed to have
been outstanding on the Issue Date, so that it is classified as permitted under
clause (k) of the second paragraph of Section 4.03.  Calculations made after the Reversion Date of
the amount available to be made as Restricted Payments under Section 4.04
will be made as though Section 4.04 had been in effect during the entire
period of time from February 12, 2003. 
Accordingly, Restricted Payments made during the Suspension Period will
reduce the amount available to be made as Restricted Payments under the first
paragraph of Section 4.04 following any Reversion Date, and the items
specified in clauses 


 


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(c)(1) through (c)(4) of
the first paragraph of Section 4.04 will increase the amount available to
be made under the first paragraph thereof following any Reversion Date. For
purposes of determining compliance with the first five paragraphs of Section 4.06,
on the Reversion Date, the Net Available Cash from all Asset Sales not applied
in accordance with the covenant will be deemed to be reset to zero.


 


ARTICLE
V


 


Successor Company


 


SECTION 5.01.  When
Company May Merge or Transfer Assets. 
(a)  The Company shall not merge, consolidate or amalgamate with or
into any other Person (other than a merger of a Wholly Owned Restricted
Subsidiary into the Company) or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all its Property in any one
transaction or series of transactions unless:


 


(1) the Company will be the surviving
Person (the “Surviving Person”) or the Surviving Person (if other than
the Company) formed by such merger, consolidation or amalgamation or to which
such sale, transfer, assignment, lease, conveyance or disposition is made will
be a corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;


 


(2) the Surviving Person (if other than
the Company) expressly assumes, by supplemental indenture in form reasonably
satisfactory to the Trustee, executed and delivered to the Trustee by such
Surviving Person, the due and punctual payment of the principal of, and
premium, if any, and interest on, all the Securities, according to their tenor,
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be performed by the Company;


 


(3) in the case of a sale, transfer,
assignment, lease, conveyance or other disposition of all or substantially all
the Property of the Company, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person;


 


(4) immediately before and after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (4) and clause (5) below, any
Debt that becomes, or is anticipated to become, an obligation of the Surviving
Person or any Restricted Subsidiary as a result of such transaction or series
of transactions as having been Incurred by the Surviving Person or such
Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing;


 


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(5) immediately after giving effect to
such transaction or series of transactions on a pro forma basis, either (A) the
Company or the Surviving Person, as the case may be, would be able to Incur at
least $1.00 of additional Debt under clause (1) of the first paragraph of Section 4.03
or (B) the Surviving Person would have a Consolidated Interest Coverage
Ratio which is not less than the Consolidated Interest Coverage Ratio of the
Company immediately prior to such transaction or series of transactions; and


 


(6) the Company shall deliver, or cause
to be delivered, to the Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each
stating that such transaction and the supplemental indenture, if any, in
respect thereto comply with this covenant and that all conditions precedent
herein provided for relating to such transaction have been satisfied.


 


(b) The
Company shall not permit any Subsidiary Guarantor to merge, consolidate or
amalgamate with or into any other Person (other than a merger of a Wholly Owned
Restricted Subsidiary into such Subsidiary Guarantor, or a merger of a
Subsidiary Guarantor into the Company or another Subsidiary Guarantor) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially
all its Property in any one transaction or series of transactions unless:


 


(1) such Subsidiary Guarantor will be
the Surviving Person or the Surviving Person (if other than such Subsidiary
Guarantor) formed by such merger, consolidation or amalgamation or to which
such sale, transfer, assignment, lease, conveyance or disposition is made will
be a corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;


 


(2) the Surviving Person (if other than
such Subsidiary Guarantor) expressly assumes, by a Subsidiary Guarantee or a
supplement to the Second Priority Subsidiary Guarantee Agreement or a
supplemental indenture in form reasonably satisfactory to the Trustee, executed
and delivered to the Trustee by such Surviving Person, the due and punctual
performance and observance of all the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee;


 


(3) immediately before and after giving
effect to such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (3), any Debt that becomes, or is
anticipated to become, an obligation of the Surviving Person, the Company or
any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person, the Company or
such Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be continuing;
and


 


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(4) the Company shall deliver, or cause
to be delivered, to the Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each
stating that such transaction and such Subsidiary Guarantee, if any, in respect
thereto comply with this covenant and that all conditions precedent herein
provided for relating to such transaction have been satisfied.


 


The foregoing
provisions (other than clause (3)) shall not apply to (A) any transactions
which do not constitute an Asset Sale if the Subsidiary Guarantor is otherwise
being released from its Subsidiary Guarantee at the time of such transaction in
accordance with this Indenture and the Second Priority Collateral Documents or (B) any
transactions which constitute an Asset Sale if the Company has complied with Section 4.06
and the Subsidiary Guarantor is released from its Subsidiary Guarantee at the
time of such transaction in accordance with this Indenture and the Second
Priority Collateral Documents.


 


The Surviving
Person shall succeed to, and be substituted for, and may exercise every right
and power of the Company under this Indenture (or of the Subsidiary Guarantor
under the Subsidiary Guarantee, as the case may be), but the predecessor
Company in the case of:


 


(a) a
sale, transfer, assignment, conveyance or other disposition (unless such sale,
transfer, assignment, conveyance or other disposition is of all or
substantially all the assets of the Company as an entirety or virtually as an
entirety); or


 


(b) a
lease,


 


shall not be
released from any obligation to pay the principal of, premium, if any, and
interest on, the Securities.


 


ARTICLE
VI


 


Defaults and Remedies


 


SECTION 6.01.  Events of
Default.  The following events shall
be “Events of Default”:


 


(a) the
Company fails to make the payment of any interest on any of the Securities when
the same becomes due and payable, and such failure continues for a period of 30
days;


 


(b) the
Company fails to make the payment of any principal of, or premium, if any, on
any of the Securities when the same becomes due and payable at its Stated
Maturity, upon acceleration, redemption, optional redemption, required
repurchase or otherwise;


 


(c) the
Company fails to comply with Article V;


 


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(d) the
Company fails to comply with any covenant or agreement in the Securities or in
this Indenture (other than a failure that is the subject of the foregoing
clause (a), (b) or (c)) and such failure continues for 30 days after
written notice is given to the Company as provided below;


 


(e) a
default under any Debt by the Company or any Restricted Subsidiary that results
in acceleration of the final maturity of such Debt, or the failure to pay any
such Debt at final maturity (giving effect to applicable grace periods), in an
aggregate amount in excess of $35.0 million or its foreign currency equivalent
at the time (the “cross acceleration provisions”);


 


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


 


(1) commences a voluntary case;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


and in each such case the order or decree
remains unstayed and in effect for 45 days; or


 


(h) any
judgment or judgments for the payment of money in an aggregate amount in excess
of $35.0 million or its foreign currency equivalent at the time is
rendered against the Company or any Restricted Subsidiary and shall not be
waived, satisfied or discharged for any period of 30 consecutive days during
which a stay of enforcement shall not be in effect;


 


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(i) any
Subsidiary Guarantee of a Significant Subsidiary ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary Guarantee
and this Indenture) and such default continues for 20 days after notice or
any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms
its obligations under its Subsidiary Guarantee (the “guarantee provisions”);
and


 


(j) the
material impairment of the security interests under the Second Priority
Collateral Documents (other than in accordance with the terms of the Second
Priority Collateral Documents and this Indenture as each may be amended from
time to time) for any reason other than the satisfaction in full of all
obligations under this Indenture and discharge of the Second Priority
Collateral Documents and this Indenture or any security interest created
thereunder shall be declared invalid or unenforceable or the Company or any of
its Subsidiaries asserting, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable (the “security
default provisions”).


 


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


 


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


 


A Default
under clause (d), (i) or (j) is not an Event of Default until the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Securities then outstanding notify the Company (and in the case of such
notice by Holders, the Trustee) of the Default and the Company does not cure
such Default within the time specified after receipt of such notice.  Such notice must specify the Default, demand
that it be remedied and state that such notice is a “Notice of Default”.


 


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


 


SECTION 6.02.  Acceleration.  If an Event of Default with respect to the
Securities (other than an Event of Default specified in Section 6.01(f) or
6.01(g) with respect to the Company) shall have occurred and be
continuing, the Trustee by notice to the Company, or the Holders of not less
than 25% in aggregate principal amount of the Securities then outstanding by
notice to the Company and the Trustee, may declare to be immediately due and
payable the principal amount at maturity of all the Securities then
outstanding, plus accrued but unpaid interest to the date of acceleration on
all the Securities to be due and payable. 
Upon such a declaration, such principal and interest shall be due and
payable immediately.  If an Event of
Default specified in 


 


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Section 6.01(f) or
6.01(g) with respect to the Company occurs, the principal of and accrued
and unpaid interest on all the Securities shall, automatically and without any
action by the Trustee or any Holder, become and be immediately due and
payable.  The Holders of a majority in
aggregate principal amount of the outstanding Securities by notice to the
Trustee and the Company may rescind and annul such declaration of acceleration
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal, premium or interest that has become due solely because of the
acceleration.  No such rescission shall
affect any subsequent Default or impair any right consequent thereto.


 


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


 


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


 


SECTION 6.04.  Waiver of
Past Defaults.  The Holders of a
majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may waive an existing Default and its consequences except
(i) a Default in the payment of the principal of, premium, if any, or
interest on a Security or (ii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder
affected.  When a Default is waived, it
is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.


 


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


 


SECTION 6.06.  Limitation
on Suits.  A Holder may not pursue
any remedy with respect to this Indenture or the Securities unless:


 


(1) such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default;


 


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(2) the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding shall have made a
written request, and such Holder or Holders shall have offered reasonable
indemnity to the Trustee to pursue a remedy; and


 


(3) the Trustee has failed to institute
such proceeding and has not received from the Holders of at least a
majority in aggregate principal amount of the Securities outstanding a
direction inconsistent with such request, within 60 days after such notice,
request and offer.


 


The foregoing
limitations on the pursuit of remedies by a Holder shall not apply to a suit
instituted by a Holder for the enforcement of payment of the principal of and
premium, if any, or interest payable with respect to such Security on or after
the applicable due date specified in such Security.  A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.


 


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


 


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


 


SECTION 6.09.  Trustee May File
Proofs of Claim.  The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders (it being understood it shall be under no obligation to do so), to pay
to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.


 


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


 


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


 


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


 


THIRD:  to the Company.


 


The Trustee
may fix a record date and payment date for any payment to Holders pursuant to
this Section 6.10.  At least
15 days before such record date, the Company shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and amount
to be paid.


 


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


 


SECTION 6.12.  Waiver of
Stay or Extension Laws.  The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.


 


SECTION 6.13.  Enforcement
of Remedies.  Notwithstanding any of
the foregoing, any enforcement of the Guarantees under the Second Priority
Guarantee Agreement or any remedies with respect to the Second Priority
Collateral under the Second Priority Collateral Documents is subject to the
provisions of the Intercreditor Agreement.


 


ARTICLE
VII


 


Trustee


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(d) Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b) and (c) of this Section 7.01.


 


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


 


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


 


(g) No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers.


 


(h) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the provisions of the TIA, and the provisions of this Article VII
shall apply to the Trustee in its role as Registrar, Paying Agent and Security
Custodian.


 


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(i) The
Trustee shall not be deemed to have notice of a Default or an Event of Default
unless (i) the Trustee has received written notice thereof from the
Company or any Holder or (ii) a Trust Officer shall have actual knowledge
thereof.


 


SECTION 7.02.  Rights of
Trustee.  (a)  The Trustee may
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.  The Trustee may, however, in its discretion
make such further inquiry or investigation into such facts or matters as it may
see fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.


 


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


 


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


 


(d) The
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers; provided,
however, that, subject to paragraph (b) of Section 7.01, the
Trustee’s conduct does not constitute willful misconduct or negligence.


 


(e) The
Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to 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
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.


 


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


 


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


 


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(i) 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.


 


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


 


SECTION 7.03.  Individual
Rights of Trustee.  The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee.  Any Paying Agent, Registrar or co-registrar
may do the same with like rights. 
However, the Trustee must comply with Sections 7.10 and 7.11.


 


SECTION 7.04.  Trustee’s
Disclaimer.  The Trustee shall not be
responsible for and makes no representation as to the validity, priority or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company’s use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.


 


SECTION 7.05.  Notice of
Defaults.  If a Default or Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Holder notice of the Default or Event of Default within 30
days after it is known to a Trust Officer or written notice of it is received
by the Trustee.  Except in the case of a
Default or Event of Default in payment of principal of or interest on any
Security, the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Holders.


 


SECTION 7.06.  Reports by
Trustee to Holders.  Within 60 days
after February 1 each year beginning with February 1, 2009, the
Trustee shall mail to each Holder a brief report dated as of such February 1
that complies with TIA § 313(a), if and to the extent required by such
subsection.  The Trustee shall also
comply with TIA § 313(b).


 


A copy of each
report at the time of its mailing to Holders shall be filed with the Commission
and each stock exchange (if any) on which the Securities are listed.


 


The Company
agrees to notify promptly the Trustee whenever the Securities become listed on
any stock exchange and of any delisting thereof.


 


SECTION 7.07.  Compensation
and Indemnity.  The Company and the
Guarantors, jointly and severally, shall pay to the Trustee from time to time
reasonable compensation for its services. 
The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Company and the Guarantors, jointly and severally, shall reimburse
the Trustee upon request for all reasonable out-of-


 


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pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services.  Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee’s agents, counsel, accountants and experts.  The Company and the Guarantors, jointly and
severally, shall indemnify the Trustee against any and all loss, liability,
claim, damage or expense (including reasonable attorneys’ fees and expenses)
incurred by it in connection with the acceptance and administration of this
trust and the performance of its duties hereunder.  The Trustee shall notify the Company promptly
of any claim of which a Trust Officer has received notice for which it may seek
indemnity.  Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder
unless the Company has been prejudiced thereby. 
The Company shall defend the claim, and the Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel.  The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee’s own willful misconduct, negligence or bad
faith.  The Company need not pay for any
settlement made by the Trustee without the Company’s consent, such consent not
to be unreasonably withheld.  All
indemnifications and releases from liability granted hereunder to the Trustee
shall extend to its officers, directors, employees, agents, successors and
assigns.


 


To secure the
Company’s payment obligations in this Section 7.07, the Trustee shall have
a lien prior to the Securities on all money or property held or collected by
the Trustee other than money or property held in trust to pay principal of and
interest on particular Securities.


 


The Company’s
payment obligations pursuant to this Section 7.07 shall survive the
resignation or removal of the Trustee and the discharge or termination of this
Indenture.  When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(f) or
(g) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.


 


SECTION 7.08.  Replacement
of Trustee.  The Trustee may resign
at any time by so notifying the Company. 
The Holders of a majority in aggregate principal amount of the
Securities the outstanding may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee; provided that so long as no Default
or Event of Default has occurred and is continuing, the Company shall have the
right to consent to the successor Trustee, such consent not to be unreasonably
withheld.  The Company shall 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 otherwise becomes
incapable of acting.


 


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


 


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


 


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


 


If the Trustee fails to
comply with Section 7.10, any Holder who has been a bona fide Holder of a
Security for at least six months may petition at the expense of the Company any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.


 


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


 


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


 


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


 


SECTION 7.10.  Eligibility; Disqualification.  The Trustee shall at all times satisfy the
requirements of TIA

§ 310(a).  The Trustee shall have
(or, in the case of 


 


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a corporation included in a
bank holding company system, the related bank holding company shall have) a
combined capital and surplus of at least $50,000,000 as set forth in its (or
its related bank holding company’s) most recent published annual report of
condition.  The Trustee shall comply with
TIA § 310(b), subject to the penultimate paragraph thereof; provided,
however, that there shall be excluded from the operation of TIA
§ 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in
TIA § 310(b)(1) are met.


 


SECTION 7.11.  Preferential Collection of Claims
Against Company.  The Trustee
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.


 


ARTICLE VIII 


 


Discharge
of Indenture; Defeasance


 


SECTION 8.01.  Discharge of Liability on
Securities; Defeasance.  (a) 
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation
or (ii) all outstanding Securities have become due and payable, whether at
maturity or as a result of the mailing of a notice of redemption pursuant to Article III
and the Company irrevocably deposits with the Trustee funds sufficient to pay
at maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such redemption date (other than Securities replaced
pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect.  The Trustee shall acknowledge satisfaction
and discharge of this Indenture on demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel and at the cost and expense of
the Company.


 


(b) Subject to Sections
8.01(c) and 8.02, the Company at any time may terminate (i) all of
its obligations under the Securities and this Indenture (“legal defeasance
option”) or (ii) its obligations under Sections 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.14 and the operation
of Sections 6.01(e), 6.01(f), 6.01(g), 6.01(h), 6.01(i) and 6.01(j) (but,
in the case of Sections 6.01(f) and (g), with respect only to
Significant Subsidiaries) and the limitations contained in Section 5.01(a)(5)
(“covenant defeasance option”). 
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option.


 


If the Company exercises its
legal defeasance option, payment of the Securities may not be accelerated
because of an Event of Default.  If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in
Sections 6.01(d) (with respect to the covenants of Article IV
identified in the immediately preceding paragraph), 6.01(e), 6.01(f), 6.01(g),
6.01(h), 6.01(i) or 6.01(j) (with respect only to Significant
Subsidiaries in the case of Sections 6.01(f) and 6.01(g)) or because of
the failure of the Company to 


 


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comply
with the limitations contained in Section 5.01(a)(5).  If the Company exercises its legal defeasance
option or its covenant defeasance option, the Second Priority Lien, as it
pertains to the Securities, will be released and each Subsidiary Guarantor will
be released from all its obligations under its Subsidiary Guarantee, as it
pertains to the Securities.


 


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


 


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


 


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


 


(a) the Company
irrevocably deposits in trust with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;


 


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


 


(c) 123 days pass after
the deposit is made and during the 123-day period no Default specified in Section 6.01(f) or
6.01(g) occurs with respect to the Company or any other Person making such
deposit which is continuing at the end of the period;


 


(d) no Default or Event
of Default has occurred and is continuing on the date of such deposit and after
giving effect thereto;


 


(e) such deposit does
not constitute a default under any other agreement or instrument binding on the
Company;


 


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


 


(g) in the case of the
legal defeasance option, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that


 


(1) the Company has received from the Internal Revenue Service a
ruling; or


 


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(2) since the date of this Indenture there has been a change in
the applicable Federal income tax law, to the effect, in either case, that, and
based thereon such Opinion of Counsel shall confirm that, the Holders will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred;


 


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


 


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


 


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


 


SECTION 8.03.  Application of Trust Money.  The Trustee shall hold in trust money
or U.S. Government Obligations deposited with it pursuant to this Article VIII.  It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities.


 


SECTION 8.04.  Repayment to Company.  The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.


 


Subject to any applicable
abandoned property law, the Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of principal or
interest that remains unclaimed for two years, and, thereafter, Holders
entitled to the money must look to the Company for payment as general
creditors.


 


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


 


SECTION 8.06.  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 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, 


 


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


 


ARTICLE IX 


 


Amendments


 


SECTION 9.01.  Without Consent of Holders.  Without the consent of any Holders, the
Company, when authorized by a Board Resolution, the Subsidiary Guarantors and
the Trustee may amend this Indenture or the Securities and, subject to any
other consent required under the terms of the applicable Second Priority
Collateral Documents, the Second Priority Collateral Documents, in each case
without notice to:


 


(a) cure any ambiguity,
omission, defect or inconsistency;


 


(b) provide for the
assumption by a successor corporation of the obligations of the Company or any
Subsidiary Guarantor under this Indenture or any Second Priority Collateral
Documents;


 


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


 


(d) add additional Guarantees with respect to the
Securities or release Subsidiary Guarantors from Subsidiary Guarantees
as provided by the terms of this Indenture or the Subsidiary Guarantees;


 


(e) further secure the
Securities (and if such security interest includes Liens on Property of the
Company, provide for releases of such Property on terms comparable to the terms
on which Collateral constituting Property of Subsidiary Guarantors may be
released), release all or any portion of the Collateral pursuant to the terms
of the Second Priority Collateral Documents, add to the covenants of the
Company or the Subsidiary Guarantors for the benefit of the Holders or
surrender any right or power herein conferred upon the Company;


 


(f) in the case of this
Indenture, make any change that does not adversely affect the rights of any
Holder;


 


(g) make any change to
the subordination provisions of a Subsidiary Guarantee or any Second Priority
Collateral Documents that would limit or terminate the benefits available to
any holder of Senior Obligations under such provisions;


 


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(h) make any change to
comply with any requirements of the Commission in connection with the
qualification of this Indenture under the Trust Indenture Act; or


 


(i) to conform the text
of this Indenture or the Securities to any provision of the “Description of
Notes” contained in the Prospectus Supplement.


 


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


 


SECTION 9.02.  With Consent of Holders.  (a)  The Company, when authorized by a
Board Resolution, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities and, subject to any other consent required under
the terms of the applicable Second Priority Collateral Documents, the Second
Priority Collateral Documents, and (subject as aforesaid) waive any past
default or compliance with any provisions (except, in the case of this
Indenture, as provided in Section 6.04), with the consent of the Holders
of at least a majority in aggregate principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Securities). 
However, without the consent of each Holder affected thereby, an
amendment may not:


 


(1) amend this Indenture to reduce the amount of Securities whose
Holders are required to consent to an amendment or waiver;


 


(2) amend this Indenture to reduce the rate of or extend the time
for payment of interest on any Security;


 


(3) amend this Indenture to reduce the principal of or extend the
Stated Maturity of any Security;


 


(4) amend this Indenture to make any Security payable in money
other than that stated in the Security;


 


(5) amend this Indenture or any Subsidiary Guarantee to impair the
right of any Holder to receive payment of principal of and interest on such Holder’s
Securities on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Securities or
any Subsidiary Guarantee;


 


(6) amend this Indenture or any Subsidiary Guarantee to
subordinate the Securities or any Subsidiary Guarantee to any other obligation
of the Company or the applicable Subsidiary Guarantor (except in the case of
the Second Priority Subsidiary Guarantee Agreement, as permitted by paragraph (b) below);


 


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(7) amend this Indenture to reduce the premium payable upon the
redemption of any Security or change the time at which any Security may be
redeemed in accordance with Article III;


 


(8) amend this Indenture to reduce the premium payable upon a
Change of Control or, at any time after a Change of Control has occurred, amend
the definition of “Change of Control” or change the time at which any Change of
Control Offer relating thereto must be made or at which the Securities must be
repurchased pursuant to such Change of Control Offer; or


 


(9) at any time after the Company is obligated to make a
Prepayment Offer with the Excess Proceeds from Asset Sales, amend this
Indenture to change the time at which such Prepayment Offer must be made or at
which the Securities must be repurchased pursuant thereto.


 


(b) Without
limiting the foregoing, the Holders will be deemed to have consented for
purposes of the Second Priority Collateral Documents (including for purposes of
determining actions of the Second Priority Instructing Group) to (i) any
amendment, waiver or other modification (including any consent thereunder) of
the Second Priority Collateral Documents (including any annexes, exhibits or
schedules thereto) that would not be adverse to the Holders in any material
respect, as reasonably determined by the Board of Directors (as evidenced by a
Board Resolution), and (ii) to any of the following amendments, waivers
and other modifications to the Second Priority Collateral Documents (the “Second
Priority Collateral Documents Amendments”):


 


(1) an amendment to the
Intercreditor Agreement to modify the restriction on changes to Second Priority
Collateral Documents and Second Priority Debt Documents without the consent of
holders of Senior Obligations or their representatives (but without modifying
any provisions relating to consent of Holders or other Second Priority Debt to
various actions);


 


(2) to the extent such
amendment, waiver or modification relates to the amount (including amounts of
Senior Obligations and Second Priority Debt) or the terms of Debt (including as
reflected in related definitions such as “Replacement Second Priority Debt”)
that may be secured by Liens on the Collateral, as may be consented to by the
Senior Collateral Agent or the Senior Banks in accordance with the terms of the
Intercreditor Agreement or the applicable Second Priority Collateral Document
(but without limiting any of the restrictive covenants and related definitions
contained in this Indenture);


 


(3) an
amendment to the Second Priority Subsidiary Guarantee Agreement to subordinate,
on comparable terms to those provided therein with respect to Senior Bank
Obligations, the obligations of the Subsidiary Guarantors under the Second
Priority Subsidiary Guarantee Agreement to 


 


82





















 


the prior payment when due
of the guarantees by such Subsidiary Guarantor of any Additional Senior Debt; provided
that such amendment applies equally with respect to all Second Priority Debt;


 


(4) an amendment to the
Second Priority Collateral Documents to provide for a class of Secured
Obligations having rights in respect of the Collateral that are subordinated to
the Second Priority Debt Obligations to at least the same extent that the
Second Priority Debt Obligations are subordinated to the Senior Obligations, as
reasonably determined by the Board of Directors (as evidenced by a Board
Resolution); provided that (A) such Debt is not secured by Liens on
any assets other than Collateral and (B) to the extent such Secured
Obligations represent Debt of a Subsidiary of the Company, such Subsidiary is a
Subsidiary Guarantor and such Debt is subordinated to the prior payment of the
Second Priority Debt Obligation to at least the same extent as the Subsidiary
Guarantees are subordinated to the Senior Obligations (determined as
aforesaid);


 


(5) an amendment to the
Intercreditor Agreement to provide, on comparable terms to those provided
therein with respect to Senior Bank Obligations, the lenders under any Senior
Obligations (including Additional Senior Debt Obligations) with rights and
remedies with respect to the Collateral, including the rights to distributions
of proceeds of Collateral and rights to control all remedies or other
activities related to the Collateral so long as any Senior Obligations remain
outstanding, comparable to those provided therein with respect to the Senior
Bank Obligations; provided that (A) the holders of Senior
Obligations and their representatives have obligations to holders of Second
Priority Debt and their representatives comparable to the obligation of holders
of Senior Bank Obligations and their representatives provided therein and (B) such
amendment applies equally with respect to all Second Priority Debt;


 


(6) an amendment to the
Intercreditor Agreement to change the conditions that must be satisfied in
order for a representative of additional Debt to become a party to the
Intercreditor Agreement; provided that (A) such amendment is
consented to by the Senior Collateral Agent in accordance with the terms of the
Intercreditor Agreement, (B) the conditions continue to require a
representative of such holders on behalf of such holders to become a party to
the Intercreditor Agreement, (C) such amendment applies equally with respect
to all Second Priority Debt, (D) the ability of the Second Priority
Collateral Trustee and the holders of Second Priority Debt and their
representatives to enforce their rights under the Intercreditor Agreement are
not adversely affected in any material respect by such amendment and (E) the
Lien on the Collateral securing the Subsidiary Guarantees of the Securities
will not be impaired (other than the addition of new Secured Obligations that
will be secured by the Collateral) as a result of implementation of such
amendment;


 


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(7) an amendment,
waiver or modification to the Second Priority Collateral Documents to
effectuate (A) (i) the release of assets included in the Collateral
from the Liens securing the Securities (I) if all other Liens on those
assets securing the Senior Obligations (including all commitments thereunder)
are released, (II) if the Company or a Subsidiary of the Company provides
substitute Collateral for all or a portion of those assets with at least an
equivalent fair value, as determined in good faith by the Board of Directors
(as evidenced by a Board Resolution) or (III) if those assets are owned by
a Subsidiary that is a Subsidiary Guarantor and that Subsidiary Guarantor is
released from its Subsidiary Guarantee; provided that in the case of
each of clauses (I)-(III) after giving effect to the release there remains
no Lien on such assets securing any Secured Obligations or (ii) the
release of the Subsidiary Guarantee of a Subsidiary Guarantor of the Securities
upon such Subsidiary Guarantor ceasing to Guarantee or be an obligor in respect
of, or to pledge any of its assets to secure, any Senior Obligations; provided
that after giving effect to the release the Subsidiary Guarantor ceases to
Guarantee or be an obligor in respect of, or to pledge its assets to secure,
any Secured Obligations and provided, in the case of both (i) and
(ii), that after giving effect to the release, at least $300 million in
aggregate principal amount of Senior Obligations under Credit Facilities will
remain outstanding or (B) a release of Collateral or a Subsidiary
Guarantee of a Subsidiary Guarantor otherwise in accordance with the terms of
this Indenture and the Second Priority Collateral Documents;


 


(8) with respect to any
amendment, waiver or modification agreed to by the Senior Collateral Agent or
the holders of the Senior Obligations under any provision of any Senior
Collateral Documents, a comparable amendment, waiver or modification to the
comparable provision of the comparable Second Priority Collateral Document; provided
that such amendment, waiver or modification applies equally with respect to all
Second Priority Debt;


 


(9) upon request of the
Company without consent of any Holders unless, within 20 Business Days after
written notice of the proposed amendment, waiver or modification is mailed to
the Trustee and Holders, 25% in interest of the Holders delivers to the Trustee
written objection thereto;


 


(10) with the written
consent of the Holders of at least a majority of the aggregate principal amount
of the Securities then outstanding pursuant to Section 9.02(a); or


 


(11) an amendment, waiver or
modification permitted pursuant to Section 9.01.


 


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At
the request of the Company, the Trustee shall execute and deliver any
documents, instructions or instruments evidencing such deemed consent of the
Holders. The Trustee, in its capacity as Second Priority Representative to
Holders, shall take such action under the Second Priority Collateral Documents
as may be requested by the Company to give effect to any such amendment, waiver
or modification. Notwithstanding the foregoing, no such consent or deemed
consent shall be deemed or construed to represent an amendment or waiver, in
whole or in part, of any provision of this Indenture or the Securities.


 


The
foregoing shall not limit the right of the Company to amend, waive or otherwise
modify the Second Priority Collateral Documents in accordance with their terms.


 


(c) In
addition and without limiting the foregoing, (x) Collateral securing a
Subsidiary Guarantee of the Securities or (y) a Subsidiary Guarantee of
the Securities provided by a Subsidiary Guarantor may be released only in
respect of the Securities:


 


(i) upon
request of the Company without consent of any Holder unless, within 20 Business
Days after written notice of the proposed release of such (1) Collateral
from the Liens securing Subsidiary Guarantees of the Securities or (2) Subsidiary
Guarantor, as the case may be, is mailed to the Trustee and the Holders,
Holders of 25% of the outstanding principal amount of Securities deliver to the
Company a written objection to such release; or


 


(ii) with
the written consent of the Holders of at least a majority of the aggregate
principal amount of the Securities then outstanding.


 


Under
the circumstances described in clauses (i) and (ii) above, Holders
shall also be deemed to have consented to such release for purposes of any
consent required under the Second Priority Collateral Documents (including for
purposes of determining actions of the Second Priority Instructing Group).


 


At
the request of the Company, the Trustee shall execute and deliver any
documents, instructions or instruments evidencing the consent of the Holders to
such release.  The Trustee, in its
capacity as Second Priority Representative for Holders, shall take such action
under the Second Priority Collateral Documents or otherwise as may be requested
by the Company to give effect to any such release.


 


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


 


After an amendment under
this Section becomes effective, the Company shall mail to each Holder at
such Holder’s address appearing in the Security Register a notice briefly
describing such amendment.  The failure
to give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.


 


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


 


SECTION 9.04.  Revocation
and Effect of Consents and Waivers. 
A consent to an amendment or a waiver by a Holder of a Security shall
bind the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent or waiver is not made on the Security.  However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder’s Security or portion of the
Security if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. 
After an amendment or waiver becomes effective, it shall bind every
Holder.  An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.


 


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


 


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


 


SECTION 9.06.  Trustee To
Sign Amendments.  The Trustee shall
sign any amendment or release authorized pursuant to this Article IX if
the amendment or release does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
If such amendment or release does adversely affect the rights, duties,
liabilities or immunities of the Trustee, the Trustee may but need not sign
it.  In signing such amendment or release
the Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that
such amendment or release is authorized or permitted by this Indenture.


 


SECTION 9.07.  Payment
for Consent.  Neither the Company nor
any Affiliate of the Company shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this 


 


86





















 


Indenture or the Securities unless such consideration is offered to be
paid to all Holders that so consent, waive or agree to amend in the time frame
set forth in solicitation documents relating to such consent, waiver or
agreement.


 


ARTICLE
X


 


Miscellaneous


 


SECTION 10.01.  Trust
Indenture Act Controls.  If any
provision of this Indenture limits, qualifies or conflicts with another
provision that is required to be included in this Indenture by the TIA, the
required provision shall control.


 


SECTION 10.02.  Notices.  Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
and addressed as follows:


 


if to the
Company:


 


Rite Aid
Corporation


30 Hunter Lane


Camp Hill,
Pennsylvania 17011


facsimile:
717-760-7867


 


Attention
of:  Robert B. Sari, Esq.


 


if to the
Trustee:


 


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


2 North
LaSalle Street, Suite 1020


Chicago, IL
60602


facsimile:
312-827-8542


 


Attention
of:  Corporate Trust Administration


 


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


 


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


 


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


 


SECTION 10.03.  Communication
by Holders with Other Holders. 
Holders may communicate pursuant to TIA § 312(b) with other
Holders with respect to 


 


87





















 


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


 


SECTION 10.04.  Certificate
and Opinion as to Conditions Precedent. 
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:


 


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


 


(2) except in the case of Section 3.01
under which an opinion will not be required, an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee stating that, in the opinion
of such counsel, all such conditions precedent have been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers’ Certificate or certificates of public officials.


 


SECTION 10.05.  Statements
Required in Certificate or Opinion. 
Each certificate with respect to compliance with a covenant or condition
provided for in this Indenture shall include:


 


(1) a statement that the individual
making such certificate 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
contained in such certificate are based;


 


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


 


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


 


Each opinion
with respect to compliance with a covenant or condition provided for in this
Indenture shall be in form and substance reasonably satisfactory to the party
requesting such opinion and the party giving such opinion.


 


SECTION 10.06.  When
Securities Disregarded.  In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such 


 


88





















 


direction,
waiver or consent, only Securities that the Trustee knows are so owned shall be
so disregarded.  Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.


 


SECTION 10.07.  Rules by
Trustee, Paying Agent and Registrar. 
The Trustee may make reasonable rules for action by or a meeting of
Holders.  The Registrar and the Paying
Agent or co-registrar may make reasonable rules for their functions.


 


SECTION 10.08.  Legal
Holidays.  A “Legal Holiday” is a
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of New York.  If a
payment date is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.  If a regular record
date is a Legal Holiday, the record date shall not be affected.


 


SECTION 10.09.  Governing
Law.  THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW.


 


SECTION 10.10.  No
Recourse Against Others.  A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Holder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.


 


SECTION 10.11.  Successors.  All agreements of the Company in this
Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.


 


SECTION 10.12.  Multiple
Originals.  The parties may sign any
number of copies of this Indenture.  Each
signed copy shall be an original, but all of them together represent the same
agreement.  One signed copy is enough to
prove this Indenture.


 


SECTION 10.13.  Table of
Contents; Headings.  The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.


 


SECTION 10.14.  Waiver of
Jury Trial.  EACH OF THE COMPANY AND
THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.


 


89





















 


SECTION 10.15.  Force
Majeure.  In no event shall the
Trustee be responsible or liable for any failure or delay in the performance of
its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, accidents, acts of
war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it being
understood that the Trustee shall use reasonable efforts which are consistent
with accepted practices in the banking industry to resume performance as soon
as practicable under the circumstances.


 


90





















 


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


 


	
   

  	
  RITE AID CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert B. Sari

  
	
   

  	
   

  	
  Name:

  	
  Robert B. Sari

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,

  
	
   

  	
   

  	
   

  	
  Secretary and General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EACH OF THE SUBSIDIARY

  
	
   

  	
  GUARANTORS LISTED ON SCHEDULE

  
	
   

  	
  A HERETO,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert B. Sari

  
	
   

  	
   

  	
  Name:

  	
  Robert B. Sari

  
	
   

  	
   

  	
  Title:

  	
  Authorized Person

  
					



 

















 


	
   

  	
  THE BANK OF NEW YORK MELLON

  TRUST COMPANY, N.A., as Trustee,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ D.G. Donovan

  
	
   

  	
   

  	
  Name:

  	
  D.G. Donovan

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 

















 


SCHEDULE A


 


Subsidiary
Guarantors


 


Corporations


 


3581 Carter Hill Road–Montgomery Corp.


Harco, Inc.


K&B Alabama Corporation


Rite Aid of Alabama, Inc.


Thrifty Corporation


Thrifty PayLess, Inc.


Rite Aid of Connecticut, Inc.


Eagle Managed Care Corp.


K&B, Incorporated


Rite Aid Drug Palace, Inc.


Rite Aid Hdqtrs. Corp.


Rite Aid Hdqtrs. Funding, Inc.


Rite Aid of Delaware, Inc.


Rite Aid Transport, Inc.


Rite Fund, Inc.


Rite Investments Corp.


Rx Choice, Inc.


Rite Aid Realty Corp.


Patton Drive and Navy Boulevard Property Corporation


Rite Aid of Florida, Inc.


Rite Aid of Georgia, Inc.


Rite Aid of Illinois, Inc.


Rite Aid of Indiana, Inc.


Rite Aid of Kentucky, Inc.


K&B Louisiana Corporation


K&B Services, Incorporated


Rite Aid of Maine, Inc.


Rite Aid of Massachusetts, Inc.


GDF, Inc.


READ’s Inc.


Rite Aid of Maryland, Inc.


Apex Drug Stores, Inc.


PDS-1 Michigan, Inc.


Perry Distributors, Inc.


Perry Drug Stores, Inc.


Ram–Utica, Inc.


RDS Detroit, Inc.


Rite Aid of Michigan, Inc.


K&B Mississippi Corporation


Rite Aid of New Hampshire, Inc.


657–659 Broad St. Corp.


 

















 


Lakehurst and Broadway Corporation


Rite Aid of New Jersey, Inc.


Rite Aid of New York, Inc.


Rite Aid Rome Distribution Center, Inc.


Rite Aid of North Carolina, Inc.


4042 Warrensville Center Road–Warrensville Ohio, Inc.


5600 Superior Properties, Inc.


Broadview and Wallings–Broadview Heights Ohio, Inc.


Rite Aid of Ohio, Inc.


The Lane Drug Company


Keystone Centers, Inc.


Rite Aid of Pennsylvania, Inc.


537 Elm Street Corporation


Rite Aid of South Carolina, Inc.


K&B Tennessee Corporation


Rite Aid of Tennessee, Inc.


K&B Texas Corporation


Rite Aid of Vermont, Inc.


England Street–Asheland Corporation


Rite Aid of Virginia, Inc.


5277 Associates, Inc.


Rite Aid of Washington, D.C., Inc.


Rite Aid of West Virginia, Inc.


Brooks Pharmacy, Inc.


Eckerd Corporation


EDC Licensing, Inc.


Genovese Drug Stores, Inc.


JCG Holdings (USA), Inc.


Maxi Drug North, Inc.


Maxi Drug, Inc.


P.J.C. Distribution, Inc.


P.J.C. Realty Co., Inc.


PJC Lease Holdings, Inc.


PJC Special Realty Holdings, Inc.


The Jean Coutu Group (PJC) USA, Inc.


Thrift Drug Services, Inc.


Thrift Drug, Inc.


Eckerd Fleet, Inc.


PJC of Massachusetts, Inc.


PJC Realty MA, Inc.


EDC Drug Stores, Inc.


MC Woonsocket, Inc.


PJC of Cranston, Inc.


PJC of East Providence, Inc.


PJC of Rhode Island, Inc.


P.J.C. of West Warwick, Inc.


 


2

















 


Maxi Green Inc.


PJC of Vermont, Inc.


 


Limited
Liability Companies


 


1515 West State Street Boise, Idaho, LLC


Ann & Government Streets–Mobile, Alabama, LLC


Central Avenue & Main Street Petal-MS, LLC


Eighth and Water Streets–Urichsville, Ohio, LLC


Munson & Andrews, LLC


Name Rite, L.L.C.


Paw Paw Lake Road & Paw Paw Avenue-Coloma, Michigan, LLC


Rite Aid Services, L.L.C.


Silver Springs Road–Baltimore, Maryland/One, LLC


Silver Springs Road–Baltimore, Maryland/Two, LLC


State & Fortification Streets–Jackson, Mississippi, LLC


State Street and Hill Road–Gerard, Ohio, LLC


Tyler and Sanders Roads, Birmingham–Alabama, LLC


1740 Associates, LLC


Northline & Dix–Toledo–Southgate, LLC


Seven Mile and Evergreen–Detroit, LLC


764 South Broadway–Geneva, Ohio, LLC


Gettysburg and Hoover–Dayton, Ohio, LLC


Mayfield & Chillicothe Roads–Chesterland, LLC


112 Burleigh Avenue Norfolk, LLC


Fairground, L.L.C.


JCG (PJC) USA, LLC


PJC Dorchester Realty LLC


PJC East Lyme Realty LLC


PJC Haverhill Realty LLC


PJC Hermitage Realty LLC


PJC Hyde Park Realty LLC


PJC Manchester Realty LLC


PJC Mansfield Realty LLC


PJC New London Realty LLC


PJC Peterborough Realty LLC


PJC Providence Realty LLC


PJC Realty N.E. LLC


PJC Revere Realty LLC


 


Limited
Partnerships


 


Maxi Drug South, L.P.


 


3














 


Exhibit A


 


[FORM OF
FACE OF SECURITY]


 


[Global
Securities Legend]


 


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


 


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


 


[Definitive
Securities Legend]


 


IN CONNECTION
WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT
SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.


 

















 


[FORM OF
FACE OF SECURITY]


 


	
  No.:

  	
  [up to]**

  



 


10.375% Senior
Secured Note due 2016


 


CUSIP No. 767754BV5


 


ISIN No. US7677554BV53


 


RITE AID
CORPORATION, a Delaware corporation, promises to pay to [Cede &
Co.]**, or registered assigns, the principal sum [         ]*
[as set forth on the Schedule of Increases or Decreases annexed hereto]** on July 15,
2016.


 


Interest
Payment Dates:  July 15 and January 15, commencing on January 15,
2009.


 


Record Dates: July 1
and January 1.


 






*  Insert for Definitive
Securities.


** Insert for Global Securities. 
If the Security is to be issued in global form, add the Global
Securities Legend from Exhibit A and the attachment from such Exhibit A
captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY”.


 


2

















 


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


 


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


 


	
   

  	
  RITE AID CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION


 


Dated:


 


THE BANK OF
NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee, certifies that this is

one of the Securities referred to in the Indenture.


 


 


	
  By:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  



 


3

















 


[FORM OF
REVERSE SIDE OF SECURITY]


 


10.375% Senior
Secured Note due 2016


 


1.  Interest


 


RITE AID
CORPORATION, a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
the “Company”), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. 
The Company will pay interest semiannually on July 15 and January 15
of each year, commencing January 15, 2009. 
Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from July 9,
2008.  Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue
principal at the rate per annum borne by the Securities plus 1% per annum, and
it shall pay interest on overdue installments of interest at the rate per annum
borne by the Securities to the extent lawful.


 


2.  Method of Payment


 


The Company
will pay interest on the Securities (except defaulted interest) to the Persons
who are registered Holders at the close of business on the January 1 or July 1next
preceding the interest payment date even if Securities are canceled after the
record date and on or before the interest payment date.  Holders must surrender Securities to a Paying
Agent to collect principal payments.  The
Company will pay principal and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts.  Payments in respect of
the Securities represented by a Global Security (including principal and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by the Depository. 
The Company will make all payments in respect of a Definitive Security
(including principal and interest), by mailing a check to the registered
address of each Holder thereof; provided, however, that payments
on the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).


 


3.  Paying Agent and Registrar


 


Initially, The
Bank of New York Mellon Trust Company, N.A., a banking association organized
and existing under the laws of the United States of America (the “Trustee”),
will act as Paying Agent and Registrar. 
The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice.  The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.


 


4

















 


4.  Indenture


 


The Company
issued the Securities under an Indenture dated as of  July 9, 2008
(the “Indenture”), among the Company, the Subsidiary Guarantors named
therein and the Trustee.  The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined in the Securities have the meanings ascribed thereto in the
Indenture.  The Securities are subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.


 


The Securities
are unsecured, unsubordinated obligations of the Company.  The Company’s obligations under the
Securities are Guaranteed, subject to certain limitations, by the Subsidiary
Guarantors pursuant to Subsidiary Guarantees, subject to release of the Subsidiary
Guarantees as provided in the Indenture or such Subsidiary Guarantee.  This Security is one of the Original
Securities referred to in the Indenture issued in an aggregate principal amount
of $470,000,000.  The Securities include
the Original Securities and an unlimited aggregate principal amount of
additional Securities that may be issued under the Indenture.  The Original Securities and such additional
Securities are treated as a single class of securities under the
Indenture.  The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Debt, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the
ability of the Company and each Subsidiary Guarantor to consolidate or merge
with or into any other Person or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all of the Property of the Company or
such Subsidiary Guarantor.


 


5.  Optional Redemption


 


The Company
may choose to redeem the Securities at any time.  If it does so, it may redeem all or any
portion of the Securities, at once or over time, after giving the required
notice under the Indenture.


 


To redeem the
Securities prior to July 15, 2012, the Company must pay a redemption price
equal to 100% of the principal amount of the Securities to be redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, but not
including, the Redemption Date (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date that is on or prior to the Redemption Date).  Any notice to Holders of such a redemption
shall include the appropriate calculation of the Redemption Price, but need not
include the Redemption Price itself.  The
actual redemption price must be set forth in an Officers’ Certificate delivered
to the Trustee no later than two Business Days prior to the Redemption Date.


 


5

















 


“Applicable
Premium” means, with respect to any Security on any Redemption Date, the
greater of (i) 1.0% of the principal amount of such Security and (ii) the
excess of (A) the present value at such Redemption Date of (1) the
Redemption Price of such Security at July 15, 2012 (such Redemption Price
being set forth in the table below) plus (2) all required interest
payments due on such Security through July 15, 2012 (excluding accrued but
unpaid interest), computed using a discount rate equal to the Treasury Rate on
such Redemption Date plus 75 basis points over (B) the principal amount of
such Security.


 


“Treasury
Rate” means, as of any Redemption Date, the yield to maturity as of such
Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two
Business Days prior to the 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 the Redemption Date to July 15, 2012;
provided, however, that if the period from the Redemption Date to
July 15, 2012 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.


 


On and after July 15,
2012, the Company may redeem the Securities in whole at any time or in part
from time to time at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest, if any, to, but not
including, the Redemption Date (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during
the 12-month period beginning on July 15 of the years set forth below:


 


	
  Redemption Period

  	
   

  	
  Price

  	
   

  
	
  2012

  	
   

  	
  105.188

  	
  %

  
	
  2013

  	
   

  	
  102.594

  	
  %

  
	
  2014 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


Notwithstanding
the foregoing, at any time and from time to time prior to July 15, 2011,
the Company may redeem up to 35% of the original aggregate principal amount of
the Securities (including Securities issued after July 9, 2008, if any)
with the proceeds from one or more Equity Offerings by the Company, at a
Redemption Price equal to 110.375% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to, but not including, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date that
is on or prior to the Redemption Date); provided, however, that
after giving effect to any such redemption, at least 65% of the original
aggregate principal amount of the Securities (including Securities issued after
July 9, 2008, if any) remains outstanding. 
Any such redemption shall be made within 75 days of such Equity Offering
upon not less than 30 nor more than 60 days’ prior notice.


 


6

















 


If the
optional Redemption Date is on or after a record date and on or before the
relevant Interest Payment Date, the accrued and unpaid interest, if any, will
be paid to the person or entity in whose name the Security is registered at the
close of business on that record date, and no additional interest will be
payable to Holders whose Securities shall be subject to repurchase.


 


6.  Sinking Fund


 


The Securities
are not subject to any sinking fund.


 


7.  Notice of Redemption


 


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


 


8.  (a)  Repurchase of Securities at the
Option of Holders upon Change of Control


 


Upon a Change
of Control, any Holder will have the right, subject to certain conditions
specified in the Indenture, to cause the Company to repurchase all or any part
of the Securities of such Holder at a purchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest, if
any, to, but not including, the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date that is on or prior to the date of purchase) as
provided in, and subject to the terms of, the Indenture.


 


8.  (b)  Prepayment Offer Upon Asset Sale


 


When the
aggregate amount of Excess Proceeds exceeds $50.0 million (taking into
account income earned on such Excess Proceeds, if any), the Company will be
required to make an offer to purchase (the “Asset Sales Prepayment Offer”)
the Securities, which offer shall be in the amount of the Allocable Excess
Proceeds, on a pro rata basis according to principal amount at maturity, at a
purchase price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to, but not including, the purchase date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant Interest Payment Date), in accordance with the procedures
(including prorating in the event of oversubscription) set forth in the
Indenture.  To the extent that any
portion of the amount of Net Available Cash remains after compliance with the
preceding sentence and provided that all Holders have been given the
opportunity to tender their Securities for purchase in accordance with the
Indenture, the Company or such Restricted Subsidiary may use such remaining
amount 


 


7

















 


for any purpose permitted by the Indenture and the amount of Excess
Proceeds will be reset to zero.


 


9.  Guarantees; Security


 


The Indenture
provides that, under certain circumstances, the Securities will be guaranteed
pursuant to Subsidiary Guarantees. 
Subsidiary Guarantees may be released in various circumstances,
including in certain circumstances without the consent of Holders.


 


The Indenture
provides that, under certain circumstances, the Securities or Subsidiary
Guarantees must be secured by Liens on certain Property of the Company or
Subsidiary Guarantors.  Liens securing
the Securities or Subsidiary Guarantees may be released in various
circumstances, including in certain circumstances without the consent of
Holders.


 


10.  Denominations; Transfer; Exchange


 


The Securities
are in registered form without coupons in denominations of $2,000 and whole
multiples in excess thereof of $1,000.  A
Holder may transfer or exchange Securities in accordance with the Indenture.  Upon any transfer or exchange, the Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture.  The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to
be redeemed or 15 days before an interest payment date.


 


11.  Persons Deemed Owners


 


The registered
Holder of this Security may be treated as the owner of it for all purposes.


 


12.  Unclaimed Money


 


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


 


13.  Discharge and Defeasance


 


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


 


8

















 


14.  Amendment, Waiver, Deemed Consents,
Releases


 


Subject to
certain exceptions set forth in the Indenture, (i) the Indenture, the
Second Priority Collateral Documents or the Securities may be amended without
prior notice to any Holder but with the written consent of the Holders of at
least a majority in aggregate principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Holders, the Company, when authorized by a Board Resolution, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
and, subject to any other consent required under the terms of the applicable
Second Priority Collateral Documents, the Second Priority Collateral Documents
to: (i) cure any ambiguity, omission, defect or inconsistency; (ii) provide
for the assumption by a successor corporation of the obligations of the Company
or any Subsidiary Guarantor under the Indenture or any Second Priority
Collateral Documents; (iii) provide for uncertificated Securities in
addition to or in place of certificated Securities; provided, however,
that the uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of
the Code; (iv) add additional Guarantees with respect to the Securities or
release Subsidiary Guarantors from Subsidiary Guarantees as provided by the
terms of the Indenture or the Subsidiary Guarantees; (v) further secure
the Securities (and if such security interest includes Liens on Property of the
Company, provide for releases of such Property on terms comparable to the terms
on which Collateral constituting Property of Subsidiary Guarantors may be
released), release all or any portion of the Collateral pursuant to the terms
of the Second Priority Collateral Documents, add to the covenants of the
Company or the Subsidiary Guarantors for the benefit of the Holders or
surrender any right or power conferred upon the Company under the Indenture; (vi) in
the case of the Indenture, make any change that does not adversely affect the
rights of any Holder; (vii) make any change to the subordination
provisions of a Subsidiary Guarantee or any Second Priority Collateral
Documents that would limit or terminate the benefits available to any holder of
Senior Obligations under such provisions; (viii) make any change to comply
with any requirements of the Commission in connection with the qualification of
the Indenture under the Trust Indenture Act; or (iv) to conform the text
of the Indenture or the Securities to any provision of the “Description of
Notes” contained in the Prospectus Supplement.


 


Without
limiting the foregoing, the Holders will be deemed to have consented for
purposes of the Second Priority Collateral Documents (including for purposes of
determining actions of the Second Priority Instructing Group) to (i) any
amendment, waiver or other modification (including any consent thereunder) of
the Second Priority Collateral Documents (including any annexes, exhibits or
schedules thereto) that would not be adverse to the Holders in any material
respect, as reasonably determined by the Board of Directors (as evidenced by a
Board Resolution) and (ii) to specified Second Priority Collateral
Documents Amendments.


 


9

















 


At the request of the Company, the Trustee
shall execute and deliver any documents, instructions or instruments evidencing
such deemed consent of the Holders. The Trustee, in its capacity as Second
Priority Representative to Holders, shall take such action under the Second
Priority Collateral Documents as may be requested by the Company to give effect
to any such amendment, waiver or modification.


 


In addition and without limiting the
foregoing, (x) Collateral securing a Subsidiary Guarantee of the
Securities or (y) a Subsidiary Guarantee of the Securities provided by a
Subsidiary Guarantor may be released only in respect of the Securities (i) upon
request of the Company without consent of any Holder unless, within 20 Business
Days after written notice of the proposed release of such (1) Collateral
from the Liens securing Subsidiary Guarantees of the Securities or (2) Subsidiary
Guarantor, as the case may be, is mailed to the Trustee and the Holders,
Holders of 25% of the outstanding principal amount of Securities deliver to the
Company a written objection to such release or (ii) with the written
consent of the Holders of at least a majority of the aggregate principal amount
of the Securities then outstanding.


 


Under the circumstances described in clauses (i) and
(ii) above, Holders shall also be deemed to have consented to such release
for purposes of any consent required under the Second Priority Collateral
Documents (including for purposes of determining actions of the Second Priority
Instructing Group).


 


At the request of the Company, the Trustee
shall execute and deliver any documents, instructions or instruments evidencing
the consent of the Holders to such release. 
The Trustee, in its capacity as Second Priority Representative for
Holders, shall take such action under the Second Priority Collateral Documents
or otherwise as may be requested by the Company to give effect to any such
release.


 


15.  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 the Securities then outstanding, subject to
certain limitations, may declare all the Securities to be immediately due and
payable.  Certain events of bankruptcy or
insolvency are Events of Default and shall result in the Securities being
immediately due and payable upon the occurrence of such Events of Default
without any further act of the Trustee or any Holder.


 


Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture.  The Trustee may refuse
to enforce the Indenture or the Securities unless it receives reasonable
indemnity or security.  Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power under the Indenture.  The
Holders of a majority in aggregate principal amount of the Securities then
outstanding, by written notice to the Company and the Trustee, may rescind any
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all existing Events of Default
have been cured or waived 


 


10

















 


except nonpayment of principal,
premium or interest that has become due solely because of the acceleration.


 


16.  Trustee Dealings with the Company


 


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


 


17.  No Recourse Against Others


 


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


 


18.  Successors


 


Subject to
certain exceptions set forth in the Indenture, when a successor assumes all the
obligations of its predecessor under the Securities and the Indenture in
accordance with the terms of the Indenture, the predecessor will be released
from those obligations.


 


19.  Authentication


 


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


 


20.  Abbreviations


 


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


 


21.  Governing Law


 


THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW.


 


11

















 


22.  CUSIP Numbers


 


Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Securities and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. 
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.


 


The company
will furnish to any holder upon written request and without charge to the
holder a copy of the indenture which has in it the text of this security.


 


12














 


ASSIGNMENT
FORM


 


To assign this
Security, fill in the form below:


 


I or we assign
and transfer this Security to:


 


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


 


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


 


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


 


	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
    Your Siganture:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  



 


Signature
Guarantee:


 


	
   

  	
   

  	
   

  
	
  Signature must be guaranteed by a
  participant in

  a recognized signature guaranty medallion

  program or other signature guarantor acceptable

  to the Trustee

  	
   

  	
  Signature of Signature Guarantee

  



 

















 


[TO BE
ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY


 


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


 




	
  Date of

  Exchange

  	
   

  	
  Amount of decrease in

  Principal Amount of

  this Global Security

  	
   

  	
  Amount of increase in

  Principal Amount of this

  Global Security

  	
   

  	
  Principal amount of this

  Global Security following

  such decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Securities Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  






 


2

















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Security purchased by the Company pursuant to Section 4.06
(Asset Sale) or 4.13 (Change of Control) of the Indenture, check the box:


 


o


 


If you want to
elect to have only part of this Security purchased by the Company pursuant to Section 4.06
or 4.13 of the Indenture, state the amount:


 


$


 


	
  Date:

  	
   

  	
     Your Signature:

  	
   

  	
   

  



 


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


 


	
  Signature
  Guarantee:

  	
   

  	
   

  



 


Signature must
be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.


 


3